'Fast Money' Recap: Big Turn Upon Us?

Is the bull market in deep trouble?

That was the buzz on Tuesday night's "Fast Money" show on CNBC, as the crew of traders and market watchers digested a litany of woes: the S&P 500 is now lower for the second month in a row; sectors leading the decline are the financial and consumer names; there's disconcerting news out of Bear Stearns (BSC Quote) on more hedge fund travails; and higher borrowing costs have taken liquidity out of the markets for the bulls.

One more area concern is the calendar, as August looms. Eric Bolling said August is a slow month with lots of traders and market players away from Wall Street. He feels that now could be a good time to buy energy and technology stocks on weakness, but stay away from the financials.

Jeff Macke, who feels we have a reversal in trend in the market, would only buy market weakness, and sell rallies for a trade. "If it's up, whack it." Guy Adami doesn't believe we have seen capitulation until we see 12,700 in the Dow by Labor Day, on the heels of a day when the Dow gave up a 140-point rally and ended down over 100.

Also, crude oil was up 2% and was near a record close on supply concerns. Bolling says every time they do a show, oil is $1 higher and almost traded at a record price today. Bolling didn't like the action in the integrated names or refineries, and said he would stay with the Oil Service HOLDRs (OIH Quote).

Turning to the day's action in individual stocks, Apple (AAPL Quote) dropped $10 on rumors of production cuts in either the iPod or iPhone. Options guy Pete Najarian said speculation took Apple down, and that he saw lots of activity on the August $135 puts with both buyers and sellers. However, Najarian doesn't believe the world is coming to and end with Apple, and Bolling believes the company is innovating the way we communicate, although money is flowing out now. Bolling would pick up shares in Apple on dips.

News was out today that Rupert Murdoch will get Dow Jones (DJ Quote) after the Bancroft family accepted the offer, which Najarian says is evidence that deals are still getting done. He cited another example: Marathon Oil (MRO Quote) acquiring Western Oil Sands for $5.8 billion.

Whole Foods (WFMI Quote) was up big after hours on strong earnings, but Jeff Macke said he would sell the news. Alexandria Real Estate Equities (ARE Quote) will report earnings on Thursday, and Najarian is bullish on ARE. Bolling said he would stay away from anything real estate.

More Troubles At Bear Stearns

The Wall Street Journal reported this evening that Bear Stearns, which already had to shut down two hedge funds, is now faced with big losses at a third hedge fund that has $900 million in mortgage bonds that aren't leveraged and has little subprime exposure. Could this take down Bear? Guy Adami believes traders will sell first and ask questions later, and Bolling noted that S&P futures are already down on the news. Jeff Macke thinks this news is bad for the financials, and Najarian, who likes Goldman Sachs (GS Quote), says this type of news is why he has a options put spread on.