Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.

Retail Apparel Stocks' Weakness Deepens

Originally published Jan. 3 at 11:52 a.m. EDT

Retail stocks (e.g., JCPenney (JCP) - Get J. C. Penney Company, Inc. Report ) are being kicked in the groin this morning.

The first real retail data comes out on Thursday from L Brands (LB) - Get L Brands, Inc. (LB) Report , GAP (GPS) - Get Gap, Inc. (GPS) Report and Ascena Retail (ASNA) - Get Ascena Retail Group, Inc. Report .

I expect industry comps from real stores at 0-2%. Industry at 4%. Online at 20%.

Online remains the category killer as Amazon (AMZN) - Get, Inc. Report (which makes no money) reaps ever-more market share.

Overall, apparel seems on the weak side. Still, huge free cash flow (as I recently wrote) and secularly low valuations.

One positive is terrific emerging consumer economics.

As well, in the fullness of time, apparel needs replacing.

I have added to JCP this morning.

Position: Long JCP large; short JCP puts.

My Takeaways and Observations (3:30 p.m. Edition)

Originally published Jan. 3 at 3:33 p.m. EDT

The markets started Tuesday like Usain Bolt at the start of a 100-meter race. But, unlike Bolt, the finish wasn't as strong as the start.

I thought one of the day's features was the reversal in bond yields, particularly after the good data.

The day started with a Trump Twitter storm.

Good food for thought from my pal Peter Boockvar on possible positives and negatives for the new year.

Moved to large-sized in Allergan (AGN) - Get Allergan plc Report last week. Allergan is raising a number of drug prices by about 9%. (Management said it is consistent with its commitment to hold down drug prices expressed in 2016). Investors liked, and the shares rose by another $6.

Speaking of Usain Bolt, I continue to go for the gold.

TheStreet Recommends

The Mighty Oak might have been the subject of tax-loss selling--as I guessed last week.

A quick synopsis of retail apparel woes -- the sector had a worse day than Mariah Carey's New Years Eve performance. I explained why I added to my large JCPenney (JCP) - Get J. C. Penney Company, Inc. Reportlong.

Back to net (but small) short.

I was interviewed on Bloomberg's "Market Surveillance" this morning.

Today was Byron Wien's turn to give his Surprises.

I added incrementally to individual stock shorts on strength this morning.

At 3:30 p.m. the market was bending but not breaking.

Here are some value-added contributions on our site today:

    Welcome back Jimmy! Jim "El Capitan" Cramer on the hit and miss parade.

    Tom Graff on navigating the bond market.

    "Meet" Bret Jensen on biotech takeovers. (interesting stuff!)

    A market assessment (midday) from Rev Shark.

    Steve Blitz on the ISM data blitz!

    Positions --
    Long: AGN large, CPB large, HIG large, JCP large, OAK, DD small, RDN, HIG large

    Short: SPY, QQQ, IWM, CAT, MET, LNC, DIS, SBUX small, AAPL

    Position: See above.

    Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AGN, GOOGL and AAPL.

    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.