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Fast Money Recap: Confidence Eroding

The 'Fast Money' team talks retail stocks and the weak consumer.

The Dow managed to squeak out gains, even with consumer confidence at its lowest levels in two years and home sales dropping to its lowest levels in five years. The team at CNBC's "Fast Money" discussed the whipsaws in trading and how retail stocks may be affected.

Pete Najarian pointed at that while stocks were down early, technology names recovered. Investors shot first and didn't bother to ask the questions in the retail sector according to Jeff Macke. Karen Finerman feels something else besides fundamentals were at work with regards to the overall market selloff and the selling seen in retail stocks.

Target

(TGT) - Get Report

,

Lowe's

(LOW) - Get Report

and

Wal-Mart

(WMT) - Get Report

traded lower off the poor consumer confidence numbers. Guy Adami thinks Target is worth a trade here.

Consumer Confidence and Christmas

A

CNBC

snap survey showed that people think holiday sales will be as weak as they were during the recession of 2002. If this survey plays out to be correct, how can investors profit from a poor Christmas season?

Margaret Brennan,

CNBC's

retail correspondent, thinks consumer electronics and retail accessories like handbags and shoes will be strong again this Christmas. She is looking at Wal-Mart and agrees with Adami on Target for a play on strong consumer electronics demand. Macke recommends

Coach

(COH)

. Adami suggests

Saks

(SKS)

as he feels the retailer will have a great Christmas.

Najarian continues to favor athletic apparel maker

Under Armour

(UA) - Get Report

. (

RealMoney

Take: Dan Fitzpatrick said recently, "Under Armour has been consolidating for the past six weeks or so. And with the stock now right on the 50-day moving average, something has to give. If you like UA, then try taking some on this pullback. After all, the stock has persistently bounced along this key moving average, and I don't see any evidence that this pattern will change." To read more on what Fitzpatrick said,

click here.)

Word on the Street

Existing-home sales were reported on Tuesday and hit a five-year low. Finerman has concerns that

Lennar

(LEN) - Get Report

might have more write-downs in its future. However, she feels a short-term trade is in order at

Centex

(CTX)

. Adami says if

KB Home

(KBH) - Get Report

trades down to a 52-week low on 10 million shares, it should be bought for a short-term trade. He predicts this scenario could play out on Thursday.

The strike at

General Motors

(GM) - Get Report

hit its second day on Tuesday as investors grow nervous of a stalemate. Najarian doesn't want to see the strike go more than five days. Adami's idea for an auto trade is to look for a pullback in

BorgWarner

(BWA) - Get Report

and then get long. (

RealMoney

Take: Tony Crescenzi said recently, "Hence, while the net economic impact of the current automobile strike at GM is likely to be small, its most important impact will be its effect on perceptions about U.S. economic growth." To read more on what Crescenzi said,

click here.)

Crude oil broke down 2% on Tuesday. Dennis Gartman, author of

The Gartman Letter

, joined the crew to give his opinion on oil. Gartman notes that some of the storms the market thought would be problematic have not been. He declares that oil has been extended on the upside and could pull back to $76.

Commercial goods shipper

YRC Worldwide

(YRCW) - Get Report

saw heavy options trading on Tuesday as takeover speculation heats up. Najarian tells investors that YRC Worldwide saw five times the open interest traded in the call options in the first half hour. He doesn't know what is going on, but the buying is from institutional money managers. (

RealMoney

Take: Steven Smith said recently, "In other notable action, YRC Worldwide shares jumped over 7% today and saw heavy call volume. I wish I could say this is a sign that investors anticipate the need to move a lot of merchandise in the coming weeks, but the activity seems to be the result of takeover speculation." To read more on what Smith said,

click here.)

Tech Shines

Apple

(AAPL) - Get Report

and

Google

(GOOG) - Get Report

hit new records as technology stocks continued to shine. (

RealMoney

Take: Richard Suttmeier said recently, "Apple tends to peak when it becomes more than 20% overvalued." To read more on what Suttmeier said,

click here.)

Najarian says gadget stocks like

Garmin

(GRMN) - Get Report

and

Research In Motion

(RIMM)

continue to be strong as the global growth story is still working for tech.

Conference Action

A series of investment conferences will kick off over the next few days that could cause price movement in the chemical and consumer sectors. Najarian will pay attention to

TheStreet Recommends

Monsanto

(MON)

, which will be presenting at a Credit Suisse chemical conference on Wednesday. Another name he likes is

Digital River

(DRIV) - Get Report

, which will be presenting at the Piper Jaffray London Consumer Conference on Thursday.

