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Pro Trader: Stock Market Should Stabilize Right Here

On Monday, the bears were at no loss for momentum as negative sentiment swelled on Wall Street.

Stocks touched their lowest level of the year with August 8, 2011 likely going down in the history books for all the wrong reasons.

For example:
- The S&P was on track for its worst six-day start to August ever.
- More than 1,000 stocks traded on the NYSE made new 52-week lows.
- The Russell 2000 traded solidly in bear market territory.
- The Vix , or Fear Index, topped 40, a level not seen since May 2010.

The question now becomes is the market action a kind of crescendo that comes right before the end of a movement. Or are the bears just getting into the groove?

Instant Insights with the Fast Money traders

Anthony Busch of BMO Capital thinks it’s more likely that the market stabilizes right here and right now.

Like so many investors, he thinks the greatest concern in the market comes from uncertainty about the financial woes of Europe. But the ECB likely stemmed the uncertainty by announcing plans to buy the debt of Italy and Spain – in an effort to reassure markets.

If the ECB move stems jitters, if only in the near-term, then stocks could bounce with Busch identifying two positive catalysts.



”Monday night we get China data and if CPI comes in below 6.4% Beijing will be expected to stop tightening,” he says. That should benefit commodities. ”And we have potential for (suggestions of) QE3 on Tuesday from Fed.”

”Right around these levels I’d be surprised to see the stock market put in further lows.”

Trader Rich Ilczyszyn of MF Global Senior Market Strategist is also keeping a close eye on the Fed meeting as a potential positive catalyst. “The Fed could say something that quells investors and stimulates risk appetite or they could say something that moves the dollar.”

Just to be clear - these pros are making a trading call.

Trade Steve Grasso reminds retail investors who are in the market for the long-term to develop a trading thesis - decide for yourself when you think the market is oversold. “70% of all stocks go with the overall momentum. If you believe the momentum is lower, don't buy anything," he says.

Trader Brian Kelly says much the same. He's concerned that the downward momentum can't be broken by the catalysts mentioned above. “This is a freight train of a market that keeps going lower. He agrees that there will be a time to go shopping, "but I don’t think it’s today,” he says.




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Trader disclosure: On Aug 8, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell own (AAPL); Karabell owns (GOOG); Karabell owns (GS); Karabell owns (GE); Terranova owns (VRTS); Terranova owns (LQD); Terranova owns (IBM); Terranova owns (FCX); Terranova owns (CVI); Terranova owns (AAPL); Terranova owns (GS); Terranova owns (GOOG); Terranova owns (XOM)

For Zach Karabell
Rivertwice Capital & Karabell owns (IBM)
Rivertwice Capital is short (XLF)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of Building Materials Holdings
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)|
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LHO)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of Sun Pharmaceutical Industries Ltd
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (RLI)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of Domino's Pizza UK & IRL PLC

For Brian Kelly
Accounts Managed By Brian Kelly Capital Own (TLT) calls
Accounts Managed By Brian Kelly Capital Own (GLD) calls
Accounts Managed By Brian Kelly Capital Own (SLV) calls
Accounts Managed By Brian Kelly Capital Own (MUB) puts
Accounts Managed By Brian Kelly Capital Own (SPY) put
Accounts Managed By Brian Kelly Capital are short the Euro
Accounts Managed By Brian Kelly Capital are short the Swiss Franc




CNBC.com with wires.