TAKE YOUR POSITION: FINANCIALS
Investors are also closely watching developments in Washington Tuesday, as White House adviser Paul Volcker testifies before a Senate panel.
Volcker is expected to tell the Senate Banking Committee that commercial banks' proprietary and speculative activities should not be protected by the government, according to testimony obtained by Reuters.
His comments could hurt bank stocks, which tumbled when reports on the proposal broke last month.
But "If (Volcker) backs off a little bit, or if people gain confidence (the proposal) is not going to be as pointed as it seemed when it was first announced, then maybe that will help the banks," said Miller Tabek’s Peter Boockvar in a Reuters interview.
What’s the bank trade?
I think there could be opportunity in the space, but I’m a fan of the smaller community banks, reveals Patty Edwards.
I’m watching Goldman, says Pete Najarian. If it can get above $160 then maybe financials could stage a full turn. But I’d let the Volcker testimony play out. Certainly what is said will be market moving.
TOPPING THE TAPE: HOMEBUILDERS
The Homebuilders ETF popped on Tuesday after new data showed sales of existing home edged higher in December.
Also, D.R. Horton surprised the Street by posting its first quarterly profit in almost three years.
What’s the sector trade?
I’m bullish on the sector, says Brian Kelly of Kanundrum, and I’d play it with a basket of stocks including Toll , Hovnanian , and DR Horton. Those three, I’m long.
Patterns in the DR Horton chart look good to me, adds Todd Gordon. As long as it hold $12.50 I like it.
SECTOR TRADE: AUTOS
Ford wowed investors on Tuesday by reporting a 35 percent increase in January sales versus the same month last year. The total number of vehicles sold by Ford in the month totaled 116,534, up from 93,506 last year. Ford also reported that its domestic market share rose 2 percent from a year ago
What’s the auto trade?
The Ford chart looks good, says Todd Gordon, and the Toyota chart looks sickly. Ford has better upside. If we get to $11.50 I think Ford could pop to $12 even $12.50.
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Trader disclosure: On February 2nd, 2010, 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), (BTU), (MSFT), (NUE); Najarian Owns (AAPL) Call Spread; Najarian Owns (AA) Calls; Najarian Owns (AKAM) Call Spread; Najarian Owns (CEPH) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MET) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE); Najarian Owns (SPF) Calls; Najarian Owns (XLF) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO), (BKS); Finerman's Firm Is Short SPX Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (CVS), (FLS), (GOOG); Finerman's Firm Owns (KFT)
For Brian Kelly
Kanundrum Capital Is Long U.S. Dollars vs. Short Swiss Franc
Kanundrum Capital Is Short (EWY)
GE Is The Parent Company Of CNBC
Other Relevant Disclosures:
Najarian Owned (CEPH) Call Spread Today
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