'Fast Money' Recap: A Big Correction

Dennis Gartman told the trading panel that he sees a correction of more than 10% coming.
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NEW YORK (

TheStreet

) -- The markets fell Monday on nagging worries about Europe's sovereign debt problems.

The

Dow Jones Industrial Average

fell 103.84, or 1,04%, to 9,908.39 while the

S&P 500

lost 9.45, or 0.89%, to 1,056.74. The

Nasdaq

dropped 15.07, or 0.70%, to 2,126.05.

Pete Najarian said on

CNBC

's "Fast Money" TV show that today's drop followed a weekend with no real news and last Friday's rally, which he described as mostly short-covering. He said volatility was low in today's session.

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 onTV

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Gary Kaminsky said money is not coming in from the sidelines into stocks and equity funds are seeing redemptions. He said a lot of investors are taking out money from the equity funds because they do not want to be caught in a position they were in 2008 when the markets plunged.

Guy Adami said the markets have been behaving badly since

Intel

's

(INTC) - Get Report

earnings: "good news, bad price action." If

Goldman Sachs

(GS) - Get Report

falls below $148, "you're in full bear-market mode," he said.

Dennis Gartman, of the Gartman Letter, said "we're in for a lot more than a 10% correction." He said that the money isn't coming in from the sidelines and there's a "disconcerting" turndown in economic activity. He said almost everything is going to get hit hard except for restaurants and "things like

Procter & Gamble

(PG) - Get Report

.

He had a dim view of copper recovering anytime soon. And he said he doesn't like to be bullish in gold, but he does favor being in gold in foreign currency terms such as the euro, sterling and Canadian dollar.

Melissa Lee, the moderator of the show, said the financials were hit hard today on ongoing global credit concerns and Obama's move to tighten federal regulations of the industry.

Seymour noted credit default swap spreads are widening in Europe as a number of countries are wrestling with their debt problems. Najarian said there is no compelling reasons to be in

Goldman Sachs

(GS) - Get Report

or

JPMorgan Chase

(JPM) - Get Report

. Kaminsky went even further, saying he could see no catalyst to move the financials for some time.

In after-hours trading,

Electronic Arts

(ERTS)

was getting hammered for a weak forecast. Seymour said investors should be wary of getting into Chinese gaming companies, adding that trade is too crowded.

Brian Kelly, founder of Kanundrum Capital, said he favored what he called a digital trade strategy: in essence, a pairs trade that called for buying

Akamai

(AKAM) - Get Report

, which is involved in products and software related to downloading games, and selling

Gamestop

(GME) - Get Report

, which sells packaged good products.

Lee asked the panel for some names of stocks that can do well in down markets. Najarian said he liked

Medivation

(MDVN)

, which is about to hear the results of Phase 3 data in March on a drug for Alzheimer's disease.

Lee brought in Steven Halper, associate head of research at Thomas Weisel, to talk about Karen Finerman's enthusiastic endorsement Friday of

CVS Caremark

(CVS) - Get Report

, which jumped today on blowout earnings.

Halper seconded the choice, noting CVS' margins will benefit from the proliferation of generic drugs and its ability to use its leverage to drive down the cost of acquiring drugs. He said there is no reason why the stock, which now trades at a multiple of 12 times, can reach 15 times.

In the "ear to the wall" segment, Seymour commented on a report today from the U.S. holdings of the China Investment Corp., which has some $300 billion in assets. He said the report shows the CIC investing as usual in U.S. banks and commodities. In particular, it has large holdings in

Teck Resources

(TCK)

and

Morgan Stanley

(MS) - Get Report

while being heavily weighted in its portfolio to ETFs.

Kelly said lumber futures have been on a tear and that the best way to play that is to pick up

Plum Creek Timber

(PCL)

.

In the final trades, Seymour said to sell

Baidu

(BIDU) - Get Report

into earnings. Adami said he liked

Diamond Foods

(DMND)

, while Kaminsky said to short

Lululemon Athletica

(LULU) - Get Report

. Najarian said he liked

Lowe's

(LOW) - Get Report

.

-- Written by David Tong in San Francisco

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

.

"Check out

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

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