By Roberto Pedone
WINDERMERE, Fla. (
) -- The traders of
"Fast Money" are starting to notice some cracks in the market. On Tuesday's "Halftime Report" segment, Katie Stockton of MKM Partners pointed out patterns in the charts show that sentiment in the market has become uncomfortably bullish. She told viewers that the spread between bulls and bears has reached highs that we haven't seen since May 2008. Stockton believes this is a contrarian signal for market players.
She mentioned that the markets could see a pullback in February, and it wouldn't surprise her to see the
trade down to its 200-day moving average, which right now is around 1010. She advised viewers to sell into any strength and avoid the big correction that could be coming. Mike Gurka of Empower said technically the S&P is wedged in between the 100-day and 50-day moving averages. He said a bounce could be coming around 1087.
On Monday's "Fast Money" TV Show, Joe Terranova also warned investors that the market could be vulnerable going forward. He said that he's concerned about whether it is heading toward a deep dive or a series of shallow corrections.
Karen Finerman thinks last week's selloff was an overreaction to Obama's proposed banking reforms (view
on Stockpickr). She told viewers that she continues to build her stake in
Bank of America
, despite all of the negative headlines coming out of Washington.
The "Fast Money" crew has recently highlighted trading ideas that play off
earnings announcement and new product launch, stocks to buy in the face of the market selloff and stocks with unusual options activity. Here are some highlights from over the past week as aggregated from the show.
: The traders highlighted a number of ideas that can help you profit and protect your assets in case of a major market correction. On last Thursday's "Fast Money" show, Pete Najarian told viewers: "Take a look at
due to bullish options activity. An unusual amount of BB&T Feb. 30 call volume leads me to believe the stock could make a sharp move higher." The
: The traders have noticed that a number of stocks are acting as "tells" that suggest the economy is starting to look vulnerable. On Tuesday's "Fast Money" show, Guy Adami told viewers: "
and the railroads are down. Up until now, the rails have been crushing on their releases, but CSX didn't crush." The
Goldman Sachs Group
: The crew sees a buying opportunity amid the sell-off that was sparked by fears that China's curbs on bank lending might derail the global recovery. On last Wednesday's "Fast Money" show, Karen Finerman told viewers: "I bought more Bank of America calls. I think it's a great franchise." The
: The traders have noticed some unusual options activity in a number of stocks. On last Thursday's "Halftime Report" segment, Jon Najarian told viewers: "
continues to see active buying of at- and out-of-the-money calls. But I wouldn't play the options naked; I'd only do it with spreads." The
: How should you play Apple's recent strong earnings report and iPad product launch? On Monday's "Fast Money" show, Tim Seymour told viewers: "I would not put more money into Apple ahead of the latest creation event. We're less than 5% off the highs, and the tech market looks a little vulnerable. A lot seems to be baked into this stock." The
Research In Motion
: Commodities moved up on Monday largely due to weakness in the U.S. dollar, plus the greenback fell against the euro and a basket of other currencies. What's the trade? On Monday's "Fast Money" show, Joe Terranova told viewers: "In commodities I'm bullish on
. I think it goes above $90 a share." The
-- Written by Roberto Pedone in Windermere, Fla.
Follow Stockpickr on
and become a fan on
Stockpickr is a wholly owned subsidiary of TheStreet.com.
Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.