STOCKS REBOUND 10% FROM DAY'S LOWS
The Dowstaged a monster rally on Thursday, as bargain hunters rushed back into the market to scoop up beaten-down shares.
Although the S&P 500 and the Nasdaqalso surged higher, both indexes touched new multiyear lows earlier in the session. However, the desire to buy stocks at cheap prices offset worries about a sharper economic and consumer downturn.
Meanwhile GE shares tumbled to a fresh lows in midday trading after market rumors circulated that the conglomerate was considering changing its dividend. Later in the day GE confirmed plans to pay a dividend through the end of 2009.
Also oil jumped nearly 4 percent on Thursday as OPEC seemed poised to cut production again later this month. Energy shares including Exxon, and Chevron led Thursday’s rally.
Strategy Session with the Fast Money Traders
Not since Tuesday at 2:36 in the afternoon when the market traded at this same level have I been so happy, says a sarcastic Jeff Macke. This is a panic rally, nothing more.
Fear is a huge component on both the way down and the way up, explains Karen Finerman. On the upside, if you have shorts and you see stocks trading up you feel like you should rush to cover and that creates a buying frenzy.
If you’re looking for an old-fashioned capitulation market reversal you got it today, says Guy Adami. You could see another messy day on Friday, to the upside. (In other words he expects the rally to continue.)
I think it shows that we’re trading in a range, adds Pete Najarian. And investors got a good look at what that range is. Not only is the Dow in a range so is the VIX . Also if you are in this market you better have real time quotes. If you’re 15 minutes behind you might as well not be in at all!
Turning attention to retail...
Best Buy rallied 8% on Thursday and I can’t understand it, adds Macke. I expect them to have a horrible Christmas.
I’m long Wal-Mart and I wasn’t crazy about the quarter. But that’s as good as it’s going to get.
I wouldn’t buy retail here, counters Karen Finerman. The valuations look rich but I absolutely would not short it, either
Moving onto energy...
The move in oil was crazy ridiculous, adds Finerman.
I think money is being put back to work in the energy space, adds Adami. We might have seen a short term low in the price of crude.
Crude is down $90 bucks a barrel. I would much rather be a seller up higher. Now I’d wait.
Look at how Freeport McMoRan and ArcelorMittal moved on Thursday, adds Pete Najarian. If you’re in them I’d take some off the table because they could go down as quickly as they went up.
Important day for Intel....
Keep an eye on Intel , counsels Guy Adami. Technically Thursday was a key reversal day in Intel. Don’t fade the rally, he counsels.
I also think Intel action was a bullish tell, adds Macke.
And looking at casino stocks...
Pete Najarian says that options action suggests to him Las Vegas Sands could soon move higher.
I prefer MGM, counters Macke.
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Trader disclosure: On Nov.13, 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); Macke Owns (MSFT), (UUP), (WMT), (DIS), (MGM); Finerman's Firm Owns (MSFT), (UNH); Finermans Firm Owns (OIH) Puts; Finerman's Firm Is Short (IJR), (IYR), (IWM), (MDY), (SPY), (USO), (BBT), (VNO), (COF), (USO); Pete Najarian Owns (AXP) Put Spread; Pete Najarian Owns (CROX) Call Spread; Pete Najarian Owns (FXI) Put Spread; Pete Najarian Owns (LVS) Call Spread; Pete Najarian Owns (MU) Calls
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CNBC.com with wires