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Joe Terranova: These 3 Things Could Signal Cool-Down

Is the market due for a cool down?

That’s the question the "Fast Money" traders were asking Monday, as the markets climbed higher on a mixed bag of earnings reports and optimism about Friday’s fourth-quarter GDP release.

Joe Terranova, chief market strategist at Virtus Investment Partners, suggested a 3-pronged barometer for measuring whether the markets were overheated; Apple , Google and the financials .

Morgan Stanley, Apple and Google -- more than any other stocks -- can be considered a barometer for the full market because they have been the most actively traded by investors and they touch the two most important sectors to this 2011 rally right now: financials and tech, Terranova said.

And these market "tells" are worth keeping on the radar for quite some time. The performance of these three giants should indicate the direction of the markets for the next few weeks, he said.

Looking at the price action on Monday morning. Apple was up after R.W. Baird & Co. analyst William Power said that the iPhone on the Verizon network would see stronger sales than many analysts anticipate. Power predicts that as many as 19 million iPhones could be sold through Verizon.

Google was lower Monday on investor concerns about long-time CEO Eric Schmidt leaving his post. Google announced last week that co-founder Larry Page will succeed Schmidt in April.

Some of investors concerns are likely due to Schmidt’s large stake in the company. Schmidt owned more than nine million shares in the prior quarter, according to recent SEC filings. Google awarded Schmidt an additional $100 million in shares and options ahead of his exist announcement, according to an SEC filing. Schmidt plans to sell about 534,000 shares worth an estimated $335 million this year.

Financials were also mixed Monday morning. The XLF was slightly higher, but the KBW Bank Index of small cap banks was lower. JPMorgan , Bank of America and Morgan Stanley were each lower after BOFA’s disappointing earnings last week.

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Trader disclosure: On Jan. 24, 2011, 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); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Terranova Owns (UPL); Terranova Owns (VRTS); Terranova Owns (PVH); Terranova Owns (GM); Terranova Owns (CVI); Terranova Owns (CNQ); Terranova Owns (LTD); Terranova Owns (C); Terranova Owns (PEP); Terranova Owns (CPX); Terranova Owns (ARUN); Terranova Owns (MS); Terranova Owns (RSH); Terranova is short Gold; Weiss owns (UUP); Weiss owns (TBT); Weiss owns (QCOM); Weiss owns (MXIM); Weiss owns (VZ); Weiss owns (WFR); Weiss owns (JPM); Weiss owns (MEE); Weiss owns (BTU); Weiss owns (FAS)

For Brian Kelly
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For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
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For Tim Seymour
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For Jon Najarian
Najarian owns (VMW) puts

For William Power
Robert W. Baird & Co. Incorporated is a market maker in (AAPL), (RIMM), (S), (T) and (VZ)
Robert W. Baird & Co. Incorporated and/or its affiliates expect to receive or intend to seek investment banking related compensation from (AAPL), (RIMM), (S), (T) and (VZ) within the next three months.

For Amelia Bourdeau
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For Mike Khouw
Cantor Fitzgerald & Co is a market maker in (JNPR)
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For Gillis/Brown SOT
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For Jon Najarian/Joe Terranova SOT
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For Fast Fire SOT 12/6/10
Terranova owned UPL on 12/6/10

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