So the banks were wrong. The BKX rally yesterday was a false tell, a headfake that could have cost you some money, big money. Remember yesterday I was marveling that the bonds were headed down (interest rates were headed higher) even as the banks rallied?

Many of you emailed me to say it was because banks have diversified away from bonds. Nonsense. This was one of those examples where either the bond sellers were wrong or the bank buyers were wrong.

Now we know. The bond sellers were right.

I love this kind of resolution. Much of what we do is try to spot patterns. If the banks are strong, that coincides with the need for my firm to put more money on the table, as I ALWAYS regard a market with the banks going up as a positive market. (That's an empirical correlation that I respect.) But if the banks are getting hammered, I don't want to be too aggressive because that's a sure tell of an unhealthy market.

Right now the banks are confirming my view that you have to keep some chips on the sidelines for lower prices still.

So now I am building a checklist. I want to see the banks stop going down. I want to see those three losing stocks

stop going down. And I want to see any indicators of inflation go the right way so that we can get

Greenspan

back in the bull's camp. Right now with oil back over $20, we aren't winning that war either. When I see these things happen, I will part with more cash. Otherwise, again, I don't feel much fire from my pockets. That's where a lot of the money is.

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

jjcletters@thestreet.com.