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Stocks Hit 11-Month Highs After Lehman Collapse

Strong manufacturing data and robust retail sales figures sent the S&P 500 to its highest level for 2009, on Tuesday – one year to the day since Lehman Brother collapsed.

The improvement in retail sales reassured investors that a recovery is underway and a rise in the government's Producer Price Index signaled increased consumption of raw materials.

Also comments by Federal Reserve Chairman Ben Bernanke that the recession was probably at an end provided a strong tailwind for stocks.

What must you know about this market?

Strategy Session with the Fast Money traders

Again the move seems like money managers just chasing returns, muses Karen Finerman. The comments and data made money managers nervous. They can’t afford to miss gains.

I’m intrigued by the Master Trust data, explains Guy Adami. It showed delinquencies are on the upswing but investors just looked past it and bought stocks.

Options investors seem to be buying protection on the downside, muses Pete Najarian. That suggests to me they expect to see more upside.

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TRADERS BETTING ON GLOBAL RECOVERY

Industrials led the market higher on Tuesday with investors betting that companies such as Cooper Industries and Textron will be big winners as the world comes out of recession.

What’s the trade?

In the space, I'm watching Nucor , says Guy Adami. The company expects a third-quarter loss that’s substantially wider than Wall Street expectations yet shares made gains on Tuesday. That action really surprised me. And it’s also important to note that $49 has been resistance in this stock, he adds.

I’m watching Arch Coal, says Tim Seymour, which provides coking coal used in the manufacture of steel. I think the stock could go to $26.50.

If you’re looking for a downstream play, look at Walter Industries, adds Adami. It appears to be breaking out.

It’s also worth noting that a lot of retail investors are getting into this market, he adds. You have to ask yourself if that’s bullish.

I’m watching Joy Global, says Pete Najarian. It also seems to be breaking out.

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UNDER THE RADAR TRADE: CHEMICALS

Both Dow Chemical and Dupont closed higher on Tuesday after Solutia, a specialty chemicals and materials company, raised its 2009 earnings view.

What’s the trade?

I wish I owned Solutia, muses Karen Finerman, but I don’t and I wouldn’t buy it here.

I’ve got an eye on Eastman Chemical, adds Guy Adami. I think valuations look fair and it could have more upside.

Sasol is also worth watching, adds Pete Najarian.

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OIL SNAPS 2-DAY LOSING STREAK

Oil prices jumped on Tuesday after Federal Reserve Chairman Ben Bernanke said the worst U.S. recession since the Great Depression was probably over.

Traders have been looking to wider economic data for signs of a turnaround that could bolster flagging oil demand.

However the move all but ignores new data which shows supplies of U.S. distillate inventories are growing.

What’s the trade?

Big integrated names such as Exxon were down on the day, reminds Tim Seymour. I don’t think oil is running away.

However the OIH broke through $110, which was a point of resistance, and Pride broke $30, counters Karen Finerman. There is big momentum in the space.

It seems to me in the nat gas space Apache just broke out, counsels Guy Adami. I don’t know where the price of nat gas is going but it seems like Apache has room to the upside.

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TOPPING THE TAPE: YAHOO, EBAY LEADING TECH HIGHER

Yahoo led the Internet space higher on Tuesday after Bernstein raised the stock to Outperform from Market Perform saying the company’s core business of online search is undervalued.

EBay also generated a strong tailwind after Piper Jaffray and UBS upgraded the stock of the online auctioneer citing momentum in its core marketplace business.

What’s the trade?

At 15 times earnings I think Ebay could still move higher, muses Guy Adami.

I’m watching Baidu , says Pete Najarian. It has made almost $100 run in a very short time. Also Seagate , NTAP and Western Digital are at 52-week highs.





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Trader disclosure: On Sept. 15th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AA), (AAPL), (BAC), (BX), (FCX), (NOK), (RIG), (SBUX), (UNG); Finerman Owns (PDE), (RIG); Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And Owns (BAC); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC); Finerman Owns (WFC) Preferred Shares; Finerman's Firm Owns (WMT), (RIG), (MSFT), (NOK), (PBR), (PDE), (BDK); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (BUCY) & Short (BUCY) Calls: Najarian Owns (C) Calls: Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Calls

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