GO
Loading...

Fast Pros Navigate the Crazy, Dizzy Market Action

On Tuesday it was hard to tell professional investors from thrill seekers who just stepped off that latest theme park ride. Both were doubled over – some elated others near tears - all whipsawed by the Great American Scream Machine.

In fact, investors probably had it a little worse than people on the regular roller coaster - the market reversed directions six times before the wild ride ended.

”We moved 852 Dow points in an hour and 42 minutes,” says OptionMonster Jon Najarian.

And like any good theme park attraction, the biggest whoosh happened at the very end with stocks surging higher into the close – making Tuesday the stock market's best day in more than two years.

Of course, that was after a dizzying drop of more than 17% over the past two weeks and more than a 600 point drop in the Dow, just one day earlier.

"This was a war," says Fast trader Tim Seymour. "The Street wanted to test its resolve."

The catalyst was the latest commentary from the Fed, which pledged to keep rates exceptionally low into 2013.

At first investors took the commentary to mean the economy would remain weak for well over a year.

However, after the market digested the Fed statement, buying prevailed with more investors taking the commentary to mean the Fed would do anything and everything to push the stock market higher– including issuing a statement that made it clear they had no intention of raising rates and offering investors yield.

"I think the Fed just started the clock on a massive 2-year search for yield," says trader Joe Terranova.

After the wild ride, how should you position? What should you be watching?

Strategic investor Dennis Gartman thinks at least for the short term – the path of least resistance is higher. “The panic is done for now,” he says. “The bottom is in for a while.”

In fact Gartman has already established long positions in the SPY. And if the S&P holds he suggests looking at steel, railroads and banks.

However he concedes, the market could very well go back and test the Monday lows “just to see how good they are. Don’t get too married to a long position. I don't know if the ultimate bottom is in, but for a while the 'V' bottom is in."

Trader Joe Terranova concurs. He’s putting money to work in Caterpillarand JPMorgan as well as Amazon . If you're looking for other ideas, he also says August to December is typically a strategic time to own technology.


Trader Pete Najarian is also establishing new longs. He thinks the market has settled enough to look at BofA and Blackstone simply because he thinks they were beaten up badly. “But only put a toe in the water, don’t dive in head first,” he says.

Trader Steve Cortes is also a buyer “because Monday was so chaotic,” he says. "When traders are cryin' I'm buyin'."

Cortes if focused on consumer staples and is a buyer of Walmart , Procter & Gamble and J&J . Cortes feels that oil’s down move – which totals $40 from peak to trough – presents massive relief to consumers in the form of lower prices at the pump. “It’s time to be constructive,” he says.

Trader Patty Edwards is more cautious. She’s staying on the sidelines and doesn't trust the rally. “Bounces can be quick and violent,” she says. “Nobody sprinkled any magic fairy dust on this market.”

Trader Steve Grasso shares the caution. He says, "don’t do anything until S&P holds 1168 for a couple days."

Karen Finerman is also in the cautious camp. She has a hard time reconciling the sharp changes in the market value of companies versus "the underlying value of companies which didn’t change that much."

According to Chris Verrone of Strategas – "wait and see" may be the best strategy. After looking at chart patterns he tells us that he thinks “Tuesday's gains are a classic oversold bounce.”

Dan Niles of Alpha One shares the concern. He tells us that he’s expecting a 10% rally from Monday’s bottom. “But then we go back to the same problems and I think we can re-test the lows and perhaps even break through, them.”

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

What do you think? We want to know!


* Trader comments in this post were compiled from both Fast at 5 as well as Halftime



______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our Web site send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On Aug 9th 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Finerman and Finerman’s firm own (AAPL); Finerman owns (BAC) and Finerman’s firm own (BAC) leaps; Finerman owns (JPM) and Finerman’s firm owns (JPM) stock and (JPM) leaps; Finerman’s firm owns (HPQ) stock and (HPQ) puts; Finerman and Finerman’s firm own (MSFT); Karen Finerman owns (GOOG); Finerman’s firm owns (IBM); Finerman's Firm Is Short (IWR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (XRT); Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts; Steve Grasso owns (AMD); Steve Grasso owns (ASTM); Steve Grasso owns (BA); Steve Grasso owns (BAC); Steve Grasso owns (C); Steve Grasso owns (D); Steve Grasso owns (JPM); Steve Grasso owns (LIT); Steve Grasso owns (LPX); Steve Grasso owns (LVS); Steve Grasso owns (MAR); Steve Grasso owns (MHY); Steve Grasso owns (NDAQ); Steve Grasso owns (PFE); Steve Grasso owns (PRST); Steve Grasso owns (UAL); Steve Grasso owns (XHB); Steve Grasso owns (XLB); Steve Grasso owns (XLI); Terranova owns (XOM); Terranova owns (CVI); Terranova owns (CAT); Terranova owns (OXY); Terranova owns (AAPL); Terranova owns (DAR); Terranova owns (FCX); Terranova owns (CACI); Terranova owns (ARUN); Terranova owns (ORCL); Terranova owns (EMC); Terranova owns (NCR); Terranova owns (VMW); Terranova owns (IBM); Terranova owns (AMZN); Terranova owns (LULU); Terranova owns (LTD); Terranova owns (WFM); Terranova owns (JPM); Terranova owns (AXP); Terranova owns (FXA); Terranova owns (VRTS); Terranova owns (LQD)


For Steve Grasso
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MET)
Stuart Frankel & Co and it’s partners own (MSFT)
Stuart Frankel & Co and it’s partners own (YHOO)
Stuart Frankel & Co and it’s partners own (RHT)
Stuart Frankel & Co and it’s partners own (MET)
Stuart Frankel & Co and it’s partners own (MU)
Stuart Frankel & Co and it’s partners own (NYX)
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 (SDS)
Stuart Frankel & Co and it’s partners own (UAL)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners are short (QQQQ)

For Joe Terranova
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



CNBC.com and wires

Symbol
Price
 
Change
%Change
AMZN
---
BAC
---
BX
---
CAT
---
JNJ
---
JPM MLP ETN
---
PG
---
SPY
---
WMT
---

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report