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Big Investors Bailing Before Earnings, Should You?

Investors hit the brakes on Tuesday after disappointing results from Alcoa and a warning from Chevron spooked buyers.

Adding to the negative headwinds were reports suggesting banks could face new government fees and word that China is putting brakes on growth –by ordering banks to set aside more reserves.

Chips stocks performed particularly poorly ahead of Intel earnings on Thursday.

How should you be positioned now?

Strategy Session with the Fast Money traders

I’m bullish on Intel reveals Pete Najarian. I think this stock is poised to spike off the next earnings report, he says. Intel has been sitting at $20.50 for almost the entire quarter. The Street is looking for $25. I really think the stock could start moving in that direction.

Technology has suffered in the early part of 2010 and Intel held up well, adds Tim Seymour. I’m a buyer of Intel ahead of earnings, he reveals. I wouldn’t take any money off the table in this name. And I’m also bullish on Infosys after their strong earnings report.

I don’t see any fundamental changes in tech, says Karen Finerman. Wait for earnings to unfold, she counsels. I think earnings show Google and Apple remain value plays.

In the space I still like EMC as well as Microsoft and Qualcomm, adds Joe Terranova.

I’m short the QQQQ , counters Gary Kaminsky. Sometimes fundamentals don’t matter. Portfolio managers are trying to raise cash and they’re doing it by selling their winners in tech. Also, I'm bearish because I don’t think there’s as much cash on the sidelines as some investors think there is. There’s rotation happening now – but new money isn’t going into stocks.

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INVESTORS BAILING BEFORE EARNINGS, PT 2

Once again the traders are keeping a close eye on bank stocks after Goldman fell below its 50-day moving average and JPMorgan closed lower ahead of earnings Friday.

Should you buy into the weakness?

I would give the Goldman trade some time, says Joe Terranova. Momentum in Goldman stock is pointed down But long-term I’m a buyer of Goldman. And I like JPMorgan ahead of earnings.

I’m holding calls in JPMorgan, reveals Karen Finerman.

The XLF closed above 15, adds Pete Najarian. It hadn’t broken above that level in quite some time.

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MARKET BUZZKILL: AG STOCKS SLAUGHTERED

The price of wheat, corn and other commodities plunged on Tuesday after the latest crop report from the Agriculture Department showed production was higher than the expected.

In the space, Caterpillar and Deere were among the biggest losers on the news.

What’s the ag trade?

If farmers can't command higher prices for crops they can’t spend more money on equipment and fertilizer, explains Tim Seymour. That's what dragged down the sector. Potash could be going to $105.

I’m a seller of Agrium . adds Joe Terranova


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TOPPING THE TAPE: MCDONALD'S UP IN DOWN MARKET

The traders are keeping a close eye on the action in McDonald’s which closed higher despite the down tape.

What’s the fast food trade?

I love this stock, says Pete Najarian. I'm bullish.

I also like McDonald’s, adds Karen Finerman. And I like YUM! too.




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Trader disclosure: On Jan 12th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (AA), (AKS), (BAC), (FXI), (GE), (INFY), (LVS), (MGM), (SBUX), (MOO), (INTC), (VALE); Seymour Is Short (TSO); Finerman's Firm Is Short (IJR), (MDY), (SPY), t (IWM); Finerman's Firm Is Short (USO); Finerman's Firm Is Short (UNG); Finerman Owns (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman's Firm Owns (WFC) Preferred; Finerman Owns (BAC) Preferred, (BAC); Finerman Owns (JPM) Calls; Finerman's Firm Owns (MCD), (MSFT), (MSFT), (PBR), (STJ), (TGT), (TJX), (WMT), (YUM), (STJ), (BDX), (BCR), (BSX), (GOOG); Najarian Owns (AMAT) Calls; Najarian Owns (AA) Feb. Calls, Is Short (AA) Jan. Calls; Najarian Owns (CLF), Is Short (CLF) Calls; Najarian Owns (FCX), Is Short (FCX) Calls; Najarian Owns (MGM) Call Spread; Najarian Owns (MS); Najarian Owns (STJ) Calls; Terranova Is Long March British Pound Futures; Terranova Is Long Copper Backwardation: Long May 2009, Short July 2009; Terranova Is Short (AGU), (JCI), (CMA), (ICE), (ESS),(CAL); Terranova Owns (BAC), (QCOM), (MSFT), (EMC), (FTO), (XOM); Terranova Owns (XHB) March Puts; Adami Owns (GS), (INTC), (AGU), (BTU), (C), (MSFT), (NUE); Kaminsky Is Short (QQQQ)

GE Is The Parent Company Of CNBC

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Tim Seymour
Seygem Asset Management Is Short (EEM)
Seygem Asset Management Is Short (EWA)

For Geoff Meacham
J.P. Morgan Has An Investment Banking Relationship With (CELG), (AMGN), (OSIP) (ACOR), (MDVN)


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