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
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: 10 Reasons the Market Has Peaked

Stocks in this article: SPYXLFITBIBB

5. The Fed head selection represents a more significant market event than consensus believes. My money is on Larry Summers. The selection of Summers (the favorite) or Geithner (a very long shot) could cost the S&P something like 50 points, while the selection of Kohn or Yellen (second favorite) could be a marginal positive for the markets.

Though Summers has broad experience and is intellectually gifted, he would probably be difficult to work with, and the reduced transparency in a Summers-led Fed would likely increase asset price volatility. Both Yellen and Kohn are as qualified intellectually/academically and understand the workings of the Fed as they have been there forever. Also, they are highly respected by the other Fed members.

6. Politics will return to the front burner in the coming months. The September-October political agenda is lengthy, including the debt ceiling, government spending and immigration, tax and government-sponsored enterprise reform.

Though market participants have become inured to the nonsensical rhetoric, a lengthy fight and impasse could again weigh on consumer and corporate confidence as it has previously.

7. The bull market is long in the tooth. We now lie almost 54 months from the generational low of March 2009. Over the past six decades, the average bull market has been about 43 months, the longest bull markets have lasted 56 and 60 months. (Note: The longest bull streaks didn't face the structural economic headwinds that we face today; they had long runways of growth and technological innovation ahead of them.)

Moreover, the intermediate leg of the bull market, which commenced in November 2012, has already climbed by almost 30% in only eight months.

8. Changing leadership seen as a negative. As I recently wrote, sector/group leadership changes are typically a negative sign for markets. (And, as Jim Cramer suggested on Real Money yesterday, "It's hard to find leaders.")

Former market-leading financials ( Financial Select Sector SPDR (XLF) is -4% off its high), housing (the most distributional pattern, with the iShares U.S. Home Construction ETF (ITB) -18% off its high), health care and biotech ( iShares Nasdaq Biotechnology Index Fund (IBB) is -4% off high) sectors are all extended and in recent weeks have begun to show signs of lost momentum, underperformance and possibly distribution. At the same time, materials have improved, but few others have, suggesting that a broader-based (and healthier) sector rotation is not yet in place.

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

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs