On Wednesday, the chatter on Wall Street had everything to do with the reversal in oil prices and whether they signal a fundamental shift in the market.
Oil prices tumbled as U.S. gasoline futures plunged limit down, triggering a brief halt in trade on the New York Mercantile Exchange.
Gasoline traded down 25 cents at midday in New York, stopping trade on NYMEX crude , heating oil and gasoline futures , as concerns the flooding along the Mississippi River would shut regional refineries eased.
The floods, however, have become less of a focal points for traders on the floor of the NYMEX, reports CNBC's Sharon Epperson. Instead, Epperson said traders are talking about interest rates rising, inflation concerns and the end to the U.S. government's bond-buying program, commonly referred to as quantitative easing, in June. These three global, macroeconomic issues are putting pressure on the euro , yet another bullish catalyst for the U.S. dollar . And according to Epperson fear of a much stronger dollar is what's generating the sell-off in commodities across the board.
The sell-off is "painful," Joe Terranova of Virtus Investment Partners said. "Clearly, if you lose oil, you're going to lose the S&P."
Last week, Guy Adami of Drakon Capital had said the sell-off in oil and silver was the bottom. Adami now calls the reversal to the downside "pretty unbelievable." Throughout his career, he's never seen a 25 cent move in gasoline. But in the last 10 days, there have been two 25 cent moves in gasoline.
On a related note, Adami would take profits in the rails because he thinks that group has rallied too hard, too fast.
Karen Finerman, president of Metropolitan Capital Advisors, is also being cautious. The world's economies will still have a need for oil, so although the oil service names are getting slaughtered, she still likes that group.
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Trader disclosure: On May 11, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (PFE); Pete Najarian owns (MRK); Pete Najarian owns (AAPL); Pete Najarian owns (TCK); Pete Najarian owns (AKAM); Pete Najarian owns (C); Pete Najarian owns (HPQ); Pete Najarian owns (TEVA); Pete Najarian owns (MS); Pete Najarian owns (RSX); Pete Najarian owns (GE); Pete Najarian owns (MSFT); Pete Najarian owns (YHOO); Pete Najarian owns (VLO); Pete Najarian owns (TER); Pete Najarian is long (RIMM) calls; Pete Najarian is long (AVL) calls; Pete Najarian is long (NTAP) calls; Pete Najarian is long (XLF) calls; Pete Najarian is long (PMCS) calls; Pete Najarian is long (CVS) calls; Pete Najarian is long (XL) calls; Pete Najarian is long (BSX) calls; Pete Najarian is long (HBC) calls; Pete Najarian is long (EWZ) calls; Pete Najarian is long (XLI) calls; Pete Najarian is long (FCX) calls; Finerman and Finerman's firm own (AAPL); Finerman and Finerman's firm own (BP); Finerman owns (C); Finreman and Finerman's firm own (CVS); Finerman's firm owns (IBM); Finerman's firm owns (JPM) and is long (JPM) leaps; Finerman owns (JPM); Finerman and Finerman's firm own (MSFT); Finerman's firm owns (TGT); Finerman owns (UNG); Finerman owns (USO); Finerman's firm is short (IWM), (SPY), (MDY); Finerman's firm owns s&p puts; Finerman's firm owns Russel 200 puts; Terranova owns (XOM); Terranova owns (BAX); Terranova owns (SLV); Terranova owns (TCK); Terranova owns (APA); Terranova owns (HOC); Terranova owns (OXY); Terranova owns (UPL); Terranova owns (FCX); Terranova owns (BX); Terranova owns (V); Terranova owns (VRTS); Terranova owns (JPM); Terranova is short (NFLX); Terranova is short S&P Futures; Terranova is Chief Market Strategist of Virtus Investment Partners, LTD; Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU)
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