NEW YORK (TheStreet) -- Last quarter, Macy's (M) disappointed investors by missing on both top and bottom line estimates. With the company reporting earnings on Wednesday, it will be an important tell for the holiday season. 

TheStreet's Jim Cramer told Brittany Umar the general consensus was that retail apparel was weak. 

However, Gap (GPS) positively surprised many investors in its recent earnings report, perhaps changing the tide for the struggling retail sector. 

In this regard, Cramer said it may also be possible for Macy's to surprise investors to the upside. 

The low-risk play could perhaps offer $4 of upside vs. $1 to the downside, he added. 

While not calling it a long-term pick of his, Cramer said that Macy's will be the gauge for the holiday season, and is also one of the last big retailers to report earnings. 

If the company reaffirms the positive holiday outlook, like United Parcel Service (UPS) and Amazon (AMZN), coupled with lower gasoline prices, we could be set up very well going into the holidays, Cramer concluded.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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