Investors are bracing for a bumpy ride, after the Dow briefly fell below the psychologically important 10,000 mark on Thursday before bouncing modestly at the close.
But that bounce was little consequence for bulls. By the end of trading, stocks had suffered their worst losses in more than nine months after concerns about the debt of Greece and some other nations in Europe triggered widespread selling.
Also an unexpected rise in jobless claims put investors on the defensive just ahead of Friday's crucial payrolls report.
Meanwhile, the Vix , Wall Street's fear gauge jumped more than 20 percent, fueling speculation that the selling was not over.
How should you be positioned now?
Strategy Session with the Fast Money traders
I’m staying with my long-term thesis in the names that I own, adds Karen Finerman. I ask myself if anything that happened in the world today should changes my outlook. I would say ‘no’. As a result, I didn’t do anything on Thursday.
I agree that you stay with your fundamental thesis, echoes Joe Terranova. When I see opportunity I will be a buyer of things I believe in fundamentally, likely in technology and energy .
Emotion and fear dominated Thursday’s trading, muses Steve Grasso. Everything all came to a head today. On the floor on the NYSE nobody knew what to do. It seems to me investors were just confused. That says to me investors are going to sell first and ask questions later.
Technical levels in the S&P broke down on Thursday, adds Jon Najarian. That had a lot to do with the sell-off. Now the question become is this merely a 10% correction. If so we stay around 1065 on the S&P. But if we’re going down into bear territory, 920 on the S&P is a 20% drop. And I worry about Friday. A weak jobs report could send stocks tumbling.
After hours action in the dollar suggests the market will have a tough time on Friday, adds Brian Kelly. The strong dollar generates headwinds for resource related names.
I think the market has a lot of room on the downside, says Guy Adami. Investors will probably go bottom picking on Friday but I think it’s the wrong move. If you must buy stocks play defense and look at Johnson & Johnson.
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MARKET BUZZKILL: COMMODITIES KILLED
Commodities and natural resource names took it on the chin, Thursday after the safe-haven appeal of the greenback sent the US dollar higher.
A stronger greenback, makes commodities denominated in dollars (things like gold and oil ) more expensive for buyers using other currencies.
What’s the trade?
I’m seeing a significant sell-off in copper , says Joe Terranova. Commodities are on the defensive. And gold looks broken to me, he adds. The significant uptrend is broken.
I’m concerned about the price of steel, says Steve Grasso. With China stepping on the brakes, it could be a big problem for this metal.
What do you think? We want to know!
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Trader disclosure: On February 4th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Jon Najarian Owns (AAPL) Collar; Jon Najarian Owns (AXP) Collar; Jon Najarian Owns (BAC); Jon Najarian Owns (C); Jon Najarian Owns (CSCO), Is Short (CSCO) Calls; Jon Najarian Owns (JPM); Jon Najarian Owns (PG), Is Short (PG) Calls; Jon Najarian Owns (QCOM) Call Spreads; Jon Najarian Owns (WFC); Jon Najarian Owns (WMT), Is Short (WMT) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO); Finerman Owns (AAPL); Fineramn's Firm Owns (BAC) Leap, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT), (PLCE), (TGT), (WMT), (YUM); Grasso Owns (ABK), (AAPL), (ASTM), (BAC), (BGP), (C), (COST), (CSCO), (FAZ), (PFE), (PRST), (WMT), (V); Terranova Owns (BAC), (JPM), (OIH), (GOOG), (EMC), (AAPL), (DELL), (MSFT); Terranova Is Short (OIH) Feb. Calls; Jon Najarian Owns (WYNN)
Jon Najarian Owns (PG); Finerman's Firm And Finerman Own (CVS)
For Steve Grasso:
Stuart Frankel & Co. Inc. And Its Partners Own (ABX)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (ROK)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (TOL)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)
For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Brian Kelly
Kelly Owns (FXE) Puts
Kelly Owns (SPY) Puts
Kanundrum Capital Is Long U.S. Dollars vs. Short Euros
Kanundrum Capital Is Long Dollar vs. Short Swiss Franc
Kanundrum Capital Is Long Dollars vs. Short Yen
Kanundrum Capital Owns (WMT)
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