Watching the Bond Tells

Having a long bond position means that you've got to keep your eyes open and watch those retail stocks.
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When you are long the bonds, you tend to look at the stock tea leaves and read too much into them. I know that, and I try very hard to be rigorous about what my eyes see.

So, that said, I am cheering to myself that the retail stocks are foundering here. You can't be long the bonds and be cheering consumer spending. Robust retail sales are the enemy.

That's why I find myself rooting against

Gap

(GPS) - Get Report

, the stock, even though I love Gap, the company. I am not distressed to hear that May is another month of tough compares. I also don't mind the talk that Dead Head (what everyone calls

Dayton-Hudson

(DH)

) is stalled -- I have less Dead Head than I have bonds. A sudden splurge of spending means less savings, and less savings mean higher interest rates. So, when I see these weaker numbers, I am indeed heartened.

What else short-term do I watch with the bonds? Auto sales are key. Jobless claims, obviously. And anything airlines. These are concurrent tells, and they are better than any other information out there for me as a bond trader.

Right now, I am not hearing anything that tells me I am wrong.

So I am staying long.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Dayton-Hudson and the 30-year bond. 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

letters@thestreet.com.