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Greece Audit Could Roil Markets Next Week

An audit of Greece next week could send markets lower, so it might pay to beware of trades linked to Europe, one “Fast Money” pro said Monday.

“Nothing’s new. We know about the risks in Europe,” said Larry McDonald, Newedge senior director.

What is new, however, is a Jan. 16 review of Greece’s austerity measures and tax collection rates, as well as private sector involvement.

If it goes poorly, Greece might be forced to accept stricter guidelines by the troika of IMF, European Central Bank and EU officials.

“I see a number of risk points over the 15 to 20 days,” McDonald said. “Imagine trying to collect taxes when the GDP original outlook for last year was at minus-3 percent. That’s now looking at minus-6.”

McDonald said if European officials play hardball, there could be political ramifications.

“There might some airing of dirty laundry, and that’ll create a risk-off trade,” he said. “But I think the market is very, very cheap, so this creates a great buying opportunity. Technically, without Europe, this market could be 1,000 points or higher on the Dow.”

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Trader disclosure: On Jan. 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: Murphy is long M; Murphy is long CMI; Murphy is long CAT; Murphy is long TYC; Murphy is long SWK; Murphy is long KEX; Murphy is long CSX; Murphy is long BRCD; Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU)

For Scott Nations
Nations is long BAC

Nations is long C

Nations is long SPY

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