Legendary investor David Tepper feels the current stock market might be more overvalued than the one he witnessed prior to the Dot.com bubble in 1999. The Federal Reserve has been trying to do its part via quantitative easing by purchasing assets to help pump capital into the economy, but is it being done in vain?

“The market is pretty high and the Fed has put a lot of money in here,” Tepper, the founder of Appaloosa Management, said. “There’s been different misallocation of capital in the markets. Certainly you are seeing pockets of that now in the stock market. The market is by anybody’s standard pretty full.”

“There might have been a bottom put in … but that doesn’t mean you can’t fall significantly from these levels,” Tepper said.

So what does Tepper like in the current market environment where large tech names like Google and Facebook roam like dinosaurs? One name that’s worth a look is Amazon, which might cause some to believe that the online retail giant might be overvalued at this point—or not.

“Just because Amazon is perfectly positioned doesn’t mean it’s not fully valued,” he said. “Google or Facebook … they are advertising companies. …They are not rich but they may be fully valued.”

If a market comeback is ahead, this creates an opportunity for investors to capitalize on the Direxion FTSE Russell US Over International ETF (NYSEArca: RWUI).

RWUI features:

  • Seeks investment results, before fees and expenses, that track the Russell 1000®/FTSE All-World ex-US 150/50 Net Spread Index (the “index”).
  • The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in securities that comprise the Long Component of the index or shares of ETFs on the Long Component of the index.
  • The index measures the performance of a portfolio that has 150% long exposure to the Russell 1000® Index (the “Long Component”) and 50% short exposure to the FTSE All-World ex-US Index (the “Short Component”).

Investors looking to play the other side with weakness in the U.S. equities market can use the Direxion FTSE International Over US ETF (NYSEArca: RWIU)  to capitalize on international equities will outdoing U.S. equities. RWIU seeks investment results, before fees and expenses, that track the FTSE All-World ex-US/Russell 1000 150/50 Net Spread Index, which measures the performance of a portfolio that has 150 percent long exposure to the FTSE All-World ex-US Index and 50 percent short exposure to the Russell 1000® Index.

For more market trends, visit ETF Trends.