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 his trade of the week went.
  • How Penney caught an upgrade.

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

A Shopping List

Originally published Dec. 2 at 2:17 p.m. EDT

While I see many stocks with attractive reward vs. risk, they reside mostly on the short side.

Some stocks I plan to short on any strength include: Citigroup (C) - Get Report , Bank of America (BAC) - Get Report , JPMorgan Chase (JPM) - Get Report , Caterpillar (CAT) - Get Report , Metlife (MET) - Get Report , Lincoln National  (LNC) - Get Report , Ford Motor (F) - Get Report , General Motors (GM) - Get Report , Apple (AAPL) - Get Report and REITs, like iShares Dow Jones US Real Estate ETF (IYR) - Get Report . I am also considering new short positions in Morgan Stanley (MS) - Get Report and Goldman Sachs (GS) - Get Report .

Only Campbell Soup (CPB) - Get Report and Oaktree Capital (OAK) - Get Report at current prices meet my criteria on the buy side.

I am intrigued with gold (on price), but frankly I don't have a near-term catalyst.

Positions:
Long CPB large, OAK, GLD small

Short C, BAC, JPM, CAT small, MET small, LNC small, F small, GM small, AAPL large, IYR small

Position: See above.

Trade of the Week Update

Originally published Dec. 2 at 1:54 p.m. EDT

This week's Trade of the Week was to short the weekly (expiring Friday afternoon) iShares Russell 2000 Index ETF (IWM) - Get Report $131 calls and buy the weekly (expiring this afternoon) IWM $132 puts.

I closed out the positions profitably Thursday.

We shorted the calls at about $2.60 and they are currently $0.12 bid.

We purchased the puts at about $0.60 and they are currently $1.20 bid.

For emphasis, I spend a lot of time thinking about my Trades of the Week, trying to identify near-term catalysts that may make a trade profitable.

This one worked like a charm, others not so much, but a lot of thought goes into this determination every week.

Position: Short IWM.

Penney Catches an Upgrade

Originally published Dec. 2 at 8:33 a.m. EDT

Friday morning, Bank of America upgraded its rating on JCPenney (JCP) - Get Report from neutral to buy.

JCP is my only retail long (and a member of my Best Ideas List).

The shares are trading up more than $0.25 in pre-market action.

Bank of America expects JCP to deliver strengthening comps primarily due to initiatives in non-apparel categories, thus providing the foundation for strong cash flow that will allow for more rapid debt repayment, deleveraging and stock appreciation.

Position: Long JCP large.

Shorting Banks

Originally published Dec. 1 at 3:03 p.m. EDT

I am back with a trading short rental in three banks, Citigroup (C) - Get Report , Bank of America (BAC) - Get Report and JPMorgan Chase (JPM) - Get Report .


Here is my rationale:

  • I remain negative on the overall market.
  • Bank stocks are substantially overbought. Like other market leadership groups, I expect some mean reversion lower in price.
  • The banking sector faces the fundamental challenge of peak housing and peak autos over the very near term and into 2017. I don't expect much of a change in EPS expectations next year.
  • Optimism on a quick repudiation of Dodd-Frank seems premature. There is much between cup and lip--as the opposition will be vocal.
  • The 10-year U.S. note hit 2.5% early Thursday afternoon. I think this was an exhaustion move. Ergo, I am with Jeff Gundlach. Like Jeff Gundlach, I expect bond yields to decline and bond prices to rise in the next one to three months--contrary to the growing consensus that rates will continue to ramp higher.

Position: Short TLT small, C small, JPM small BAC small

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

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.