Strategy Session with the Fast Money Traders
Investors should have expected this turn lower, muses Mike Khouw. The Vix has traded lower over the last few days indicating more complacency in the market. And when you have more complacency you often get a pullback like this.
We’re in a bear market and there are going to be pullbacks, adds John Roque. That’s the way it works. I think the S&P could slide to 830. But if you’re looking for trade, I suggest sellingGoldman if you own it. The downward sloping 200-day moving average says to me, be cautious of this stock.
I’d take the other side of that trade, counters Joe Terranova. On any pullback I think investors should add to their position in Goldman as well as Morgan Stanley. They’re best in breed plays and both firms should make money going forward from their trading desks.
THE CURRENCY PLAY
The euro fell against the dollar and the yen on Monday on uncertainties over the next policy steps the European Central Bank will take to stimulate the economy.
I’m keeping a close eye on the yen versus euro cross, explains Dennis Gartman. Over the past several weeks as the yen has lost value and the euro gained (value) the stock market has gotten stronger. I think it’s a good barometer of the urge to take on risk.
But last week even as stocks were still going higher that cross began to turn downward. That says to me, we could be in for a serious correction in stock prices.
And if you’re looking for a currency trade I would be longAustralia’s dollar or Canada’s dollar, counsels Gartman. In other words long the younger commodity exporters and maybe be short the older commodity importers.
TECH IN FOCUS: BUY ON WEAKNESS?
On the mergers and acquisitions front, Oracle said it would buy Sun Microsystems for about $7.4 billion after Sun's talks with IBM broke down earlier this month.
Oracle was the among the biggest drags on the Nasdaq, down 5.1 percent at $18.07 midday, while Sun, the high-end computer server and software maker, was among the biggest lifts, surging 36 percent to $9.09.
I think the pullback in Oracle is an opportunity, counsels Pete Najarian. I really like Oracle at these levels. IBM is worth a look too, but I’d wait for a pullback.
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CNBC.com with wires