Crocs

(CROX) - Get Report

will also be at the London conference. Najarian expects the plastic clog maker to talk about international growth plans at this conference. Crocs, which has a high short interest, is his favorite trade out of the three. (

RealMoney

Take: Jim Cramer said recently, "Shorts can't stop shorting? Or covering? When you see a Crocs go up like this, day after day, you know that's shorts coming in and taking it up or trying to short and cover again. The stock still has only two major research houses writing on it. My rule is that until there are four, you are still in great shape." To read more on what Cramer said,

click here.)

Chartology With Carter Worth

Carter Worth, chief market technician at Oppenheimer, joined the crew to discuss his take on technical analysis in the markets. Worth says the stock market is bifurcated. Meaning there is strength in materials, energy and industrial stocks, but that strength is being offset by weakness in consumer discretionary and financial stocks. He showed three charts that compared the strength vs. weakness.

The first chart comparison was

BHP Billiton

(BHP) - Get Report

vs. Wal-Mart. BHP is killing Wal-Mart in performance. The second chart was

Schlumberger

(SLB) - Get Report

vs.

UBS

(UBS) - Get Report

and the third was

Arcelor Mittal

(MT) - Get Report

vs.

Toyota

(TM) - Get Report

. UBS and MT are the out performers in the above comparisons.

Worth suggests selling the over-extended names because these stocks are clearly at extremes. Historically, a bifurcated market ends with the weaker names pulling down the stronger names. Adami thinks BHP still has room to go higher and it has technically broken out. Overall, Worth thinks the

S&P 500

is going to be weak not strong in the near future.

Pops & Drops

Pops --

ValueClick

(VCLK)

traded up 13% and

Focus Media

traded up 19%. Najarian says these guys are in the online ad space and he favors both. (

RealMoney

Take: Steven Smith said recently, "The options on Focus Media have already traded more than 9 times their daily volume, with five calls for every put. But implied volatility is already down 15% on the day." To read more on what Smith said,

click here.)

Navteq

(NVT) - Get Report

traded up 11%. Dylan Ratigan says the GPS trade is alive and well.

Tesoro

(TSO)

popped 3% after news broke that the refiner was added to the S&P 500. Adami is bearish on the refiners and he feels oil is toppy at current levels.

USEC

(USU)

popped 6%. Adami says own this and stop out if it closes below $9.75.

Drops --

Vonage

(VG) - Get Report

plunged 34% after losing a patent case. Finerman tells investors to hang up on this one because it is down a third every time "Fast Money" talks about it.

Whirlpool

(WHR) - Get Report

fell 5% off the weak home-sales data reported Tuesday. Macke says this is a value trap, don't own it.

Freeport-McMoRan

(FCX) - Get Report

fell 2% as the commodity markets pulled back. This sucker is going to take the elevator down, Macke said.

Face2Face

The crew at "Fast Money" takes questions from listeners in this segment of the show.

Tom from Atlanta writes "

IntercontinentalExchange

(ICE) - Get Report

has fallen considerably from its high of $174, and the chart looks like it has taken a solid downward trend. Is this an opportunity to accumulate a larger position, or is ICE's stock price reflecting slower growth?"

Finerman responds by noting that the exchanges are in play for M&A and this could draw in more investor interest for names like ICE. (

RealMoney

Take: Dan Fitzpatrick said recently, "The series of lower highs is easy to see in this daily chart of Intercontinental Exchange. But Monday's high is very close to the 50-day moving average. If ICE breaks above that level, then the next entry point is on a pullback to that same level. So be careful in jumping on a breakout -- this downtrend is pretty well established, and the safer trade is to wait for the stock to prove itself." To read more on what Fitzpatrick said,

click here.)

Jim from Pennsylvania asks, "Does Jeff Macke have an opinion on

Chipotle Mexican Grill's

(CMG) - Get Report

and its ability to continue to deliver 25% growth? Or has the stock finally been priced beyond perfection?"

Macke likes CMG for a trade.

Final Trade

The crew signs off with their best ideas for the day.

  • Macke favors eBay (EBAY) - Get Report.
  • Finerman prefers Comverse Technology (CVMT) .
  • Najarian tells investors to play the online ad space with Digital River (DRIV) - Get Report.
  • Adami likes USEC (USU) . (RealMoney Take: Jim Cramer said recently, "If you read the NRG Energy nuclear story today and you want to go buy the stocks of companies that make nuclear power plants or you want to go buy the uranium maker USEC you are nuts." To read more on what Cramer said, click here.)

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