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S&P Action Tuesday Could Provide Key 'Tell'

This week expect investors to remain squarely focused on Japan.

First and foremost, Wall Street is keenly aware of the heartache stemming from earthquake and resulting tsunami.

On Monday a slew of firms including Goldman Sachs, Morgan Stanley JPMorgan and many others announced plans to donate millions to emergency relief efforts.

But like it or not, the tragedy is more than emotional. For investors it also requires cool and strategic decision making in an attempt to protect and profit in an environment of uncertainty.

What should you be watching? How should you position now?


JAPAN IMPACT: STOCK MARKET

World stocks hit a six-week low on Monday driven by a 7.5 percent slide in Tokyo shares. Both the Dow and S&P also traded lower though the sell-off here in the US was not nearly as severe.

What's the trade?

Fast trader Steve Grasso is watching key technical levels on the S&P. “If we break 1288 the next key level is 1275, the Egypt bottom.” And if that doesn’t hold the next level to watch is 1257, “that’s flat on year,” Grasso says.

Jon Najarian suggests being greedy when others are fearful. “A breakdown toward 1258 is a buying opportunity,” he says. Looking at fundamentals, he thinks Japan will be back on it feet “faster than most people think.

Jeff DeGraaf, institutional investors top ranked technical analyst for the past six years agrees. “The trend of the market is still higher," he says. "Add to positions at oversold levels,” he says. (Click here for our entire conversation with DeGraaf.)

Trader Guy Adami is on the other side of the trade. "I think the market is broken technically," he says. "My level in the sand is 1300, so I think we’ve broken down. Tuesday may be a critical day and I favor the downside."

When making broad market bets, trader Stephen Weiss says to also keep an eye on other catalysts. “Austerity measures by the ECB could crimp demand,” he says. “And the Mideast is still in flux. “Too many mixed currents,” he concludes. I’d pause.”

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JAPAN IMPACT: TECH

Tech shares were among the hardest hit on Monday with investors running for the exits on concerns that weakness in Japan will harm this sector, most.

Meanwhile, the desk has a few key names on the radar after UBS released a report showing companies that derived a substantial amount of revenue in 2010 from the Asia-Pacific region.

2010 REVENUE
Apple 24%
IBM 23%
Dell 12%
EMC 12%
Net App 10%
Source: UBS

Brian Kelly thinks the tech trade may be breaking down for 2011, broadly. He points to a number of signs such as anecdotal evidence from Finisar and Texas Instruments.

He also points to the macro slowdown in Europe and now troubles in Japan. Putting all the pieces together “we’re looking at an economically sensitive sector and an economy that’s starting to slow.”

Trader Zach Karabell is on the other side of that trade. “I’m not sure we’re seeing a shift in the big picture. I’m not ready to call a change in the global marco environment,” he explains. He also cautions not to confuse Asia-Pacific with Japan only. “Asia Pacific includes China, Taiwan, Thailand, Vietnam Korea and more,” he says.

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JAPAN IMPACT: ADRs

Stocks of many Japanese companies took a hit after the earthquake. Has the sell-off presented any buying opportunities?

If you feel compelled to look at ADRs, Zach Karabell suggests Toyota. However, largely he suggests moving to the sidelines, until events plays out a little more. "I’d hesitate to wade into these areas," he says.

Jon Najarian thinks Toyota as well as Honda and Sony belong on the radar. "I think these companies will be back in production mode faster than most people think. And they have factories all around the globe."

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JAPAN IMPACT: ENERGY

The traders are watching moves all over the energy sector because of the troubles in Japan.

What’s the trade?

Joe Terranova remains bullish on energy equities. "I added to BTUand took a new position in Consol Energy and increased my exposure in UPL."

Stephen Weiss suggests keeping an eye on names related to LNG gas, such as GLNG , with Japan likely needing to import this energy source. "It has to be frozen brought into a sold and then shipped," he says.

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JAPAN IMPACT: CLEAN UP

The traders are also looking at the companies involved in the clean-up efforts in Japan.

What’s the trade?

Jon Najarian has spotted unusual options activity in Clean Harbors. "We’re seeing a pick up in volume and volatility," he says.

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CHART OF THE DAY: EWJ

The traders are closely watching the action in the iShares MSCI Japan Index.

What’s the trade?

Brian Kelly is short but he made the bet before the earthquake. "I was betting on a stronger yen hurting Japan’s exports," he says. "And I still am."

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JAPAN IMPACT: OTHER

Concerns about the stock market ripple generated by the Japan earthquake sent stocks lower broadly. Was anything oversold?

Joe Terranova suggests putting ag stocks on the radar. "I'm a buyer of Potash and CF Industries .

* Note, trader commentary above was compiled from Fast at 5 as well as the Halftime Report.

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STREET FIGHT


This throw down puts the Fed in the crosshairs. Some people are calling for QE3, but Natixis head of US fixed income trading Abdullah Karatash says "no way" start raising rates now.

It’s a bloody contest. Who wins? Take a look and see for yourself.





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Trader disclosure: On March 9, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Weiss Owns (SHAW); Steve Weiss Owns (FWLT); Steve Weiss Owns (MSFT); Steve Weiss Owns (MEE); Steve Weiss Owns (CSCO); Steve Weiss Owns (QCOM); Steve Weiss Is Short (ANF); Guy Adami Owns (AGU); Guy Adami Owns (C); Guy Adami Owns (GS); Guy Adami Owns (INTC); Guy Adami Owns (MSFT); Guy Adami Owns (NUE); Guy Adami Owns (BTU); Joe Terranova Owns (VRTS); Joe Terranova Owns (C); Joe Terranova Owns (GS); Joe Terranova Owns (PNC); Joe Terranova Owns (USB); Joe Terranova Owns (JPM); Joe Terranova Owns (UPL); Joe Terranova Owns (ABT); Joe Terranova Owns (CVI); Joe Terranova Owns (RSX); Joe Terranova Owns (CNQ); Joe Terranova Owns (MS); Joe Terranova Owns (PBR); Joe Terranova Owns (BAX); Joe Terranova Owns (TEVA); Joe Terranova Owns (BTU); Joe Terranova Owns (CNX); Joe Terranova Owns (SU); Pete Najarian Owns (AAPL); Pete Najarian Owns (GE); Pete Najarian Owns (NTAP); Pete Najarian Owns (GE); Pete Najarian Owns (TCK)

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