STOCKS REBOUND AS BUYERS SWOOP IN
The Dow ended trading Thursday with a modest advance as a sharp drop in oil prices helped counter renewed concerns about the strength of the economy.
OIL FALLS $4...CHINA TO THE RESCUE?
Oil fell nearly $5 per barrel after China announced plans to raise caps on gasoline and diesel fuel prices, a move that could ease global demand. China’s explosive growth has been one of the main factors driving oil prices to a record near $140.
Demand for diesel is what’s been driving oil, explains Joe Terranova. When China stepped into the game, it mattered. I think you can move away from the USO and into integrated oils.
I gotta’ tell you I think crude is going $10 - $15 lower, adds Guy Adami. And be careful of Exxon Mobil, too.
Why would you call the top in oil here, counters Jeff Macke. The trend is your friend and the trend is up. Buy the United States Oil Fund with a $99 stop.
Find out why Carter Worth says if oil comes down – it will create problems for the market. Read "Lower Crude Bad For Stocks"
BANKS BACK TO LIFE?
Bank stocks rebounded this afternoon after falling to new credit crunch lows. Meanwhile Citigroup hinted that a second quarter writedown could lie ahead and Wachovia , the subject of takeover speculation, has hired investment bank Goldman Sachs to advise on its search for a new chief executive.
I was impressed by the reversal in the Financial Select Sector SPDR, says Joe Terranova.
I think you can get long. The journey of a lifetime begins with one step, says Jeff Macke.
Financials recovered Thursday? Whippdy-doo, counters Pete Najarian. That’s a lot of short covering. I see a lot of put buying every day, he says. Watch for more trouble to come.
TECH MOUNTS TURNAROUND
Tech darling Appleclosed about 1% higher after announcing iTunes had reached another milestone, 5 billion songs sold. Investors also liked hearing that IBMextended outsourcing agreements with Ericsson and Hewlett Packardplanned to consolidate its printer business.
With the S&P where it is, I think it’s okay to get into tech, says Joe Terranova.
I believe in this rally 100%, says Pete Najarian. Keep an eye on Qualcom , Broadcom,, Apple and RIMM. They all keep working.
I think there’s going to be a rotation out of oil and into tech, says Guy Adami. No question in my mind. I like Western Digital , Apple and Microsoft. Tech selectively should be fine.
OPTIONS ACTION: SANDRIDGE ENERGY
Pete Najarian spotted unusual options action in SandRidge Energy.
Call buying on Thursday suggests to Pete that this stock could go higher.
OPTIONS ACTION: JUNIPER NETWORKS (JNPR)
Pete Najarian spotted unusual options action in Junpier Networks.
The call buying in this stock suggests to Pete there could be significant upside in this stock.
I think Juniper is going to $25, adds Guy Adami.
I’d own Juniper and Cisco over AT&T and Verizon anyday, says Guy Adami. To me the guys that build the infrastructure are a buy.
WHALE WATCHING: WHALE ROLLS THE DICE
Billionaire investor Kirk Kerkorian’s Tracinda reported Thursday that they have increased their stake in Fordby about 20 million shares to 6.49 percent from 5.5 percent. The filing came two days after Chief Executive Alan Mulally and Executive Chairman Bill Ford met with officials from Tracinda including Kerkorian to discuss the automaker's transformation plan.
I’m with him, exclaims Pete Najarian. Ford has been rolling out better mile per gallon cars. And they don’t have as much exposure to trucks as General Motors .
I think Kirkorian is an old man looking for his last hurrah, adds Guy Adami. You can buy Ford but not for Kirkorian.
MCCAIN LOVES NUCLEAR POWER
Sen. John McCain has revealed two of his strategies to reduce dependence on foreign oil. He’s called for the construction of 45 new nuclear reactors by 2030 and pledged $2 billion a year in federal funds "to make clean coal a reality."
I’m with him, says Pete Najarian. No one wants a nuclear power plant in their backyard but at least it’s a solution. And it’s a solution that’s been embraced in China and France.
Not going to happen, ever, counters Jeff Macke. Not in America.
If you want to play the space, I’d look at KOLadds Joe Terranova.
IS GOLD BETTER TRADE THAN STOCKS?
Although gold slipped Thursday, it had climbed to one week high as investors played it as a hedge against rising raw materials costs. Will inflation fuel a gold breakout or will it fail at $900 again?
There’s been heavy call buying on GLD in anticipation of Friday’s options expiration, (call buying has outpaced put buying by a 3:1 ratio) says Susquehanna Market Strategist Stacey Gilbert.
However I think the better gold trade is to buy the miners. The GLD is better as a hedge, but the miners offer much more growth, she says. Names I like include Kinross Gold and Barrick Gold .
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Trader disclosure: On June 19, 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 (INTC), (MSFT), (HAS), (WMT), (DIS); Adami Owns (C), (GS), (INTC), (MSFT), (NUE), (AGU), (BTU); Najarian Owns (AAPL), (ANR), (BHI), (CHK), (ENER), (NOK), (TSO), (XLF), (HPQ); Najarian Owns (SD) Calls; Terranova Owns (FXC), (IYT), (XLF), (YHOO), (LUV), (GOOG), (CME), (FCX), (SU), (BNI), (INTC); Terranova Is Long 2008 December Crude Oil; Terranova Is Short 2009 December Crude Oil
Terranova is chief alternatives strategist at Phoenix Investment Partners; Phoenix Investment Partners Ltd. Owns (RWX), (DBC), (DBV), (IGE), (AAI), (ALK), (AMR,) (APA), BP plc, British Airways plc, (CHK), (CVX), (COP), (CAL), (DAL), ENI SPA, (XOM), Gazprom, (HA), (HES), (HOC), (HSE), (JBLU), Lukoil, (MRO), (MUR), (OXY), Petrobras Intl Fin, Petro-Canada, (PBR), Petroleos De Venezuela, (QAN), (RJET), Royal Dutch Shell plc A Shares, (SKYW), (LUV,) (SU), (TSO), Texaco Capital, Total SA, (UAUA), (LCC), (VLO)
Stacey Gilbert Is A Market Strategist For Susquehanna Capital Group; Gilbert Does Not Cover Individual Securities; Susquehanna Capital Group Is A Market Maker In (KGC), (GLD), (ABX), (NEM), (AUY), (AEM), (GG), (FCX)