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To Hell And Back

Friday, 25 Jan 2008 | 6:13 PM ET

TO HELL AND BACK

The headline: Stocks Overcome Global Credit Panic, Abysmal Bank Earnings, & A Rogue Trader To Post Gain This Week.

Investors experienced gut-churning volatility through the very end of a tough, holiday-shortened week. After two days of gains, the key averages faded, capping a week that saw triple-digit moves in the Dowevery day, explains Dylan Ratigan.

As I told you last Friday, put protection is down, says Pete Najarian. I expect volatility to spike for the next 4 to 5 weeks. I’m expecting 200- 300 intraday moves for that period.

The market received a lot more clarity this week adds Guy Adami. Microsoft, the miners, and the rails all suggested things aren’t so bad.

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HAVE BANKS FINALLY BOTTOMED?

The headline: Bank, Broker Shares Pop This Week On Hopes It Can't Get Any Worse.

After the Federal Reserve ordered an emergency interest rate cut bank shares moved higher despite poor earnings, explains Dylan Ratitgan. The central bank will remain in the news next week with a two-day meeting.

With treasuries rallying, I think investors are still seeking safe haven in bonds, says Tim Seymour.

The Financial Select Sector SPDR (XLF) at $25 is probably a buy, says Pete Najarian. But sell it at $28.

If you own Wachovia (WB) take profits, adds Guy Adami. I think investors can get back in cheaper.

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WHO NEEDS APPLE?

The headline: Tech-Heavy Nasdaq Mounts Strong Comeback This Week Even As Apple (AAPL) Shares Sink 15%.

Microsoft (MSFT) gave a good forecast, says Pete Najarian, but stay away from technology right now. It’s very volatile.

I think at $32 Microsoft is a buy, says Guy Adami.

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CRUDE COMEBACK

The headline: Crude Oil Rises 1.5% To $90.71 After Jumping Nearly 3% Yesterday.

There’s word out of Davos of a supply issue and that leads oil traders to stay tight, says Tim Seymour.

I sold refiners Friday, says Karen Finerman. In this market it’s important to stay nimble.

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GOLD HITS NEW RECORD HIGH

The headline: Gold Jumps $4.90 To $910.70, New Record High, As South African Power Shortages Slam Miners.

I would be short gold and long miners such as Gold Fields Limited (GFI) or Harmony Gold Mining (HMY) going into next week, says Tim Seymour.

I like the mining companies that are cheap on a valuation basis such as Freeport McMoRan (FCX), says Guy Adami. Also look at Peabody (BTU) as a coal play.

Or check out Joy Global (JOYG) adds Pete Najarian.

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GLOBAL TITANS TRIUMPHANT

The headline: Honeywell (HON), Caterpillar (CAT) Earnings Friday Show Multinational Strength Of Industrials.

I like Honeywell, says Guy Adami. However keep an eye on weakness in housing spilling over to non-residential.

I think CAT is cheap to Deere (DE), adds Tim Seymour.

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A VALUABLE LESSON FOR MOMENTUM TRADERS

The headline: Value Investors Outperforming 'Momentum' Traders In Volatile 2008: Says WSJ.

I love value, says Karen Finerman. I’m a value investor and the stocks I’ve picked such as Home Depot are performing in this market. However, it’s as much an art as it is a science.

But the market isn’t trading on valuations, says Tim Seymour it’s trading on fear. It’s not easy to price that in.

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CHEMICAL REACTIONS

The headline: Pete Seeing Unusual Options Activity In Chemical Stocks.

Options action suggests to me Dow Chemical (DOW) could explode higher, says Pete Najarian. Also watch Delta Petroleum (DPTR), he counsels.

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THOSE LOVABLE ROGUES

The headline: Alleged Societe Generale Rogue Trader Jerome Kerviel Cooperating With Police.

After reports that Kerviel embezzled tens of billions of euros from Societe Generale, we couldn’t help but ask – rogue traders; where are they now?

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ROGUE TRADER JOE JETT:

Firm: Kidder, Peabody & Co.
Year: 1994
Loss: $350 Million In Fake Profits
Crime: Rigged Computer System Creating Phony Bond Trading Profits
Punishment: $8.4 Million in Fines
Where is he now? Wrote a book entitled "Black and White On Wall Street: The Untold Story Of The Man Wrongly Accused Of Bringing Down Kidder Peabody."

ROGUE TRADER NICK LEESON

Word on the Street
The Fast Money guys take a look at today's top business stories.

Firm: Barings Bank
Year: 1995
Loss: $1.3 Billion
Crime: Bankrupted 200 Yr-Old British Bank with Bad Asian Market Bets
Punishment: 6 ½ Years In Prison
Where is he now? Also wrote a book, called "Back from the Brink: Coping With Stress" and turned his experience into a 1999 movie called "Rogue Trader", in which Leeson is played by none other than the dreamy Ewan McGregor.


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Trader disclosure: On Jan 25, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (C), (CSCO), (MCD), (MS), (MSFT)’ Najarian Owns (AAPL) Calls, (COP) Calls, (DOW) Calls, (WM) Calls, (AAPL) Calls, (DPTR) Calls, (YRCW) Calls; Seymour Owns (AAPL), (CSCO), (INTC), (MSFT), (TSO), (SSL), (SBUX), (YHOO); Seygem Asset Management Owns (COP); Finerman's Firm And Finerman Own (HD); Finerman Owns (GS), (M), (WMT), (MO), (GLNG), Finerman's Firm Owns (SUN), (TSO), (VLO), (YHOO), Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Owns Paramount Energy Trust

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DJIA
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CAT
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DOW
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PARR
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GFI
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HD
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HON
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MSFT
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SPDR FIN SEL
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HAR
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AAPL
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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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