What a crazy rally, exclaims Jeff Macke. It was half lunacy and half rational. The move in Burlington Northern made sense to me but Toyota’s move really didn’t.
The confidence trade drove the market on Tuesday, adds Tim Seymour. Not necessarily the Obama confidence trade but just the belief that the financials are getting better.
What a fun day, shouts Pete Najarian. The volatility indexis way down. This is a major contraction and it creates a great opportunity with option buy rites. For more on the VIX click here.
I think the massive selling could be over but the Dow is still trading in the 7500 – 9600 range, muses Guy Adami.
FINANCIALS LEAD ELECTION-DAY RALLY
Financials led the stock market higher after reports surfaced that the Treasury Department is exploring how best to expand its capital injection program and is considering specialty finance firms in the process.
According to a Reuters report, a possible next step for Treasury investment could be extending help to specialty finance arms such CIT Group Inc or others that provide financing to the broad economy, the source said.
I think if Barack Obama wins Larry Summers will be named Treasury Secretary by the end of this week, speculates Guy Adami. And I expect to see a monster rally in best of breed bank stocks such as USB and JP Morgan .
I bought Charles Schwab on Tuesday, says Pete Najarian, because they had record volume. With hedge funds down 40% it seems to me that more investors want to manage money themselves.
And stocks like Schwab and TD Ameritrade don’t have the same worries as Goldman, adds Jeff Macke.
I expect Goldman to recover, counters Guy Adami. They know how to make money. (Remember Guy is a former Goldman guys.)
Goldman Sachs is the Sharon Stone of the market, counters Jeff Macke. They’re really not aging well.
ALL COMMODITIES ROAR BACK
Oil prices jumped more than 10 percent on Tuesday on signs Saudi Arabia and other OPEC members had made cuts in crude exports and as global financial markets rallied ahead of the U.S. election result.
Meanwhile, The dollar fell against most major currencies on Tuesday as investors look toward central bank meetings later in the week.
“Clearly there is interest out there to buy the dollar but there is a little bit of taking money off the table in very short-term long dollar positions," said John McCarthy, director of foreign exchange trading at ING Capital Markets.
It seems to me that this presents an incredible opportunity to buy cheap materials stocks, says Tim Seymour. I’m looking at steel companies such as ArcelorMittal because steel prices are half what they were. But if you play emerging markets you might want to hedge any long trades with the EEV , he counsels
I’m a seller, counters Jeff Macke. You have to sell when it hurts. In fact I trimmed gains on Burlington Northern on Tuesday.
OPTIONS ACTION: STARBUCKS
Pete Najarian is seeing unusual options activity in Starbucks.
Institutional investors are gobbling up the December 12 and December 10 puts, reveals Najarian. That suggests to him that this stock could move lower sometime soon.
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Trader disclosure: On Nov. 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; Macke Owns (BNI), (MSFT), (CY), (UUP); Macke Is Short (TM); Adami Owns (AGU), (BTU), (C), (GS), (MSFT), (INTC), (NUE); Pete Najarian Owns (MSFT) And Is Short (MSFT) Calls; Pete Najarian Owns (SBUX) Puts; Pete Najaria Owns (YHOO) And Is Short (YHOO) Calls; Seymour Owns (AAPL), (BAC), (MER), (SBUX),(BAC), (EEM); Seygem Asset Management Owns (EEV)
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