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

Parsing the FOMC Comments

Originally published April 5 at 2:21 p.m. EST

Some Fed participants viewed equity prices as quite high relative to standard valuation measures. It was observed that prices of other risk assets, such as emerging market stocks, high yield corporate bonds, and commercial real estate, had also risen significantly in recent months. In contrast, prices of farmland reportedly had edged lower, in part because low commodity prices continued to weigh on farm income. Still, farmland valuations were said to remain quite high as gauged by standard benchmarks such as rent-to-price ratios.

  • In particular, participants agreed that reductions in the Federal Reserve's securities holdings should be gradual and predictable, and accomplished primarily by phasing out reinvestments of principal received from those holdings. Most participants expressed the view that changes in the target range for the federal funds rate should be the primary means for adjusting the stance of monetary policy when the federal funds rate was above its effective lower bound.
  • Many participants emphasized that reducing the size of the balance sheet should be conducted in a passive and predictable manner. Some participants expressed the view that it might be appropriate for the Committee to restart reinvestments if the economy encountered significant adverse shocks that required a reduction in the target range for the federal funds rate
  • To promote rapid normalization of the size and composition of the balance sheet, one participant preferred to set a minimum pace for reductions in MBS holdings and, if and when necessary, to sell MBS to maintain such a pace.

More to come!

Position: None .

Trade of the Week - Short Nasdaq

Originally published April 4 at 1:23 p.m. EST

This week's "Trade of the Week" is shorting PowerShares QQQ Trust, Series 1 (ETF) (QQQ) - Get Free Report (at $132.30) and buying ProShares Trust UltraPro Short QQQ ETF (SQQQ) - Get Free Report (at $37.10).

I listened intently to "the mysterious" Northman Trader (Sven Hendrich) on Fast Money last night. Some of the points he made:

- Relative strength of the Nasdaq Index may be waning. Nasdaq futures made a lower high--that's a red flag

- Negative divergences may be developing.

- In 2017 we have had only one down week in the Nasdaq. We are in the ninth year up for the Nasdaq.

- There is almost panic buying in the Nasdaq--opening up the chance of a larger move lower.

- Many of the individual drivers to the Nasdaq ( Apple (AAPL) - Get Free Report, Facebook (FB) - Get Free Report, Alphabet (GOOGL) - Get Free Report) may become problematic (and toppy) on the charts.

Lets go the tape.

Position: Long SQQQ; Short QQQ, AAPL small .

Action Alerts PLUS, which Cramer manages as a charitable trust, is long AAPL, GOOGL and FB.