Hedge Funds Looking for 5-10% Correction, Says Scaramucci

With a volatile stock market and investor confidence in tatters are hedge funds looking for a sharp downturn?

Not according to Anthony Scaramucci of Skybridge.

”There’s no question that the Fed signaled they’re worried," he says during a live interview on Fast Money. But most of the hedge funds I spoke with on Wednesday are only looking for a 5-10% correction."

That may seem surprising given all the headwinds. Over the past 24 hours we've gotten a weak Fed outlook, poor data out of China and commentary from Cisco that's concerning at best.

However, in the long term, Scaramucci says the hedge fund community believes the fundamentals for the S&P remain in tact. He cites all the cash US companies have on the books and management teams that have become impressively more efficient as two examples. "I don’t think we’re looking at a long term train wreck,” he says.

Karen Finerman of Metropolitan Capital sees another positive catalyst. “No hedge funds that I know of are levered up big -- that should mean we’re not going to see forced selling in the market place.”

But don't get all giddy just yet.

“I think a worried group of people will sell in the short term,” Scarmucci adds. But over the next 3-4 weeks I think we see the market stabilize.”

And looking at the economy broadly Scaramucci admits that over past 3 weeks more hedge funds have begun to anticipate a double dip recession, however the number is still small -- only 25%.

In other words 3 out of 4 hedge funds are still looking for some growth. ”And for what it’s worth, I don’t think there will be a double dip,” he adds.

* Anthony Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management. Every week on Fast Money, Scaramucci, aka 'The Hedge', takes you behind the hedges, giving you unprecedented access to chatter in the hedge fund community.

______________________________________________________
Got something to to say? Send us an e-mail at [e-mail] and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to [e-mail].

Trader disclosure: On Aug 11, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (AKAM), (BAX), (FCX), (MOS), (PFE), (SU), (XBI); Terranova owns (GLD) Calls; Adami owns (AGU), (BTU),. (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Finerman and Finerman’s Firm owns (BAC); Finerman and Finerman’s Firm owns (JPM); Finerman & Finerman's firm owns (RIMM); Finerman owns (AAPL); Finerman's firm owns (ARM); Finerman’s firm owns (BBY); Finerman's firm owns (LEA); Finerman’s firm owns (KFT); Finerman’s firm owns (TSX); Finerman’s firm owns (GYMB); Finerman’s firm owns (PLCE); Finerman's firm owns (WMT); Finerman's firm owns (DAN); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Jon Najarian owns (AKAM) short calls

For Brian Kelly
Accounts managed by Kanundrum Capital own (C)
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (UNG)
Accounts managed by Kanundrum Capital are short (IAI)

For Kaushik Roy
Wedbush Securities Is A Market Maker In (WDC), (STX)

For Dan Greenhaus
***No Disclosures***

For Brian Stutland
***No Disclosures***

CNBC.com with wires