'Fast Money' Recap: Banking on Bottoms

Markets slide while many are calling a bottom in banks. The traders says that is a dangerous way to play the markets.
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On today's "Fast Money" show, Dylan Ratigan starts off by saying, "If you had a bad month, it is because you did have a bad month."

The

Dow Jones

closed down nearly 358, or 3.03%, to 11,453; the

Nasdaq

fell about 80, or 3.33%, to 2,321; and the

S&P 500

fell 38, or 2.94%, to 1,283. Crude oil rose sharply by $5.10, or 3.79%, to $139.65.

Pete Najarian said "the pressure is on, everyone is calling a bottom in the banks," which is a dangerous way to play, with the market performing the way it has been. He agrees with what was mentioned the other day, to play the market by buying

QID

, which is a double short of the S&P 500. He suggests you buy this "if you think the market is going down further."

Guy Adami said "there was no good news today to spin anything." Although he did noticed

Halliburton

(HAL) - Get Report

was up today. He said "if it can trade up like it did today with this tape, it should continue to go up."

Ratigan mentioned that this morning

Goldman Sachs

(GS) - Get Report

downgraded

Citigroup

(C) - Get Report

and

General Motors

(GM) - Get Report

.

Karen Finerman commented on Ratigan's statement, "I really don't focus that much on it." But she did find it comical, perhaps even ridiculous, that banks are downgrading each other. She did state that normally in a day like this she would bring out a "buy list," stocks she would like to buy if the prices were lower. However, she said "oil prevented me from doing so." She cautions investors to "wait a little," since she said she "wouldn't be surprise (the markets) are down tomorrow."

Najarian said, the "market was accelerating down as we saw oil and coal names roll over, and when they turned around, the market still went down." He noticed coal stocks, such as

Alpha Natural Resources

(ANR)

, moved up from those lows. He stated he owns Alpha and that he added to his position.

Adami, said Rick Wagoner made a statement that GM does not have a cash problem. He found it interesting that there was no capitulation today with the GM stock. He believes the stock is "getting to a point where a trade could be done." He said not right now but in three or four days this stock could be a major buy.

Terranova started talking about the

Fed

, saying "it's your move" to Ben Bernanke on what will he do to make the dollar rally significantly.

Dylan asks Terranova what he thinks will make the dollar rally?

Terranova said the Fed needs to "step it up." He says

UUP

is the best play for the dollar from the long side.

General Motors was brought into the discussion again.

Adami does not believe General Motors is going away, and finds the stock a good trading vehicle. He sees some the stock could possibly be bought out with a market cap of $7 billion.

Finerman mentioned if someone bought GM, would they be buying $7 billion in equity? She said there is a big turn-off of being bought if the company is highly in debt.

Finerman went on to talk about

Nike

(NKE) - Get Report

. She said she always looks at how strong the balance sheets are, and that Nike has very strong balance sheets. She considers Nike a good buy long term due to its strong balance sheet.

Najarian commented on Nike, saying "I didn't want to buy it today, but I love Nike at this level."

Adami is not too sure about Nike, he says there are reasons why investors did not like Nike's recent earnings report.

Terranova changed subjects and started talking about rail roads. He said "rails should be given a look, such as

Burlington Northern

(BNI)

, which he owns.

Terranova was asked if he likes gold by Ratigan. He said he does not like gold, but "I like copper."

Adami is on the same side as Terranova, saying on a technical standpoint he is still bearish on Gold.

Najarian says gold is "an unused commodity," which is why he does not like it and prefers commodities such as coal and oil. Referring to coal and oil, he said "everyone wants to jump off it, they're wrong."

Carter Worth, chief market technician at Oppenheimer, said "the market is by all counts nowhere near to be finished." He stated how railroads and coal are coming apart from a technical standpoint. He showed a chart of the S&P 500 where there were two rallies that helped boost the index from its downtrend, one was when the Fed lowered interest rates by 75 bbs and the other was the Bear Stearns bail-out, but he said now that it started its downtrend again, there is "nothing to save it."

Terranova did not agree with Carter, stating while "it is a fragile market technically, fundamentally there is something that could take this higher."

Smith & Wesson

(SWHC)

was up 7% since a supreme court ruling allowed people to have a possession of a weapon in Washington, DC.

An announcement was made that the Fed might possibly allow private-equity groups and others to invest in banks.

After hearing that, Finerman stated that

Washington Mutual

(WM) - Get Report

at $5 looks attractive to buy already." She continued to say if it looks good now that perhaps a private equity group might snatch it up.

Ratigan asked the group about pairs trading, revolving with the thesis that companies in the same sector are correlated where one company goes up while its competitor goes down.

Terranova said pairs trading in the past for him had to have a theme to it. Such as when the JPMorgan vs. JMP vs.

Capital One Financial

(COF) - Get Report

.

Finerman is more cautious with pairs trading and says it might be adding more to risk.

Adami says "it is sometimes becomes a confusing trade to do." He suggests if you didn't want risk, then you shouldn't be in the market. He doesn't believe pairs trading diminishes risk but perhaps adds to it.

Najarian likes

ConocoPhillips

(COP) - Get Report

. He said the stock sold off today with the company having a 20% stake in

Lukoil

, and from a valuation basis, that makes this stock attractive.

Finerman believes

Merck

(MRK) - Get Report

is pretty interesting from its current valuation.

Adami said he likes

Level 3 Communications

(LLL) - Get Report

. He said the stock hit a 52-week low recently but that it is a well-managed company that has been downgraded a lot because of the aerospace segment.

Terranova says

Nucor

(NUE) - Get Report

is a buy "if the broader market brings it."

Steve Cortes, CEO and Founder of Veracruz Real-time Market Research, came on the show and said "the difficult situation for the Fed is raising the dollar without raising the rates." He believes the solution is for a "government intervention to buy dollars, something that has not be done with this administration."

Ratigan announced the House passed a bill requiring the Commodity Futures Trading Commission (CFTC) to curb speculation in Energy Markets.

Najarian said, "I think this is nuts!"

Finerman then asked if the House can really do this?

Terranova answered, saying "I think it's more of a request" and cannot necessarily force people not to add to their position.

Finerman said she is a believer in free market capitalism, and believes we should "let oil trade where it's going to trade."

Ratigan turned to Najarian saying since his energy plan is coal, "doesn't this worry you from the House."

Najarian said he is not necessarily worried. He also said,"I don't think they can get this through."

William Fleckenstein, president of Fleckenstein Capital, came on the show to talk about the market. The last time he was on the program, the Dow was at 14,000 and he said to sell. He stated his reasoning for saying sell at that time was because the housing bubble burst. He is bearish on tech and the three stocks he is currently shorting are

Cisco

(CSCO) - Get Report

IBM

(IBM) - Get Report

and

Texas Instruments

(TXN) - Get Report

.

Final Trade

Terranova picked

Suncor Energy

(SU) - Get Report

.

Finerman picked Merck.

Adami picked

Allstate

(ALL) - Get Report

.

Najarian

Semiconductor Holders

(SMH) - Get Report

.

This article was written by a staff member of TheStreet.com.