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'Fast Money' Recap: The Gains Are Gone

CNBC's John Jannarone said hedge funds may be exacerbating the selloff in certain stocks because many firms are usually long similar companies. When the firms all sell out of their positions, it hurts the stocks much more than what's reflected in the broader market. Of course, this can create buying opportunities too, but usually in more quality stocks, he concluded. 

Adami said the biotech sector has sold off to the point where it's almost time for investors to buy. 

David Trainer, managing partner of Novo Capital, said Netflix (NFLX) should be trading at $100 per share, based on its fundamentals. He pointed out the company grew revenue 17% last year while expenses increased 23%. He argued the stock has finally lost momentum and looks to be headed lower.

Kelly said it's hard to short-sell momentum stocks after they have already had a big selloff. 

Adami agreed, saying he would not look to short stocks that have a large short-interest. Instead, he was a seller of International Business Machine (IBM) and Caterpillar (CAT)

Seymour said earnings expectations for this quarter seem "reasonable." He added that financial stocks have very low valuations. Specifically, he likes J.P. Morgan (JPM) ahead of earnings. 

Grasso, who is long Bank of America (BAC), said Citigroup (C) is also beginning to look attractive at current levels. 

Carter Braxton Worth, chief market technician at Sterne Agee said the S&P 500 could pull back to the range of 1,520 to 1,675. He argued that the broader market is just beginning to roll over and more pain is on the way. He suggested the rotation into low-valuation stocks will eventually stop but the selling will continue, driving down the indices.

Kelly advised investors not to be afraid of buying stocks if there is a 10% to 15% pullback. 

Seymour reminded investors the economy is still doing well and the industrial and materials sectors remain strong. 

Whole Foods Markets (WFM) dropped 4% and was the first stock on the show's "Pops & Drops" segment. Grasso said investors could take a small position in the stock with a stop-loss at $49. 

Rite-Aid (RAD) popped 8%. Kelly said investors should take profits. 

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