THE JO JONES INDUSTRIAL
AVERAGE AND THE S&P HAD THEIR
WORST WEEK IN TWO YEARS.
THE DOW EXPERIENCED TWO DROPS
OF MORE THAN 1,000 POINTS AND
TWO RALLIES OF 300 POINTS LAST
WEEK.
OVERALL THE DOW AND THE S&P
BOTH CLOSED DOWN 5.2% FOR THE
WEEK.
WHAT HAPPENS TOMORROW?
WE HAVE A REGULAR CONTRIBUTOR
TO CNBC'S FAST MONEY AND YOU
MAY ALSO REMEMBER HIM AS A
FORMER MINNESOTA GOPHER AND
VIKING AND FOOTBALL ANALYST,
BUT WE'RE HERE TO TALK ABOUT
THE STOCK MARKET AND THE
MARKETS.
IT IS MORE EXCITING THAN
FOOTBALL.
IT IS MORE DRAMATIC.
THANK YOU FOR COMING IN, PETE.
WE HAD YOU ON A FEW MONTHS AGO
AND BASIC LUE YOU SAID THIS IS
GO-- BASICALLY YOU SAID ITS IS
GOING TO GO DOWN AT SOME POINT.
DID YOU EXPECT THIS?
GIVEN THE FACT THAT WE
CONTINUED TO RISE EVEN HIGHER,
I LOOKED BACK FROM WHEN I WAS
ON WITH YOU AND IN LATE
SEPTEMBER WE WENT UP 4,000
POINTS TON DOW, 400 POINTS ON
THE S&P AND NOW WE HAVE PULLED
BACK FINALLY.
YOU NEVER KNOW WHEN THE PULL
BACKS ARE GOING TO COME.
YOU NEVER KNOW WHEN YOU'RE
GOING TO SEE THE CORRECTION,
BUT A FEW ELEMENTS ABSOLUTELY
TIPPED US OFF OVER THE LAST
WEEK OR SO THAT MADE IT SEEM
LIKE, YOU KNOW WHAT?
IS THIS ACTUALLY MADE SENSE.
YOU HAD INFLATION CONCERNS
STARTING TO COME INTO THE
MARKET PLACE.
FOLKS WHEN THEY STARTED TO SEE
THE AL GAR RHYTHMS START TO
JUMP ON THIS, WHAT I MEAN BY
THAT IS COMPUTERIZED TRADING.
WHEN THE FORMULA IS TO PICK UP
ON THAT MOMENTUM, IT IS
UNBELIEVABLE.
AND YOU SAW IT ON MOMENT
APPROXIMATELY DAYS.
WE ALSO HAD MULTIPLE DAYS WHERE
WE MAY -- ON MULTIPLE DAYS.
WE ALSO HAD MULTIPLE DAYS WHERE
WE FINISHED UP.
SO IT IS THE AIR POCKET SORT OF
A MARKET THAT WE'RE IN RIGHT
NOW.
VOLATILITY IS HERE, BUT
VOLATILITY NORMALLY DOES NOT
LAST AT THIS LEVEL FOR NORMALLY
A TWO-WEEK STRETCH, MAYBE
THREE.
SO YOU THINK IT WILL BE HAVE
VOLATILE GOING INTO NEXT WEEK?
I THINK -- THE VOLATILITY,
WE'LL CALL IT 30.
THAT MEANS WE'RE GOING THE SEE
A 2% MOVE EVERY SINGLE DAY.
I DON'T THINK THAT CAN EVER, IN
THE PAST AT LEAST, IT HAS NOT
EXTENDED PAST A SPECIFIC TIME
FRAME.
SO THAT IS WHY I AM FEELING
BETTY COMFORTABLE ABOUT THE
IDEA ARE WE GOING TO BE AT 30
AND MAYBE JUMP UP TO 40?
SURE.
COULD WE FALL BACK?
ABSOLUTELY.
I THINK OVERALL WE'LL START TO
SEE THIS, AFTER A WEEK OR SO
MORE, WE'LL START TO SEE IT
SETTLE BACK DOWN AND FEEL LIKE
WE CAN TRADE THE MARKETS.
