'Fast Money' Recap: Trading Silver

The trading panel was divided on how to trade the red hot commodity.
By David Tong ,

NEW YORK (

TheStreet

) -- Silver surged to a 30-year high on a day when the markets ended mixed on Monday.

The

Dow Jones Industrial Average

fell 19.90, or 0.17%, to 11, 362.19 while the

S&P 500

lost 1.59, or 0.13%, to 1,223.12. The

Nasdaq

rose 3.64, or 0.13%, to 2,594.92.

Dennis Gartman said on

CNBC

's "Fast Money" TV show said the surge in silver has been incredible but that he was recticent about getting long it at this level.

Joe Terranova attributed the surge to a competitive currency devaluation and investors preferring silver over gold.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

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Tim Seymour said silver-related stocks like

Silver Wheaton

(SLW)

are getting squeezed. But Guy Adami said he still likes the stock and sees more room to the upside.

Brian Kelly said he got out of the silver trade today after an incredible run. "I had to take profits."

Terranova said he wouldn't be surprised if the

CME

(CME) - Get Report

steps in to raise margins.

Melissa Lee, the moderator of the show, noted the U.S. government is exiting its stake in

Citigroup

(C) - Get Report

with an offering for $2.4 billion shares. Adami said he wasn't sure what was behind the move but was sure the shares would be gobbled up.

Seymour said it wasn't a bad move, with the stock at a six-month high. Anthony Polini, an analyst with Raymond James, said he was surprised the government was selling its stake sooner rather than later. He said Citigroup could become a $8 to $9 stock, adding it has done a good job cleaning up credit quality and operating in emerging markets that are robust.

In another round of forecasts for 2011, Doug Kass, president of Seabreeze Partners Management, came up with his next two. He believes

Microsoft

(MSFT) - Get Report

will make a tender offer for

Yahoo!

(YHOO)

at $24. He said Microsoft needs to make the move to attain critical mass in Internet search and gain exposure in China.

Second, he believes Secretary of State Hillary Clinton and Vice-President Joe Biden will exchange jobs in mid-2011.

Lee referred to a report the five worst performing stocks year to date in the S&P. They are

Dean Foods

(DF) - Get Report

,

H&R Block

(HRB) - Get Report

,

Apollo Group

(APOL)

,

Supervalu

(SVU)

and

Pulte Group

(PHM) - Get Report

.

Gartman advised against speculating on the stocks for 2011. He said there's a reason why they have been the worst performers of the year.

Shifting to the negotiations over the extension of the Bush tax cuts,

CNBC

political editor John Harwood said the Obama administration is considering a 2% payroll tax cut for one year. For a worker with an annual pay of $40,000, it would represent $800 in relief, he said.

With copper up 20% this year on strong demand from China, Kelly noted that the consumption of copper has exceeded production for the first time since 1995. He said he would be a buyer of

Freeport McMoRan

(FCX) - Get Report

on dips to $105.

Kelly said Freeport's rise could wane if a copper ETF were to appear. He said

JPMorgan

(JPM) - Get Report

and ETF Securities have filed papers for a copper ETF. He said he would be a buyer of a copper ETF over the stock.

Lee brought in Vitaliy Katsenelson, author of

The Little Book of Sideways Markets

, who believes the markets will be rangebound for next decade. With earnings growth heading lower than in the past, he provided two picks that he said would work:

L3 Communications

(LLL) - Get Report

and

Medtronic

(MDT) - Get Report

.

Lee came in with some breaking news about a deal that had been reached in Washington in which income and dividend tax cuts would be extended for two years and jobless benefits for 13 months.

Seymour said the news illustrated the extent of new Republican influence in Washington. Terranova said the markets may have already discounted the news.

In the final trades, Seymour was long

Hecla Mining

(HL) - Get Report

. Adami liked

Apache

(APA) - Get Report

Gartman was long the Aussie dollar and gold and short the euro. Terranova said to buy put protection if the markets open weak.

-- Written by David Tong in San Francisco

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.

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