STOCKS STUMBLE ON THE WEEK
Although the S&P closed higher Friday, all three major indexes closed down for the week as investors questioned whether stocks were due for a correction.
After four weeks of gains, the Dow fell 3 percent, the S&P lost 2.6 percent, and the Nasdaq dropped 1.7 percent for the week.
Concern that the economy remains weak and that the next spate of earnings will be disappointing sidelined the bulls – who have driven the S&P 500 up as much as 40 percent from March's 12-year low.
It seems a debate is emerging -- Do we need to rest here? Do we need to pull back? Or can it continue?'
Strategy Session with the Fast Money Traders
The market lost the leadership from the resource and energy sector , explains Joe Terranova. That does not bode well for the bulls going forward.
I've noticed that major strategists are starting to downgrade the market, adds Tim Seymour. However despite those downgrades the S&P held above the 200-day and that leads me to believe we’re range bound.
I think we grind lower, counters Guy Adami. Traders seem complacent to be long and that’s the wrong trade in my book.
I’m also cautious, adds Jared Levy. Options action suggests to me the next leg is lower.
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IPHONE MANIA RETURNS
Tech investors spent Friday sorting through a mixed bag of results. Apple closed higher after its new and improved iPhone hit stores on Friday. The 3GS smartphone features a faster processor, longer battery life and the ability to take videos.
Rival Palm also recorded gains ahead of earnings next week. RIMM, however, traded lower after the firm offered weaker-than-expected guidance.
What’s the tech trade?
I think RIM is a dangerous stock at current levels, says Tim Seymour.
It seems to me RIM trades down into the $60’s, adds Guy Adami. If you’re long you may have gotten in too early.
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MICROSOFT A CONVICTION BUY
Goldman Sachs added Microsoft to its “Americas conviction buy list” Friday and raised its price to $29 per share from $25 per share.
Goldman said Microsoft's revenue drivers, improved expense management and cash balances provided opportunities for the company to beat on its profit estimates.
"Looking out to calendar year 2010 and beyond, the new product pipeline, combined with a modest rebound in information technology spending, should buoy top-line growth," Goldman wrote in a note to clients.
What’s the trade?
In terms of valuation Microsoft looks cheap, muses Tim Seymour. And it seems they could experience growth from their new line of products. I think the stock goes higher.
The stock has been very resilient, adds Joe Terranova. I think Microsoft is a buy for its new operating system as well as Bing.
From a technical perspective I think the Microsoft pulls back before it goes higher, adds Jared Levy.
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ANALYST SAYS BUY CITI
Shares of Citigroup closed in positive territory on Friday after widely followed analyst Dick Bove upgraded the bank to a 'Buy' and suggested an ultimate price target of $12.
Dick Bove has upgraded the stock a couple times and he’s been wrong, reminds Guy Adami. I wouldn’t be a buyer on this upgrade.
If you’re looking for a bank trade check out Santander, counsels Tim Seymour. I think it’s one of the best banks in the world.
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TOPPING THE TAPE: HEALTH CARE’S BIG WEEK
Healthcare finished the week as the only sector in the green with investors rotating money into stocks they feel are better positioned to withstand weakness in a still uncertain economy.
S&P SECTORS THIS WEEK
Energy -8%
Materials -7%
Financials -4%
Industrials -6%
Cons.Disc -3%
Tech -2%
Cons. Staples -2%
Utilities -2%
HEALTH CARE +3%
What's the trade?
In the space I like Abbot Labs, counsels Guy Adami. It could go to $50.
I prefer Cigna, adds Tim Seymour.
Also take a look at the XBI , says Joe Terranova.
I’m bearish on the space for the very short term and looking for a pullback, counters Jared Levy. I think you can find your entry point a little lower.
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SIRIUS XM RADIO TOP IPHONE DOWLOAD
And in breaking news CNBC’s Silicon Valley Bureau Chief Jim Goldman reveals that the app for Sirius XM is one of the most popular downloads for the iPhone.
That could mean big things for Sirius shareholders, muses Goldman.
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FAST FATHER’S DAY PLAY
With Father's Day on Sunday, how can you profit from dear ol' Dad?
Tim Seymour likes Callaway Golf “for a rebound in their business.”
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BEST PLAY HEADING INTO NEXT WEEK
Tim Seymour thinks Nokia is your best play heading into next week for three reasons: 1) handset data points are incrementally positive, 2) new products are shipping this month and 3) new hardware designs are launching end of year.
He's a buyer.
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TAKE YOUR POSITION: TRADING GAMEPLAN FOR NEXT WEEK
Wondering what will wake up this lethargic market? So are we. And that’s what we asked Option Monster Jon Najarian.
He told us that he’s keeping an eye on the financials, gold and earnings reports from Oracle and Palm.
How’s he gaming it? Find out. Watch the video now!
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Trader disclosure: On June 19th, 2009, 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 (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AAPL), (BAC), (F), (NOK); Terranova Owns (SDS), (TER), (XBI), (BTU), (ABT), (MSFT), (HES), (BTU); Terranova Is Short (XOM) Call Spreads; Terranova Is Short (OIH) And (OIH) Puts; Terranova Is Short (RIG) And (RIG) Puts; Terranova Is Short (FCX) And Is Short (FCX) Puts; Terranova Is Short (GENZ) Call Spreads; Terranova Owns (GENZ) And Is Short (GENZ) Calls; Terranova Owns (X) And Is Short (X) Calls; Terranova Owns (MS) And Is Short (MS) Calls; Terranova Owns (DIS) Call Spreads; Terranova Owns (BRCM) And Is Short (BRCM) Calls; Terranova Is Short (IBM) Calls; Terranova Owns (RIMM) And Is Short (RIMM) Calls;
Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Virtus Investment Partners Owns More Than 1% Of (ABD), (CAL), (CLB), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co,;Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
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