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


My Takeaways and Observations

Originally published Dec. 15 at 4:51 p.m. EDT

Slow day, at meetings all Friday morning.

Despite the strength in our currency (and its adverse implications on multinational profitability), there was no follow-through to Thursday's schmeissing.

I reflected on my July call that we have hit a Generational Bottom in Bond Yields.
 
Kool-Aid tastes refreshing to the majority of traders and investors these days.
 
Some inside baseball--an example of dialogues I have with some smart pros. I hope this inside look is helpful.
 
A look back with some focus on credit (which we rarely discuss).
 
A puzzling Oaktree Capital ( OAK - Get Report) , whose leaves have wilted.
 
Today's small trades.
 
The market was up from the "get go" and then basically flat-lined.
 
  • The U.S. dollar is smoking hot.
  • The price of crude is flat and now under $51.
  • Gold down by another $32. Free fall/panic time but I can't just make a solid case for the yellow metal.
  • Ag commodities: wheat down $0.09, corn down $0.06 soybeans up $0.07 and oats down $0.05.
  • Lumber flat.
  • Bonds continue the flight higher in yield and lower in price. The 10-year is up 7.5 basis points to 2.6% and the long bond is up 2 basis points.
  • The 2s/10s spread expands by another 4 bps to 133 basis points.
  • Municipals off small, and closed-end muni bond funds getting hit again. Stay away! (We are in the tax-selling season for this asset class and just like December 2013 I could see some opportunities but only if duress is more substantial).
  • The junk bond market has a small bid, but Blackstone/GSO Strategic Credit Fund (BGB - Get Report) is down by two pennies.
  • Banks up solidly, as are brokerages and insurance.
  • Auto stocks up small.
  • Energy stocks are flattish.
  • Retails continues to be pressured, led by losses in Nike (NKE - Get Report) and Nordstrom (JWN - Get Report) . I added to JCPenney (JCP - Get Report) . Again, my retail contacts and channel checks see a weak December, despite the cooler weather. I plan to add to my VanEck Vectors Retail ETF (RTH - Get Report) short (which is now small).
  • Old tech is doing nothing. I shorted more International Business Machines (IBM - Get Report) Friday but still am small-sized.
  • Consumer staples are up despite the strength of our currency. I picked at Campbell Soup (CPB - Get Report) on weakness Thursday.
  • Big pharma is better, led by Eli Lilly (LLY - Get Report) .
  • Biotech up 1% (Celegene (CELG - Get Report) and Allergan (AGN - Get Report) both up) though Valeant Pharmaceuticals (VRX) at another new low as Ackman takes a tax loss on 3.5 million shares. Speculative biotech is firmer, notably Acadia Pharmaceuticals (ACAD - Get Report) , Sage (SAGE) .
  • Fertilizers stronger, led by Monsanto (MON) .
  • Ag equipment was stronger, Deere (DE - Get Report) and Caterpillar (CAT - Get Report) up by almost a beaner.
  • (T)FANG mixed. Amazon (AMZN - Get Report) down after a good run.
  • In individual stocks, two favs , DuPont (DD - Get Report) and Radian (RDN - Get Report) , hit new highs. IBM turns lower after being up all day (I added to my short on earlier strength). Apple (AAPL - Get Report) continues on its move higher.
Here are some value-added columns posted by our contributors.

1. Jim "El Capitan"Cramer is " chewing."
2. "Meet" Brett Jensen likes Celgene and Gilead.
3. Bruce Kamich teases us about where he would buy the 10-year U.S. note.
4. Ed Ponsi "Scheme" on how to play trading sardine, Freeport-McMoRan.
5. Tim "Not Judy or Phil" Collins on the same subject, fixed income.
 
Positions --
Long: JCP large, CPB large, DD, RDN, SDS small
Short: SPY small, CAT small, AAPL large, IBM small
Position: See above.

Ringing the Cash Register

Originally published Dec. 14 at 3:20 p.m. EDT

With S&P futures now about 28 handles less than the post-Fed rally, I am taking off my trading short rentals made at that time (including some of my ProShares UltraShort S&P500 ETF (SDS - Get Report) , iShares Russell 2000 Index ETF (IWM - Get Report) and SPDR S&P 500 ETF Trust (SPY - Get Report) ).

 
I also reduced Direxion Daily Small Cap Bear 3X Shares ( TZA - Get Report) at around $20.08 ("Trade of the Week") for a nice gain.
 
Remember trades are trades--they are short-term rentals and not long-term leases.
 
This will move me back to between small-sized and medium-sized net short in my portfolio.
 
Position: Long SDS small, TZA small; short SPY small, IWM small.

Did I Mention Something About China ... and Life Insurers, Too?

Originally published Dec. 14 at 8:51 a.m. EDT

On cue, China says it plans to slap a penalty on an unidentified U.S. auto manufacturer for monopolistic behavior.

And Morgan Stanley downgrades the life insurance space.

Now that's timing!

Ford (F - Get Report) , General Motors (GM - Get Report) , MetLife (MET - Get Report) and Lincoln National (LNC - Get Report) are trading lower in pre-market action.

By contrast, International Business Machines (IBM - Get Report) is trading higher (I am adding to my short in pre-market trading as this is small and will very slightly dent margins) on news that the company plans to add to its U.S. hires.

Position: Short LNC, MET, IBM (all small).

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

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.