As the weather turns colder, bears typically go into hibernation – real bears that is. For Wall Street bears, the colder months may be anything but sleepy time.
The S&P closed lower for the 4th day in a row with market pros hitting the sell button, worried about the upcoming earnings season and the health of the global economy.
According to a new Investors Intelligence survey, the number of bears is growing – it now totals 29% - that's up 8% from onlythree weeks ago.
According to David Tice, president at Tice Capital, the growing skepticism is warranted. He tells us to prepare for a correction – that one is coming soon.
Tice, who is a famed bear, sees the current market similar the one in 2008, right afterLehman Brothers failed. “Remember in September ’08 after Lehman, it wasn’t until October, November that the market started sliding.”
Tice sees troubles in Europe, the slowing economy of China and the impending “Fiscal Cliff” as seriously negative catalysts - just like Lehman - “that are about to be recognized by the market.”
Trader Steve Grasso, director of institutional sales trading at Stuart Frankel is also cautious of the months ahead.
“Going into year end, there’s a long list of things that people are worried about,” Grasso adds. In other words, he doesn’t see a compelling reason to buy.
Although the other traders on the desk agree that a defensive posture makes sense, trader Brian Kelly, founder of Shelter Harbor Capital, adds that there’s another risk -- to the upside.
If the global economy improves Kelly expects it to ignite a giant chase for performance with “nobody being as long as they should be if that’s the case.”
Posted by CNBC's Lee Brodie
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