Ultimately Kelly thinks Fed rhetoric will be good for the dollar. “So long as the Fed makes it clear it will deal with the financial problems that’s got to be positive for the dollar which I think is still undervalued.”
If you’re looking for a trade Kelly says to sell gold because, "there are a lot of reasons to be against it." Not only does he think the banks could cool off but "if the dollar rallies that’s negative for gold."
Also, Kelly sees an oil bubble. "The world economy is slowing and the demand for oil isn’t really growing,” he says. That too would be bearish for gold.
The Bottom Line: "I think people should have faith the the economy will recover and the stock market will follow," Kelly says.
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Trader disclosure: On Aug 20, 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 (MSFT), (WMT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (MS), Najarian Owns (AAPL) And Is Short (AAPL) Call, Najarian Owns (ANR) And Is Short (ANR) Call, Najarian Owns (JOYG) Call Spread, Najarian Owns (LEH) Put Spread, Najarian Owns (NOK) And Is Short (NOK) Calls, Najarian Owns (XLY) Puts
Terranova Owns (AAPL), (BNI), (CME), (EOG), (FCX), (GS), (GOOG), (INTC), (KOL), (NOV), (POT), (RIMM), (SA), (XLF), (SU), (X), (VLO), (YHOO); Terranova Owns (AIG) Puts; Terranova Is Short Crude Oil Time Spread (Short Dec. 2009, Long Dec. 2012); Terranova Is Long Crude Oil Futures (Dec. 2012)
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)