Do You Dare Buy This Pullback?

Once again, investors went running for the exits as headlines out of Europe reminded Wall Street that overseas financial woes may again be spinning out of control.

The S&P traded sharply lower and the Dow tumbled by triple digits with investors determined not to get burned by the latest developments. Traders on the floor are saying, “we’re not going to get caught in the same trap as last year,” explains Fast pro Mike Murphy.

This time troubles began in the Netherlands. After Dutch officials failed to agree on budget cuts, the Dutch prime minister tendered his government's resignation on Monday.

“The Netherlands is very serious,” says trader Brian Kelly. “They were staunchly behind austerity – but now that they can’t make a budget – who knows?”

Adding to the turmoil was the possibility of a socialist victory in France, which also casts doubts on future austerity measures.

Here in the US, the selloff was broad with seven stocks on the New York Stock Exchange falling for each one that rose.

Now what? Do you dare buy this pullback?

Strategy Session with the Fast Money traders

In a nutshell, pro trader Joe Terranova does think you buy the pullback - but strategically.

“I don’t think the way to play this market is with a binary thesis – that is risk on or risk off. Instead the way to play this market is to buy quality on pullbacks such as this,” says Terranova. “Lately, financials have been a source of opportunity. Personally I pulled the trigger on JPMorgan this morning, ” he says.

Terranova also likes oil services on the weakness and tells us Schlumberger , Halliburton, and Hornback Offshore are all on his radar.

Trader Mike Murphy agrees. He too believes the pullback has generated buying opportunities.

Like Terranova, he also finds JPMorgan attractive on the pullback. “And I’m looking at quality names that have released earnings and said good things: that includes Ingersoll Rand and Johnson Controls,” Murphy says.

Amid the pullback, trader Brian Kelly sees opportunity, too - Kelly sees it in US regional banks, which are mostly a play on the US economy. “Look at Sun Trust he says.”

Trader JJ Kinahan also subscribes to the thesis. “Last week McDonald’s talked about strength in US market – and housing companies said some good things, too.” It should all bode well for the USA.

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Trader disclosure: On Apr 23, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Joe Terranova is long JPM; Joe Terranova is long NXPI; JJ Kinahan is long AAPL Options; JJ Kinahan is long C; JJ Kinahan is short GS puts; JJ Kinahan is short WFC puts; JJ Kinahan is long TLT; JJ Kinahan is long CSCO; JJ Kinahan is short YHOO puts; JJ Kinahan is short SPY; Mike Murphy is long BAC; Mike Murphy is long JPM; Mike Murphy is long INTC; Mike Murphy is long ANF; Mike Murphy is long SBUX; Mike Murphy is long FCX; Mike Murphy is long PHM; Brian Kelly is long LWM; Brian Kelly is long KRE; Brian Kelly is long USG; Brian Kelly is long BUNDS; Brian Kelly is short EWW; Brian Kelly is short FTSE 100; Brian Kelly is short EURO STOXX BANKS; Brian Kelly is short YEN

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