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Market Weathers Bear Collapse

Monday, 17 Mar 2008 | 6:20 PM ET

MARKET WEATHERS BEAR COLLAPSE

The headline: Fed's Emergency Moves Avert Crisis

Trading was remarkably calm Monday, as investors digested the news that JPMorgan Chase & Co.is buying investment house Bear Stearnsin a deal backed by the government, explains Dylan Ratigan. Now the market is focused on Tuesday when the Federal Reserve holds a regularly-scheduled interest rate meeting. Analysts are looking for another cut in the benchmark rate.

I want to see if the market rallies after the Fed meeting and then holds those gains overnight, adds Joe Terranova.

Monday's volatility spike impressed me, says Pete Najarian. I think there were buys on the day’s whoosh.

Read More:

> Trading The Volatility


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BANKS PLUNGE ON BEAR STEARNS BAILOUT

The headline: Fed Supports Bear Stearns Fire Sale In Effort To Prevent Wall Street 'Domino Effect'

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

JPMorgan Chasesaid it would buy stricken rival Bear Stearnsfor just $2 a share in an all-stock deal that values the fifth-largest U.S. investment bank at the center of the credit crisis at about $236 million.

Besides supporting the buyout, the Federal Reserve took the extraordinary step of lowering the rate it charges to loan directly to banks on Sunday night -- ahead of its scheduled meeting tomorrow. The central bank lowered the discount rate by a quarter point to 3.25 percent.

Read More:

> JP Morgan Agrees to Buy Bear Stearns for $2 a Share

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IS LEHMAN NEXT?

The headline: Crisis Of Confidence Strikes Lehman Brothers, Sending Shares Down 31%.

On Tuesday all eyes will turn to Lehman Brothers as well as Goldman Sachswhen they report earnings, explains Dylan Ratigan. Lehman's significant subprime exposure could make investors nervous.

I think Lehman’s chart looks interesting, says Jeff Macke. If you want to play the technicals I think it's a buy with a tight stop.

I expect Goldman will take a $3 billion write-down on Tuesday, adds Guy Adami. If you’re okay with that then I think Goldman is a buy. Also look at US Bancorp , Adami adds.

Options action suggests to me that Goldman could move 10% in either direction on Tuesday, adds Pete Najarian.

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SAFE-HAVEN GOLD SOARS TO RECORD

The headline: Gold Climbs As High As $1,033 As Nervous Investors Seek Safety.

Gold ended trading slightly higher, as safe-haven buying kept it above the key $1,000 level, explains Dylan Ratigan.

The streetTRACKS Goldcould be a buy on any dip, says Jeff Macke.

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OIL RETREATS FROM RECORD

The headline:
Crude Oil Posts Biggest Loss Since August As Fearful Traders Unwind Speculative Positions.

Oil fell more than 4 percent as speculators sold futures to raise cash and cut their exposure to commodities amid a broader decline in world financial markets, explains Joe Terranova. It seems to me that momentum has shifted and it could stay that way through the end of the month.

If you’re thinking about buying the refiners make sure to also buy puts for protection, adds Pete najarian

Look at Apacheand XTO Energy as nat gas plays, adds Guy Adami.

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TRADING THE TURMOIL AT TOP SPEED

The headline: Chart Guru Dennis Gartman Offers Savvy Strategies For Trading The Turmoil.

Strategic investor Dennis Gartman is the author of the Gartman Letter. Following is a summary of the main points he made during his conversation with the traders.

I think there could be downside in commodities, says Gartman. I did a very material liquidation of my positions in commodities and for me to do that, well that’s very hard. I still own gold but I got out of the PowerShares DB Ag Fund because it didn’t hold any of it’s gains early on.

Any buys?

I actually bought JP Morgan Monday for the first time in a long time. It looks like JP Morgan CEO Jamie Dimon made the best trade of all time. And there was a lot of activity that suggested to me we may have a bottom in financials.

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THE GREEN ON THE SCREEN

The headline: Microsoft (MSFT), Verizon (VZ), and Hewlett-Packard (HPQ) All Higher Monday.

Intel (INTC) traded like a rock star on Monday, says Jeff Macke. It opened on its lows and worked higher all day. I'm long and happy.

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OPTIONS ACTIONS: RAILS

The headline: Pete Najarian Reveals Where He’s Seeing Options Action

There was a lot of put action in Burlington Northern (BNI) out to the summer , reveals Pete Najarian, but I think it’s protection.

I like CSX Corp. (CSX), adds Guy Adami.

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VISA IPO TO PRICE IPO TUESDAY

The headline: Market Turmoil Will Not Stop Visa IPO

Visa Inc, which plans to float its shares on the New York Stock Exchange on Wednesday in the biggest U.S. initial public offering ever, will not be deterred by market turmoil that has taken a severe toll in recent days, analysts said on Monday.

I’d let this thing shake-out first, counsels Guy Adami. If you’re looking for a trade check out Mastercard .

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Trader disclosure: On Mar.17, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:Macke Owns (YHOO), (INTC), (EMC); Pete Najarian Owns (AAPL), (C), (CSCO), (ETFC), (MS), (MSFT), (XLF), (YHOO); Pete Najarian Owns (COP) Calls, (GS) Calls; Pete Najarian Owns (LEH) Puts, (XLB) Puts; Pete Najarian Owns (MF) And (MF) Puts; Gartman Owns (COIN), (PBR), (GWR), (NFLX), (CQB), (CAT), (JPM); Gartman Is Short (GM), (DRYS), (GOOG), (WFMI), (SWY), (APOL); Gartman Owns (SDS), CIBC Gartman Index Is Short U.S. Equities; Gartman Owns (GLD), CIBC Gartman Index Owns Gold; CIBC Gartman Index Owns Grains, Energy, The EUR, Sugar

  Price   Change %Change
APA
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CSGN
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DBA
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GLD
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GS
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INTC
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JPM MLP ETN
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MA
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USB
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MCD
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