This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Kass: Dreaded Triple Top Approaching?

This column originally appeared on Real Money Pro at 7:25 a.m. EDT on Aug 14.

NEW YORK ( Real Money) -- What I learned in my investment career is market participants prefer the comfort of crowds rather than the company of the remnants.

Investors and traders, as demonstrated in recent years, seemingly prefer to buy strength and sell weakness than to address, anticipate and prepare for an inflection point or change in market direction.

That helps to explain the growing view in the business media and in other outlets that the recent low-volume market rise has been greeted with growing optimism by relatively complacent (accompanied by a 14.0 VIX) players.

That said, this chart of the S&P Index suggests (to this observer) that a possible triple top in the market might be in formation.

S&P 500 Index, Source: Bloomberg

But technical discovery and technical analysis is not my market weather vane. It is the fundamentals that move me.

And on the fundamental score, the outlook is stormy, with slowing global economic growth ignored by the hope of more Band-Aid policy initiatives (a global easing put) and the prospects that our leaders in Washington will begin to behave like adults as we approach the fiscal cliff.

Five Near-Term Market Challenges That Suggest a Top Is Near

So, rather than grow more constructive with higher prices (like many), I grow more cautious based principally on the blurring in the demarcation between economic progress and fantasy as well as the political and geopolitical issues raised above.

Price is what you pay, value is what you get.

I remain net short.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,380.05 -36.80 -0.21%
S&P 500 2,016.83 -4.42 -0.22%
NASDAQ 4,698.6730 +15.2660 0.33%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs