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An Undeniably Bullish Signal From The Street

While we don’t have a crystal ball, we have detected an undeniably bullish signal from The Street.

By The Street we mean the website that publishes market insights from widely followed strategist Doug Kass of Seabreeze Partners.

In a recent post the renown bear tells his readers the US economy is alive and well –and opportunities in the market are far and wide.

In it he sounds a bit like Warren Buffett; he says ‘fear is the rational buyers’ friend and advocates making a shopping list then snapping up your favorite names. Considering the sell-off, they’re likely a bargain.

Kass is also a great friend to Fast Money and we found his commentary so intriguing given current market conditions we asked him to join us on the show.

”Many stocks that I follow are approaching or are already at attractive price levels,” Kass explains to the desk.

That’s a far cry from what Fast Money traders Tim Seymour and Steve Grasso have been telling us. Grasso expects the market to remain challenged and Seymour says nothing is cheap until the crisis in Europe plays out - current valuations may be all wrong. And their view is widely held.

But Kass thinks Grasso, Seymour and all those investors have it all wrong.

”(Many) base their investment decision on price momentum, while I view individual stock opportunities on a fundamental basis,” says Kass.

And based on my company contacts and channel checks the US economy is alive and well.

In fact Kass suggests that the slowdown in Europe could actually boost domestic growth. “The US economy benefits somewhat from slowing developed world (European) growth in the form of lower interest rates and lower commodity prices (especially of an energy kind),” he says.

The only question we have left is how much upside lies ahead.

According to Kass you should expect to see the S&P trade around 1250 to 1270 – 15% higher than it’s close on Friday May 21st when this post was written. And he calls that forecast a conservative estimate.

”The 15 times P/E is lower than the long-term average but higher than the current 13 times,” he says.

And if you're looking for single stock stories he adds, "financials are attractive. ETrade looks great. And I love the mortgage insurers. The housing industry has been underperforming and I think it recovers far faster than anyone expects."

"The hardest trade is to buy," he tells us – but it’s the best trade.

That’s pretty bullish. And a far cry from the consensus. Now if only we had that crystal ball.


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Trader disclosure: On May 21, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (PFE), (BMO), (SWN), (XCO), (EMC), (FTO), (YHOO), (AXP), (BBY), (TER), (STLD), (THC), (BTU), (AAPL), (DIS), (CVS), (IPSU); Terranova owns (GLD) JUN $115 Calls; Terranova Owns (GLD) June Calls; Terranova Owns (OIH) June Calls; Terranova Owns (PFE); Terranova Owns (RSX); Kinahan owns (C), (BAC), (AKS), (MSFT); Kinahan is short (SPY); Tomasulo owns (VXX); Tomasulo owns VIX calls; Tomasulo owns gold spot futures; Tomasulo owns (VZ); Tomasulo owns (PCLN); Tomasulo owns (V) calls; Grasso Owns (ABK), (BP), (BAC), (BGP), (C), (DYN), (JPM), (LPX), (NDAQ), (DCPA), (ASTM), (PRST); Kelly Owns (CAT) Puts; Kelly Owns (EMN) Puts; Kelly Owns (EXPE) Puts; Kelly Owns (WYNN) Puts; Jon Najarian Owns (BAC), (BAC) Preferred; Jon Najarian Owns (BP); Jon Najarian Owns (C); Jon Najarian Owns (JPM), (JPM) Puts; Cortes Owns (GS); Cortes Is Long Crude Oil; Cortes Is Short U.S. Treasuries

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DHR)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (GS)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (SYMC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (TRV)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Own (TBT)
Stuart Frankel And Its Partners Are Short (QQQQ)


For Brian Kelly
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short (USO)
Kanundrum Capital Is Short (XLB)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (EXPE)
Kanundrum Capital Is Short (WYNN)
Kanundrum Capital Is Short (IOC)
Kanundrum Capital Is Short (SU)
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short (STT)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (CAT)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (DOW)
Kanundrum Capital Is Short (XLK)
Kanundrum Capital Is Short (EMN)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Is Short (DAI)

For Doug Kass
Seabreeze Partners Management Owns (ETFC)
Seabreeze Partners Management Owns (MTG)
Seabreeze Partners Management Owns (C)


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