'Fast Money' Recap: Rotation Time

Ahead of the Fed announcement, the trading panel notes the market's move away from commodities.
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Tuesday marked another drab day for U.S. stocks as investors again turned their attention forward to the outcome of a rendezvous by Federal Reserve officals. The Dow finished down 0.3%, the S&P 500 lost 0.4%, and the Nasdaq added 0.1%.

On

CNBC's

"Fast Money" TV show, the traders talked about the action in commodities and the U.S. dollar. Jeff Macke noted a large move in agriculture names. He said that a 2% move downward in oil is not a top. He said gold is a better short than oil.

Karen Finerman said that she doesn't believe the market has seen a bottom for the dollar. She said that she hopes the

Fed

does nothing to the fed funds rate, because another rate cut won't accomplish anything for the financial markets.

Pete Najarian said that investors are rotating out of oil, metals and agriculture, which he said have had an unbelievable run. He pointed to action in

ConocoPhillips

(COP) - Get Report

and

Potash

(POT)

, saying the companies have continued to produce outstanding numbers. He said that investors should prepare for a pullback and be willing to sell some of their gains, but oil at $110 is still evidence of a bull market in commodities.

3 Stocks I Saw on TV

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Finerman said that if there is a groundswell against U.S. ethanol policy, that could be bearish for agriculture companies.

Najarian disagreed, saying that ethanol policy is not a driving force in the agriculture boom, pointing to a global surge in demand for food. He said a pullback in Potash stemmed from an RBC analyst predicting a pullback, but Najarian said the analyst still has $300 in a target range for the stock.

Macke noted strong action in retail today. He said that the stimulus package may help the consumer. He said that ethanol may not be driving the ag boom, but every bubble gets pricked eventually, and he says ethanol policy may serve that purpose. He said

Wal-Mart

(WMT) - Get Report

is trading on "decade-long" highs, thanks to the consumer.

Back to the Oil Patch

Najarian noted options activity in the

U.S. Oil Fund

(USO) - Get Report

may indicate a pullback in the ETF.

Guy Adami recommended

Baker Hughes

(BHI)

after a 50% correction. He said the stock may be offering an entry point. He also recommended

Schlumberger

(SLB) - Get Report

and

Halliburton

(HAL) - Get Report

.

Not-So-High Finance

After

Citigroup's

(C) - Get Report

CFO previously said the bank would not need to raise capital, the company raised $3 billion in a stock offering. Shares dropped after hours.

Finerman said that the problem is that shareholders are left with the impression that the company was done raising capital, only to be surprised. That's troubling, she said.

Adami said that similar news has occurred in other financial names, notably

Bear Stearns

(BSC)

.

Macke said $3 billion isn't enough for Citigroup. He recommended raising more capital if the company needs it. He predicted the financials would ease after a good run on the Fed news.

Najarian noted that $27 has served as resistance in the

Financial Select Sector SPDR

(XLF) - Get Report

. He said the fund has reached that level seven times, and Citi's selloff has kept it in that range.

Murky Results

Merck

(MRK) - Get Report

shares plummeted 9% today on news that the FDA would reject its experimental cholesterol drug.

Najarian said that bad news has kept this stock down for a while, and investors had thought this drug would be a "layup for approval. He said it might be time to buy the stock, although the pipeline has been hurt.

Macke advised viewers to stay away from Merck. After repeated bad news, it's time to move on, he said.

On predictions that

Take-Two's

(TTWO) - Get Report

Grand Theft Auto 4

will be the best video game ever, Michael Pachter, gaming analyst at Wedbush Morgan, joined the show to discuss video games.

Pachter said that although the game will be great, he doesn't believe it will substantially affect

Electronic Arts'

(ERTS)

unsolicited bid for Take-Two. He said that the game's sales are already priced into the stock and that arbitrageurs may raise Electronic Arts' bid slightly, but the original price is a fair value.

In advance of the Fed's notes on its meeting and GDP figures,

CNBC

correspondent Steve Liesman joined the show to talk about the economy.

Liesman said that GDP growth is expected to be flat to slightly positive. He advised viewers to be cautious if the growth appears to come from rising inventory numbers, as this is actually not a positive sign. He said, however, that if the consumer appears to be waking up, that will be better for the market. He predicted a pop in consumer spending from the economic stimulus package.

Liesman also predicted that Fed Chairman Ben Bernanke would temper his statements to attempt to avoid dissenting statements from other Fed board members. He said that in the future the Fed is likely to rely more on creative measures to help the credit markets, rather than simple rate cuts.

Adami said that the weak-dollar trade is likely to unwind in the second half of the year.

Noting solid earnings reports from

MasterCard

(MA) - Get Report

and

Corning

(GLW) - Get Report

, the traders debated whether the economy may be all right, and how to trade that thesis.

Macke said that good companies are not whining about the economy, and that's why Corning and

Wal-Mart

(WMT) - Get Report

are performing well. Adami recommended taking profits in Corning, saying the stock will likely pull back before making a run to $30. Finerman recommended

PepsiCo

(PEP) - Get Report

and

Apple

(AAPL) - Get Report

. Najarian said he likes

Broadcom

(BRCM)

and

Qualcomm

(QCOM) - Get Report

.

Trader Radar

Rent-A-Center

(RCII) - Get Report

traded on unusual volume today.

The traders looked at actions by billionaire investor Warren Buffett, who has done very well even in a slumping economy. Macke said to keep things simple and buy

Berkshire Hathaway

(BRK.B) - Get Report

, Buffett's company. Adami recommended figuring out why Buffett likes what he holds. He said he thinks Buffett likes

Wells Fargo

(WFC) - Get Report

because of its good management,

Burlington Northern Santa Fe

(BNI)

because of pricing power, and

Johnson & Johnson

(JNJ) - Get Report

because of its consumer products exposure.

Finerman said she would buy Berkshire shares. Najarian said he agrees with Adami, and pointed viewers to

American Express

(AXP) - Get Report

, which he said has some credit risk but might have more upside than Burlington Northern or Johnson & Johnson.

Commodities trader Dennis Gartman wrote in to the show to say that the commodities bubble has popped and that he's short

Deere

(DE) - Get Report

as a play on weakness in the space.

Fast Messages

One viewer asked what would be a good trade on aggressive Fed action against inflation. Finerman said that if the Fed raises rates the market will go down, as will oil. She predicted the dollar would rise substantially.

Another viewer asked for a good play on potential bullish action in natural gas. Najarian recommended

Chesapeake Energy

(CHK) - Get Report

. Macke recommended leaving the commodities trade alone. Adami recommended

Apache

(APA) - Get Report

and

XTO

(XTO)

on a pullback.

Final Trade

Macke recommended selling Citigroup. Adami chose the

Short Dow30 ProShares

(DOG) - Get Report

. Finerman selected

Altria

(MO) - Get Report

. Najarian picked

Biogen Idec

(BIIB) - Get Report

.