The S&P 500 closed lower for the fourth day in a row after the latest economic reports suggested that the job market could trip up the recovery.
Factory orders rose less than expected and figures released by ADP showed private employers cut 298,000 jobs – more than expected though less than the month prior.
Considering the ADP survey is seen as a precursor to Friday's closely-watched jobs report, how should you be positioned?
Strategy Session with the Fast Money traders
It seems investors are waiting for the employment numbers before making big moves, says Joe Terranova. But that doesn’t mean you can’t play stock picker.
We may have lost Goldman Sachs on Wednesday, adds Guy Adami. It was down on a benign tape and that could be a ‘tell.” The move in Goldman makes me think the market may be heading lower.
The Vix closed near 29, adds Pete Najarian. That suggests traders expect movement in the S&P to continue.
I was watching Pride and HMO stocks on Wednesday, adds Karen Finerman. But otherwise the day wasn’t terribly interesting to me.
GOLD BREAKS OUT TODAY, UP $24
U.S. gold futures rallied on Wednesday to end near $980 an ounce marking the biggest one-day percentage gain since March. The move was largely triggered by safe-haven demand amid renewed worries about the recovery.
What's the trade?
It’s late summer, reminds Guy Adami. I think Wednesday’s move would have been a smaller move in a regular market.
I think this move takes gold above $1000, counters Joe Terranova. I see no reason to sell.
I’m seeing a large volume of puts trading in Goldcorp, reveals Pete Najarian. But I think it’s protection not a bet GG is going lower.
As far as I can tell gold is going higher, adds Dennis Gartman, author of the Gartman Letter. I’ve spotted what looks like a move away from currencies all together and into gold.
OPTIONS ACTION: AG NAMES
Pete Najarian has spotted unusual options activity in the ag space. The volume of calls traded in IPI suggests to him this stock could go higher.
And according to Tim Seymour on the Halftime Report, fertilizer companies such as IPI could be takeover targets. Both BHP and Vale have expressed an interest in diversifying into the fertilizer space, Seymour says.
I’d be cautious on Potash the stock, muses Guy Adami. It did not participate in the recent rally.
OIL BREAKOUT FAILS, AGAIN
U.S. crude oil futures settled unchanged on Wednesday as investors weighed reports that showed crude inventories and gasoline supplies fell last week against a belief the dollar could grow stronger.
Meanwhile, shares of oil giant BP traded higher after the company said it had made a "giant" oil discovery in the Gulf of Mexico.
What’s the trade?
I still don’t think the trade is short oil, counsels Joe Terranova. I think the trade is long or flat.
I think it’s okay to be short oil, counters Guy Adami. Personally, I think the OIH trades down to $98.
BP looks cheap to me, adds Pete Najarian.
BIG WINNERS TODAY: HMOS
Seeking to breathe new life into health care reform, President Obama announced plans to address a rare joint session of Congress on September 9th. The speech will come one day after lawmakers return from a month-long August break.
And according to Politico.com Obama has no plans to insist on a public option. “Aides said Obama does not plan to make a public option, or government plan, a make-or-break issue when he spells out his specifics,” writes the website.
What’s the trade?
I’m keeping my eye on the HMO stocks, says Karen Finerman. If you really believe that Obama is backing away from a public option I think HMOs are great plays. But be careful. The headlines keep changing in health care nearly every day.
I’d play this space carefully, adds Guy Adami. I think you can get bopped on the head with these stocks. The HMO trade may be over.
DEALMAKING ON THE RISE?
It appears deal making may be picking up as we head into the fall with Japanese drugmaker Dainippon Sumitomo Pharma offering to buy Sepracor for about $2.7 billion.
This merger follows news earlier in the week that Disney would acquire Marvel and Baker Hughes will buy BJ Services.
Is there a trade?
I expect to see M&A in tech and pharma, muses Pete Najarian.
I think the sleeper sector is financials, muses Joe Terranova.
Lazard and Greenhill are probably the best plays, adds Guy Adami, because they often broker these deals and make money on them.
TOPPING THE TAPE: PALM, RIMM FIGHT TOUGH TAPE
It appears the smartphone trade remains in tact, with Palm and RIM closing higher one day after a Credit Suisse report said "we believe smart phones represent one of the most attractive secular trends in technology."
What’s the trade?
I think Qulacomm is worth a look for a trade, counsels Joe Terranova.
But from a technical perspective Qulacomm is pushing against resistance at $45, counters Guy Adami.
Apple under $165 looks interesting to me ahead of the developer’s meeting next week, adds Pete Najarian.
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to firstname.lastname@example.org.
Trader disclosure: On Sept. 2nd, 2009, 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), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (AMZN), (FCX), (QCOM), (POT), (WFT), (SU); Terranova Is Short (TM); Terranova Owns (GS) Puts; Terranova Owns Gold Futures; Terranova Works For (VRTS); Finerman Owns (RIG); Finerman's Firm Owns (MSFT), (NOK), (WMT), (RIG), (TGT); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC), Finerman Owns (WFC) Preferred Shares ; Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And Owns (BAC); Finerman's Firm Is Short (USO), (IJR), (MDY), (IWM) ; Finerman's Firm Owns (AXL) Calls; Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) Calls; Najarian Owns (TXT) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Calls; Najarian Owns (IPI) Calls; Najarian Owns (OXPS) Calls
Gartman's Funds Are Long Gold In Terms Of Currencies
For John Hyland:
Hyland is Sponsor & General Partner of USO, UNG, USL, UGA, UHN
For Kimberly Greenberger:
A suit by AEO against Citigroup Is Currently Pending in Federal Court
Citigroup Owns (ARO)
Citigroup has received compensation from (GPS)
Citigroup has received compensation from (JCG)
Citigroup has received compensation from (LTD)
Citigroup has received compensation from (PLACE)
Citigroup has received compensation from (AEO)
Citigroup has had (AEO) as a client in past 12 months
Citigroup has had (GPS) as a client in past 12 months
Citigroup has had (JCG) as a client in past 12 months
Citigroup has had (LTD) as a client in past 12 months
Citigroup has had (PLACE) as a client in past 12 months
CNBC.com with wires