Given these concerns, if the markets continue to advance, it might be an ideal time to cull out poor-performing stocks or companies that face earnings challenges in a disappointing and decelerating domestic economy.
Now, let's move on to a technical observation.
A famous Woody Allen quote -- used by Warren Buffett previously in his annual report and letter to Berkshire Hathaway (BRK.A - Get Report)/ (BRK.B - Get Report) shareholders -- has some bearing on our analysis of the markets: "Bisexuality immediately doubles your chances for a date on Saturday night."
In other words, embracing both fundamentals and technicals can have its benefits.Earlier this year, I raised the issue that an unusually negative technical formation, " Three Peaks and a Domed House," might have indicated that an important market top was being made in March-April 2011. This observation, which caught a number of technically inclined analysts by surprise, with the benefit of hindsight, might have been prescient. Technical analyst George Lindsay coined this 23-step "Three Peaks and a Domed" technical pattern and gained celebrity because it pointed to a market peak in late 1968 -- and the largest stock market correction since World War II followed in the years after. ( Here are some historic examples of such a technical setup.) Below is a chart of S&P 500 cash year-to-date. Observe the similarity between the chart above and George Lindsay's "Three Peaks and the Domed House" technical configuration below (with points 3, 5, 7 and 9 corresponding to the S&P's March-April 2011 price action). Err on the side of conservatism in these uncertain (and market volatile) times. Doug Kass writes daily for Real Money Pro , a premium service from TheStreet. For a free trial to Real Money Pro and exclusive access to Mr. Kass's daily trades and market commentary, please click here.