Why do these numbers matter so much? Pretty simple. Every single strategist on the street, every single major opinion maker, was on the wrong side of this number. Everybody who thought we were going to tighten 100 basis points now looks way too negative. Everybody who thought 50 b.p. is too negative.

That means each strategist has to get on the hoot and holler and say "I have been too negative. I have to raise my equity ratings."

Every one.

And they will do it as surely as night follows day. Because that is what happens at the end of the tightenings. That is what always happen. It will not be different this time. We leave 1994 today and begin to focus on 1995.

Banks. Financials. They are the biggest movers. They have the biggest move off the bottom. They are the most compressed. They make the most sense. That's what worked then. That's what will work now.


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 of the 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