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No. 2 - Out Of Steam?

With the Dow closing at record levels on a daily basis (down only three days in April), it’s easy to be swept up in the bull market euphoria. But beyond the bold headlines, a veritable pastiche of negativity is emerging with the all-important consumer.

Retail giants Circuit City (CC) and Target (TGT) both recently lowered their guidance, and just this morning a housing report showed pending sales of existing homes fell to its lowest level in four years. But the party rages on at the corner of Wall & Broad. Has this market gotten ahead of itself?



Karen Finerman owns S&P puts as protection in this market, which has run so far in such a short amount of time that she thinks a correction could be coming.

Eric Bolling agrees. There has to be a day of reckoning coming, he says, because every short keeps getting taken out of the market. “Eventually the shorts are going to be right and you’re going to see some long selling,” he says. “And selling begets more selling.”

But you don’t have to sell your whole portfolio if you think the market is headed for the red, Dylan says. Eric recommends S&P shorts or ETF shorts as a way to pick up some protection. And Jeff says you can always just sell a little bit if you think the market is out of steam. Take a little caution and sell some, but not all, he says.

Questions? Comments? fastmoney@cnbc.com

Trader disclosure:
On May 1, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Bolling Owns (DIS), (NMX), Gold, Silver; Karen Finerman’s Firm Owns (BBI); (ISE), (DVA), Finerman’s Firm Owns S&P Puts, CNBC Is A Service Of NBC Universal And Dow Jones.

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