The Bonds Hold the Key

We're starting to get to levels where bonds represent real competition for stocks.
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We are hanging on a slim reed of the 98 level in the bonds. You have to understand how important this level is. It holds the key to this market because if we can maintain it, we can buy the non-Y2K stuff like


(AMGN) - Get Report



(MRK) - Get Report

. If we penetrate it and take out the low, then nothing really works -- except the bonds!!

Cramer's Latest: Join the discussion on


Message Boards. In other words, I am bullish on many stocks if the bonds hold, and I am bearish on stocks if we go to 6.75% on bonds, having taken out the 6.5% level.

Why does this stuff matter so much? Because we are beginning to get to levels where you make some bucks in the bonds. They will begin to represent real competition to stocks. And they will begin to look appealing to guys like me who want to lock in a good year.

Don't sneer. If you are long



(as I am) or


(XRX) - Get Report







, you are getting sick of this game. You are beginning to think, what the heck, why do I need this aggravation? For what?

Bonds offer a nice place to visit, maybe at 6.75% a great place to live. You have to understand for the last two years bonds offered very little competition to stocks. Last year at this time with bonds headed nicely under 5%, stocks were the only game in town.

At this pace, stocks will get a run for the money from bonds. In the Cutting Room

piece this weekend, there was some claptrap about how I would switch my position on a dime with bonds. Forget it. I like to trade bonds, but I love to own them.

Random musings:

There are lots of interesting discussions on the

boards about how powerfully corrupt I am and whether I can influence our TV show's coverage. If I were only as omniscient as these board messages say I am! Then I could get my youngest not to stalk off the field in tears when she got called for using her hands in the big soccer game yesterday. I could get my wife to load and unload the dishwasher instead of me. I am highly confident, if I am as superhumanly evil as the boards make me out to be, that I could will Amgen back to 84 where I bought it. Alas, my "power" is a joke.

Alex Berenson's

Cutting Room

piece didn't capture all that was going on in the Green Room on Friday. I was steamed because I thought that Berenson attacked



without getting Lucent's response. I did not know at the time that he tried to get it and they didn't give him comment. It wasn't mentioned on the show when it was filmed, though it was added in a graphic.

I am neither long nor short Lucent, but I live in Summit, N.J. -- ground zero for this company. I coach kids whose parents work at Lucent. And I like the company very, very much. I admit it. I can't stop a tough piece on Lucent. I can't stop anything BECAUSE I NEVER KNOW WHAT


IS WORKING ON. Even if I did, I could not influence the coverage. More important, the reporters could care less about what I think.

But I stand for fairness, and if Lucent disputes our story about its accounting, I know the editor-in-chief would welcome its response on the site. Yeah, I was pissed. I shouldn't have been because in fact we had given Lucent a chance to respond, but that was the Green Room story.

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