Doug Kass: Stock Market Oversold on Japan Crisis

What started as a quiet day turned into a violent sell-off on Wednesday after comments from an EU official triggered more fears about Japan and the potential of a nuclear crisis.

Although those comments were later downplayed, ”they took stocks down in a snap,” says Fast trader Jon Najarian.

The S&P fell almost 2% in Wednesday's session; it's now fallen 3.6% for the week and has turned negative for the year.

And that led to widespread chatter about an impending correction and a whoosh lower.

But according to the usually bearish Doug Kass, values are developing in this market.

The Seabreeze president and CNBC contributor has crunched some numbers and thinks the Japan crisis will translate into a 4/10^th of a percent reduction in US GDP.

That he says basically translates into lower S&P profits of about $3 on average.

”If you take the multiple of the market pre-Japan crisis of 13.5 times, that means it costs the market 40 S&P points. The fact is we’re down almost 70 points,” Kass says.

What’s all that mean?

”Barring a real catastrophic result we have begun to discount the Japanese crisis,” he says. In other words he thinks the market is now oversold.

And he’s not alone. Fast trader Karen Finerman says much the same.

”In the last two weeks the S&P is down 5%. That’s a big move in a short-time. I’m a buyer of select names such as McDonald’s,” she says.

It worth noting that Kass still thinks the market is still facing some serious fundamental issues such as sovereign debt problems, geo-political issues and questions about China’s growth. Although he didn't say it on TV, it sounds like his S&P call is a short-term call.

What do you think? We want to know?

* As you may know, Kass is widely followed for his market timing. He correctly called a bottom last summer and also predicted the crisis lows in March 2009.

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Trader disclosure: On March 16, 2011, 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 (VRTS); Terranova Owns (C); Terranova Owns (GS); Terranova Owns (PNC); Terranova Owns (USB); Terranova Owns (JPM); Terranova Owns (UPL); Terranova Owns (ABT); Terranova Owns (MS); Terranova Owns (PBR); Terranova Owns (BAX)Terranova Owns (TEVA); Terranova Owns (FCX); Terranova Owns (XOM); Terranova Owns (DIS); Terranova Owns (IBM); Terranova Owns (BTU); Terranova Owns (CNX); Terranova Owns (POT); Terranova Owns (MCD); Terranova Owns (CVE); Terranova Owns (CVI); Terranova Owns (RSX); Terranova Owns (SU); Terranova Owns (CNG); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (XRT); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap; Finerman Owns (BAC); Finerman's Firm And Finerman Own (CVS); Finerman Owns (GOOG); FInerman's Firm And Finerman Own (HPQ); Finemran's Firm Owns (IBM); Finerman's Firm Owns (JPM), (JPM) Leaps; Finerman Owns (JPM); Finerman's Firm And Finerman Own (MSFT)l Finerman Owns (USO); Jon Najarian Owns (AMD), Is Short (AMD) Calls; Jon Najarian Owns (BTU), Is Short (BTU) Calls; Jon Najarian Owns (CBOE), Is Short (CBOE) Calls; Jon Najarian Owns (CME), Is Short (CME) Calls; Jon Najarian Owns (NYX), Is Short (NYX) Calls; Jon Najarian Owns (MCD), Is Short (MCD) Calls; Kinahan Is Long VIX; Kinahan Is Short S&P 500; Kinahan Owns (BAC); Kinahan Owns (C); Kinahan Owns (F); Kinahan Owns (MSFT), Is Short (MSFT) Calls; Kinahan Owns (NFLX) Puts; Kinahan Is Short (SPY) Through Options Positions; Kinahan Owns (XHB) Puts; Kinahan Owns (YHOO)

For Joe Terranova
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Late Additions:
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Kass's Firm Owns (CL), (PG), (CLX)

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