Kass: A Couple of Concerns

In summary, while we are now ending the year and are squarely in a period of seasonal market strength, I remain bearish in view. I remain net short, and if the animal spirits continue to elevate share prices, I will likely raise the size of my short book. At the core of my pessimism are more tentative signs of economic growth, the vulnerability of the small business and consumer sectors, the aftermath of the credit crisis that will continue to haunt the business cycle in availability and access to credit (e.g., Greece et al.), and generally too bullish market expectations. On the last score, the average year-end 2010 S&P price target and S&P profit forecasts by the top strategists now stand at about 1,225 and $72 to $73 a share, respectively. For some of the points contained in today's opening missive (and others), I believe they are being too optimistic.

Doug Kass writes daily for RealMoney Silver, a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass's daily trading diary, please click here.

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