Kass: The Hardest Stock Market to Navigate Ever?

This blog post originally appeared on RealMoney Silver on Nov. 20 at 8:19 a.m. EST.

Yesterday's opening missive -- Get Real and Drop the Rose Forecasts -- delivered a familiar refrain: Stay cautious and trade/invest small with volatility on the rise.

It is for these reasons that I have suggested that opportunistic trading/investing (i.e., buying the dips and selling the rips) and lower-than-usual positions are strategies that can deliver excess returns in an increasingly volatile market.

During the middle of the day, I suggested that Fed-cut rumors should be flying:

I fully expect rumors that the Fed will cut before the December meeting will emerge now.

And we closed the day with another familiar message for a market without memory from day to day:

The market is getting schmeissed, but the VIX is flat. That was the positive market tell last week as well. So the seeds might be sowed for another tradeable rally. Stay tuned.

Monday's market had more moves than a shortstop batting .110, and, right on cue, CNBC and other media outlets are reporting this morning of the emergence of rumors that the Federal Reserve will announce a rate cut after an emergency meeting.

Similarly on cue, the futures suggest that the market might gap higher on the opening -- my admiration for the PowerShares QQQ(QQQQ Quote) and the N's over S's (Nasdaq over the S&P) remains intact -- a possible contrarian development I offered, even despite the awful close and even worse price action.

To me, even despite the profound weakness, the late-day stability in the VIX signaled some promise, and our notion of a market without a memory has temporarily continued to prove prescient.

Arguably, this is the hardest market to navigate in years, and this is manifested in the likely closure of some sizable hedge funds. Those liquidations might be contributing to the recent spate of selling.

Case in point: brilliant hedge fund manager Ed Lampert, whose canvas of Sears Holdings(SHLD Quote), AutoNation(AN Quote), AutoZone(AZO Quote), Citigroup(C Quote) and others looks worse than Sotheby's recent weak auction of Impressionist paintings.