Caution: May Be Fragile

As you know, investors poured into stocks worldwide after the U.S. government seized control of Fannie Mae and Freddie Mac in what could be among Washington's biggest bailouts ever.

However, the rally might be short-lived, at least according to Oppenheimer chief market strategist Carter Worth. He sent a note to clients on Monday saying to sell this bounce.

”Ask yourself why wasn’t the market up 1,000 points on Monday?” Worth says to the Fast Money traders. “The Freddie Fannie takeover is big news.”

In other words if this was so great how come there wasn’t a cataclysmic move in the markets to match the cataclysmic nature of the government action.

”We’ve nationalized home mortgages! But the rally was pretty feeble and a huge part of the market didn’t even participate,” he adds. "And we're making fresh new lows, globally."

From a technical stand point Worth doesn’t think we’re out of the woods, by any stretch of the imagination. "There's weakness at the strong end and weakness at the weak end. That's bearish," he says.

Here are some of his charts.


"It’s hard to believe that the market is making a bottom and that a premiere enterprise such as Google is not participating," Worth says.


"This chart of the Philadelphia Semiconductor Index is at defined 52-week lows. If the market was at a bottom there would not be this kind of weakness in semi-conductors," Worth says. "It's a huge part of the Nasdaq."

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Trader disclosure: On Sept 8, 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 (DIS), (WMT), (MSFT) Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MST), (NUE); Najarian Owns (NVO); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (LEH) Put Spread And (LEH) Call Spread; Najarian Owns (MER) Put Spread; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (XLF) And (XLF) Collar; Finerman Owns (GS); Finerman's Firm And Finerman Own (FLS); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Owns (HUN) Leaps; Finerman's Firm Owns (MO), (MSFT), (NOK), (SUN), (TSO), (VLO), (GE); Finerman's Firm Is Short (XLF), (IYR), (IJR), (MDY), (SPY), (IWM), (BAC), (COF); Finerman's Firm Is Short (BBT) And Owns (BBT) Puts

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