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Big Winner In An Otherwise Down Day

Stocks swung between gains and losses but ultimately both the Dow and S&P 500 closed in negative territory on Tuesday.

There was little news and low volume compared with recent days; with investors dumping stocks in afternoon trading as worries about Europe's financial crisis crept back into the market.

However, there was a big winner on Tuesday. Jiittery investors sent gold to a new all-time high above $1,230 an ounce as investors gobbled up the precious metal in a flight to safety,

How should you be positioned now?

Strategy Session with the Fast Money traders

It’s all about gold right now; gold seems to be the trade that works, says Joe Terranova. The base metals aren’t performing right now but gold is. I’d get long.

Banks around the world have to diversify out of the euro and they’re going into gold as a currency, explains Steve Grasso. I agree that gold will go higher. And it should take the gold miners higher too.

I’m long gold and short of many foreign currencies, adds strategic investor Dennis Gartman. Central banks around the world have no other choice now than to own gold. And this enormous force will put a long-term bid under the metal, he says.

You can’t get me long gold at gun point, counters Guy Adami But I would look at Pan American Silver, he adds. These guys are crushing; I think it goes north of $30 as investors start to worry that gold is getting ahead of itself.

I’m a contrarian and worried that gold is at the top, says Anthony Scaramucci. A lot of investors are already invested. Long gold is not a new idea.

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OVERLOOKED FACTOR COULD SUPPORT GOLD LONG-TERM

With most of the traders bullish, we got to wondering if there was some little know reason that could propel gold higher.

Fast Money executive producer John Melloy wrote about that exact phenomenon in his daily blog Behind The Money.

Quoting Dennis Gartman, he says gold may have new found support because "it may become the second reservable currency, supplanting the euro which had assumed that rule until quite recently."

"Central banks of the world have no other choice now than to own gold," Melloy writes. "Sure, there are other currencies, like the Canadian Dollar, which will gain favor, but none have the liquidity and fungible value of gold. This enormous force will put a long-term bid under the metal."

You really don't want to miss Melloy's valuable market insights concerning these developments. Click here and check out 'Gold Finds Identity Amid Currency Crisis'.

What do you think? We want to know!








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GOLD GOING TO $10,000 PREDICTS SCHIFF

I'm an un-apologetic gold bull and have been bullish on gold for 10 years, says Peter Schiff of EuroPacific Capital. Gold is maybe going to $10,000.

You read that right - Schiff said "gold is going to $10,000." Hear our entire interview. Watch the video now!

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AFTER HOURS ACTION: ERTS

On Thursday after the bell, Electronic Arts reported reported better-than-expected results, led by sales of "Battlefield: Bad Company 2" and "Mass Effect 2," and the video game publisher affirmed its outlook for the current quarter and fiscal year.

Taking a closer look at the numbers, Electronic Arts swung to a net profit of $30 million, or 9 cents a share, in the fiscal fourth quarter ended March 31, versus a year-ago net loss of $42 million, or 13 cents a share.

Excluding items, EA earned 7 cents a share, ahead of the consensus analyst estimate for earnings of 5 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 14 percent to $979 million. Non-GAAP revenue came in at $850 million, better than Wall Street's target of $836.5 million.

However, the company's shares fell 5.3 percent in extended trading, after climbing 3.1 percent during the regular session.

What’s the trade?

I’d let this one shake out a little, counsels Guy Adami. But it’s probably a buy on the dip.

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AFTER HOURS ACTION: VERIZON

After the bell, a report in the Wall Street Journal said, Verizon Wireless was working on tablet computer with Google.

Verizon Wireless chief executive Lowell McAdam told the newspaper in an interview the tablet computer project is part of a deepening relationship between Verizon, the largest US wireless carrier, and Google, whose Android operating system is used by a number of mobile handset makers.

"We're looking at all the things Google has in its archives that we could put on a tablet to make it a great experience," McAdam said.

What’s the trade?

I'd go downstream; think the play is Clearwire, counsels Brian Kelly.

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CHAOTIC TRADING

Volatility continued to be a main theme in the markets on Tuesday with stocks once again experiencing big intraday swings.

What levels should you be watching?

On the downside, I’m watching 1121 in the S&P, which is the 150-day moving average and on the upside I’m watching 1171 the 50-day, says Steve Grasso. I think we bounce around between the two.

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FINANCIAL FALL OUT

US financials including Morgan Stanley and Citigroup followed their European counter-parts lower, but weakness at home was largely triggered by a proposal to ban proprietary trading activity at large banks.

What’s the trade?

The firm that would be hardest hit if it passes is Goldman , says Anthony Scaramucci. But from what I’m hearing prop trading probably won’t go away all together.

If you’re trading Goldman my pivot point is $147.81, says Guy Adami.

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CONTRARIAN CALL: EUROPE'S BAILOUT WILL WORK


Despite a growing chorus of nay-sayers one market maven is going against the crowd. Deutsche economist Joe LaVorgna believes Europe’s bailout will work.

He tells the desk “it will provide both liquidity and solvency and help restore order to markets. Does LaVorgna see something that the Street is missing?

Watch the video and find out!





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Trader disclosure: On May 11, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Tomasulo Owns (VXX); Tomasulo Is Long VIX Options; Tomasulo Owns (GLD); Tomasulo Is Long Spot Gold Futures; Tomasulo Owns (VZ); Tomasulo Owns (CAT) Puts; Najarian Owns (KGC) Call Spread; Najarian Owns (XOM) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (C) Calls; Najarian Owns (BP), Is Short (BP) Calls; Najarian Owns (TEVA); Najarian Owned (BP), Was Short (BP) Calls Today; Grasso Owns (BP), (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Terranova Owns Gold; Terranova Owns (GLD), (RIG), (SWN), (PFE); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts

For Joe Terranova
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 (GLD)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (AUY)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short (USO)
Kanundrum Capital Is Short (DE)
Kanundrum Capital Is Short (NUE)
Kanundrum Capital Is Short (XOM)
Kanundrum Capital Is Short (HES)
Kanundrum Capital Is Short (XLE)
Kanundrum Capital Is Short (XLK)
Kanundrum Capital Is Short (XLI)
Kanundrum Capital Is Short (XLY)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (RSX)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (EXPE)
Kanundrum Capital Is Short (IBM)
Kanundrum Capital Is Short (SU)
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short (DE)
Kanundrum Capital Is Short (FDX)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (CLF)

For Anthony Scaramucci
Scaramucci Owns (AAPL), Skybridge Owns (AAPL)
Scaramucci Owns (BAC), Skybridge Owns (BAC)
Scaramucci Owns (DIS), Skybridge Owns (DIS)
Scaramucci Owns (GS), Skybridge Owns (GS)
Scaramucci Owns (JPM), Skybridge Owns (JPM)
Scaramucci Is Long S&P 500, Skybridge Is Long S&P 500

For Peter Schiff
Schiff Owns Gold

Schiff Owns Gold For Clients

For David Bank
RBC Capital Markets Provides (DIS) With Non-Securities Services
RBC Capital Markets Has Provided (DIS) With Non-Securities Services In The
Past 12 Months



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GD
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GS
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MS
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VZ
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GOOGL
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