Doug Kass, Brian Kelly Not Chasing The Market

Tonight on Fast Money, Doug Kass called in to talk to the traders. He said that he is "recluctant" to chase the market at this level. Kass and Karen Finerman also talked about the difficult environment for asset managers. Kass said that ETFs are diluting the value added proposition of active asset managers. In my opinion, if you are a long only, passive investor, ETFs are far superior to mutual funds because of their tradability and significantly lower expenses.

Brian Kelly is also in the bear camp right now. He said that he doesn't want to go out on Monday and start buying the market with bullish disregard. Kelly's argument is that the fundamentals are not telling the same story as the market. In other words, the fundamentals are bearish, but the market keeps heading higher. My counterpoint would be that this is a very bullish indicator that the market wants to go higher, despite the questionable macro economic fundamental improvement. Why is the market discounting the bad news? I think it is signaling that this market has some room to run. If stocks continue to surge, a lot of bears and shorts are going to be forced to reevaluate their theses. If and when they reverse course, the momentum to the upside will become amplified. A very important level to watch on the S&P 500 next week is 1,150. This is the top that we made before February's sell off. Today, the S&P closed at 1,138, so we are fast approaching this key technical level. If we push through 1,150 with momentum it will be a very good sign and could be an indicator that we have a ways to go on the upside.