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‘Utterly Absurd’ Stock Rally: Pro

Friday, 26 Apr 2013 | 5:31 PM ET
'Utterly Absurd' Stock Rally: Pro
Friday, 26 Apr 2013 | 5:00 PM ET
Investors should be rooting for a correction, Josh Brown of Fusion Analytics says.

A pullback would be healthy for the stock market — and may be overdue, Josh Brown of Fusion Analytics said Friday.

"I have no idea why we're rooting against a correction," he said. "It's utterly absurd."

On CNBC's "Fast Money," Brown took a long-term perspective.

"It's only the third time in history that we've gone from January into May 1 without a 5 percent correction.," he said. "The other two times, you didn't get a great result afterward. I really don't see why we don't want that cleansing breath of fresh air."

Brian Kelly of Shelter Harbor Capital was bearish.

"History is on my side, and I'm still selling," he said. "I mean, it's uncanny this rally. Everything that I thought would happen – where the economy weakens, you get bad earnings – happened. And the stock market hasn't gone down."

Kelly sounded a note of caution for investors.

"Clearly there's another dynamic going on where individuals are putting money to work in the stock market to get that yield, to get some kind of return because there's no other alternative," he said. "To me, those are very weak hands, and it's a very scary trade."

Dan Nathan of RiskReversal.com called out a warning sign.

"This week, we saw names like Bristol-Myers, Amgen, Procter & Gamble, AT&T – these are all defensives with pretty decent yields that have been pretty crowded trades – they all got nailed," he said. "I think you have to keep your eyes open."

Nathan added that one defensive stock could be a harbinger.

"You can say, 'For every Procter, I know a Johnson & Johnson,' or something like that. But let me tell you something: If we do get that 3, 5, 7 percent selloff in the next couple of months, this could be the canary in the coalmine."

Trader disclosure: On April 26, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long TGT; Josh Brown is long TLT; Josh Brown is long XLF; Josh Brown is long XLV; Dan Nathan is long YHOO; Dan Nathan is long JNJ; Dan Nathan is long QCOM; Dan Nathan is short IWM; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU (AGZIUM); Guy Adami's wife, Lisa Snow, works at MERCK; Brian Kelly is long treasuries US dollar; Brian Kelly is short UK pound; Brian Kelly is short STP; Brian Kelly is short DAX; Brian Kelly is short CAC 40; Brian Kelly is short Japanese Bonds.

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S&P 500
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AMGN
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JNJ
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