NEW YORK (TheStreet) -- After a sharp decline on Monday, the S&P 500 bounced back on Tuesday.
On CNBC's "Fast Money" TV show, Brian Kelly, founder of Brian Kelly Capital, said rising heating costs for consumers could crimp spending. Natural gas is up 25% in 2014 and propane costs could double for some customers.
Kelly said he would likely exit his long natural gas position sometime later this month. He added the S&P 500's selloff could continue if Wednesday's ISM data is weaker than expected.
Pete Najarian, co-founder of optionmonster.com and trademonster.com, said consumers are continuing to buy select items from Michael Kors (KORS) and Under Armour (UA) - Get Report while ignoring retailers such as J.C. Penney (JCP) - Get Report.
Guy Adami, managing director of stockmonster.com, agreed consumers are spending, but only in specific areas. He said the consumer does not appear as healthy as investors seem to think.
Dan Nathan, co-founder and editor of riskreversal.com, said the SPDR S&P Retail ETF (XRT) - Get Report has drastically underperformed the S&P 500, down 12% versus 5%, respectively. He added the weak January auto sales show that U.S. consumers are drained at the moment.
Paul Hickey, co-founder of Bespoke Investment Group, was a guest on the show. He said the recent 5% pullback in U.S. equities has been "very textbook." He added that at this time there doesn't seem to be anything that investors should worry about. His top sector picks include consumer discretionary, financials, industrials and materials. Of those industries, his top picks include Comcast(CMCSA) - Get Report, Bank of America (BAC) - Get Report, Alliant Technology (ATK) , and Dow Chemical (DOW) - Get Report.
Nathan said he is a seller of Google (GOOG) - Get Report. The stock is up 50% from one year ago but the company recently missed on earnings and has shrinking margins. He called the stock "priced for perfection."
Adami said he was surprised how much Google popped after earnings and said it could trade down to the low $1,000s.
Apple (AAPL) - Get Report has continued to hold the $500 level amid the market selloff. Najarian likes it that the company is likely to introduce wearable technology, which could add $17 billion to the company's revenue next year.
Microsoft (MSFT) - Get Report said one of its own executives, Satya Nadella, will be the new CEO. Adami called the stock "fine" at current levels and said it could be at $40 if it weren't for the recent weakness in the broader market.
Ted Bailey, founder, CEO and chairman of Dataminr, was a guest on the show. His company has algorithms dig through the 500 million daily tweets on Twitter (TWTR) - Get Report and provide relevant, actionable trading ideas to clients. He said Twitter is considered a public source of information and that creates no compliance issues for his company with the SEC.
Arm Holdings (ARMH) was the first stock on the show's "Pops & Drops" segment. Kelly said the company reported weak earnings but he wouldn't sell it short near $40 support.
OpenTable (OPEN) was up 3% and Adami said investors could buy the stock's recent weakness ahead of earnings on Thursday.
RadioShack (RSH) fell 5% after announcing it will close 500 stores. Najarian said the move won't be enough and the electronics retailer will need to think of something else to turn itself around.
Terence Burnham, a finance professor at Chapman University, was a guest on the show. Because U.S. bank accounts are only federally insured up to $250,000, he decided to remove all of his money from his checking account. He reasoned that the risk-to-reward scenario was unfavorable.
Because checking accounts pay a 0% interest rate, there is no reward to having your money there, he said. Since banks borrow short-term money and lend over the long term, it puts depositors at risk if there is some sort of global financial crisis, he concluded.
Another guest, Matt Burnell, an analyst at Wells Fargo, removed Citigroup (C) - Get Report from his priority list but kept his outperform rating on the stock. He reasoned that the recent issues in emerging markets could weigh on Citigroup because the bank has so much exposure. He said today's U.S. banks have much higher capital requirements and liquidity to handle the type of financial crisis to which Burnham was referring.
Kelly is a seller of Japanese bonds.
Najarian said there was some unusual bullish activity in DirecTV (DTV) , with a trader buying a noticeable amount of September $80 call options.
For their final trades, Nathan is selling Google and Kelly is buying the United States Oil ETF (USO) - Get Report. Najarian is a buyer of Twenty-First Century Fox (FOXA) - Get Report and Adami is buying Ultra Petroleum (UPL) .
-- 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.