'Fast Money' Recap: Gold at $1400?

NEW YORK ( TheStreet) -- The markets sank again Wednesday as gold fell 5% and broke through its 200-day moving average.

The Dow Jones Industrial Average fell 131.46, or 1.10%, to 11,823.48. The S&P 500 dropped 13.91, or 1.31%, to 1211.82. The Nasdaq slid 39.96, or 1.55%, to 2539.31.

Joe Terranova said on CNBC's "Fast Money" TV show that the big decline in gold today is connected to the growing need in the euro region to raise capital by selling gold.

Guy Adami suggested there could be a bottom to the decline when a headline comes out saying a central bank is stepping in to buy gold.

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

Tim Seymour characterized the decline in gold as credit deleveraging by EU banks and hedge funds. He said there could be more negative news on Thursday, with PMI numbers coming out across the eurozone. He also said investors should recognize that China will not be the final bidder for commodities and its easing will not lift commodities.

Brian Kelly expressed his concerns about the trouble global economic landscape, with the prospects of a recession in Europe, continued slowing in China and muddling along in the U.S.

Terranova said it would be a mistake to short the commodities. He said Freeport McMoRan ( FCX) did a good job of holding on. Another option might be Joy Global ( JOYG), which was decimated today and could be a takeover target, he said.

Seymour said he wouldn't be surprised to see the dollar continue to get stronger and test its March 2009 highs as soon as the end of the first quarter.

Brian Stutland said he didn't want to own commodity-related stocks because they have become too volatile.

What's the next stop for gold? Bill Strazzullo, chief market strategist for Bell Curve Trading, said the selling is not over, adding gold could trade down to $1,400 and "as deep as $1,100."

The technical trader said bears and sellers of gold have become more aggressive. Gold is now down more than 16% from its August highs.

He said there may be a bounce in the coming days but he advised selling on the rally.

As for oil, he said crude has reached a critical support level of $93 to $95 a barrel, which if broken, could lead down to $89.

Melissa Lee, the moderator of the show, noted a report that Michael Kors' IPO had been priced at $20 a share for $42.7 million shares.

Dana Telsey, CEO of Telsey Advisory Group, said the stock was worth it because Michael Kors has shown an ability to grow its stores, core brands and lifestyle apparel. She sees the stock moving to $26 to $28 before she would take a pause.

She said the company has shown same-stores sales growth of 30% and traction in retail and department store channels.

She also listed her other favorite retail stocks: Limited ( LTD), Guess ( GES) and Express ( EXPR).

Research In Motion ( RIMM) will be reporting its earnings on Thursday. Peter Misek, an analyst with Jefferies, said the company would probably walk through how bad sales have been of Blackberry 7, how bad the next quarter will be and whether QNX has been delayed.

He said the top question he would ask the company is when the Blackberry 10 smartphones will be launched. He said it's important for the company to open up its Blackberry email service to Android and Apple ( AAPL).

He said RIM has to migrate subscribers to its next-generation platforms. Seymour said he would be wary of channel stuffing in RIM's earnings report.

Shifting to the fear trade, options trader Jim Iuorio said the VIX is at a five-month low, as investors are getting used to wild 25-handle swings on a daily basis and a well-behaved market. He said people are stepping back and not falling for the daily swings.

Lee moved on to First Solar ( FSLR), which had a disastrous day as it saw its stock get a 21% haircut after it announced next year's profits wouldn't meet expectations.

Gordon Johnson, managing director for Axiom Capital, said the timeline for a possible bankruptcy won't accelerate because the company has enough projects for the next two years.

Fundamentally, however, he said investors are losing confidence in the company's weak EPS guidance for 2011 and 2012. He said the company figures only an EPS of $3 for 2015.

He said First Solar and the industry faces a massive problem of overcapacity in an oversaturated market.

Lee noted that Green Mountain Coffee ( GMCR) was another loser today after it got a sell rating by Stifel Nicolaus. Kelly said the company's great product - the K Cups - has run its course.

Moving to the shipping space, Urs Dur, an analyst for Lazard Capital Markets, praised FedEx ( FDX) for being well placed in the ecommerce business and said it does a good job growing margins and increasing international exposure. He has a price target of $100 on the stock.

Dur also liked Expeditors International of Washington ( EXPD), Seaspan ( SSW) and Golar Ing ( GLNG).

With Treasury yields dropping on the 10-year bond to 1.95%, Kelly said investors would be better off going with the 10-year bond in Australia which offers almost 4%. He said investors can tap into it through the Wisdom Tree: Australia and New Zealand Debt ETF ( AUNZ).

In the final moves, Kelly liked Pfizer ( PFE). Stutland said he picked up some put spreads against the S&P. Adami noted an opportunity to get into Joy Global ( JOYG) today with a tight stop. Terranova liked American Express ( AXP).

-- Written by David Tong in San Francisco.

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

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