'Fast Money' Recap: Clear for Three Weeks

NEW YORK ( TheStreet) -- The markets rallied Monday on encouraging steps toward protecting banks from Europe's sovereign debt crisis.

The Dow Jones Industrial Average jumped 330.06, or 2.97%, to 11,433.18. The S&P 500 added 39.43, or 3.41%, to 1194.89. The Nasdaq rose 86.70, or 3.50%, to 2566.05.

Brian Kelly said on CNBC's "Fast Money" TV show today's rally was spurred by a "plan for a plan" in Europe to rescue the banks even though there was nothing new in today's developments. However, he said something "very important" is going to happen at the Nov. 3 G-20 Meeting.

Until then, that hope should keep the market up for the next three weeks or so, he said.

Tim Seymour said the market surprisingly doesn't look so bearish after Goldman Sachs upgraded third-quarter GDP numbers and some good data points.

Stephen Weiss also said he was staying long until the end of the month as the markets look to upcoming earnings and guidance.

Joe Terranova said the markets have basically repriced the absence of an Armageddon-styled scenario in Europe and a double-dip recession in the U.S. He said the shorts are getting unwound as investors shift to the long side of the trade.

Options trader J.J. Kinahan had some reservations about the market. He said he was seeing a lot of put buying, adding there was no bond trading today. He said he was nervous about the upcoming earnings of Alcoa ( AA) and other companies.

Scott Nations said the implied volatility of banks is falling. He said he was feeling a lot better about the financials, adding the options markets for Morgan Stanley ( MS) and Bank of America ( BAC) are risker than those for Deutsche Bank ( DB) and UBS ( UBS).

Josh Brown, a VP for Fusion Analytics, said today's action had the earmarks of a bear market rally. He noted short interest was at a high in September and a rush of short covering, followed by people coming in from sidelines but with no one coming in a higher level after they are done buying.

He said it would be foolish to extrapolate from today's trading when the bond market is closed and China was closed last week. He said he was sticking in this trading range with some larger oil companies. He also said he plans to stay liquid for some growth opportunities in the emerging markets, which he admitted would be hard to come by.

Melissa Lee, the moderator of the show, moved to the next trade: Netflix ( NFLX) after it backed away from its spinning off its DVD-by-mail plan called Qwikster. Terranova said the stock's market action was terrible today. He said there was no reason to own a company whose reputation and brand have been tarnished. Seymour said the business model is broken as the company faces increasing demand from customers while taking on higher content costs.

For a technical view of the market, Chris Verrone, of Strategas Research Partners, said the market could rally up to 1230, but he is not convinced a secular bull market is in the offing. He said his favorite picks were Cisco ( CSCO), Boeing ( BA) and UPS ( UPS).

Lee brought in Gregory Zuckerman, who co-authored an article in the Wall Street Journal today that said the September selloff in gold has turned a bad year for John Paulson into a worse year.

Among other things, Paulson's fund for gold investments lost 16% in September, triggering redemption concerns. Paulson is the largest holder of the SPDR Gold Trust ( GLD).

Zuckerman said he hasn't seen any real pressures on the gold fund, although he acknowledged investors are clearly frustrated with the results. He said he suspects Paulson will pare back his holding and do some selling.

Shifting to the currency trade, Amelia Bourdeau, a director for Westpac Institutional Bank, said the euro picked up momentum today after an announcement Sunday by the French and Germany prime ministers for a comprehensive banker capitalization plan and Friday's non-warm payroll report. She said the details of the plan won't be released until the EU leaders summit on Oct. 23.

She said the road ahead in Europe will be rocky the next two weeks. For that reason, she is bullish on the U.S. dollar and would sell risk by shorting the Aussie dollar at current prices.

Lee brought in Dennis Goldman to comment on gold, which had a big day. Gartman said gold in dollar and euro terms held up well today. He said gold was bid up today in anticipation of the many hurdles ahead for Sarkozy-Merkel's latest crisis plan.

Lee brought in David Dunlap, CEO of Superior Energy Services, to comment on his company's deal to purchase Complete Production Services for $2.7 billion. He said the deal makes sense in light of bright future for oil development in the U.S.

In the final moves, Seymour was long Mechel OAO ( MTL). Kelly liked Qualcomm ( QCOM). Weiss favored Key Energy Services ( KEG). Terranova liked Disney ( DIS).

-- Written by David Tong in San Francisco.

>To contact the writer of this article, click here: David Tong.

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