Halftime Report: Geo-Political Concerns Trigger Sell-Off?
The S&P 500 slipped from its highs and turned lower around lunchtime Friday leading to chatter about geo-political concerns in Asia and whether they had anything to do with the declines.
According to published reports, a South Korean naval ship was sinking on Friday after possibly being hit by a North Korean torpedo and several sailors were killed.
How should you trade in the wake of this news?
The market has run up a lot and a lot and I think investors are looking for a reason to hit the exits, explains Steve Grasso of Stuart Frankel. I wouldn’t be surprised to see some sell pressure through the end of the day. Geo-political tension doesn't help though I don't see a lot of people pointing toward the incident in South Korea as the catalyst for market weakness. As long as we stay above 1150 I don’t think there's any cause for concern, he concludes.
When Asia's markets open on Monday I think we could see complete fear and lack of confidence, adds Mike Gurka of Neural. And here at home we have spring break and Easter week coming - and as a result lighter volume in our markets. Ahead of all that, it wouldn’t surprise me to see profit taking.
I’m watching the action in gold , adds Brian Stutland of Stutland Equities. We haven't seen the typical spike that we'd expect after this kind of geo-political news. However, turning attention to the technicals, the charts suggest we may be nearing a triple top. If the GLD drops below 102 I think we see the selling accelerate.
OIL LOSING MOMENTUM?
Oil lost all its gains on Friday and slipped below $80 after data showed the U.S. economy grew less briskly than expected last quarter and a plan to give Greece a safety net failed to quell concerns any recovery was fragile.
How should you trade oil?
Oil seems to have lost intermediate term momentum, says Katie Stockton of MKM. I expect it to trade to the high $60 dollar per barrel range on that loss of momentum.
And if you look at the XLE patterns suggest that’s the energy SPDR is broken down, she adds. That tends to yield a pretty sharp decline and a sharp phase of underperformance in the sector.
"THE YEAR OF MOBILE COMPUTING"
Shares of Nokia and Research In Motion popped on Friday after JPMorgan upgraded both stocks to buys citing optimism about smartphone growth.
Analyst Rod Hall also gave a thumbs up to mobile chip maker Qualcomm , initiating coverage with a buy rating. Hall, however, was less optimistic about Motorola , which he launched with a sell rating.
What’s the tech trade?
I think the space will do very well in the next quarter, says Mike Gurka. But I’d be hesitant to buy right here.
NOT SO BEST BUY
Despite strong results and a bullish call from Fast Money contributor Patty Edwards, not everyone is optimistic about Best Buy.
FBR Capital analyst Stephen Chick downgraded the electronics seller to Underperform from Market Perform, setting a price target of $36.
In a live interview on Fast Money he tells the desk that he’s concerned about margins. If notebooks and lower margin products continue to grow as I think they will, we’re looking at a margin mix headwind, Chick says. And the international business is growing, but it too is a lower margin business.
For more from Stephen Chick please watch the video.
TOPPING THE TAPE: CASINO STOCKS
With Wynn hitting a 52-week high and Las Vegas Sands just pennies away from a similar milestone how should you game the space?
What’s the trade?
Brian Stutland has noticed unusual options action in the space. The high volume of April 22.5 calls and 24 calls suggest to Stutland the stock could break out.
FAST FLASH: BANK OF AMERICA
The traders are closely watching the action in Bank of America. If it touches $19.11 it will make a new 52-week high.
What’s the trade?
I think the stock will break above it’s 52-week high, says Katie Stockton. I think the stock has both positive momentum and improved relative strength.
CALL THE CLOSE
Steve Grasso: I’m a seller on Friday.
Brian Stutland: If we close lower on Friday, I’d lighten up short term.
Katie Stockton: I like the market long term but short term the complacency levels are too high for my comfort level.
Mike Gurka: I’d take profit and buy lower in the next week.
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Trader disclosure: On March 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (BAC), (BX); Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (TCK); Najarian Owns (YHOO) Calls; Najarian Owns (LMT) Calls; Terranova Owns (IOC) Puts, Strikes; Terranova Is Short (GS), (CAL), (UAUA); Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (WMT), (JPM), (NEM); Stutland Is Short (GLD); Stutland Equities Is A S&P 500 And VIX Options Market Maker; Stutland Equities Is Short VIX Near Term Volatility, Is Long VIX Long Term Volatility; Cortes Is Short Euro vs. U.S. Dollar
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