Buckle Up: It’s Going To Be A Bump Week

It looks like investors are expecting the next few days to be a tad rough. The Vix closed higher on Monday for the 6^th day straight.

With only a short while until the election and the much hyped QE2 announcement, how should you position?

Instant Insights with the Fast Money traders

A lot of firms are in a buy the rumor sell the news mode, says Karen Finerman. That makes me cautious. I think there could be serious downside from here. I’m holding puts.

Everyone is waiting for a pullback on the news, muses Brian Kelly. But if QE2 works we’re looking at bull market conditions and that should ignite a chase for performance.

If you’re looking for trade I’d start looking toward the transports and the dry bulk shippers, Kelly adds. I think we’re coming into a ‘normal’ business cycle.

If we get a sell-off, I think it’s an opportunity to buy or add to your position in stocks that you like and that have been working well. For me that includes Apple , F5, RiverbedSalesforce.com , copper, energy and whatever else had been working for you.

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THE LIQUIDITY FLOOD

Has Wall Street properly anticipated the flood of liquidity that the Fed is about to unleash? Chatter on the Street suggests where QE2 money will actually flow.

Have investors been too indiscriminate in their buying?

Find out from Stephen Weiss, author of The Billion Dollar Mistake. Watch the video and find out now! It begins about 10 minutes into this clip.

Fast Money executive producer John Melloy wrote about where QE2 money will likely flow in his daily post. Click here to go to Bernanke’s Stimulus Unleashing ‘Liquidity Flood.’

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TOPPING THE TAPE: OIL STANDS OUT

The traders are keeping a close eye on energy stocks after the sector bucked the trend and remained strong when most other sectors rolled over on Monday.

The desk is especially curious considering oil closed higher despite gains in the dollar .

What’s the energy trade?

I think there’s further upside ahead in oil , says Joe Terranova. I expect we see true supply and demand going forward. For the first time since July of 2009 we had a golden cross in the energy sector. The last time that happened the 3 month return was 10% and the 6-month return was 30%.

I’m not a believer in the oil story, counters Steve Cortes. If you’re bullish on oil you’re betting on surging EM demand. I expect to see oil break $80 to the downside. The trade seems very crowded to me.

But there’s a lot of momentum in oil, reminds Steve Grasso. I’m seeing a lot of clients pile into long oil position.

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Trader disclosure: On Nov 1, 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 (APA), (AAPL), (AXP), (C), (GOOG), (GS), (FCX), (IBM), (NOV), (ORCL), (PCP), (PEP), (PFE), (UPL), (VRTS), (XBI); Cortes is short (AAPL); Cortes owns (GOOG); Cortes is short (RSX); Cortes is long S&P 500; Cortes owns (K); Cortes owns (TSN); Cortes is short Euros; Cortes is short crude oil; Cortes is short gold; Cortes owns U.S. Treasuries; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Finerman owns (AAPL); Fienrman’s Firm owns (APC); Finerman & Finerman’s Firm owns (BAC); Finerman & Finerman’s Firm owns (JPM); Finerman’s Firm owns (MSFT); 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; Finerman’s firm owns Russell 2000 puts; Weiss owns (UPS); Weiss owns (JWN); Weiss owns (HK); Weiss owns (DVN); Weiss owns (CSX); Weiss owns (COP)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (MGM)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (OPEN)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (MCD)

For Brian Kelly
Accounts managed by Kanundrum Capital own (POT)
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SWC)
Accounts managed by Kanundrum Capital own (MCP)
Accounts managed by Kanundrum Capital own (JJG)
Accounts managed by Kanundrum Capital own (JO)
Accounts managed by Kanundrum Capital own (SGG)
Accounts managed by Kanundrum Capital own (NIB)
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (GS)
Accounts managed by Kanundrum Capital own (JPM)
Accounts managed by Kanundrum Capital own (RSX)
Accounts managed by Kanundrum Capital own (XHB)
Accounts managed by Kanundrum Capital own (HD)
Accounts managed by Kanundrum Capital own (AWI)
Accounts managed by Kanundrum Capital own Euros
Accounts managed by Kanundrum Capital are short Japanese Yen

For Ed Mills
***No Disclosures***

For Scott Burk
***No Disclosures***

For Mike Khouw
***No Disclosures***

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