Doug Kass fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- How the Fed has run out of credibility.
- How Janet Yellen's speech was boring.
Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.
Originally published Aug. 26 at 2:34 p.m. EDT
Friday's Takeaways and Observations
The Fed has no cred.
Though I continue to trade around core investment shorts, I remain committed to the short side.
- The U.S. dollar strengthened on New York Fed President Stanley Fischer's hawkish comments.
- The price of crude oil is flat.
- Gold also flat lined. A $1,300 to $1,310 test seems possible. Entry point?
- A wild day in agricultural commodities: wheat -18, corn -5, soybean -14 and oats -6. (To those in Comments Section, I would continue to avoid fertilizers. I don't understand the interest in purchasing Potash (POT) down below! Double entendre! )
- Lumber rallied by a beaner after being lower this week.
- Municipals are flat but closed-end muni bond funds are getting hit by profit taking; I would be out of/avoid this asset class. Junk bonds are unchanged.
- Banks continue to act swell, led by Bank of America (BAC) - Get Report .
- Insurance is slightly higher but my fav long, Hartford Financial Services Group (HIG) - Get Report , continues to lag.
- Brokerages, up big, are flat. I initiated shorts in MS and GS based on the magnitude of the recent rally, reduced expectations for capital market activity and a flattening yield curve.
- Retail was broadly lower. I addressed the headwinds facing dollar-store companies in my opening missive. Both DG and DLTR reversed by more than $2 from the morning highs. Home Depot (HD) - Get Report also is lower again (Some interest in this name in the Comments Section; I would continue to avoid after a period of outperformance).
- Biotech is flat as a pancake.
- Energy stocks moved lower despite a modest rise in the price of crude. I initiated trading shorts in U.S. Oil Fund (USO) - Get Report , Schlumberger (SLB) - Get Report and Exxon Mobil (XOM) - Get Report this week.
- Autos down on the day. I pointed out the rise in subprime auto delinquencies yesterday as another signpost of Peak Autos.
- Staples have been hit on a stronger U.S. currency.
- Media is weaker.
Here are some value-added contributions on our site today:
Jim "El Capitan" Cramer on what's real or Memorex? Jim also chimes in on his view of the dollar-store space.
Mark "Nashville Cats" Sebastian on a Financial Select Sector SPDR ETF game plan.
Rev Shark on possible reactions to the Fed.
Ed Ponsi "Scheme" on how to play Jackson Hole.
Position: Long HIG, SDS, JCP, LARGE, RDN, TWTR, DD; short SPY, TLT, AAPL, NFLX small, DIS small, GM, F, GS small.
Originally published Aug. 26 at 10:25 a.m. EDT
Shorting Goldman, Morgan on Yellen's Boring Speech
My initial take on Federal Reserve chair Janet Yellen's widely anticipated
Jackson Hole speech Friday morning:
- No timetable for Fed rate hikes.
- No nod to the data.
- Nothing new.
As I said in my opening missive, it's time to move on -- and for me, that means adding to my short book.
I'm initiating shorts this morning in Goldman Sachs (GS) - Get Report at $167.60 and Morgan Stanley (MS) - Get Report at $31.40. And as I noted previously, I've also added to my short of Apple (AAPL) - Get Report and my long of the ProShares UltraShort S&P 500 ETF (SDS) - Get Report , which is a 2x inverse play on the S&P 500.
Position: Long SDS (large), Short GS (small), MS (small), AAPL, Apple calls.
Originally published Aug. 26 at 10:13 a.m. EDT
Buying SDS and Shorting Apple on the 'Yellen Pop-Up'
Position: Long SDS (large), Short AAPL, AAPL calls.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL, CMCSA, SBUX, CSCO and GE.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL and SLB.
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.