'Fast Money' Recap: Pick China-Related Stocks

Fast Money traders agreed that right now China-related stocks are a good buy. Rio Tinto and Vale are among them.
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NEW YORK (

TheStreet

) -- The

Dow

managed to recapture the 10,000 level in the last hour of trading. After being down around 200 points during a good part of the session, the

Dow Jones Industrial Average

finished 23 points lower, or 0.2%, to 10,044. The

S&P 500

eked out a fractional gain to close at 1074. The

Nasdaq

dipped 3 points, or 0.1%, at 2211.

On

Fast Money

, Melissa Lee asked what everyone thought of the markets today and how they managed to face the fears that were gripping the markets.

Tim Seymour said despite news about North Korea and Europe Tuesday, the news was not that terrible this morning. "Valuations are stupid cheap" in a couple of places he said.

Guy Adami said, if you have your buy orders in place, it's going to be the right thing to do. A lot of things reversed today, at least you have a point of reference now, 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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Fast Money

participants agreed that right now China-related stocks are a good buy.

Rio Tinto

(RTP)

and

Vale

(VALE) - Get Report

are among them.

Freeport McMoRan

(FCX) - Get Report

was another name that cropped up.

Steve Cortes of Veracruz is bullish on the China trade and thinks that global commodities are a buy.

Lee said that small caps are not the place to be if you think credit markets are still at risk.

Seymour says that small guys get destroyed in the current market situation and we don't want to get into small caps at this stage of the rally.

Terranova said to get into copper and oil.

Joe Terranova says that the U.S. markets have been flushed with liquidity and there's a difference between the markets today and back in 2008, when they were just "ignoring" the solution. Today, he thinks that

Goldman Sachs

(GS) - Get Report

has hit a trough and saw that oil was trading relatively well. He thinks it's OK to step in and buy.

He bought some

Pfizer

(PFE) - Get Report

and

Steel Dynamics

(STLD) - Get Report

.

David Rosenberg of Gluskin-Sheff advises to take what worked last year and assume it's not going to work in the next several quarters. "Focus on safe income," he said.

CNBC

Contributing Editor Gary Kaminsky said that unlike last week, when we had a late-day rally off the low -- which was not significant in his opinion -- he saw actual buying today. "It was defensive buying, not short covering," he said. He thinks that defensive buying could continue as credit markets remain tight. That said, he thinks that defensive buying is very short term in nature and could quickly turnaround if some news came out of Europe.

Goldman Sachs

Lee turned the focus on Goldman Sachs, who held in nicely and reached the top during the day. She also wondered what everyone was thinking about

Citi

(C) - Get Report

.

Terranova said that he likes Citi and added that

Bank of America

(BAC) - Get Report

is getting a contribution from Merrill Lynch.

Steve Cortes of Veracruz said that he likes Goldman Sachs.

"I like the market here," he said. "I think this is the time to fade large moves."

"Dogma," he added, "is for theologians ... We are traders."

In Cortes' opinion, 2010 is not a trend year. "It's about fading large moves" by being a buyer.

Steel Stocks

Seymour mentioned during the show that

AK Steel

(AKS) - Get Report

was upgraded by two brokers and that he saw a big intra-day turnaround for

ArcelorMittal

(MT) - Get Report

. "I think you can buy that whole basket."

Oil Stocks

Seymour thinks that

BP

(BP) - Get Report

is going to continue to suffer. "I wouldn't go near it," he said. Seymour isn't so sure that the government has the technology to stop the ongoing, out-of-control oil spillage.

Terranova, on the other hand, believes that

Southwestern Energy

(SWN) - Get Report

is a good play.

Terranova points out that oil has been in the same place, while equities have been experiencing a selloff.

John Tabacco of LocateStock.com said he didn't see significant short-covering at the end of the day. What he has been seeing is a market that's scared and "on pins and needles."

That said, Tabacco thinks that short sellers feel that banks are highly overvalued right now.

Banco Santander

(STD)

and

ING

(ING) - Get Report

are some of the stocks that shorts seem to think are overvalued. U.S. and European banks are still in the short-sellers' favored zone, according to Tabacco.

More on China Hot China Stocks for 2010

More on Markets

In observing the markets Tuesday, Jeff deGraaf of ISI Group said he thinks that the steepness of the yield curve in the U.S. is "a death knell."

That said, he said a good defensive position right now is to be an S&P buyer with long gold calls.

Scott Nations of NationsShares says a lot of people think that the S&P still has more downside. And the way to protect yourself is to go for put spreads on the

SPDR

(SPY) - Get Report

; spreads are good for protection in high volatility environments.

Tech Stocks

During the show, Lee wondered why the tech sector is getting beating up; one might think that tech is a good place to go.

BGC analyst Collin Gillis' reply was, "don't be the weak hand in technology." He said their balance sheets are "loaded with cash."

Adami likes

IBM

(IBM) - Get Report

. "It's not risky," you pretty much know what they're going to make, he says.

Hedge Funds

Anthony Scaramucci of Skybridge Capital said hedge funds are de-risking. "They're cutting both long and short exposure."

"They are just pulling on both sides and reducing short and long exposure," with most of them in a defensive position amid a tremendous amount of uncertainty right now, he said. They just want to stay in business.

-- Written by Andrea Tse in New York

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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