'Fast Money' Recap: Market Crossroads?

The trading panel disagreed on the direction of the market in 2011.
By David Tong ,

NEW YORK (

TheStreet

) -- The markets erased their earlier losses and mixed on Monday.

The

Dow Jones Industrial Average

fell 18.46, or 0.16%, to 11,555.03, while the

S&P 500

was up 0.77, or 0.06%, to 1,257.03. The

Nasdaq

was up 1.67, or 0.06%, to 2,667.27.

Dennis Gartman said on

CNBC

's "Fast Money" TV that the market didn't sell off that much after China raised rates by 25 basis points and raised reserve requirements. He said he was impressed that the commodities ended higher for the day.

Anthony Scaramucci said to beware of Chinese overconfidence in its ability to contain inflation. He said the Chinese has had a worse record fighting inflation than the U.S.

Doug Kass, founder and president of Seabreeze Partners, warned that the current recovery in the economy and market rally may be shortlived. He said the consensus forecast for a recovery may prove ephemeral, adding the foundation for growth is "just not there."

Jon Najarian disagreed, saying that the headwinds are not that strong and that the economic stimulus will help the market.

Scaramucci said he thinks there will be a near term correction of 5%, while Kass stuck to his prediction that the market will move sideways in 2011.

Shifting to the banking sector, Simon Hobbs, the moderator of the show, noted that

Bank of America

(BAC) - Get Report

and

Citigroup

(C) - Get Report

performed well today. Terranova was down on Bank of America, saying it is facing put-back losses of about $25 billion.

Scaramucci liked the performance of Citigroup's management team and said he is looking for a reverse split that would push the stock to $20 and attract institutional and hedge fund traders.

In the "street fight" segment on

Apple

(AAPL) - Get Report

, Steve Cortes said he believes the Nasdaq will break down next year with Apple leading the way. He said

Google

(GOOG) - Get Report

is also headed down. The "two important generals will be shot," he said.

Terranova disagreed, arguing that Apple is poised to put up some phenomenal trading numbers at the end of January. He also said Apple will get its share of the capital flow into the equities market next year. Scaramucci agreed, saying Apple is coming up with new technologies, including 3-D television without glasses.

Scaramucci defended his recent pick of

Cisco

(CSCO) - Get Report

. He said Cisco remains a good value play, while Gordon, co-head of the research unit at the Aspen Trading Group, said Cisco's chart looked ugly.

Rare earth stocks were up today, with

Rare Element Resources

(REE)

, up 15%, and

Molycorp

(MCP)

up 8.95%. Najarian said the stocks benefitted from the institutional accumulation of calls. He said rare earth will be a big story going forward.

John Stephenson, of First Asset Investment Management, predicted silver will hit $50 an ounce in 2011, oil will top $150 a barrel and copper will rise to $5.25 a pound. He said the rise in economic activity in the U.S. and Europe will lead to more competitive commodities markets.

Hobbs said

HR Block

(HRB) - Get Report

was the worst performer in the S&P today, down 6.86%. Scaramucci said the company was down because it was told it could no longer do refund rebates. Still, he liked the stock from value perspective, with its attractive free cash flow and its hold on the market for tax preparation.

Shifting to auto stocks, Maryann Keller, president of Maryann Keller and Associates, said Beijing's new decree to limits new car registrations to 240,000 is not a big deal and shouldn't affect stocks like

Ford

(F) - Get Report

and General Motors.

Gordon offered a bleak technical outlook on the euro. He said the attraction of higher yields in the U.S. will push the euro-dollar trade to new lows. Gartman said the Swiss national bank has spent billions of dollars in an unsuccessful effort trying to support its currency against the euro.

Although natural gas has been worst performing commodity this year, options trader Mike Khouw said

Chesapeake Energy

(CHK) - Get Report

is really cheap, with expectations of producing $5 billion in free cash in 2011 vs. $30 billion in enterprise value.

Hobbs said

Microsoft

(MSFT) - Get Report

, one of the worst Dow performers for the year, was up today.

Gartman said he liked Microsoft because it's become a bank with an enormous amount of cash on its balance sheet. Terranova, though, said Microsoft will be challenged to use some of that cash to create some products to compete against

Apple

(AAPL) - Get Report

.

In the final trades, Gartman liked soybeans, wheat and corn. Gordon liked copper above $4.20, and Terranova said to sell

Home Depot

(HD) - Get Report

on the pop.

--Written by David Tong in San Francisco.

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David Tong

.

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.

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