GO
Loading...

Sell the Strength Sure, but Buy Any Weakness?

Unless you have most of your money in bonds, chances are you’re ending the quarter at least bruised and perhaps a little bloody.

We’re willing to bet that if you hold AK Steel, Netflix, First Solar, Bank of America, Hewlett Packard and/or Caterpillar , you're probably a little nauseous too. They’re among the quarter’s worst performers. Take a look:

Q3 Declines
AK Steel -58%
Netflix -58%
First Solar -52%
Bank of America -43%
Hewlett Packard -36%
Caterpillar -30%

But are the declines so sharp that they present opportunity?

Most of the Fast pros say no – they still feel these names either face company specific challenges or they’re too vulnerable to macro-headwinds.

Looking at the stock specific challenges - ”Meg Whitman has a big mess on her hands at HP. I wish her well but I wouldn’t touch her stock,” says Fast trader Patty Edwards.

And as for the macro-headwinds, ”I expect we revisit the lows of 1101 in October. I think the market’s about to fall down,” adds Steve Grasso.

Part of his thesis is based upon the recent weakness. “At the end of the quarter when we typically see window dressing, the stock market declined. That’s telling you something."

And about 70% of all stocks trade in the general direction of the S&P.

The only trader who’s modestly bullish is Jon Najarian. But he’s just looking for a quick bounce into the start of the quarter largely on the belief that “there were stocks that money managers just didn’t want on the sheets at all."

So much for stocks.

Unfortunately commodities weren’t a whole lot better. Cotton, orange juice, and corn all finished the quarter lower. However, of greatest concern is the action in copper. The red metal is flirting with 2011 lows.

”Technically the copper trade looks broken, says money pro Dan Dicker. “I think it has lower to go. You’re probabaly still better off short than long. I think it takes a long time for copper to base.”

That’s not to say that some traders didn’t make money – they did. The best performing investment of the quarter was a long position in the 30-year Treasury. It returned about 15.5%.

And that begs the question, with yields so low as a result of the price increases over the last quarter – which is what the chart shows - will the market see any kind of rotation?

Our pros don’t think anything is imminent.

”Not until we get clarity from Europe do I expect to see any kind of real rotation,” says Patty Edwards.

Jeff Kilburg of TreasuryCurve agrees. “I expect to see leadership from the bond market.”

What do you think? We want to know!

Vote
Vote to see results
Total Votes:

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


MONEY IN MOTION

Dollar strength continued Friday with the greenback up sharply versus the euro on concerns European leaders aren’t doing enough to contain the debt crisis.

So what’s next for the euro?

Find out from Camilla Sutton, chief currency strategist at Scotia Capital. Watch the video now!




______________________________________________________
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 Sep 30, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Dicker is long oil; Dicker is long SLB; Dicker is long APA; Jon Najarian Owns NFLX call spread; Edwards owns APA; Edwards owns XLK; Edwards owns COP; Grasso owns AKS; Grasso owns AMD; Grasso owns ASTM; Grasso owns BA; Grasso owns BAC; Grasso owns C; Grasso owns D; Grasso owns JPM; Grasso owns LIT; Grasso owns LPX; Grasso owns MAR; Grasso owns MHY; Grasso owns NDAQ; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XHB; Grasso owns XLB; Grasso owns XLI

For Patty Edwards
Trutina Financial owns TGT
Trutina Financial owns WLT
Trutina Financial owns MCD
Trutina Financial owns ORCL
Trutina Financial owns QCOM

For Steve Grasso
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 FDX
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 JPM
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 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 RHT
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 Jeff Kilburg
No disclosures

For Camilla Sutton
No disclosures




CNBC.com with wires.

Symbol
Price
 
Change
%Change
AKS
---
BAC
---
CAT
---
FSLR
---
HPQ
---
NFLX
---

Contact Halftime Report

  • Showtimes

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