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Stocks to pull back 3 to 5 percent: Pro

Appetites for risk are extremely low, making a case for a market pull-back, Dan Nathan of RiskReversal.com said Tuesday.

Calling 1,600 in the S&P 500 "an inflection point," Nathan said that investors who are holding stocks at the moment should be "prepared for a 3 to 5 percent move to the downside" in the next week.

Stocks finished sharply lower for a second session, with the major averages hitting one-month lows.

(Read more: Stocks tumble 1% to end at lows as DC worries linger, Dow drops nearly 160; Vix above 20)

On CNBC's "Fast Money," Nathan also noted the move in T-bill rates.

"It's one of the canaries in the coalmine, I guess," he said.

The yield on the one-month T-bill traded as high as 0.322 percent, levels not seen since the fourth quarter of 2008, before settling at 0.273 percent, according to data from Thomson Reuters. The yield stood at 0.083 at the start of the month.

(Read more: T-bill yield spikes to levels not seen since financial crisis)

Brian Kelly of Brian Kelly Capital said that he had sold S&P 500 futures short.

(Read more: Twitter's value? Depends on who you are)

"I am still short those and will remain so, I think, until about 1,620," he said. "That's what I'm targeting."

Kelly noted that 1-month T-bills were yielding 35 basis points, about the same as a 2-year yield.

"What the market's saying is in the short-term, the bond market is afraid they're not going to get paid their money in November," he said.

(Read more: 'A brilliant buying opportunity': Paul Richards)

StockMonster's Guy Adami said that technical indicators were suggesting a new key level to test 1,620 to the downside, adding that "1,670 now becomes resistance."

On the upside, he added, once the Washington impasse was resolved, the S&P could rally 20 to 25 points, depending on where it was when the hurdle was cleared.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Oct. 8, 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 MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long MDY PUTS; Dan Nathan is long Oct/Nov 500 call spreads AAPL; Dan Nathan is long Oct 185 calls IBM; Brian Kelly is long oil ; Brian Kelly is long gold; Brian Kelly is long silver; Brian Kelly is short S&P 500; Brian Kelly is short US Dollar.

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