Why not short this market to oblivion? Why not bet against it with all of your heart and soul? Isn't that what made you the big money in 1994 when the Fed was last tightening?


being short then didn't make you much more money than being long. It didn't, because then, as now, it may be too late to make the big bucks off of shorting.

When I was urging people to

take the money off the table, now that was when the going was good. Now things have come down already. A couple of tightenings are priced in. And now any time we get a weak number, such as the

retail sales number we got on Thursday, the market will be rocking and you will get squeezed into oblivion, as I was on May 17 of 1994.

Worst of all, from the short side, is the powerful rally that always occurs when the Fed is done with its tightenings. It will happen when you least expect it, because it usually comes on the heels of a crisis. In 1994 the

Orange County

folks didn't foresee the rapid tightenings and they lost billions of dollars in foolish wagering. In 1994, the peso collapsed as money got drawn to the United States out of weaker currencies to take advantage of the high rates.

This time around I could see a euro crisis developing easily if the U.S. rates got up to where the bears are so sure they are headed. Who the heck would want to be in that piece of paper when you can own dollars that are appreciating in value?

The difficult thing for the bulls, of course, is that for the crisis to be important enough to stop the tightenings, a lot of companies will see earnings forecasts cut. So, to hold on through the tightenings is no picnic either.

Yes, we will get days like Thursday when we get a soft number and the market rallies. But every single strong number, and there will be more strong numbers, will be met with threats of more tightenings and we will have ugly selloffs each time.

Until the crisis arrives or the economy breaks itself. Its weird to have to bet on calamity for a market to have a sustained rally, but that's your best-case scenario for ending this year's version of 1994 earlier than it ended the last go-around.

Under no circumstances do I think the election matters. The Fed would like not to play a role. But the greatness of the Fed is that it will play a role if it thinks it has to. If the numbers don't stay down, you can expect the Fed to tighten right on through the fall. Personally, I don't think they will have to. I think the tightenings will work in time not to interfere with the election. But that's the optimist in me talking. I don't want to miss the greatness of 1995. I didn't then; I won't now.

In the meantime, if you catch yourself getting too negative, you will miss opportunity and if you find yourself getting too positive, you will get crushed as surely as people were vaporized after March 10 of this year.

Patience and cash. They were the keys to outperforming in 1994. They will be the keys to outperforming this year, too.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at