An unexpected rise in jobless claims and a sobering profit report from Cisco sent investors running for the exits Thursday.
The Dow, S&P, and Nasdaq all closed lower for the third consecutive day and have now all erased gains for the year.
In fact, over the past three days the Dow is down more than 400 points.
How should you position now?
Instant Insight with the Fast Money traders
I’m seeing a dramatic change in the market place and I’d get a little more defensive, says Joe Terranova. I’d look at gold , utilities as well as health care companies such as Baxter .
I thought the market action was fairly good, counters Karen Finerman. The bad economic data combined with the Cisco outlook was more than enough reason for the market to roll over, but it didn’t.
However, if you want some defensive suggestions I like Becton Dickinson, as well as Carefusion, Finerman adds.
I’m seeing signs that may well be positive, explains Guy Adami on theHalftime Report. For example the S&P bounced off its lows nicely, the Vix has collapsed -- meaning fear has come out of the market -- and Intel may have found a bottom around $19. If you’re bullish and think the tape will hold, I’d get long Caterpillar at current levels, he counsels.
I’m watching 1088 on the S&P, the 50-day moving average, adds Steve Grasso. The market dipped below that level which is a negative signal and could exacerbate a sell off. However, the market must close below that level for a couple days before I’d throw out my long positions.
It’s also worth noting that Goldman upgraded Simon Property Groupand Blackstone, adds Jon Najarian. I don’t think they would have done that if they were worried about deflation. Both companies are now on the Conviction Buy list - that may be telling.
Also copper and aluminum are trading well amid a poor tape, adds Steve Cortes. And that may be telling. I agree that deflation is probably not in the cards.
GOLD RISES THE MOST IN 8 WEEKS
Gold surged on Thursday after Goldman Sachs forecast significantly higher prices over the next 6 months – the firm’s price target is now $1300 an ounce.
What’s the trade?
Don’t forget that gold takes the stairs higher and the elevator down, warns Guy Adami. Clearly the trade right now is long gold but it unravels badly.
I think $1225 is a key level, says Joe Terranova. If gold settles above that level I'd expect it to take out the highs for the year and go to $1300.
SHAREHOLDERS HIT BACK AT H-P BOARD FOR HURD RESIGNATION
What could be the first of many lawsuits was filed on Thursday against the board of HP .
According to the Wall Street Journal the suit accuses H-P board of violating its corporate governance guidelines by failing to inform shareholders of the investigation into CEO Mark Hurd.