The plays: I don’t think the supply story is broken, says Joe Terranova. There’s a pullback in the sector but the fundamental theme remains in play.
I’m with him, adds Tim Seymour. I fully expect to see China continuing their infrastructure buildout.
It’s a great story but a terrible trade, counters Quint Tatro. I’d stay out! There are better trades out there.
Look at Warren Buffet, says Pete Najarian. He stepped up his position in Union Pacific because he believes there will be a need in the future to transport more commodities.
WHALE WATCHING HIGHLIGHTS
The news: Shares of NRG Energy jumped after Warren Buffett's Berkshire Hathaway disclosed a stake in the Texas power producer. Meanwhile Lehman was trading higher mid-day after billionaire investor George Soros boosted his stake in the company.
Also you might be interested to know that Fast Money friend Carl Icahn increased is stake in Motorola by 25%, while Eddie Lampert upped his position in AutoZone but cuts his stake in Home Depot.
The plays: I like trading in Buffett’s wake, says Pete Najarian. As far as Soros is concerned, in the financials I like Morgan Stanely over Lehman.
Motorola may have room to go if Icahn is behind it, muses Tim Seymour.
I think investors have beaten down stocks related to the auto industry, says Quint Tatro and many look good on a technical basis.
The news: Both JC Penney and Abercrombie & Fitch were trading higher mid-day after beating Street estimates.
The plays: In retail, I was interested to see that Wal-Mart raised guidance while most retailers lowered guidance, says Joe Terranova. Also, I’m watching food retailers. Take a look at Krogers. I think that’s the way to play this space.
I don’t agree, counters Tim Seymour. I’m short the Retail ETFRTH.
On a valuation basis I think Target looks better than Wal-Mart, adds Pete Najarian.
BOUNCY WEEK FOR BANK
The news: Bond insurers MBIA and Ambac both jumped after the S&P ended its review of the companies and said both have taken positive steps toward shoring up their businesses. Meanwhile, the Wall Street Journal says that the quarterly filing from Wells Fargo shows questionable “Level 3” assets have increased.
The plays: I’m concerned about Goldman, says Pete Najarian. There’s some reason it’s not going higher.
I bought Goldman a couple days ago and I’m worried too, says Joe Terranova. If it breaks $150 there could be a real problem.
Watch the whole sector, adds Quint Tatro. As banks go so goes the whole market.
OPTIONS ACTION NOW:
The news: Pete Najarian is spotting unusual options action in VMWare.
The plays: Traders are buying the September upside calls in VMWare, explains Najarian which makes me think there’s positive news coming.
It’s hard to me to get excited about tech spending in this economy, says Tim Seymour. Everyone has been hopping on the 4 horsemen, but not me.
IN THE ZONE: WITH DENNIS GARTMAN
With so many investors betting on a strong dollar we turn to strategic investor Dennis Gartman to find out what’s next.
Gartman tells the Fast Money that the dollar is the beneficiary of events in Georgia. Money that might have felt comfortable in Europe now feels more comfortable moving to the US.
And from a technical perspective the market has broken almost every trend line that you’d want to draw in favor of the euro, he adds.
Is the dollar a bit over-done in this shocking run from 1.60 to 1.47 vs. the EUR in less than one month? Of course it is, he says; but the dollar is to be bought on weakness, and any rally in the EUR back toward 1.5200 shall be a selling opportunity for the EUR/ and a buying opportunity for the Dollar.
And it’s not a short-term thing, Gartman concludes. It’s a long-term trend.
Tim Seymour agrees and adds he knows many international traders who are long dollar/yen and short yen/euro.
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Trader disclosure: On Aug 15, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Quint Tatro Is The Principal Of Tatro Capital: Tatro Owns (C), (GS), (JPM): Tatro Capital Owns (EEV), (INTC), (QQQQ), (SMN), (SPY), (SSO), (UYG): Najarian Owns (AAPL) And Is Short (AAPL) Calls; Najarian Owns (HD): Najarian Owns (CSCO) Calls; Najarian Owns (VMW) Calls;Najarian Owns (HCBK) Puts; Najarian Owns (TSO) and Is Short (TSO) Calls: Seymour Owns (AAPL), (EEM), (MER), (TSO) : Seygem Asset Management Owns (EEV): Seygem Asset Management Is Short (RTH); Terranova Owns (YHOO), (AAPL), (RIMM), (INTC), (GS), (GOOG), (CME), (IYT),(BNI), (SU), (SA), (VLO), (KOL), (POT), (X), (FCX), (NOV), (EOG), (XLF): Terranova Is Short Crude Oil Time Spread (Short Dec. 2008, Long Dec. 2012): Terranova Owns Dec. 2012 Crude Oil
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.: Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO: Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
CIBC Gartman Index Owns Corn, Wheat, Soybeans: CIBC Gartman Index Is Short EUR And Long Australian Dollar
Gartman Owns (AFFY), (FLO), (SJT), (UNH), (DBA), (MSFT), (QCOM), (SDS): Gartman Owns (ANDE) And Is Short (ADM): Gartman Owns (QQQQ) And Is Short (TLT): Gartman Is Short (DIA), (X), (TAP), (KBE), (GS), (CAT)