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
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Kass: Subsurface Weakness

The Crowd Continues to Outsmart the Remnants

To be sure, the naysayers (such as myself) have been vilified, and any further top talk has now become almost indistinguishable from "The Boy Who Cried Wolf," as the averages have powered higher and have resisted crisis after crisis.

This morning's opening observations do not guarantee a top -- indeed, the recent internal divergences could be remedied and reversed. The technicals could improve, as they have at numerous stages of the current rally.

They do, however, point to current conditions that in the past have indicated a top.

Summary

Mr. Market's recent move higher has been unbalanced (measured by breadth and sector outperformance/underperformance), as it has been led by nearly parabolic moves in consumer staples and health care stocks, while the optimistic forecasts of accelerating and self-sustaining economic growth are not being validated by the lagging smaller-caps, industrials, technology and other economically sensitive sectors.

Citigroup's surprise indices for the U.S., Europe and the emerging market economies are all weakening -- in the EU and in emerging markets, the surprise indices have actually turned negative.

A slowing in global GDP after a strong first quarter (importantly buoyed by inventory replenishment after a fourth-quarter 2012 inventory contraction) will likely define worldwide economic growth over the balance of the year.

To the extent that the outsized first-quarter 2013 stock market gains were a product of better-than-expected growth, the next few months of market returns could be adversely impacted by less-than-expected growth in the real economy and in corporate profits.

As well, a stronger U.S. dollar coupled with slowing global growth should pose a challenge to optimistic consensus earnings expectations for 2013.

Other meaningful non-confirming technical divergences (discussed earlier) are increasingly conspicuous.

My personal experience is that when I have found myself as frustrated as I am these days, the best thing to do is to take a few deep breaths, reassess one's analysis/conclusions and if proven to still be in place, ignore the cheerleading and uninterrupted price rise.

Every subscriber must develop his/her own view of the market's risk/reward as well as that of individual stocks, with time frames and risk tolerance being the most important ingredients to that decision.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs