Trading An "Awful" Market

Brace yourself for some big surprises this earnings season. Early first-quarter earnings are signaling an "awful" reporting period that is expected to send U.S. stocks lower in the weeks ahead, Goldman Sachs said in a research note on Monday.

"Although only a few firms have reported (first-quarter) results, early signs are awful," said the note, which was released by Goldman U.S. investment strategist David Kostin.

"We expect generally disappointing results and a swath of lowered profit guidance that will drive the S&P 500 lower in coming weeks."

What's more, Kostin's note said, first-quarter estimates remain overly optimistic, and negative earnings surprises are likely in the coming weeks.

How should you trade when you’re being warned to expect the unexpected?

Watch the volatility index, says Pete Najarian. It has been hovering around current levels for quite a while. If it breaks higher, watch out!

Stay with what’s working, counsels Guy Adami. I like the rails, he says. Why not look at CSX Corp , Burlington Northern or Union Pacific .

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Trader disclosure: On Apr. 14, 2008, 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 (YHOO), (INTC), (HAS) (MSFT); Najarian Owns (AAPL), (AMR), (CSCO), (TSO) (XLF), (YHOO); Najarian Owns (BHI) Calls, (BSC) Calls, (CHK) Calls, (LEH) Puts; Najarian Owns (MSFT) Calls; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (WMT), (YHOO), (GLNG), (CROX); Finerman's Firm Is Short (IYR), (IJR), (SPY), (MDY), (IWM), (COF) (GLD); Finerman's Firm Is Short (FNM) Calls; Finerman's Firm Is Short The British Pound; Finerman's Firm And Finerman Own (KALU); GE Is The Parent Company Of CNBC; NBC Universal Is The Parent Company Of CNBC