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

My Takeaways and Observations

Originally published July 28 at 5:39 p.m. EDT

I had a hectic day and a hectic week! All over the place, literally.

On investment process, I'm keeping it real. Beware of taking heads who have high conviction in their commodities price forecasts.

A breakdown in the price of crude oil, Equity Residential's (EQR) - Get Report warning Thursday regarding a glut of high-end New York City properties, the Atlanta Fed's GDPNow reduction of its second-quarter real growth in the U.S. and Ford's (F) - Get Report weak guidance all contribute to my ursine theme that corporate profit and economic growth expectations are too high.

Good stuff from subs Kevin and Kim G.

Double D on the Fed, housing and the economy.

Radian Group's (RDN) - Get Report results were radiant. I added to the name, which is now up by almost 30% from its purchase and inclusion in my Best Ideas List. I will have an update on the quarter tomorrow.

I am boosting my support of ProShares UltraShort S&P 500 (SDS) - Get Report -- Bernie Sanders would be proud -- and have moved my SDS long to a medium-size position.

Another day, another recovery in stocks from the morning's lows. Stocks closed at their highs.

Alphabet (GOOGL) - Get Report and Amazon (AMZN) - Get Report had big beats after the close. The shares were up more than 1% after hours.

  • The U.S. dollar was weaker.
  • Crude oil dropped by nearly $1 to $41.10. The causality between energy prices and junk bonds and equities have disconnected recently.
  • Gold rose by $7 to $1,333.
  • Agricultural commodities: wheat -3, corn -3, soybeans -7.
  • Lumber -3.
  • Bonds were weaker despite poor economic data and a downbeat Atlanta Fed GDP forecast. I believe that the fixed-income market is discounting a recession.
  • The 10-year U.S. note lost one basis point in yield to 1.50% and the long bond was flat, yielding 2.22%.
  • The 2s/10s spread was relatively flat at 79 basis points.
  • Municipals were up small. Closed-end muni bond funds were mixed.
  • Junk bonds acted junky.
  • Banks and insurance stocks were mixed and brokerages were lower. Financial Select Sector SPDR ETF (XLF) - Get Report was up eight cents -- a new (small) short based on the flattening in the yield curve and the prospects for deteriorating domestic economic growth.
  • Autos were lower on Ford's negative guidance and outlook.
  • Oil stocks weakened off of crude oil's continued dive.
  • Retail stocks, save Home Depot (HD) - Get Report and Lowe's (LOW) - Get Report (which were stronger), faltered.
  • Agricultural equipment gave back recent gains; I missed shorting Caterpillar (CAT) - Get Report (which I wanted to execute) but was not around this morning.
  • Media was lower, and was old tech.
  • Staples picked up a bid after recent weakness.
  • Biotech was flat after spirited action yesterday.
  • (T)FANG featured big rips by GOOGL and AMZN after the close and post earnings.
  • In individual stocks, Apple (AAPL) - Get Report continued to gain (up $1.50) and DuPont (DD) - Get Report might have an appointment with $70a share.

Here are some value added contributions on our site Thursday:

    Jim "El Capitan" Cramer on Ford and peak autos. Thanks for the shout-out, Jimmy!

    Ben "Goldfinger" Cross on the Federal Open Market Committee, gold, aluminum and Ford.

    Big Jim Gentile on autos -- fuhgetabout 'em!

    RevShark on the prospects for a market breakout.

    The Divine Ms M on the subsurface "action."

    Position: Long HIG, DD, RDN, TWTR, SDS, SPY puts; short SPY small, QQQ small, NFLX small, JWN small, MET small.

    A Reminder of a Golden Swan

    Originally published July 28 at 6:51 a.m. EDT

    Back in October 2014, in "Could the Dissolution of OPEC Become a Golden Swan?" I offered the view that the power of OPEC to manage oil prices would wane and that there was a significant risk for a rapid drop in the price of crude oil.

    The price of crude oil ultimately took (to many) a totally unexpected dive that few anticipated, falling to about $30 a barrel. It subsequently rallied to over $50 and is now back to $41.77 per barrel Thursday morning.

    In this column I put my general observations together to form a conclusion. I did not use a complicated regression analysis or any other complex and exacting form of forecasting to come to my conclusion.

    I and others have found that projecting the price of any commodity with precision is a difficult -- a near impossible job. The reality is that most talking heads make their pricing conclusions either based on a non-vigorous fundamental approach or by gazing at the charts.

    They are basically guessing.

    Neither approach is useful.

    Neither approach is productive.

    Position: None.

    At the time of publication, Kass and/or his funds were long/short XXX, although holdings can change at any time.

    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.