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How to Trade Stocks After Declines

Friday, 31 May 2013 | 5:46 PM ET
After a Down Day, What's Next for Stocks?
Friday, 31 May 2013 | 5:00 PM ET
The "Fast Money" traders reveal what they're looking for the stock market to do after 2.5-week lows.

The "Fast Money" traders revealed Friday what they're expecting after stocks close at 2½-week lows.

StockMonster's Guy Adami said that he was looking to the high in the S&P 500 last week as an important technical level.

"I still believe 1,625 is line in the sand," he added.

The Dow Jones Industrial Average tumbled 208.96 points, or 1.36 percent, to close at 15,115.57. The S&P 500 slumped 23.67 points, or 1.43 percent, to end at 1,630.74. And theNasdaq fell 35.39 points, or 1.01 percent, to finish at 3,455.91.

(Read More: Month-End Selloff: Stocks Drop 1%, Dow Tumbles 200 Points ... But Major Averages Higher for May)

Josh Brown of Fusion Analytics invoked the so-called "Hindenberg Omen," which could signal plunging stock prices. The phenomenon is triggered when multiple stocks set new 52-week highs and lows simultaneously.

(Read More: The 'Hindenburg Omen': Bear Signal Scares Market)

"It doesn't always have to mean something," Brown added, noting that the last time the market saw the occasional indicator was in October 2007.

"It's a bunch of hot air," Stuart Frankel's Steve Grasso said.

The market's action led him to lighten up on positions, he added, noting that his technical level was "1,629 to cash."

"We closed right there," Grasso said.

Dan Nathan of RiskReversal.com noted that since May 22, the stock market had seen three intraday reversals.

Commodities, bonds, emerging market currencies – "everything was moving very quickly," he added. The volatility index, too, gained to close over $16.

Trader disclosure: On May 30, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long GDX; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is funds long EMC; Steve Grasso is funds long QQQ; Steve Grasso is funds long SPY; Steve Grasso is funds long HPQ; Steve Grasso is funds long NEM; Steve Grasso is funds long ZNGA; Josh Brown is long AAPL; Josh Brown is long WFC; Josh Brown is long XLU; Josh Brown is long TGT; Dan Nathan is long VIX JUN 1/20 CALL SPREAD; Dan Nathan is short SPY; Dan Nathan is long JNJ JUN 87.5 PUTS; Dan Nathan is long CAT JUN 87.5/80 PUT SPREAD; Dan Nathan is short IBM; Dan Nathan is long FB JULY/AUB 25 CALL SPREAD.

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