How To Play Oil’s Weakness


With oil trading around three month lows, and many commodities facing a precipitous fall off, Fast Money’s Joe Terranova told Dylan Ratigan on Closing Bell that "The only trade left to unwind is probably the Japanese Yen . That’s it. Every trade that’s been put on in 2008 that has some sort of momentum or trend is being unwound."

Terranova says we have to make a case for this behavior in part due to the summer doldrums, and also that commodities experienced their worst month in July and the equities market still went nowhere.

In the face of the pullback Terranova says he will not go short on Oil below $120. It’s against his core strategy. But, what he would do is go long on equities of what oil has touched negatively in the last six months. “Look at an airline, look at automobiles. Look at General Mills today, Look at FedEx . Even the transports” said Terranova.

Talking about how to trade Natural Gas , Terranova said he wouldn’t touch it and told Dylan. “The supply is coming here, we have the infrastructure in terms of LNG. Natural gas has super spikes, and super sell-offs, and after that super sell-off occurs, the temptation is always been there to buy it. Don’t do it, 2000, 2003 and 2005 taught you hard lessons not to do it.”

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On Aug 4, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Is Short (IYR) (IJR) (MDY) (SPY) (IWM) (COF) (BBT) (XLF), Finerman's Firm And Finerman Own (C) Leaps, Finerman Owns (GS), Finerman's Firm Owns (MO) (MSFT) (PM) (SUN) (TSO) (VLO) (WLP) (UNH) (AET), Macke Owns (MSFT) (WMT) (COST), Macke Is Short (TM), Adami Owns (AGU) (C) (BTU) (GS) (INTC) (MSFT) (NUE), Seymour Owns (AAPL) (CSCO) (INTC) (MER) (MSFT) (TSO) (EEM) (F) (SHLD), Seygem Asset Management Owns (EEV), Joe Terranova Owns (BNI), Jon Najarian Owns (EMC) Calls, Jon Najarian Owns (CSCO) Calls