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How To Protect & Profit As Market Spirals Lower

The Dow fell for a 7th straight day Friday after a dismal jobs report confirmed what a slew of economic reports suggested earlier in the week; the recovery may be at risk.

Investors turned their backs on stocks broadly, worried that the prospects for Corporate America are murky, at best. For the week, the Dow fell 4.5 percent, the S&P lost 5 percent and the Nasdaq shed 5.9 percent.

Now the chatter on Wall Street is all about how much father stocks may fall. What seemed like just a correction at first is now starting to look like the start of a bear market.

How do you protect and profit in this environment?

Instant Insights with the Fast Money traders

I’m worried about the market and I think the way to protect yourself is to get out, says Guy Adami. I do think we’ll get another rally that investors can sell into. But long term I think we’re going a lot lower.

If you think the market is going down, be a buyer of the Ultra-Short S&P 500 ETF , counsels Steve Grasso. It’s not a cure-all, but it could help.

I’m worried about Tuesday, reminds Joe Terranova. As I said on the Halftime Report we could be looking at capitulation. However if we do get a big whoosh lower on Tuesday, I’d become a buyer, especially of technology stocks such as Apple .

I see no reason to be in this market, says Brian Kelly. And if you’re aggressive I’d get short, he says.

I also don’t like the market, says Patty Edwards. I don’t see any catalyst until earnings and they don’t really start to kick until the middle of July.

Everyone on the desk is bearish, muses Simon Hobbs who’s filling in for host Melissa Lee. Isn’t that a bullish sign? It’s the perfect contrarian call.

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MARKET BUZZKILL: BANKS

Banks were the big market buzz kill this week with the financial ETF falling more than 7% over the last 5 days; Morgan Stanley was one of the biggest losers hitting a new 52-week low.

What must you know?

The yield curve isn’t as steep as it used to be, explains Brian Kelly. The gravy train is over.

I’m holding Citi, but I’m holding it for 5-years, reminds Steve Grasso. The move lower in financials now is guys selling who were looking for the quick play.

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OIL, COMMODITY STOCKS FALL ON GROWTH CONCERNS

Commodity and commodity stocks experienced big declines this week with crude perhaps the most notable mover; down 8.5% for the week. And on Friday the price of oil fell to its lowest level in nearly a month,.

Meanwhile gold traded below $1,200 an ounce earlier in the week a technical break down.

What’s the trade?

Looking at gold, I think the trade is to be short, says Joe Terranova.

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CONSUMER STOCKS: BUY ON THE BAD NEWS?

With weak jobs growth and a sketchy market, you might think the consumer is an iffy bet these days. However Brian Nagel of Oppenheimer begs to differ.

He tells the desk he’s a buyer of retail and suggests looking at the following 4 stocks:

Bed Bath & Beyond
Williams-Sonoma
Pier 1 Imports
Life Time Fitness

”I think the consumer is actually in decent shape,” he says. Nagel has performed proprietary checks and after talking to his sources tells us, “Most management teams are concerned about what could happen in this fragile environment but sales momentum seems to be building.”

*Hear more from Brian Nagel. Watch the video to your left!




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Trader disclosure: On July 2, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (FCX), (MON), (AGU), (KO), (XOM), (TEVA), (RDS.A), (GMCR), (UPL), (GS); Terranova is short gold; Terranova owns (GLD) July 123 puts; Terranova owns (GS) JULY 130 CALLS; Terranova owns (GS) JULY 135 CALLS; Najarian Owns (PFE); Najarian Owns (CELG); Grasso owns (ASTM), (ABK), (BAC), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST)

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 (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
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 (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)

For Steve Grasso
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (DYN)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (IP)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

For Patty Edwards
Edwards Owns (PM)
Edwards Owns (AAPL) For Clients
Edwards Owns (AMGN) For Clients
Edwards Owns (AMZN) For Clients
Edwards Owns (BA) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (C) For Clients
Edwards Owns (CELG) For Clients
Edwards Owns (DO) For Clients
Edwards Owns (EBAY) For Clients
Edwards Owns (FCX) For Clients
Edwards Owns (GLD) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (HD) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (WMT) For Clients
Edwards Owns (YHOO) For Clients
Edwards Owns (VXX) For Clients
Edwards Owns (PM) For Clients

For Brian Kelly
Kelly Is Short (GS)
Accounts Managed By Kanundrum Capital Are Short (FCX)
Accounts Managed By Kanundrum Capital Are Short (USO)
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short (PCAR)
Accounts Managed By Kanundrum Capital Are Short (WYNN)
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short (XLI)
Accounts Managed By Kanundrum Capital Are Short (XLK)
Accounts Managed By Kanundrum Capital Are Short (EWI)
Accounts Managed By Kanundrum Capital Are Short (EWO)
Accounts Managed By Kanundrum Capital Are Short (BUCY)
Accounts Managed By Kanundrum Capital Are Short (MCO)
Accounts Managed By Kanundrum Capital Are Short (NATI)
Accounts Managed By Kanundrum Capital Are Short (RSX)
Accounts Managed By Kanundrum Capital Are Long Euro
Accounts Managed By Kanundrum Capital Own (SDS)

For Anthony Scaramucci
Scaramucci Owns (GS), Skybridge Owns (GS)
Scaramucci Owns (C), Skybridge Owns (C)
Scaramucci Owns (BAC), Skybridge Owns (BAC)

Brian Nagel
***No Disclosures On BBBY, WSM, LTM, PIR

Mark Schoenebaum
ISI Does And Seeks To Do Business With (GILD), (CELG), (GENZ), Has Recieved Non-Investment Banking Compensation In Past 12 Months

Mark Chandler
***No Disclosures

Mike Boyd
***No Dislcosures



CNBC.com with wires

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