Najarian takes the moves to mean fossil fuels will quickly become much more attractive as the safety of nuclear energy is called into question.
And of all the fossil fuels, he sees incredibly strong interest in coal names. "They are absolutely on fire across the board,” Najarian says. “From Arch Coal and Peabody to Massey and Alpha across the board. And KOL is exploding to the upside.
Trader Steve Cortes agrees with Najarian. He says, “recent events have been incredibly bullish for fossil fuels, particularly coal."
Najarian strongly believes that events in Japan could propel coal to become the fuel of choice to generate electricity.
And he’s not just talking Japan. Najarian also points to reports that Germany may close nuclear facilities.
Also China suspeneded approval of new nuclear projects; 124 reactors had been expected to be built in China over the next few years. “Something has to replace that.”
But not everyone shares Najarian's enthusiasm. Trader Brian Kelly just can’t get behind the coal trade. “Coal is dependent on industrial production and we’re going to see a slowdown in industrial production in Japan,” he argues. “And we may also see a slowdown in Europe and possible in the US. How is coal going to benefit?”
Meanwhile, Cortes says he’s looking to shortsolar names. “They got a very big pop, but I don’t believe solar is an alternative source of energy that’s credible for an industrial society.”
AGAIN JAPAN DOMINATES SESSION
U.S. stocks dropped for a third day in a volatile session on Wednesday as worries about Japan's nuclear crisis escalated, and analysts saw more volatility ahead for the market.
"We are so fixated here on Japan, and this intraday volatility is without question here to stay as we are all quickly learning what nuclear power is. You can throw everything else out the window," says Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in
a Reuters interview.
How should you position?
Pete Najarian is squarely focussed on the Vix. "Now that we’ve broken above 25 and sustained at these levels, expectations are for more volatility in the days ahead," he says.
Trader Steve Cortes is closely watching moves in the yen , which are at 16 year highs against the US dollar. He thinks that kind of strength is exaggerated. "At some point the BofJ will have to ease and on a mammoth scale to trigger the kind of recovery needed," he speculates. "I’m long dollars." He also likes long Toyota as a stock that was oversold.
Patty Edwards is watching the action in the GLD. "It's got to hold its 50-day and 100-day moving averages," she says. "And if it doesn’t hold those levels, I’d look out below."
TOLD YOU SO
U.S. housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.
Peter Schiff of Euro Pacific Capital and author of "How An Economy Grows And Why It Crashes" has warned the desk that housing would be the Achilles Heel in the recovery.