Columnist and money manager Doug Kass is standing by his earlier call that the S&P 500 has hit its high for the year, but says current conditions make for a “fertile environment” for stock-pickers and traders.

“My guess is that the risk/reward has tilted slightly more positive based upon the strength of the domestic economy coupled with the several percentage point drop in the markets over the last few weeks,” Kass writes on TheStreet.com. “The downside to stocks might be contained to the 1,140-1,150 area on the S&P, and the upside might be limited to 1,240-1,260 through the end of the first quarter of next year. While the downside and upside predictions are revisions from my previous expectations, this is still a relatively narrow projected trading range, with a downside risk of 3% to 4% and an upside reward of 5% to 6%.”

Kass says that through the first quarter of next year, he expects good news in the U.S. will put a floor under stocks, while bad news abroad will put a limit on upside gains. “While producing limitations to the breakdown risks and dampening the potential for breakout opportunities, this should be a fertile environment for stock pickers and traders,” he says.