Another late selling jag sent stocks lower on Monday with the S&P breaking below 1060, a former level of support.
Industrials led the decline as investors again punished stocks closely linked to the global recovery.
Not even the next revolution from Apple CEO Steve Jobs could ignite buyer enthusiasm.
What should you be watching, now?
Instant Insights with the Fast Money traders
I’m watching Goldman, Cliffs and Freeport as my market 'tells', says Pete Najarian. And they all trended lower. The global growth trade may be falling apart.
The trend I'm watching is that we tend to open stronger and close on weakness, adds strategic investor Dennis Gartman. That tends to be a hallmark of a bear market.
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MARKET BUZZKILL: FINANCIALS
Financials were the big market buzz kill on Monday with Bank of America leading the way lower. The move follows bearish comments on the sector from Rochdale Securities and Deutsche Bank.
Meanwhile, a Goldman Sachs analysts suggests buying puts in the XLF , explains host Melissa Lee. The analysts says that while the financials have fallen 16% since Apr. 23, he expects a 22% decline.
What’s the bank trade?
If you’re looking at the space I’d steer clear of the big U.S. banks because of financial regulation, says Joe Terranova. However, banks based in Canada have performed well as have Visa and Mastercard.
As soon as we get clarity on financial reform, even if it’s bad, I think the sector stages a relief rally, muses Karen Finerman. I established a new position in Citigroup , she reveals. It just seems to me the stock is getting clobbered and the selling probably overdone.
I'm also looking for a relief rally in the space, says Stifel Nicolaus analyst Chris Mutascio. That's largely because over the next few months the House and Senate will reconcile their bills and we'll likely see some of the more onerous aspects of financial regulation get watered down.
If you have a long term time horizon, look at Bank of America, Mutascio says. It's just a very inexpensive stock. Also look at Wells Fargo, PNC and US Bancorp. They're franchises that should win market share over the next 5-10 years. Right now their valuations also look very attractive.
But it's not just fin-reg; the SEC lawsuit is also drag on the space as well - and Goldman in particular, reminds veteran trader Gary Kaminksy. And in speaking with Morgan Stanley CEO John Mack, it doesn't think a settlement is in the cards - at least not anytime soon.
I'm short Goldman and CME , reveals Brian Kelly of Kanumdrum.
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APPLE CAN'T IGNITE OPTIMISM
Apple finished the day lower even though the tech titan announced a new version of its iPhone which has 100 new features - is 24% thinner - has a front facing camera - and is priced at $199.
What must you know about these developments?
Forget all the features; we already knew about them, explains Piper Jaffray analyst Gene Munster on Fast Money. What matters is that the new iPhone is a huge leap forward in mobile technology.
Over the next 3 years the big shift in consumer technology will be all about mobile and the new iPhone suggests Apple will absolutely run the table, he says.
The phone goes on sale June 24 in five countries, expanding to 18 by July and 88 by September in the fastest-ever international roll-out for an iPhone. It’s a record speed roll out, add CNBC’s Jim Goldman.
What’s the trade?
The company really seems to be hitting the sweat spot in mobile, says Gene Munster. Going forward I think $330 is a fair valuation.
As a second derivative trade I’m watching Akamai , says Pete Najarian. If it gets beneath $40 I’d put on a call spread.
I like long Netflix for it’s new app, says Dennis Gartman.
I think the new video calling feature is very interesting, says Brian Kelly. It’s coming over WiFi and not 3G and that’s bad for the wireless carriers. I’d short AT&T and Verizon.
> Click here for Apple Debuts Next iPhone
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SILVER NEW SAFE HAVEN?
There’s been a lot of debate over what might replace the euro as an alternative safe haven, but silver? It appears the precious metal is riding gold’s coattails; with silver posting it’s best gain in a month on Monday.
But are investors missing something?
According to Dennis Gartman they sure are. He says although gold is a precious metal silver is largely an industrial metal these days. Don’t confuse the too.
