Bad News Bulls
These are strange days indeed. Despite horrible headlines some stocks are trading higher. Much higher.
Take MGM Mirage for example. The casino reported third quarter profits that were 67% lower than the same quarter this year. And they’ve halted development of a promising Atlantic City project, as well as a joint venture on the Las Vegas Strip. The stock, however, closed higher.
Or check out Aflac. Net income fell by 76% in the third quarter and it expects to take a fourth-quarter charge of about $110 million on securities it owned in Icelandic banks. This stock traded higher too.
Then there’s Lowe’s . Home prices fell a record 16% and construction spending is down a whopping 19%. But where’s the stock. Higher!
And in general consumer confidence out this past Tuesday was a record low. Yet Macy’s , Kohl’s and even the Retail HLDRs all closed in the green.
What’s going on?
When stocks like these with so much horrible news trade higher, I can only assume that the bad news is baked in, says Jon Najarian. And that could suggest the bottom is in for these names.
How is Najarian trading it?
He’s long (MGM) Calls, (LOW) Calls, (AFL) Calls. In other words he's betting these three stocks are going to go higher.
Guess that makes Jon Najarian, a bad news bull!
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Trader disclosure: On Oct.30, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (MS) Calls; Pete Najarian Owns (MSFT) And Is Short (MSFT) Calls; Pete Najarian Owns (PBR); Pete Najarian Owns (TSO) Call Spread; Pete Najarian Owns (YHOO) And Is Short (YHOO) Calls; Pete Najarian Owns (BNI) Put Spread; Finerman's Firm Owns (RIG), (MSFT), (SUN), (TSO), (VLO); Finerman's Firm Is Short (IYR); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (COF), (BBT); Seymour Owns (AAPL), (BAC), (BX), (F), (MER), (TSO), (CHL); Seygem Asset Management Owns (PBR), (EEM)
Jon Najarian Owns (MGM) Calls, (LOW) Calls, (AFL) Calls