My sources tell me institutions are taking risk off, Kaminksy adds. And it will stay that way at least through the summer. They feel that this isn’t the end of the crisis in Europe, it’s the beginning.
I agree that the fundamental problems in Europe are unchanged, adds Brian Kelly of Kanundrum. They still have a big debt problem and almost zero growth. Big picture, I'm bearish and I added to my short positions in Caterpillar , Expedia, and Wynn.
With so many names 20% off their highs I’d start looking for opportunities, adds Mike Khouw of Cantor Fitzgerald. It doesn't mean trouble is off the table but I'd definitely look for opportunities if people are getting shaken out.
South of $50 I think Bucyrus is starting to look interesting, adds Finerman. That stock was at $72 a little over a month ago.
What do you think? We want to know!
FLASH CRASH LEGITIMATE
As the market continues to break through key technical levels, traders now find themselves asking a difficult question: was the so-called "flash crash" legitimate, possibly signaling a coming deterioration in the global economy?
Fast Money Executive Producer writes about this topic at length. Click here to go to "Was Flash Crash Legitimate?"
WHERE ARE SHORTS HOVERING NOW?
Meanwhile, if the markets are heading lower, investors are eager to hear where the shorts may be hovering. According to John Tabacco of LocateStock.com the following names are the most requested shorts – at least at his firm:
NBG - National Bank of Greece
FSLR - First Solar
SPWRA - SunPower
CSIQ - Canadian Solar
WYNN - WYNN Resorts
LVS - Las Vegas Sands
VALE - Vale (ADR)
Of all the stocks listed above Tabacco says Vale looks like it's heading to $16 and if it breaks it could be going a whole lot lower.
Looking at the market broadly, he also says, I think there's a whole lot more downside here. The behavior of the market tells me it needs to retest the 'flash crash' intra-day low of 1066.
In fact 2010 could be a replay of 2008. I think there could be as much as 1500 points to the downside in the DJIA. However, at Dow 9000, retail investors would be wise to come in a seek value.
HEAVY PUT ACTIVITY IN THE S&P 500
Brian Kelly of Kanundrum has spotted unusual options action in the SPY .
I’m seeing an awful lot of activity in the December SPY 60 puts, says Kanundrum. The open interest on the puts is now larger than it was in 2008 pre-Lehman and post Lehman.
TOPPING THE TAPE: FINANCIALS REBOUND
Some financials bucked the trend in Wednesday’s trading, with Citi , Goldman Sachs and JP Morganall ending the day in the green.
The moves seems surprising, considering reports suggest the Senate is entering the home stretch in its efforts to pass a massive financial regulation bill.
What’s the story?
The cloture motion did not pass in the senate, says Sandler O’Neill analyst Jeff Harte. It suggests that we may be looking at a friendlier financial regulation bill.
Harte is cautiously bullish on the sector. In fact, he thinks Citi, Goldman Sachs and Morgan Stanley all belong on your radar. You read that right. He's a buyer.
* Get all the details. Check out our entire interview with Jeff Harte. Watch the video now!