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 you should say no to closed-end municipal bond funds.
  • How Cara Therapeutics is on a run.

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

The Good, the Bad and the Ugly

Originally published Nov. 18 at 3:25 p.m. EDT

It's not a joke. It's a rope, Tuco. Now I want you to get up there and put your head in that noose.
-- Blondie in " The Good, the Bad and the Ugly"

I did no trading today, and there will be no "Takeaways" today.

As expected, the markets have basically flat-lined with, for a change, little intra-day price movement.

And now it's time to run down "The Good, the Bad and the Ugly" ...

The Good

  • The market is amazingly resistant.
  • The Russell Index is killing the shorts--up, again.
  • Brokerages (Goldman Sachs (GS) - Get Report , Morgan Stanley (MS) - Get Report ) don't quit.
  • Agricultural commodities are ripping higher: wheat up $0.05, corn up $0.04, soybeans up $0.06.

The Bad

The Ugly

  • The bond market, highlighted in my opening missive is a problem. The 10-year is 5 basis points higher, to 2.34% and the long bond is at 3.01%, up 3 basis points. The 2s/10s spread has steepened by 2 basis points to 128 basis points.
  • Gold is testing $1,200, down another $8 in today's trading session.

Position: Long GLD small; short TLT small, NFLX small, GM small, F small.

Say No to Closed-End Municipal Bond Funds

Originally published Nov. 17 at 1:31 p.m. EDT

Despite their drubbing, after some consideration, (for now) I am passing on re-establishing a long in closed-end municipal bond funds:

  • The continued uncertainty of the direction in interest rates.
  • Rising rates not only demand higher municipal bond yields but closed-end funds face rising interest costs (which reduces distributions) from their borrowings--as most closed-end municipal bond funds are levered.
  • Changing tax policy expected out of the Trump administration makes municipal bonds less attractive. Ergo, spreads between taxable and non-taxable yields will likely narrow.
  • The recent weakness in closed-end bond funds has been pronounced over the last one to two months. This could lead, as it did in December 2013 (when I first went long the asset class), to even more forceful year-end tax selling.

Position: None.

Here's Why I Exited Retail

Originally published Nov. 15 at 10:24 a.m. EDT

Monday, I sold out all my long trading rentals in retail-- Nordstrom (JWN) - Get Report , Walgreens (WBA) - Get Report , Macy's (M) - Get Report and Target (TGT) - Get Report --at exceptional prices.

As an FYI, I also have moved to a large ProShares UltraShort S&P 500 ETF (SDS) - Get Report position from medium in size.

I wanted to make one observation that suggests, at least based on price action, the "yuge" upward move in the retail sector will pause.

Specifically, retail stocks gapped higher in a panicky buying session and closed well off their highs.

Here are three examples of stocks I sold near the day's highs in Monday's session:

Ticker JWN
Day's High
62.82
Day's
Low 59.06
Close 59.55

Ticker M
Day's High
43.94
Day's
Low 41.10
Close 41.56

Ticker TGT
Day's High
72.88
Day's
Low 70.55
Close 72.17

Position: Long SDS large.

Cara Therapeutics on a Run

Originally published Nov. 16 at 2:16 p.m. EDT

Not much change in the market since our last update. The S&P 500 and Dow are down, and the Nasdaq is having a nice day. Longtime favorite Cara Therapeutics (CARA) - Get Report continues its huge run, up another 20% plus today. But I can't find any new news to support this rise ... not even a vague buyout rumor. Exact Sciences down over 10% today on just disclosed sales by insiders.


I bought some shares in biotech Trevena (TRVN) - Get Report as insiders have made some recent purchases and company has a Prescription Drug User Fee Act (PDUFA) date in the first quarter.

Those looking for a contrarian investment play might want to look at Mexico. The iShares MSCI Mexico Capped ETF (EWW) - Get Report is down some 15% since the election.

Personally, I don't think anything major will change between countries despite the campaign bluster. I think I will make a lowball bid and see if it hits today.

Position: Long CARA, TRVN.

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

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