Top thoughts on stocks and the markets from TheStreet's Doug Kass.

Going Shorter Financials

Originally published Oct. 12 at 3:18 p.m. EDT

Please note that iShares Barclays 20+ Year Treasury Bond ETF (TLT) - Get Report is now at the high of the day (+$0.52).

The reversal in money center banks shares has been conspicuous. (Citigroup (C) - Get Report is -$4 from its premarket high).


The 10-year US note yield, as expected, is weakening (by three basis points) -- and now stands below the support line of 2.32%.

I have further expanded my financial shorts - - by adding to short positions in Metropolitan Life (MET) - Get Report , Lincoln National (LNC) - Get Report , Bank of America (BAC) - Get Report , Morgan Stanley (MS) - Get Report and Goldman Sachs (GS) - Get Report .


These are all medium sized.

After selling the balance of Radian Group (RDN) - Get Report and with a very large long Wells Fargo (WFC) - Get Report -- to be clear, I have moved into a reasonably large net short exposure in financials today.

Position: long WFC large; Short MS GS BAC LNC MET TLT

More of What's Trending on TheStreet:

My Takeaways and Observations

Originally published Oct. 12 at 2:36 p.m. EDT

"Gotta love those economists."

" Low probability events do happen!"

Why I shorted JPMorgan (JPM) - Get Report and Citigroup (C) - Get Report post EPS releases. And why I believe the stocks reversed lower -- think loan losses.

Pivotal Research on Facebook.

Peter Boockvar on the flattening yield curves -- the 2s/10s and 5s/30s

I eliminated Radian Group (RDN) - Get Report and Twitter (TWTR) - Get Report today. And I added to my SPDR S&P 500 ETF (SPY) - Get Report short.

Charts of the Day and Up In Smoke with another chart.

With two hours of trading left the market remains in a narrow range.

* The US Dollar strengthened again this afternoon.

* The price of crude oil retreated by -$0.62 to $50.68.

* Gold rose by $8.

* Ag commodities: wheat -2, corn +3, soybeans +24 (!!) and oats +11. Good for the fertilizers.

* Lumber +7.

* Bonds -2 basis points. The 10-year yield, as I suggested in my bank note, looks like it will pierce back down the 2.32% resistance.

* Municipals bid for but high yield for sale (smallish).

* Banks failed to hold the early morning ramp and are trading near the day's lows. WFC outperforming its peers today.

* Insurance stocks slightly lower.

* Brokerages also weaker.

* Autos profit taking.

* Energy stocks lower on the commodity hit.

* Gambling stocks profit taking.

* Consumer staples quite strong - I am not sure why.

* Ag equipment quite strong again after flattening out in recent days.

* Biotech looks toppy. CELG, GILD and AGN stinking up the joint.

* Retail is on sale, again.

* Media schmeissed - led by CMCSA and DIS.

* Rails better.

* Old tech mixed but Microsoft (MSFT) - Get Report strong.

* FANG all higher but modestly so.


Here are some value added contributions on our site today:

1. Jim "El Capitan" Cramer had a few good ones including this on Micron (MU) - Get Report .

2. Gary Morrow on C and Tim "Not Judy or Phil" Collins on Bank of America(BAC) - Get Report .

3. Divine is back! (I hope her husband feels better after his surgery!)

4. Rev Shark on flipping a coin.

Position: LONG AGN small WFC large Short DIS C JPM SPY large TLT FB small.

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 banks are already seeing rises in loan losses
  • How low-probability events really do happen

Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.

More of What's Trending on TheStreet:

Action Alerts PLUS, which Cramer manages as a charitable trust, was long C.