'Fast Money' Recap: Scary Reversal

The trading panel was alarmed by the sudden reversal in today's trading.

Author:: David Tong
Publish date:: Nov 9, 2010 7:42 PM EST

NEW YORK (

TheStreet

) -- The markets retreated on Tuesday in a dramatic reversal in intraday trading.

The

Dow Jones Industrial Average

lost 60.09, or 0.53%, to 11, 346.75 and the

S&P 500

declined 9.85, or 0.81%, to 1,213.40. The

Nasdaq

fell 17.07, or 0.66%, to 2,562.98.

Melissa Lee, the moderator of

CNBC

's "Fast Money" TV, said it was an ominous day, with stocks, silver, gold suddenly trading lower at about 1 p.m.

Joe Terranova said it was "scary" to see such a reversal of trading "all at the same time." If this is a glimpse of 2011, the future looks problematic, he said.

Guy Adami was worried about the reversal on huge volume, especially in silver. He said the development would be a key reason to get out of stocks and maybe get short.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 on TV
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 665419116001; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

Tim Seymour cited the disturbing weakness in the Treasury markets. Steve Cortes called the market reversal a "reversal of fortune" as the euro continues to weaken amid a growing sovereign debt crisis.

Terranova said today's reversal was a classic elevator down move across the board.

Amids the reversal, Seymour said agricultural trades were rallying on real demand around the globe. He said gold and silver represent very crowded trades in resources that don't have a lot of sustainable demand.

Terranova said it's important for investors to buy put protection. Brian Kelly agreed, saying there could easily be a 2% to 3% correction in the markets.

Seymour said food and agriculture will remain strategic assets because China and India are experiencing serious food inflationary pressures.

In a big energy M&A deal,

Chevron

(CVX) - Get Report

agreed to buy

Atlas

(ATLS)

for $4.3 billion. Seymour said the deal underscored the importance of the Marcellus Shale and the interest of energy names in getting exposure to natural gas.

For the hedge fund pick of the week, Anthony Scaramucci picked

Automatic Data Processing

(ADP) - Get Report

. He said ADP is trading at 18.9 times trailing 12-month earnings and posses a fortress balance sheet and a Triple-A rating. He said Bill Ackman of Pershing Square owns it, along with Whitney Tilson.

Shifting to the financials, Cortes was disappointed in the price action of

Bank of America

(BAC) - Get Report

and was looking to short it. He said it's death knell for banks when mortgage demand is down in an falling interest rate environment.

Terranova felt otherwise, saying the financials have absorbed the worst news. Kelly was also bullish on banks, saying the Fed realizes the participation of the banks is necessary for an economic recovery.

Shifting to

Netflix

(NFLX) - Get Report

, Lee noted speculation that Netflix was dropping a contract with

Akamai

(AKAM) - Get Report

and switching to

Limelight Networks

(LLNW) - Get Report

and

Level 3

(LVLT)

Colin Sebastian, an analyst for Lazard Capital, said the speculation underscored the competitive pressures in content delivery network space. He maintained a holding rating on Akamai. He said he doesn't believe the loss of a contract with Netflix will result in a hit to earnings, but he said it needs to land some new business.

Are Treasuries the ultimate bubble? Terranova said they have the potential to be a massive bubble. Cortes and Seymour, though, believe that the U.S. dollar will still be looked upon as a reserve currency.

Richard Volpe, of RBS Global Banking, expressed concerns about Wednesday's 30-year Treasury auction after today's selloff in the Treasuries.

In the trading overseas segment, David Riedel, or Riedel Research Group, said Indonesia, one of Obama's stop in his Asia tour, is one of his favorite countries, with strong institutions, a robust democracy and a stable society. He said one way to invest in the country is with

PT Telekom

(TLK) - Get Report

Seymour added

Freeport McMoRan

(FCX) - Get Report

derives 56% of its operating income from its mining operations in Indonesia.

In the final trades, Seymour liked

Rio Tinto

(RIO) - Get Report

. Adami liked

Sara Lee

( SLE). Cortes liked the U.S. dollar. Terranova said to buy