This column was originally published on Street Insight on Jan. 4 at 9:27 a.m. EST. It's being republished as a bonus for and readers. For more information about subscribing to Street Insight, please click here .

Something to keep an eye in the year ahead is the action in foreign markets, which had a banner year in 2006 and might due for a selloff.

Consider the historic moves in the Indian, Japanese and Chinese markets in the charts below.

It is interesting to note that year-end moves in large foreign markets are sometimes followed by a giveback of as much as 50% of the prior year's move.

From my perch, China and India's markets are at nosebleed levels vulnerable to any bad news or a change in market psychology.

I am considering shorting the iShares FTSE/Xinhua China 25 Index ( FXI) -- that's the China market ETF.

Source: Bloomberg

Source: Bloomberg

Source: Bloomberg

At time of publication, Kass and/or his funds had no positions in stocks mentioned, although holdings can change at any time.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd. Until 1996, he was senior portfolio manager at Omega Advisors, a $4 billion investment partnership. Before that he was executive senior vice president and director of institutional equities of First Albany Corporation and JW Charles/CSG. He also was a General Partner of Glickenhaus & Co., and held various positions with Putnam Management and Kidder, Peabody. Kass received his bachelor's from Alfred University, and received a master's of business administration in finance from the University of Pennsylvania's Wharton School in 1972. He co-authored "Citibank: The Ralph Nader Report" with Nader and the Center for the Study of Responsive Law and currently serves as a guest host on CNBC's "Squawk Box."

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