On Tuesday investors were trying to determine what’s next for the market, with latest headlines out of Rome landing in the spotlight.
Specifically, Italian Prime Minister Silvio Berlusconi suffered a huge humiliation in parliament on Tuesday in a vote that indicated he no longer had a majority and ratcheted up pressure for him to resign.
Opposition leader Pier Luigi Bersani immediately called on Berlusconi to resign, saying Italy ran a real risk of losing access to financial markets, after yields on government bonds had approached the red line of 7 percent.
"We are still trapped in this headline box, and every movement (in the market) seems to be based on that," says Kevin Kruszenski, director of equity trading at KeyBanc Capital Markets in a Reuters interview.
Considering the market is at the mercy of overseas politicians, what can you possibly watch, to help you navigate all the confusing developments?
According to strategic investor Dennis Gartman, you should be watching gold , especially how its trading in euro terms. And the way it’s trading now, suggests to Gartman that a rough ride lies ahead.
”Gold rising in euro terms says to me that the market doesn’t expect good news from Europe,” he says. "All is not well.”
Trader Patty Edwards agrees. “Gold has been marching,” she says, “also in dollar terms.”
”When gold goes higher, it signals concern,” Gartman adds.
Both traders believe money pros would be rotating into higher risk assets, if they had confidence that Europe's financial woes had turned a corner – if only because they would fear missing the next leg higher.
Trader Steve Cortes agrees. And he says the yields on bonds issued by Italy confirm the thesis. “The 2-year is now about 6.3% - that’s double from a year ago – that also says Europe is still in a lot of trouble.”
Of course that begs the question – how should you trade it?
”All I can say is that 2-weeks from now gold will probably be higher than where it is now and in a month, higher than where it will be in two weeks,” says Dennis Gartman.
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Trader disclosure: On November 8, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Gartman’s fund is long JRCC; Gartman’s fund is long AAPL; Gartman’s fund is long SU; Gartman’s fund is short MFLY; Gartman is short S&P futures; Gartman is short Euro; Gartman is long gold futures; Dicker owns RIG; Dicker owns GLD; Dicker owns HP
For Patty Edwards
Trutina Financial is long AAPL
Trutina Financial is long GLD
Trutina Financial is long INTC
Trutina Financial is long AMZN
Trutina Financial is long MSFT
Trutina Financial is long GOOG
Trutina Financial is long MCD
Trutina Financial is long DIS
For David Palmer
UBS AG, its affiliates or subsidiaries beneficially owned 1% or more of a class of the following companies' common equity securities as of last month`s end (or the prior month`s end if this report is dated less than 10 days after the most recent month`s end): McDonalds
For Mark Mahaney
Steven J Fullerton, Associate, holds a long position in the securities of Google Inc.
Neil A Doshi, Associate, holds a long position in the securities of Google Inc.
A member of the household of Andy J. Wu, Associate, holds a long position in the securities of Google Inc.
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Netflix Inc, eBay Inc. This position reflects information available as of the prior business day.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Google Inc.
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Google Inc, Orbitz Worldwide Inc, eBay Inc.
Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from eBay Inc.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Priceline.Com Inc, Amazon.com Inc, Expedia Inc, Google Inc, Orbitz Worldwide Inc, eBay Inc in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Google Inc, Orbitz Worldwide Inc, eBay Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Priceline.Com Inc, Amazon.com Inc, Expedia Inc, Google Inc, Orbitz Worldwide Inc, eBay Inc.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Priceline.Com Inc, Amazon.com Inc, Expedia Inc, Google Inc, Orbitz Worldwide Inc, eBay Inc.
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.
The Firm is a market maker in the publicly traded equity securities of Priceline.Com Inc, Amazon.com Inc, Expedia Inc, Google Inc, Netflix Inc, eBay Inc.
For George Davis
For David Miller
CNBC.com with wires.