Euro Drop: Decoupling or Time to Sell US Stocks?
“Fast Money” pro Steve Cortes said it’s the latter.
“For a long time, basically all of last year, I was very vocal and I traded accordingly, saying that the U.S. would massively outperform the rest of the year,” he said Wednesday, adding that it has become a common opinion. “As soon as that becomes a consensus view, I become very skeptical of that.”
Decoupling is bunk, Cortes said.
“It is not something markets do on a sustainable, long-term basis,” he said. “Globalization is a two-edged sword, and we cannot only have the benefits of globalization.”
Guy Adami of Drakon Capital disagreed.
“You can’t be dogmatic in terms of your views about the market. If the market says it wants to go up, you have to allow it to go up and you can’t trade against it — 1,225 in the S&P, resistance became support,” he said. “Now 1,265 is your bogey.”
Adami noted that he had been negative on the global economy but looked to market activity.
“You’re starting to see the signs where people believe in a rally — I’ll say this again — as long as we stay above 1,265, which, granted, is now some 25 S&P points away,” he said.
Trader Brian Kelly agreed with Cortes’s premise, but not his timeline.
“I think Cortes will be proven right, but I think it’s probably be closer to Flag Day before his trade works,” he said.
Jon Najarian, OptionMonster.com co-founder, said it was important to keep in mind that the U.S. Treasury would continue to print currency.
“Anybody who doesn’t think that the euro is going to see any kind of a bounce here as we turn those printing presses back on, I think is sadly mistaken,” he said.
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Trader disclosure: On Jan. 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns C; Adami owns GS; Adami owns MSFT; Adami owns AGU; Adami owns INTC; Adami owns BTU; Adami owns NUE; Najarian owns AAPL; Najarian owns BAC; Najarian owns GS; Najarian owns BCS; Najarian owns TXT; Najarian owns URBN; Najarian owns INTC; Najarian owns CMC; Najarian owns FSLR; Najarian owns WYNN; Najarian owns DHI; Najarian owns LEN; Najarian owns WLT;
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