4-DAY WINNING STREAK FOR STOCKS
Stocks rose on Friday for the 4th day in a row, with the Dow closing out its best four-week winning streak since 1933. Gains were propelled by robust results from Research in Motion and comments from Fed Chairman Ben Bernanke who said the central bank will do everything it can to stabilize banks.
Growing conviction that the worst is over for the economy helped Wall Street shrug off dour jobs data showing the highest unemployment rate since 1983.
Strategy Session with the Fast Money Traders
I think investors are afraid to be short going into next week, muses Tim Seymour. There’s a whole lot of money on the sidelines.
It’s not just afraid to be short it’s afraid not to be long, adds Karen Finerman, especially with the market now looking at break-even for the year. (Year-to-date, the Dow is down 8.65%.)
But I’m afraid to jump in with both feet. The Vix is still around 40, she adds. It’s very curious that after the run we’ve had in stocks that the Vix refuses to break much below 40.(Click here to read more about what Karen Finerman has to say about fear in the market.)
It seems like we’re in chase, chase, chase mode, adds Joe Terranova. I expect to see the Vix remain elevated until we know what’s happening with the banking system.
I’ve been selling stocks and paring back, reveals Jeff Macke.
G-20 GOOSES REFLATION TRADE
Commodity and material stocks rallied this week after world leaders clinched a $1.1 trillion deal to combat the economic crisis. Investors are hoping the agreement kick starts growth around the globe.
Meanwhile this week the Dow Jones Transportation Index made substantial gains.
Bulls would argue that the index’s recent strength may in fact be a good indication for the broader economy, reminds Tim Seymour.
Many note that a recovery in the sector is one of the first signs of improving economic conditions. Remember, as the overall economy improves and consumer demand begins to rebound, companies will need to ship more goods from one place to another via trains, trucks, and planes.
CHART OF THE DAY: DOLLAR & GOLD IN CAHOOTS?
It seems like the dollar and gold might have some kind of secret pact; both moved in tandem this week with the greenback slipping 5% and the precious metal giving back 3%.
It seems to me that fear is coming out of the gold trade, muses Karen Finerman. In other words investors went into gold when they were afraid to be in riskier assets. Watch out below.
I would not play gold, counsels Joe Terranova. If you want a metals play look at copper.
TOPPING THE TAPE: TECH & TELECOM
The Nasdaq closed in the green Friday, helped by a sizable jump in Research in Motion after the BlackBerry maker posted surprisingly strong results on brisk retail demand and gave a rosy outlook after Thursday's closing bell.
"The move into technology reflects investors rotating funds into groups likely to benefit from an economic recovery, even though a turnaround in corporate profits in that sector might still be a few quarters away," explains Michael Sheldon, chief market strategist at RDM Financial.
I sold RIMM on Friday, reveals Tim Seymour. It’s a great time to take profits. Yes, it's still performing well but it’s uncomfortable to own this stock or IBM considering how much they’ve run recently.
I’m long Apple , reminds Jeff Macke. There’s strength in this stock because investors think if RIM performed well Apple should too.
In tech, I’d look at IBM and Dell, counsels Joe Terranova.
THE WEEK: BIOTECH, PHARMA CATCH COLD
The biotech sector, which has been one of the year’s hottest sectors, finished the week lower -- dragged down by weak results from Celgene .
I expect to see more M&A in the sector, speculates Karen Finerman. I would add to my position on the pull back.
I’m long Amgen and the XBI , adds Joe Terranova. And I agree that the pull back is an opportunity to add to your position.
I’d look at Teva, counsels Tim Seymour.
VISA, MASTERCARD CHARGE HIGHER
With the TALF underway investors bid shares of credit card payment processors Visa and MasterCard higher.
These stocks were heavily shorted and they’re playing catch up in a hurry, says Jeff Macke.
As we’ve been telling you companies may be considering a spring fling with takeover chatter heating up in nearly every sector.
Jon Najarian explains that he’s watching Halliburton, Cubist Pharmaceuticals and International Game Technology
The volume of options traded in all three stocks leads Najarian to think all three could go higher.
For more thoughts on firms that might be takeover targets as well as those that could be on the prowl, please watch the video.
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Trader disclosure: On Apr 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (WFC), (AAPL), (GE), (GS), (MOS); Seymour Owns (AAPL), (AA), (EEM), (FCX), (FXI); Finerman Owns (BAC) Preferred; Finerman's Firm Owns (MSFT), (RIG); Finerman's Firm Owns (WFC) Preferred, (BAC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (USO), (IWM), (BAC), (BBT), (WFC); Terranova Owns (JOYG), (X), (IBM), (XOM), (HES), (POT), (DIS), (DELL), (JPM), (INTC), (BP); Terranova Owns (COP) Calls; Terranova Owns (BRCM) & (BRCM) Calls; Terranova Owns (WYNN) & (WYNN) Calls; Terranova Owns (AMGN) & (AMGN) Puts
J. Najarian Owns (CBST), (HAL), (IGT)
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