'Fast Money' Recap: Dec. 29

Terranova said he would be a buyer of REITs because he senses a momentum shift into the stocks after a nice recovery from November until now.

Macke said the news is going to get worse in retail as the reality of bankruptcies creeps in. "When they mark down 70%, they're giving away a significant amount of their margins."

The trading panel turned their attention to one of the big stories of the day: the 6% increase in crude oil as a result of the escalation in violence brought on by the Israeli attacks against Hamas along the Gaza Strip.

Looking at the price of gold on a chart, Adami talked about a "pennant" formation in the price, adding there could be significant move up in gold if prices move past that formation.

Najarian said investors might consider buying options in Freeport McMoRan(FCX Quote).

Lee brought in David Kelly, chief market strategist for JPMorgan Funds, to talk about his outlook for 2009. Kelly said an expansion may start in the spring to the middle of next year. "It's not going to feel like it," he said.

Using history as a guide, Kelly said the deeper recession goes, the stronger the bounce back. "If you are long-term investors, look at the valuations. Take a gut check," he said. "By every valuation, US stocks are cheap."

He said he would be a buyer of Microsoft (MSFT Quote) and Intel(INTC Quote) at these low prices.

Lyle Gramley, former Federal Reserve governor, appeared on the show to talk about the Fed's balance sheet, which has grown from $950 billion to close to $2.25 trillion.