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One Way to Play Dice-Roll Time

Cramer outlines his thinking ahead of the release of the National Association of Purchasing Management's May index.
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Don't you just feel 500 points riding on this next big number? You know you get the wrong one and the whole equation changes. You get 40 different talking heads coming out and screaming that the end of the world is near -- and you will have to envision how


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will trade after the planet implodes.

When it is dice-roll time -- meaning I don't know what numbers are going to come up on the dice, but I know that they control -- I try to play leanly and accept that I am going to miss the first point of some stuff and may miss a whole move altogether.

Let's take that

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Dayton Hudson


position I mentioned last week. I sold that when it traded up to 63. Now if we get a "wrong" purchasing number -- I always like to say wrong rather than strong because I'll be darned if I am going to buy into the notion that good growth is somehow awful -- you can expect the bonds to get whacked down to near 6% on the long end. That will set in motion a huge selloff in the S&P futures, which will translate into a 61.625 opening in Dayton Hudson, as it is a member of the S&P. Much of my gain from last week will be gone, and I'll be angry.

Now, if we get a "right" number, bonds will trade up to 5.625, the S&P futures will openly wildly up and Dayton Hudson will open at 64.625, where if I had kept it, I would be happy and enthused. What kind of stupid world is that? Why that's the world of stock trading.

Here's my secret. If the number is "wrong," I don't want Dead Head anyway. You don't want to be anywhere near retail stocks when the


tightens. That's why they have acted so crummy to begin with. They are in the immediate blast zone. You will be vaporized.

If the number is "right," the stock will retreat by 10 a.m., to about 64.175, where I can get back in if I think the move has legs. That way, I miss only the 63 to 64 gap. So, I regard my real risk as roughly a dollar opportunity cost.

What happens if I am wrong about the upside? What happens if DH never comes in, that it opens at $64.75, say, and never looks back? Then I find another horse to play.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Cisco and Microsoft. 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