YOU MENTIONED THE IMPACT OF
COMPUTERIZED TRADING.
THERE ARE BREAKERS IN PLACE
THAT STOP IT.
THOSE ARE BASED ON PERCENTAGES,
AREN'T THEY?
YES, YES.
ABSOLUTELY.
A LOT OF PEOPLE ARE SAYING,
OH, MY GOSH.
THE BOTTOM IS GOING TO FALL
OUT.
THERE ARE CERTAIN
PERCENTAGES WHERE THERE IS A
PAUSE MECHANISM THAT IS BUILT
INTO THE MARKET PLACE.
IT IS ON THE UPS AND THE DOWNS,
BUT THE DOWNS ARE WHAT HERB IS
MOST CONCERNED ABOUT.
WE'RE ALWAYS WATCHING THESE
KIND OF THINGS.
IT IS SORT OF SAFETY MEASURES
THAT THEY'RE TRYING TO PUT IN.
IT IS LIKE TRYING TO PUT IN A
SPEED BUMP ACTUALLY IN THE
GARAGE AS YOU'RE TRYING TO GET
OUT.
YOU DON'T WANT TO GET OUT TOO
FAST.
IT IS THE SAME THING WITH THE
STOCK MARKET.
WE HAVE SPEED BUMPS WHERE WE
WILL HAVE PAUSES ALONG THE WAY.
WHAT WILL YOU SAY TO THE
MORE MODEST INVESTOR, SOMEONE
WHO HAS A 401K?
I WOULD SAY STAY THE COURSE.
I AM MORE OF A TRADER AND ALSO
AN INVESTOR.
LISTEN FOR WARREN BUFFET.
HE LOOKS FOR OPPORTUNITIES LIKE
THIS TO PUT MORE MONEY INTO THE
MARKET BECAUSE YOU'RE GETTING
THE MARKET AT A DISCOUNT FROM
WHERE IT WAS.
IF YOU'RE IN FOR THE LONG HAUL,
MORE THAN LIKELY WE'RE GOING TO
SEE THE MARKETS CONTINUE TO GO
UP.
IF YOU LIKE WARREN BUFFET'S
STYLE, THAT IS WHAT YOU WANT TO
FOLLOW.
IS THERE ANY ONE SECTOR THAT
IS DOING ESPECIALLY POORLY
RIGHT NOW OR ESPECIALLY WELL
AMIDST ALL OF THIS VOLATILITY
OF LAST WEEK?
PRETTY MUCH THE CARNAGE HIT
EVERYTHING, BUT FOR THE MOST
PART, ONE OF THE THINGS THAT I
SAID JUST LAST FRIDAY, JIM
KRAMER WAS IN TOWN FOR THE
SUPER BOWL, A HUGE EAGLES'
SHOW, AND WE WERE DOG OUR SHOW
AT NOON AT THE STADIUM -- DOING
OUR SHOW AT NOON AND THEN JIM'S
SHOW FOLLOWED.
HE PHRASED IT THIS WAY, WHAT DO
YOU THINK IS THE MOST
VULNERABLE?
AND I SAID THE INDUSTRIALS.
THE REASON I SAID THAT IS WHEN
YOU LOOK AT BOEING, UNITED
TECHNOLOGY, A LOT OF THOSE THAT
I MEANS IN THAT -- NAMES IN
THAT CATEGORY, THEY HAD BEEN
GOING STRAIGHT UP IN A NEED
ORIC RISE.
THAT SHOULDN'T -- NEED YORIC
RISE.
WHEN -- NEED YORIC EARNING.
THAT'S WHAT THE INDUSTRY DID
LAST WEEK.
THANK YOU SO MUCH, PETE.
WE WANT TO KNOW THAT PETE HAS
GRACIOUSLY AGREED TO CONTINUE
THIS CONVERSATION ON FACEBOOK
LIVE IMMEDIATELY AFTER THE SHOW
AT 11:00 A.M.
IF YOU WANT TO BE A PART OF
THIS CONVERSATION, GO TO THE
WCCO PAGE ON FACEBOOK, LIKE IT