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Pros: If S&P Closes Below 1283, Ugly Week Ahead

Tuesday, 2 Aug 2011 | 1:39 PM ET

On Tuesday chatter on the floor had everything to do with the market and whether it had reached a breaking point.

The S&P traded lower for the 7th consecutive session with the market now facing its longest down streak since October 2008.

And the Fast Money pros think the environment could get worse – a lot worse.

The usually bullish Joe Terranova says, ”The rest of the week could get ugly.” Terranova, like so many other pros, is very focused on the technicals – and they’re at a critical inflection point.

Since mid-June the S&P has been testing the 50-day moving average but then bouncing and closing above that level.

However, on Tuesday, that six week trend looked like it was about to collapse with the S&P well below the 50-day which is currently 1283 – and threatening to close there.

To make matters all the worse for bulls, the 30-year broke below 4% another key technical ‘tell.’

”The consequence is that even if you want to buy - because of the technicals - you can’t,” explains Terranova.

In other words, these technical ‘tells’ will compel money managers to reduce risk and shed long positions – which in turn will create further selling pressure.

"Now that we’ve broken technical levels traders will step back and protect capital,” adds Brian Kelly

And as if that’s not bearish enough – the all important jobs number is scheduled to be released on Friday. Considering jobs is a major X-factor, the Fast traders agree, ahead of the data, money manager are much more likely to play it safe than sorry.





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Trader disclosure: On Aug 2nd 2011, 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 (XOM); Terranova owns (DIS); Terranova owns (WFM); Terranova owns (LULU); Terranova owns (MSFT); Terranova owns (TM); Terranova owns (JWN); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (MA); Terranova owns (BX); Terranova owns (GS); Terranova owns (DAR); Terranova owns (CAT); Terranova owns (VRTS); Terranova owns (AAPL); Terranova owns (F); Terranova owns (CVI); Terranova owns (IBM); Terranova owns (FCX); Cortes owns (PM); Cortes owns (WMT); Cortes is short (LULU); Cortes is short (LVS); Cortes is short Copper; Cortes is short EUR/CHF; Cortes is short the AUD; Cortes is short the CAD

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of Building Materials Holdings
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LHO)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of Sun Pharmaceutical Industries Ltd
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (RLI)
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 (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
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 Domino's Pizza UK & IRL PLC

For Patty Edwards
Edwards owns (AAPL) For Clients
Edwards owns (BMY) For Clients
Edwards Owns (CBS) For Clients
Edwards Owns (CVX) For Clients
Edwards Owns (DIS) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (HLF) For Clients
Edwards owns (JNJ) For Clients
Edwards Owns (JWN) For Clients
Edwards Owns (PH) For Clients
Edwards Owns (TGT) For Clients
Edwards Owns Gold For Clients
Edwards Owns Silver For Clients
Edwards Owns Platinum For Clients
Edwards owns (FXC)
Edwards owns the Canadian Dollar

For Brian Kelly
Accounts Managed By Brian Kelly Capital Own (TLT) calls
Accounts Managed By Brian Kelly Capital Own (GLD) calls
Accounts Managed By Brian Kelly Capital Own (SLV) calls
Accounts Managed By Brian Kelly Capital Own (FCX) calls
Accounts Managed By Brian Kelly Capital Own (NLY
Accounts Managed By Brian Kelly Capital Own Australian Dollar
Accounts Managed By Brian Kelly Capital are short the U.S. Dollar

For Christina Mcglone
Deutsche Bank and/or its affiliate(s) have received non-investment banking related compensation from (ADM) within the past year.






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