Kass: Next Big Move Will Be Down

This blog post originally appeared on RealMoney Silver on June 2 at 7:51 a.m. EDT.

Money makes the world go around, especially in the world of equities.

The plain truth is that most investors, under the guise of being fundamental investors, worship at the altar of price momentum and rarely take a variant market view. Rather, most individual and institutional investors simply prefer buying strength and selling weakness. This helps to explain the overshoot to the upside in the summer of 2008 and the overshoot to the downside in early March, when there was ample evidence of green shoots taking root and economic stabilization taking hold.

While the media talks green shoots, the recent leg up in U.S. equities seems to be based more on demand for stocks overwhelming supply rather than substantive signs of emerging worldwide economic growth. ...