Dead Cat Bounce


Volatility plunged Tuesday as the stock market mounted its 2nd-biggest gain of the year. Should you sell this rally?

Jeff Macke recommends selling the S&P rally and buying future dips.

Karen Finerman explains that she focuses a lot on the Volatility Index. And every time it spikes up high in a down market, she sells her puts.

Pete Najarian doesn’t recommend trying to pick a top or bottom. Instead he recommends setting price limits and not letting your emotions drive your behavior.

Guy Adami recommends Unilver (UN) specifically, because of its price action in this volatile tape.

For a more in-depth explanation please watch this video.

S&P 500

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Trader disclosure: On Nov. 13, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (YHOO); Najarian Owns (VMW), Najarian Owns (AMTD) Options, (AMZN) Options, (C) Options, (CSCO) Options, (GOOG) Options, (GS) Options, (XLF) Options, (YHOO) Options; Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns (AMTD), (KALU), (KSS), (TYC), (WMT), (YHOO), (LTD), (TSO); Finerman's Firm Owns (HD) And (HD) Puts, Finerman Owns (HD); Finerman's Firm Owns (BIIB) Options, (CROX) Options, (MSFT) Options, (TGT) Options; Finerman's Firm Is Short (MER), (SPY), (IWM), (MDY), (IYR); Finerman's Firm Owns (LEH) Puts