How should you be positioned?
Volatility and volume in financial stocks is exploding, explains OptionMonster Jon Najarian. That’s particularly true for JPMorgan , Morgan Stanley and Goldman. But if you don't already own protection, it’s too late to buy, he says. It’s like waiting to buy insurance when the hurricane hits; they’re going to charge you a lot of money.
At this point, the best defense is a good offense, says Guy Adami. I’d step on the accelerator on the short side. There’s nothing that suggests financials will make a meaningful bounce. Rallies should be sold into and short should be aggressive.
Looking at the market broadly, charts tell me the complexion of the market has changed, adds Scott Redler. The uptrend that’s been in tact since July has been broken in the S&P.
TAKE YOUR POSITION: GOOGLE
Google reports earnings after the bell on Thursday. Considering some investors are hoping this report turns the tide in the tech sector, how should you be positioned?
What’s the trade?
In Google, the uptrend is broken, says Scott Redler. Even if it’s a good report, I think investors will sell. I wouldn’t be long into this report.
I want to hear what’s going on with China, says Jon Najarian. And I too think the stock is vulnerable.
OPTIONS ACTION: POTASH
Jon Najarian has spotted unusual options action in Potash .
This name continues to see active buying of at and out of the money calls, he says. But I wouldn’t play the options naked; I’d only do it with spreads.
TRADE TO GO: BARRICK
Guy Adami suggests putting Barrick Gold on your radar. I think it trades down to $34.50, he says.
CALL THE CLOSE
Guy Adami: I’m pretty scared.
Jon Najarian: I’d sell into the close.
Eugene Profit: Sell into the close
Scott Redler: I’d be short into the close.
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Trader disclosure: On January 21st, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman Owns (AAPL); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (MSFT); Finerman's Firm Owns (TGT); Pete Najarian Owns (BBT) Calls; Pete Najarian Owns (BP), Is Short (BP) Call; Pete Najarian Owns (GS) Call Spread; Pete Najarian Owns (INTC) Calls; Pete Najarian Owns (MS), Is Short (MS) Calls; Pete Najarian Owns (MRVL); Pete Najarian Owns (PFE); Pete Najarian Owns (XLF) Calls; Pete Najarian Owns (CLF) Call Spread; Pete Najarian Owns (TCK), Is Short (TCK) Calls; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU)’ Seymour Owns (FXI), (AAPL), (BAC), (GOOG), (INTC), (POT)
For Tim Seymour:
Seygem Asset Management Is Short (PBR)
Seygem Asset Management Is Short (FCX)
For Jon Najarian:
Jon Najarian Owns (GOOG) Put Spread
Jon Najarian Owns (POT) Call Spread
Jon Najarian Owns (GOOG)
For Brad Hintz:
Hintz Owns Morgan Stanley And Discover
Hintz Owns (CME)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investmet Discretion Own More Than 1% Of (GS), (MS)
(GS), (MS) Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services)
An Affiliate Of Bernstein Received Non-Investment Banking Compensation From (GS), (MS) (Securities Related Services)
For Richard Kugele:
Needham & Company Is A Market Maker In (STX)
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