Doug Kass: Beware the Dreaded Triple Top

The S&P 500 is forming an ominous pattern right now that is causing notable hedge fund manager to get short the market right now.

According to Doug Kass, the president of Seabreeze Partners and a CNBC Contributor, there are a slew of disquieting technical signals emerging and they all suggest to him that the S&P wants to trade lower.

First and foremost, Kass is concerned that the S&P will challenge and fail near the April and May highs. Should that happen technicians would consider the resulting pattern a triple top– that's an extremely bearish technical signal.

Also Kass is concerned by the action in the Transports which he says is stalling out. According to Dow Theory gains in the DJIA are either confirmed or denied by gains in the Transports. In this case, Kass believes they're being denied.

Also, he points to the action in the Vix . “Over history it’s very rarely paid to buy equities when the Vix is as low as 14,” he says.

* Doug Kass is also a contributor to the Street.com, Jim Cramer’s Real Money Pro web site.

Posted by CNBC's Lee Brodie

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Trader disclosure: On August 13, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Brian Kelly is long TGT; Brian Kelly is long SWK; Brian Kelly is long USG; Brian Kelly is long XHB; Brian Kelly is long IBM; Brian Kelly is short BIG; Brian Kelly is short DLTR; Brian Kelly is short JWN; Brian Kelly is short BBBY; Steve Weiss is short JCP

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