WHICH WAY DO WE GO?
The headline: Is The Correction Over Or Is This Just the Calm Before Another Storm?
The volatility is starting to subside, Pete Najarian says. If the market can continue to hold where it is there is a “great chance the Fed will sit on the sidelines, which he thinks is the healthiest thing for the market.” Pete also thinks the “unknown is now known” with some of the big money center banks like Bank of America (BAC), Citigroup (C), Wells Fargo (WFC) and Capital One (COF). The exposure these banks have to the credit situation is now becoming apparent and that’s good, he says. These banks will prosper under the right conditions and “right now they’re starting to bubble.”
Constance Hunter notes that the yen rallied Tuesday, meaning the carry trade might still be unwinding – and that means volatility could still be ahead. She’d be a buyer of the CBOE Volatility Index (.VIX) here.
This is just the calm before another storm, Jeff Macke says. The market is acting like the Fed has already cut rates.
OIL FALLS ON GULF COURSE:
The headline: Crude Drops below $70 As Hurricane Dean Weakens, Misses Key Gulf Oil Platforms
Luckily, Hurricane Dean didn’t cause enormous disruptions, Guy Adami says. That, coupled with the trend of hedge funds getting out of some of their energy exposure, oil is starting to get cheap, he says.
The headline: Tech, Chip Stocks Like Cisco (CSCO)Among Today’s Stronger Performers
Pete Najarian recommends EMC (EMC), NVIDIA (NVDA), and the newly-public VMware (VMW). As tech spending continues, these stocks are moving higher, he says. He also recommends Research in Motion (RIMM) after its three-to-one stock split – which would put shares at over $250 each if you took out the split.
Guy Adami likes Network Appliance (NTAP), which just instituted a $1 billion stock buyback that should put a floor in the stock. He thinks NTAP goes to $30.
Constance Hunter thinks Apple (AAPL) has been oversold and likes it on strong iPhone sales.
The headline: Target (TGT) Breaks Out of Wal-Mart’s (WMT) Earnings Shadow With 13% Profit Jump; Target Reports Healthy Rise in Same-Store Sales, Reaffirms Full-Year Forecast
The specialty retailers are what’s working here, Jeff Macke says. He recommends GameStop (GME) and Zumiez (ZUMZ), which has “been working all year,” although it would be smart to take some off on ZUMZ for a trade, he says.
AFTER HOURS ACTION: MEDTRONIC SKIPS A BEAT
The headline:Medtronic (MDT), No. 1 Maker of Heart Devices, Drops After Hours as Revenue Misses Estimates
Medtronic is a great company with great numbers but disappointed on expectations, Pete Najarian says, and it’s down after hours, making for a great buying opportunity, he says. He thinks MDT’s international growth will continue.
BACK FROM THE WOODSHED:
The headline: Agrium (AGU), Potash (POT), Agricultural Stocks Aggressively Making Back Selloff of Past Month
The agriculture complex is “completely unaffected” by the credit markets, which accounts for some of its comeback, Constance Hunter says. Also, the global growth of food itself, that is, more mouths to feed, in addition to the surge in biofuels makes for “great buying opportunities” in the “oversold” agriculture names, she says.
THE RATE LEAP FORWARD:
The headline: China Boosts Interest Rates For 4th Time Since March as Inflation Hits 10-Year High
Guy Adami thinks the other shoe will drop in China, the problem is that no one knows when – but this should raise concerns.
China has allowed some liquidity to exit into Hong Kong, Constance Hunter says. If you want to get long Hong Kong you can do with through the iShares MSCI Hong Kong Index (EWH).
Pete Najarian thinks China should be owned up until next year’s summer Olympics. The growth will continue up until the games, he says, and a 2% pop in the iShares Xinhua China Index (FXI) on Tuesday alone should prove it.
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Trader disclosure: On Aug 21 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money; Macke Owns (INTC), (ATVI), (EMC); Najarian Owns S&P Puts; Constance Hunter Is The Founder And Owner Of Coronat Capital Management; Coronat Capital Management Owns (INFY),(H&M), (USO); Coronat Capital Management Owns Yen; Coronat Capital Management Owns VIX Options; Coronat Capital Management Is Short (FXI); Coronat Capital Management Is Short (EWH) But Owns Local-Listed Hong Kong Shares