Watch CAT on the Short Side!

I'm watching for an opportunity to get short Caterpillar (CAT) in the near term. Reuters is running a story that CDS spreads on CAT's financing arm are widening.

Given my serious concerns about a global slowdown, the recent blowup by Terex (TEX) and the strong performance of the US dollar in the third quarter, I think the prospect of this story catching fire could lead to a downward move in the stock.

And remember, CAT may be a cheap stock, but it won't be cheap for long if earnings expectations come down.