STOCKS CLING TO GAINS
The news: Once again, oil was the story of the day. With oil prices closing lower for a 6th day, the Dowand broader stock market closed higher on Monday. Investors believe the trend in oil improves prospects for consumer and business spending.
VOLATILE OIL TRADE DICTATES DAY
The news: Oil prices fell on Monday as a drop in crude imports by No. 2 consumer China outweighed concerns over supply disruptions stemming from the conflict between Russia and Georgia.
The plays: The oil trade is probably being driven by the strong dollar, explains Joe Terranova. But it's natural gas that's got my attention. I think gas is probably finding a bottom. Look at Apacheand Chesapeake , he says. And if oil moderates and stops going down the integrated names should trade higher.
I'd look at ExxonMobil on a valuation basis, Guy Adami suggests.
The fall in oil comes from weakness in the economy, says Karen Finerman. I’m short the British poundbecause I think the economic slowdown will creep across the globe.
I bought the PowerShares DB US Dollar Index Bullish on Monday, says Jeff Macke, as a dollar trade. In ag I’d wait for panic selling before getting long.
The news: The Retail HOLDRs ETF jumped significantly on Monday with Wal-Mart , Kohl’s and the Gap all leading the way. As we said above, investors are betting that the recent decline in oil prices lows will help boost consumer spending.
The plays: I think the play is to sell into this strength, says Karen Finerman. Also, keep in mind Kohl’s is up something like 40% over the last few weeks. That’s too much too fast.
I’m a seller too, says Jeff Macke. The RTH rallying 10% in 2 trading days is nothing more than an opportunity to sell.
If you don’t mind a little more volatility look at the Consumer Discretionary SPDR , counsels Pete Najarian. It should trade inversely to oil.
And if you're in Home Depot I'd take profits, adds Guy Adami.
AIRLINES TAKE OFF ON OIL DROP
The news: Nothing helps the airlines take flight like the plunging price of oil. In fact both the alirlines and the automakers traded higher as oil retreated.
The play: A Morgan Stanley analyst is forecasting profits for the airlines in 2009, explains Pete Najarian. The analyst thinks all the recent cost cutting measures should bode well provided oil averages about $115 next year.
BANKS JUMP 2%
The news: Bank shares also rose, with the KBW index for the sector rising nearly 4 percent, as the drop in oil prices reversed the popular trade of going long energy stocks, short the financial sector.
The play: On a forward basis I’d dump the financials, says Jeff Macke. The only buy in this group is Goldman Sachs as a best of breed trade.
I also think Goldman is going higher, Guy Adami says.
AFTER HOURS ACTION: MORGAN STANLEY
The news: Shares of Morgan Stanley trader lower after hours as Moody's downgraded the investment banks debt rating to 'A1' citing 'Risk Management Miscues'
The play: The performance out of Morgan Stanley has been stellar, says Pete Najarian. But I wouldn’t chase it. At $40 I think it’s a buy.
OPTIONS ACTION: BANKS
The news: Pete Najarian is seeing unusual bearish options activity in Hudson City Bancorp.
The play: Put buying in the stock suggests to me this stock could go significantly lower, Najarian says.
AFTER HOURS ACTION: LDK SOLAR
The news:LDK Solar posted quarterly earnings that blew past Wall Street estimates on Monday as additional manufacturing capacity allowed the company to sell more solar wafers, sending its shares up 19 percent in extended trade. The Chinese solar power company also raised its revenue and wafer shipment forecasts for the year.
That is solar fun but the trade's too hot for me to handle, says Karen Finerman with a grin.
Trader disclosure: On Aug 11, 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 (COST), (MSFT), (WMT), ( TM) (UUP); Adami Owns (C), (AGU), (GS), (BTU), (INTC), (MSFT), (NUE); Pete Najarian Owns (AAPL), (COST), (HD), (TSO); Pete Najarian Owns (CSCO) Calls, (INTC) Calls, (MRVL) Calls; Pete Najarian Owns (HCBK) Puts; Finerman Owns (GS); Finerman's Firm And Finerman Own (FLS), (PDE); Finerman's Firm Owns (JCP), (MSFT), (SUN), (TSO), (VLO), (RIG), (NOK); Finerman's Firm And Finerman Own (C) Leap; Finerman's Firm Is Short (XLF), (BBT), (COF), (IYR), (IJR), (MDY), (IWM), (SPY); Finerman's Firm And Finerman Own (ANF), Finerman's Firm Owns (ANF) Call Spreads; Finerman's Firm Is Short British Pound; Finerman's Firm Is Short (RTH); NBC Universal Is The Parent Company Of CNBC Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV); Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Owns (RIMM), (IYT), (INTC), (CME), (GOOG), (FCX), (VLO), (SA), (KOL), (SU), (BNI), (YHOO), (XLF); Terranova Is Short Crude Oil (Dec. 2008); Terranova Is Long Crude Oil (Dec. 2012)
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV); Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)