NEW YORK (TheStreet) -- The S&P 500 finished January down nearly 4%, the worst January performance since 2010.
On CNBC's "Fast Money" TV show, Brian Kelly, founder of Brian Kelly Capital, said volatility is likely to stay in the market, which will be unable to rally until the emerging market issues are solved. He reasoned that equities would go lower.
Steve Grasso, director of institutional sales at Stuart Frankel & Company, said the S&P 500 seems likely to break the 100-day moving average to the downside, and eventually work its way down to the 200-day moving average near 1,700.
Josh Brown, CEO and co-founder of Ritholtz Wealth Management, said the market is turning into a "risk-off environment" where investors do not want to be in equities at the moment. He noted that the $12 billion in fund outflows was the largest weekly outflow of U.S. equities since 2012.
Tim Seymour, managing partner of Triogem Asset Management, said emerging market scares are nothing new. He reminded investors that U.S. economic data, like GDP and consumer confidence, remain strong.
Carter Braxton Worth, chief market technician and managing director at Oppenhiemer & Company, was a guest on the show. He said the S&P 500, on average, finishes the year lower only 33% of the time. However, when January ends the month lower, the likelihood the S&P 500 ends lower for the year jumps to 58%.
In the February through December time period, the S&P 500 is up, on average, just 1.65% when the month of January ends lower. This compares to the average increase of 8.5% when January is positive. He reasoned that the S&P 500 looks likely to decline into the 1,600s.
Satya Nadella, executive vice president of cloud and enterprise at Microsoft (MSFT) - Get Microsoft Corporation Report, is rumored to be the company's next CEO. The news sent shares of MSFT higher by 2%. Seymour said he wouldn't rush to buy the stock on this news and would "wait and see."
Google (GOOG) - Get Alphabet Inc. Class C Report made all-time highs after reporting earnings. Grasso said he was waiting for a pullback below $1,100. If possible, he wants to buy it at $1,060 but admitted that that might be too greedy.
Amazon (AMZN) - Get Amazon.com, Inc. Report had its worst day in over two years after reporting earnings. Brown said most retail stocks ran too high in 2013, causing analysts to overestimate their projections. This, in turn, is causing many companies to miss estimates, and therefore is hurting the share prices.
Seymour added consumer spending has been strong, but margins continue to shrink for most retailers. Kelly suggested higher heating costs could weigh on consumer spending for the next month or two.
Grasso said he would take profits in natural gas and in natural gas plays such as Southwestern Energy (SWN) - Get Southwestern Energy Company Report, Cabot Oil & Gas (COG) - Get Cabot Oil & Gas Corporation Report and Encana Corp. (ECA) - Get Encana Corporation Report.
Chipotle Mexican Group (CMG) - Get Chipotle Mexican Grill, Inc. Report was up 12% and was the first stock on the show's "Pops & Drops" segment. Seymour said he would be a seller after the stock failed to break meaningfully above $550.
For their final trades, Kelly is a buyer of ProShares UltraShort Euro ETF (EUO) - Get ProShares UltraShort Euro Report and Grasso is buying Southern Company (SO) - Get Southern Company Report. Seymour said to buy Potash (POT) and Brown is a buyer of VCA Antech (WOOF) - Get Petco Health and Wellness Company Inc Class A Report.
-- Written by Bret Kenwell in Petoskey, Mich.
Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.