'Fast Money' Recap: GM Runs on Oil

TSC Staff

Erin Burnett hosted CNBC's "Fast Money" Monday night, starting the show by asking, was today's market action a bearish signal, or is the big money still at the beach? She explained that the market started up 200 points but ended down as oil plunged $6 a barrel.

Guy Adami explained that the move in the stock market this morning was an "oil move." However, he pointed out that traders reassessed the situation and figured out that oil was down because the global economy is slowing. He mentioned that some stories continue to work, such as Johnson & Johnson(JNJ) and Church & Dwight(CHD), which hit 52-week highs today.

Jeff Macke stated that one trade that has worked all year when the market opens strong is to sell. He says we're in a bear market. Pete Najarian advised viewers to keep their stops in place.

Burnett said the best stock in the Dow today was General Motors(GM). Macke said the fundamental news for General Motors can't get worse. He said the stock works for a trade here, and you can't be short the name. Najarian pointed out that the "GM trade" has worked because oil prices have been falling.

No Place Like Housing

The Chart of the Day was Toll Brothers(TOL), which hit a new 52-week high. Finerman said that people believe that the housing market has bottomed. She said she's skeptical that the bottom is really here, but it's possible.

Finerman pointed out that housing play Mohawk Industries(MHK) was up big today and held on to its gains. Adami said Home Depot(HD) was up big today and continues to outperform. He advised viewers to buy the stock on dips.

The discussion moved to the financials, with Lehman Brothers(LEH). Adami said he isn't convinced that Lehman will get bought out for a premium. He said the high-risk trade here is to be short Lehman. Najarian said that in the financial sector the names that continue to impress are Charles Schwab(SCHW) and Ameritrade(AMTD).

Tech Season The traders moved on to discuss the technology sector. Finerman said she bought some call options on Apple(AAPL) today. She says the stock is a great "back-to-school" trade. Macke questioned whether Google is losing its focus with the release of the new operating system Chrome. Najarian said that Google(GOOG) is going for the jugular on Microsoft(MSFT) with the new browser.

Adami said he likes Advanced Micro Devices(AMD) for a tech trade. He said the stock has a huge short interest and could go to a 7-handle.

Najarian highlighted some unusual options activity in the September $40 calls on Lexmark(LXK). He suggested that the trading action had no institutional size, so he said he believes it's just some small retail traders who are speculating on a buyout. Macke joked that the short-sellers have been printing money on Lexmark.

Burnett brought up the deadline for Boeing's(BA) machinists, who vote Tuesday on whether to go on strike over job security and medical benefits. Finerman says that a deal will happen and that the stock will go up a couple of bucks.

The Dollar Play

Strategic investor Dennis Gartman, author of The Gartman Letter, joined the traders to discuss the commodities market following the big drop in oil today. Gartman explained that the plunge in oil is directly due to the strength in the dollar. He said the dollar went through $1.46 against the euro last night and that drove all commodities lower.

Adami said that the dollar will continue to show strength in the second half of the year. Gartman said the gold market looks awful here. He pointed to the lack of strength in gold in the face of news such as the Russian/Georgian conflict that should have sent the commodity higher.

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