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Shouldn’t The Sell-Off Be Much Worse?

The market had every reason to sell-off recently. We had renewed worries about Greece, a higher dollar, and Treasury auctions.

Yet on Wednesday the worst the bulls could do was drag down the S&P by less than 1%. Shouldn’t the damage have been worse?

Strategy Session with the Fast Money Gang

Action in individual names is dominating Wall Street trading desks not broad moves, explains Gary Kaminsky. And names such as Goldman Sachs and Morgan Stanley closed higher helping to pare losses generated by the sell-off.

That says to me we’re seeing rotation, Kaminksy explains. Money is probably coming out of commodities and into financials. In the days ahead I'd trade on the thesis that the melt up will continue.

And we had a fantastic treasury auction, says Tim Seymour. It was the best auction in 16 years.

I think the sell-off stems from worry this quarter will be a repeat of last quarter, adds Jon Najarian. Remember, Q1 started off like gang busters and then we hit the wall when Alcoa reported earnings. We get Alcoa earnings next week and their results could mean everything for this market.

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DON'T SHORT A QUIET MARKET

For some traders, the last leg of this rally has been quiet -- too quiet. But history warns never short a quiet market.

The market's longest quite stretch -- without a 1% gain or decline -- happened back in 1995. And by the end of the year stocks had gained 35%!

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DEALMAKING: IS CORPORATE AMERICA UNDERVALUED?

While everyone obsesses about Greece and rates, lots of deal making is going on.

CKE, the owner of the Hardee's and Carl's Jr., said an unnamed bidder had made an alternative offer to its deal to be taken private by Thomas H. Lee Partners for $619 million.

And after the bell, Bloomberg reported that hospital chain HCA is preparing for a $3 billion IPO.

Considering the flurry deals, how should you trade?

I think both stocks mentioned above are worth a look, says Karen Finerman. And the deals suggest to me that financing is open for corporate America, she adds. If you expect the trend to continue, look at Greenhill or Lazard because they collect fees on these deals such as these.

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UNUSUAL ACTIVITY: PALM

The traders are keeping a close eye on Palm , with shares zooming higher on Wednesday. As you may remember, the stock fell precipitously after its dismal earnings release.

What’s going on?

Takeover chatter is heating up in the options pits, explains Jon Najarian, with Lenovo being thrown around as a potential buyer. There’s also speculation Nokia and Motorola could step-in. I’m playing it with call spreads in Palm.

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FAST FOOD, FAST MONEY

The traders are keeping a close eye on Darden and Yum! Brands with both stocks making 52-week highs.

What’s the trade?

I would not get out here, says Dennis Gartman. I like Darden as well as Panera .

In the space I’m bullish McDonald’s , adds Tim Seymour.

I’m bullish Yum!, adds Karen Finerman.

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BREAKING NEWS: US AIRWAYS AND UNITED

In breaking news, the desk hears that US Airways and United Airlines may be holding takeover talks. They're knee deep in talks, says New York Times reporter Andrew Ross Sorkin on Fast Money. But we're several weeks away from a deal, he adds.

And I can't tell you we're going to get there. These things break apart. But it would be an answer to the Delta-Northwest combination.

Technically US Airways will likely be the buyer however United will likely run the new company, adds Sorkin.

What's the trade?

I wouldn’t be surprised to see this deal happen, says Jon Najarian. And by taking capacity out of the system, it should make airlines stocks go higher.

If you're looking to trade airlines, I'd do it with JetBlue, counsels Gary Kaminksy.

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STREET FIGHT: SEYMOUR & GARTMAN VS. BOOCKVAR

Miller Tabak’s Peter Boockvar told us a few days back that the threat of higher rates would spook stocks. But Tim Seymour and Dennis Gartman weren’t buying it.

However on Wednesday Kansas City Federal Reserve Bank President Thomas Hoenig drove afternoon selling after he said keeping interest rates too low for too long would encourage risky financial behavior.

Are any of our market pros buying what Boockvar is selling now? Watch the video and find out!






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Trader disclosure: On Apr 7, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Jon Najarian Owns owns call spreads in (PALM), (TXT), (AAPL); Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (AKS), Is Short (AKS) Calls; Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (FCX), Is Short (FCX) Calls; Jon Najarian Owns (C) Preferred; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (IP) Call Spreads; Jon Najarian Owns (MCD), Is Short (MCD) Calls; Jon Najarian Owns (MS) Preferred; Jon Najarian Owns (NYT); Jon Najarian Owns (PALM) Call Spreads; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (WFC) Preferred; Jon Najarian Owns (WMT), Is Short (WMT) Calls; Jon Najarian Owns (PALM) Call Spreads, (TXT) Call Spreads, (AAPL) Call Spreads; Terranova Owns Gold, Oil; Terranova Is Short (XLY); Kelly Owns (FXE) Puts; Finerman's Firm Is Short (IYR), (IJR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (CVS); Finerman's Firm And Finerman Own (JPM); Finerman Owns (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT), (YUM), (MCD), (SKS); Funds Managed By Dennis Gartman Are Short S&P 500; Funds Managed By Dennis Gartman Are Short Euro; Funds Managed By Dennis Gartman Are Short Yen’ Funds Managed By Dennis Gartman Are Long Gold; Funds Managed By Dennis Gartman Are Long Natural Gas Trusts; Funds Managed By Dennis Gartman Are Long Copper; Funds Managed By Dennis Gartman Own (AAPL); Funds Managed By Dennis Gartman Own (DRI); Funds Managed By Dennis Gartman Own (FCX); Funds Managed By Dennis Gartman Own (GLD); Funds Managed By Dennis Gartman Own (PNRA); Funds Managed By Dennis Gartman Are Short (RIMM); Funds Managed By Dennis Gartman Are Short (SPLS)

For Deborah Weinswig
Citi Employees Own (WMT)
A Citi Employee Owns (JCP)
A Citi Employee Owns (LOW)
Citigroup Global Markets Or Affiliates Owns 1% Or More Of (SKS)
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed An Offering Of (KR), (SVU), (WMT) In Past 12 Months
Citigroup Global Markets Or Affiliates Have Received Investment Banking Compensation For Services Provided In Past 12 Months From (KR), (SKS), (SVU), (WMT)
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation In Past 12 Months From (HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST)
(KR), (SKS), (SVU), (WMT) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(CVS), (HD), (JCP), (KSS), (KR), (M), (SWY), (SKS), (SVU), (WAG), (WMT),
(COST) Are Or In Past 12 Montsh Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(HD), (JCP), (KSS), (KR), (M), (SWY), (SVU), (WAG), (WMT), (COST) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities Related Services)
Citigroup Global Markets Is A Market Maker In (CVS), (M), (COST)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (CVS), (HD), (JCP), (KSS), (KR), (LOW), (M), (JWN), (SWY), (SKS), (SVU), (WMT), (COST)
Citigroup Global Markets Or Affiliates Beneficially Owns 5% Or More Of (SKS)

For Richard Kang
Emerging Global Advisors Owns Jiangxi Copper Co. HK Listed Shares In Its ETFs
Emerging Global Advisors Owns China Telecom Corp. HK Listed Shares In Its ETF

For Ben Fulton
Invesco PowerShares Sponsors And Manages (XLYS), (XLPS), (XLES), (XLFS), (XLVS), (XLIS), (XLKS), (XLBS), (XLUS)


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