It has been my view throughout the past two weeks that:1. there would be a last-minute compromise over the debt ceiling; 2. the market weakness (last week) over the mystery of uncertainty in Washington, D.C., should be purchased; and 3. the history and euphoria (this week) of an agreement should be sold. While the animal spirits have anticipated a resolution and have lifted the S&P 500 by 70 handles, or by 4.5%, since last Wednesday, it remains my view that stocks have topped for the year and that stocks should now be sold. Yesterday stocks soared. This morning, two other asset classes soared -- namely gold (up $35 an ounce) and bonds (the ProShares UltraShort 20+ Year Treasury (TBT) dropped by $2 a share as the 10-year yield fell by 5 basis points, to 2.62%) -- signaling slowing economic growth and the prospects for a weakening in corporate sales/profits. Meanwhile, today the U.S. dollar is taking its worse licking in a month and is moving back toward the February 2013 lows. Below are some of the reasons behind my negative market outlook.
Kass: Buy the Mystery, Sell the History
Oct 18, 2013 | 06:00 AM EDT
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