'Fast Money' Recap: Big Turn Upon Us?

Stockpickr Staff

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.

Sneak Preview: Big Media Earnings

Time Warner (TWX Quote) and Disney (DIS Quote) will release earnings on Wednesday and Viacom (VIA.B Quote) will report on Thursday, and CNBC media reporter Julia Boorstin joined the "Fast Money" crew to talk about the media plays. Boorstin said Disney has room to room to move, as a weak dollar has lured visitors to its theme parks. Pete Najarian doesn't like DIS, while Bolling believes that if Disney gets a little bit lower it's in trouble technically on the chart. Boorstin said the Street will keep a close eye on the cable network numbers at Viacom; Guy Adami was bullish on the stock. Jeff Macke was bearish: "Get out."

Starbucks Perk

Eric Bolling was recently in a Starbucks (SBUX Quote) and noticed something that could ultimately end up boosting Starbucks: 10 people were using iPhones. Starbucks is planning on setting up all stores with Wi-Fi, and couple that with Research In Motion (RIMM Quote) recently launching a new phone with Wi-Fi capabilities, and Bolling believes BlackBerry and iPhone users will start to hang out more at Starbucks. Bolling thinks the chart looks OK here.

Jeff Macke said he would buy Starbucks, which is down 25% since last July, ahead of earnings and sell it after. Najarian was bullish on the options activity in the calls for Starbucks, and he liked that CEO Howard Schultz exercised calls but didn't sell any common stock. Najarian said he would also keep an eye on Green Mountain Coffee Roasters (GMCR Quote).

Pops & Drops

"Pops & Drops" is a new feature for "Fast Money" that follows stocks that were moving for the day.

Pops: Under Armour (UA Quote) was up 14% on a bullish forecast -- Najarian was bullish on UA and he feels they are taking it to Nike.

Sun Microsystems (SUNW Quote) was up 4% on good earnings. Jeff Macke would stay long.

Gymboree (GYMB Quote) was up 9% on a bullish earnings outlook. Jeff Macke is a seller.

Wendy's (WEN Quote) was up 4% on a takeover rumor. Jeff Macke would sell the news.

Drops: Alcatel-Lucent (ALU Quote) was down 10% on a weak quarter. Guy Adami is bearish on the name.

Interactive (IACI Quote) was down 5% on a profit miss. Eric Bolling would avoid the name and look at CNet Networks (CNET Quote).

Final Trade

Eric Bolling wants to sell some S&P and Nasdaq futures on a lower open. Jeff Macke said he would sell Wendy's. Pete Najarian wants to buy Alvarion (ALVR Quote). Guy Adami said to buy EMC (EMC Quote) because the stock has strength in a weak market.

Question Time

The crew took questions from the audience.

What's a "handle" mean? Macke explained it's the first digit in the stock price.

"What is your outlook on insurance stocks considering the subprime meltdown? What is their exposure, or can anyone assess that definitively yet?" Guy Adami believes there is more room for the insurance stocks to go down because nobody knows what the insurance companies own.

"Where do you guys see Blackstone (BX Quote) going from here? I have been short since it dipped below $29. How long do I ride this train wreck down before taking profits?" Bolling said he likes the guys at Blackstone and he likes the stock, and would trail the stop. Pete Najarian thinks that Blackstone bullied its way onto Wall Street.

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