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BIG BIOPHARMA MOVES THIS WEEK
With the ASCO Conference drawing to its conclusion should you expect big moves in BioPharma?
I’m watching Celegene , says Pete Najarian. Also Bristol Myers and Johnson & Johnson look interesting to me.
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TRADER DISCLOSURE: ON JUNE 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; TERRANOVA OWNS (SWN); TERRANOVA OWNS (GLD); TERRANOVA OWNS (RIG); TERRANOVA OWNS (IPSU); TERRANOVA OWNS (RSX); TERRANOVA OWNS (PFE); TERRANOVA OWNS (TER); TERRANOVA OWNS (APA); TERRANOVA OWNS (AXP); TERRANOVA OWNS (BMO); TERRANOVA OWNS (BBY); TERRANOVA OWNS (DIS); TERRANOVA OWNS (XCO); TERRANOVA OWNS (AAPL); TERRANOVA OWNS (CVS); TERRANOVA OWNS (IPI); TERRANOVA OWNS (TEVA); TERRANOVA OWNS (FXB); TERRANOVA OWNS (IPI); TERRANOVA OWNS (SU); TERRANOVA OWNS (V); GARTMAN OWNS (AAPL);GARTMAN OWNS (NFLX);GARTMAN IS SHORT (GS); GARTMAN IS SHORT THE S&P 500; GARTMAN IS SHORT THE YEN; GARTMAN IS SHORT THE POUND; GARTMAN OWNS GOLD; PETE NAJARIAN; PETE NAJARIAN OWNS (AMD) CALLS; PETE NAJARIAN OWNS (C); PETE NAJARIAN OWNS KELLY OWNS (GS) PUTS; KELLY OWNS (SPY) 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)
BRIAN KELLY
KANUNDRUM CAPITAL IS SHORT (GS)
KANUNDRUM CAPITAL IS SHORT (CME)
KANUNDRUM CAPITAL IS SHORT THE EURO
KANUNDRUM CAPITAL IS SHORT (XLK)
KANUNDRUM CAPITAL IS SHORT (XLI)
KANUNDRUM CAPITAL IS SHORT (XLF)
KANUNDRUM CAPITAL IS SHORT (XLB)
KANUNDRUM CAPITAL IS SHORT (FCX)
KANUNDRUM CAPITAL IS LONG (TLT)
KANUNDRUM CAPITAL IS LONG U.S. DOLLAR
KANUNDRUM CAPITAL IS LONG (GLD)
KANUNDRUM CAPITAL IS LONG (GFI)
KANUNDRUM CAPITAL IS LONG (AUY)
CHRIS MUTASCIO
**NO DISCLOSURES**
GENE MUNSTER
PIPER JAFFARY MAKES A MARKET IN (AAPL)
PIPER JAFFARY MAKES A MARKET IN (GOOG)
MIKE KHOUW
CANTOR FITZGERALD & CO. MAKES A MARKET IN (SPY)
LATE ADDITIONS:
FINERMAN'S FIRM IS SHORT (IJR)
FINERMAN'S FIRM IS SHORT (IWM)
FINERMAN'S FIRM IS SHORT (SPY)
FINERMAN'S FIRM IS SHORT (MDY)
FINERMAN OWNS (AAPL)
FINERMAN'S FIRM AND FINERMAN OWN (HPQ)
FINERMAN OWNS (GS) CALLS
FINERMAN'S FIRM OWNS (JPM), (J)PM) CALLS
FINERMAN OWNS (JPM)
FINERMAN'S FIRM OWNS (BAC), (BAC) CALLS
FINERMAN OWNS (BAC), (BAC) PREFERRED
FINERMAN'S FIRM AND FINERMAN OWN (CVS)
FINERMA'NS FIRM OWNS (BP) CALLS
FINERMAN OWNS (RIG) CALLS
FINERMAN OWNS (RIG) CALLS
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