NEW YORK (
) -- The markets ended flat Wednesday with signs that the rally may be sputtering.
Dow Jones Industrial Average
rose 4.32, or 0.04%, to 9543.52, while the
was up 0.12, or 0.01%, to 1028.12 The
added 0.20, or 0.01%, to 2029.43.
Joe Terranova said on
's "Fast Money" TV show that people are talking about the "correction trade." He said they should be careful about that trade because of three reports coming out next week. They are the report from the Institute for Supply Management, the minutes from the Federal Open Market Committee and Friday's unemployment picture. "They could be potentially positive reports," he said.
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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Steve Cortes said the bulls have to be worried because they lost their generals: the Nasdaq, which is badly lagging the S&P, and China, which is trading lower.
Guy Adami agreed, saying the rhetoric about China isn't as rosy as it looks like.
Terranova said the hedge fund community and money managers will be on a "chase for performance" between Thanksgiving until the end of the year. He said that could tack on another 11% on the Dow. He said a lot of money is coming in from the sidelines and that is not going to change unless there is a deep pullback, and he doesn't see that happening now.
Pete Najarian said job creation is the catalyst that is going to drive the market higher.
Rich Santelli, the moderator of the show, noted today's report showing new-home sales jumped 10%. Adami said he was encouraged by the drop in home supply numbers and the higher savings rate. Still, he said he doesn't feel the country has reached a point where there's been a dramatic shift in the purchase of homes.
Shifting to oil, which was down today, Terranova said he still believes the oil story is alive and is sticking to his strategy in 2009 of buying stocks on dips. Today, he said he bought
Adami told investors to tread carefully because "China may be done stockpiling things."
Shifting to the China trade, Najarian said he still liked the infrastructure and energy plays. Adami, however, warned that it's possible someday that China will be down 18% overnight and that will have a big impact on commodities and markets.
Cortes cast doubts about China's command economy and whether it can outperform American entrepreneurship and innovation. Santelli quickly pounced on that response, saying government bureaucracy in the U.S. has been slow in moving to realize the potential of natural gas.
Santelli invited William Fleckenstein, president of Fleckenstein Capital, on to the show. Fleckenstein said he doesn't care about stocks. Rather he said his trading is based upon all the money that is being printed in this country. He sees a weak dollar and is long on gold and silver.
Santelli brought in Gary Kaminsky, former managing director of Neuberger Berman, to talk about the dash-for-trash phenomenon in the markets. Kaminsky said active money managers are behaving today as they did in 1999 when they felt obligated to participate in the market. "That's not a good thing," he said.
He said the dash for trash is going to end when people realize the economy is not going to grow in the first quarter of 2010 despite all the money-printing and stimulus efforts.
Cortes talked briefly about pairs trading. He said it's basically an odd-couple trade. He said one kind of pairs trade involves a method of speculation on the relative value of two similar stocks. The example he gave was buying
The second kind involves protection. For this example, he said he would go long on
against it. The reason? JPMorgan has exposure to the consumer through mortgages and credit cards, while Goldman doesn't, he said.
Maynard Um, a UBS analyst, was asked whether he would be a buyer of
ahead of its earnings on Thursday.
He said he is not a buyer. He said PCs are still low on the totem pole for companies that are concerned about their IT budgets in the back half of the year.
He anticipates more pressure on Dell's gross margins and he said Dell would have to make a transformational acquisition for him to be a buyer of the stock.
In the chartology segment, Greg Troccoli, director of technical research for Opalesque, said he doesn't have as dim of a view of the market as some of the pessimists on the panel. He said he doesn't think "we are extremely overbought and wants to see some signs of weakness." He said oil could head to $89 a barrel if it moves above $76 on the weekly close. If it doesn't, it could be heading for a retracement, he added.
In the options pit, Najarian said he had seen heavy call activity in
. He also noted the 800% jump in two months in the stock price of
Human Genome Sciences
, from $2.50 on July 9 to $20.65 at today's close. The latter moved higher today on speculation of a takeover bid by its partner.
In the final trades, Terranova said he liked
. Adami said he would take profits on
Hartford Financial Services
, while Cortes said he would short the British pound through
CurrencyShares British Pound Sterling Tr
. Najarian said he liked Citrix.
-- Written by David Tong in San Francisco
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