On Monday, the both the Dow and S&P fell broadly as investors grew tired of hearing talk but seeing little action from lawmakers in Washington as they squabble over the debt ceiling.
The longer the debt ceiling debate remains unresolved, the bigger the risk for further declines in stocks and a spike in volatility.
”There’s a lot of pressure on the market right now,” says trader Pete Najarian. "I'm also negative on the market," adds trader Stephen Weiss.
Although most of the Fast traders expect stocks to drift lower in the near term – they do think pockets of the market could provide some catalysts. Here’s what they’re watching.
Pete Najarian is bullish and suggests a long position ahead of Tuesday earnings. He calls it a tactical idea and expects the company to profit as iPad and iPhone production and sales ramp into year’s end.
Trader Steve Grasso shares Najarian’s enthusiasm. He’s says, “it’s an Apple world and I’m positive on the name.”
Trader Patty Edwards is more cautious. She likes Apple long-term but adds she would not buy ahead of earnings. “Too many things could go wrong,” she says. “There’s chatter that the new iPhone overheats.”
Trader Stephen Weiss suggests playing Apple downstream with a long position in Qualcomm . “They’ve become one of the principal providers of chips for iPhone and iPad,” he says.
Pete Najarian loves this stock but also says, into Monday's earnings, he thinks it’s a little ahead of itself. If the stock pulls back near its 50-day of $170 – “that’s the opportunity,” he says.
Stephen Weiss thinks the company is run by one of the best management teams in technology if not the entire market. “I’d also love for it to pullback,” he says.
Although the stock has pulled back nearly 10% since the middle of last week, Pete Najarian can’t get behind this high flier. "You don't need to jump in here," he says.
If you’re already long, Steve Grasso suggests lightening up at these levels. “The chart looks toppy. Right now I’d take chips off the table,” he says.
But none of the traders would sell the stock short. “A bazillion people have tried to short it and they’ve not been able to do it successfully." reminds Patty Edwards. "I wouldn’t be short or long.”
Hear more on Netflix from Andy Hargraves of Pacfic Crest Securities. Find out why he cut his rating on Netflix to ‘Sector Perform from ‘Sector Outperform'. Watch the video now!