Following President Barack Obama's comments on Washington budget negotiations on Wednesday, the CNBC "Fast Money" traders selected a few ways to play the market.
Once lawmakers reach a budget agreement to avoid tax hikes and federal spending cuts on Jan. 1, OptionMonster's Pete Najarian said that financial stocks would pop.
"I continue to think that's the area that's going to react best when you're talking about 'fiscal cliff,'" he said. "The fact that they're very close says a lot to me. I think the spending and the revenues, if we can get those to match a little bit closer, we've got ourselves at least partially some kind of deal."
Najarian said the market could see a big reversal in home builders, too, such as PulteGroup and Lennar.
"I continue to be bullish," he added.
Josh Brown of RiskReversal.com offered a two-tiered approach.
Aggressive investors, he said, should look at stocks below their 200-day moving averages, so-called "broken stocks."
Conservative investors can stick with big themes such as health care. "Most of these names have not moved as much as the index itself," he said. "So I would be looking at large-cap pharma. I think it's just chock-full of good buys."
Enis Taner of RiskReversal said that fundamentals – earnings, specifically – would matter more in the first quarter.
"It's much more of a micro market than a macro market," he said. "We saw FedEx and Oracle today reflect that."
Trader disclosure: On Dec. 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long call spreads in AAPL; Jon Najarian is long call spreads in FB; Jon Najarian is long call spreads in FDX; Jon Najarian is long call spreads in GDI; Jon Najarian is long call spreads in SINA; Jon Najarian is long call spreads in ANR; Jon Najarian is long call spreads in AMRN; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long INTC CALLS; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long PSX; Pete Najarian is long BX; Enis Taner is long GS; Enis Taner is long GOOG PUT BUTTERFLY; Enis Taner is short FDX Dec Puts; Enis Taner is long FDX Jan 13 Puts; Enis Taner is long SPY Puts; Josh Brown is long AAPL; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long SBUX.
