GO
Loading...

Market On the Brink?

Stocks turned negative for the year on Friday as investors grappled with concerns that the financial crisis in Europe was getting worse.

Also the threat of new regulation added to the headwinds afterlawmakers called for a probe into the previous session's dramatic plunge.

The weekly declines for the Dow and the S&P 500 were the steepest since March 2009 when the market hit a 12-year low.

The Nasdaq had its largest weekly drop since November 2008.

Wall Street's "fear gauge" -- the CBOE volatility index skyrocketed, while the volume of shares traded was the second highest this year.

How should you be positioned now?

Strategy Session with the Fast Money traders

I think Friday may have been more negative than Thursday, says Guy Adami. The market went positive but couldn’t hold. And with the Vix up so much it’s disconcerting. I think it gives bulls pause and emboldens the bears. I think we’re at the beginning of something major.

And collectively we have an investment community that’s sitting, very very long in a market that’s on the brink, says Joe Terranova.

There were a couple positives, says Tim Seymour. Copper tagged its 200-day moving average and bounced. Commodities bounced and emerging markets bounced too. But going into the weekend I’m nervous. My advice is too stay small right now.

I added to my position in Cliffs , says Pete Najarian. I’m looking at big beta trades that will make a big move if there’s a bounce. However I’m only playing with options so I can define my risk going into the trade.

If you’re looking for a play, I’d put MTL on the radar, adds Tim Seymour. But don’t buy just yet. MTL stock looks cheap but if Europe is going to blow-up then we have to reassess. Perhaps nothing is cheap right now.

I got out of my long positions, reveals Brian Kelly, and I’m short. We’re looking at a slowdown in Europe and who knows what else is going to happen.

------------

EURO REBOUNDS

The euro rebounded on Friday amid chatter that the ECB may take further action to stem the debt crisis over the weekend.

ECB President Jean Claude Trichet will meet other top central bankers at the Bank for International Settlements in Basel this weekend.

However, most analysts also believe the ECB will stop short of buying bonds.

Also after hours Reuters reported that European leaders had approved a Greek aid deal to the tune of $110 euro ($150 billion).

What’s the trade?

The aid to Greece was expected, says Brian Kelly. If it didn’t happen we’d have been looking at a bloodbath on Monday.

The volatility among currencies is something I’m following, says Tim Seymour. When it comes down it may be safe to come back in.



______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.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 fastmoney@cnbc.com.

Trader disclosure: On May 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; Seymour Owns (AAPL), (BAC), (MTL); Terranova Owns Gold; Terranova Owns (XCO), (AGU), (SWN), (PFE); Terranova Owns Crude Oil; Terranova Is Short (CMA); Karabell Owns (AAPL), (C), (GS), (CME); Karabell Owns (ATHR); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); jarian Owns (C) Calls; Najarian Owns (CLF) Call Spreads; Najarian Owns (FRX) Calls; Najarian Owns (MS); Najarian Owns (MTL) Preferred; Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts; Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X)

For Tim Seymour
Seygem Asset Management Owns (VIP)

For JoeTerranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PALM)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)

For Brian Kelly
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (AUY)
Kanundrum Capital Is Long Dollar
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (DE)
Kanundrum Capital Is Short (NUE)
Kanundrum Capital Is Short (XOM)
Kanundrum Capital Is Short (HES)

For Rich Repetto
Sandler O'Neill Expects To Receive/Seek Investment Banking Compensation From (CME), (ICE), (NDAQ), (NYX) In Next 3 Months
Sandler O'Neill Is A Market Maker In (CME), (NDAQ)
Sandler O'Neill Has Received Investment Banking Compensation From (NDAQ) In Past 12 Months
A Principal Of Sandler O'Neill Is A Director Of ((NDAQ)
(NDAQ) Was An Investment Banking Client Of Sandler O'Neill


CNBC.com with wires

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report