And as market ‘tells’ he points to negative price action in areas of the market where hedge funds had been heavily allocated. “The price action in Apple, the price action in copper and the price action in grains ,” he says. In other words, if the bulls were going to push the market higher, they would have bounced. "Risk is coming off the table, clearly," he says.
Brian Kelly feels much the same. “I’m cautious,” he says. “I had hoped the market would look though the unrest in the Middle East, but that doesn’t seem to be happening.” I’m long bonds and TLT and remain long oil."
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THE OIL GAME
If you’re looking for a bullish bet, you’re probably looking at crude. But Stephen Schork of The Schork Report, suggests trading oil cautiously. “Oil in the mid-to high 90’s has been a range to sell into,” he reminds. That doesn’t mean WTI can’t break $100; he tells us it can. It’s simply that he doesn’t think the economy can withstand $100 oil for any length of time.
Jon Najarian is seeing similar bets in the options market. “I’m seeing aggressive call selling in the USO ,” he reveals, “which suggests at least some investors are betting that WTI has topped out.”
Joe Terranova feels a little differently. Although he's cautious on the refiners and has rolled out of his position in CVR Energy, “I’d be flat energy,” he says but not short. If you’re looking for a long bet Terranova likes companies connected to Canada’s oil sands. “That’s where stability is,” he says.
Meanwhile, trader Patty Edwards is also quite concerned that higher oil will translate into higher prices at the pump. “Consumers will have to pullback somewhere – I’d expect to see that in retail . She’s particularly bearish Walmart , which she calls a house of pain, because Walmart consumers are hard hit by rising energy costs.
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Trader disclosure: On Feb 22, 2011, 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 (VRTS); Terranova Owns (C); Terranova Owns (UPL); Terranova Owns (GM); Terranova Owns (MS); Terranova Owns (SLXP); Terranova owns (TEVA); Terranova Owns (BAX); Terranova Owns (CVI); Terranova Owns (RSX); Terranova Owns (SU); Terranova Owns (CNQ); Jon Najarian owns (AMD), is short (AMD) calls; Jon Najarian owns (BX), is short (BX) calls; Jon Najarian owns (CHK), is short (CHK) calls; Jon Najarian owns (CLX), is short (CLX) calls; Jon Najarian owns (CME), is short (CME) calls; Jon Najarian owns (CCL), is short (CCL) calls; Jon Najarian owns (CSTR), is short (CSTR) calls; Jon Najarian owns (CBOE), is short (CBOE) calls; Jon Najarian owns (GNW), is short (GNW) calls; Jon Najarian owns (NYX), is short (NYX) calls; Jon Najarian owns (BP), is short (BP) calls; Jon Najarian owns (PAAS), is short (PAAS) calls; Jon Najarian owns (SLW), is short (SLW) calls; Jon Najarian owns (GLD), is short (GLD) calls; Jon Najarian owns (NBR), is short (NBR) calls
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