The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top six ideas that RealMoney contributors posted today and how they played those ideas.TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. However, departing from our typical broad perspective, today our commentators are all abuzz about Doug Kass' call of a market top. Here's what Kass' bold prediction elicited from the rest of the RealMoney contributors. To see all that RealMoney offers, click here for a free trial.
1. Kass Call
By Sham Gad
11:45 a.m. EDT If I had to make a bet on the direction of the market today, I would heavily lean toward the downside. It's very difficult for me to argue a continued run-up in the market when all we got is government spending and corporate cost-cutting paving the path to recovery. While our government can continue to expand its balance sheet, you can not have a sustainable recovery without the private sector leading the way. Until we such signs -- declining unemployment numbers, cap excluding resumption, a stabilizing housing market (not based on increased housing sales because the condo in Vegas that was going for $220,000 last year is being sold for $108,000 this year) -- I am finding very few bargains now. No positions.
2. It's a Small World After All
By Howard Simons
10:03 a.m. EDT Doug, even in retrospect I find it difficult to identify the trigger for the rally in March. About the best I can come up with are a decline in sovereign CDS costs after the Fed/Treasury joint statement in late February and a shift in the forward curve of equity volatility. Neither is going to get me on Mt. Rushmore.
Doug -- Looking for a Drop
By Dick Arms
9:38 a.m. EDT My piece this morning sounds a strong warning of caution and suggests a larger drop than the Street is willing to concede. It's based on an extremely overbought Arms Index, both short term and longer term. It might serve to confirm the position you mention. No positions.
The Oscillation Between Greed and Fear
By Jonathan Heller
9:33 a.m. EDT It's hard to doubt Kass' latest call, especially given the 52% run-up in the S&P 500 since March 9, combined with a whole host of bad news on the horizon, all of which should be great cause for concern. However, I for one believe that this segment of the rally, with the S&P 500 up 17% since July 10, is being driven by the backlash against the current administration's intended policies. Hope has indeed finally been instilled by the president, but not the kind he intended. This is more of a hope that his agenda will be defeated. No positions.
Great Call, Doug
By Tim Melvin
9:19 a.m. EDT Brilliant piece by Mr. Kass this morning! His 10 points are spot on. The key phrase for me in the article is that a decade of credit-fueled run-up cannot be undone in a year. His points on cost-cutting and the consumer are in line with what I have been saying for some months. You cannot cut your way to prosperity. The point about municipalities is one I had not spent a lot of time considering but was driven home by the recently enacted cutbacks here in Maryland. I do not recall seeing layoff and cutbacks from the state government before in the same scale as currently. This could well make the employment situation even worse going forward, as it is not going to be possible to raise taxes to the level needed to reinstate services. I am in total agreement with Doug and just wish I had his exquisite sense of timing. In his honor, with the Orioles well out of contention, I shall become a temporary Yankee fan for the balance of the year. No positions.
By Bob Byrne
9:00 a.m. EDT Maybe it's Doug Kass being a Debbie Downer, but the more I stare at a 15-minute chart of the e-mini, the more nervous I get (about trading from the long side). For the first time in a while, I am finding decent-looking short setups. Stocks like Starent Networks ( STAR), Riverbed Technology ( RVBD), iShares Dow Jones Real Estate ( IYR) (as long as it stays under $40.65ish), McAfee ( MFE) and LDK Solar ( LDK) all look like they could get clubbed if the broad market begins to tick lower.