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Market Mystery: The Confouding Case Of Goldman Sachs

The Fast Money traders have spotted a market mystery. Let’s call this one the Confounding Case of Goldman Sachs!

Like all good detectives, the traders are always on the look out for something that doesn’t quite add up.

And lately the action in Goldman Sachs doesn’t add up -- at all.

Since reporting earnings mid-October, shares of Goldman are down about 15%.

That's right down 15%.

Not only is the stock underperforming within its sector -- the financials -- it’s also underperforming the broader market, as well.

What's Wrong With Goldman
Since GS Reported Earnings Oct 14t
Goldman Sachs down 15%
Financial SPDR down 10%
S&P 500 up 1%

That might not strike you as unusual for most companies – but we’re not talking about most companies. We're talking about Goldman.

It's the standard. It's the gold standard.

Widely considered a market bellwether, the conventional wisdom has been Goldman led the market higher and it would lead the market lower in a correction.

So why the disconnect?

For insights, who better to turn to than former Goldman guy, Fast Money trader Guy Adami.

He says, "Goldman is a stock that overshoots on the upside and it overshoots on the downside. It wouldn’t surprise me to see it at $150."

When asked if it's a sign of broad weakness to come, Adami answered, "Whether it’s a canary in a coal mine I can’t say but JPMorgan and Morgan Stanley are trading the same way. All 3 stocks may be telling you something!"

Karen Finerman sees the situation a little differently.

"I like Goldman," she says. "I'm bullish. I think their business is very strong. The sell-off has everything to do with a belief that they can't generate the kinds of results they generated in the last quarter. But they don't need to. I’m a buyer at $160."


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Trader disclosure: On Dec. 18th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (M) Calls; Pete Najarian Owns (MS), Is Short (MS) Calls; Pete Najarian Owns (UUP) Call Spread; Pete Najarian Owns (MRVL); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG); Finerman Owns (AAPL); Finerman's Firm Owns (BCR), (M), (MSFT), (NOK), (TGT), (WMT); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; nerman's Firm And Finerman Own (FLS)

For Joe Terranova
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