The S&P 500 touched a 13-month high on Monday breaking above the technically important 1100 level as investors made bullish bets on companies that benefit from a weak dollar.
However, around lunchtime stocks paired some of those gains after Fed chief Ben Bernanke said that the Fed is "attentive to the implications of changes in the value of the dollar," which market mavens took as strong dollar commentary.
Where to from here?
I think the market trades higher, muses OptionMonster Jon Najarian. It seems to me the market doesn’t care about strong dollar rhetoric from Bernanke. Investors don’t think he means it.
When Geithner made similar comments about a stronger dollar last week the same thing happened with the market, adds Mike Khouw of Cantor Fitzgerald. The market dipped and then continued higher.
I agree that the market just wants to go up, adds Zach Karabell of River Twice. But I don’t think it’s all about the dollar. It’s as much about earnings, which were decent, as well as the fact that the financial system has stabilized and global growth is off to the races.
I expect to see chase for performance through the end of the year adds Joe Terranova. That’s what I think is driving this market.
COMMODITIES CLIMBING HIGHER
The weak dollar sparked gains in commodities broadly with crude futures taking back all of last weeks’ losses.
Meanwhile, gold touched a fresh high above $1,130 an ounce on Monday as momentum from recent gains and a slide in the dollar index sparked fund buying of the precious metal.
What’s the trade?
If you’re going to play commodities, I’d do it with commodity related stocks, says Mike Khouw. Not the underlying commodity. There’s more upside in the stock.
In the space I like Rio Tinto, adds Jon Najarian. To me play is the companies that mine the metals rather than the metals themselves.
I would look to BHP, adds Zach Karabell. And I would also play the stock and not the commodity itself.
I think high beta commodities names run into the end of the year, muses Joe Terranova.
TAKE YOUR POSITION: RETAIL
The Retail HLDRs traded higher Monday ahead a slew of retail earnings earnings reports this week.
Tue: Home Depot, Saks, Target, TJX
Wed: BJ's, Chico's, Limited Brands
Thu: Gamestop, Sears, Williams-Sonoma, Gap
Fri: Ann Taylor
What’s the trade?
I wouldn’t jump in now, counsels Zach Karabell. I’d want to see strong retail sales numbers before establishing a new position.
OPTIONS ACTION: LORILLARD
OptionMonster Jon Najarian has spotted unusual options activity in cigarette maker Lorillard .
The large number options traded suggests to me that this stock could make a sharp move higher, Najarian tells the panel.
FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE
BUY INTC? Intel traded to the upside after raising its dividend and announcing it’s on track to meet Q4 estimates; should you buy?
In the space, I’d play the SMH and spread out the risk, counsels Joe Trinova.
BUY XOM?Exxon received a Barron's bounce Monday after the magazine said investors should put money to work in this bargain stock; should you buy?
I’d look at Chevron instead, says Mike Khouw.
BUY STEEL?US Steel traded higher after being added to JPMorgan's focus list; should you buy?
I’m not fond of US Steel, says Zach Karabell. Instead I’d look at steel names tethered to emerging markets.
BUY S?Sprint traded higher by over 12% after receiving an upgrade at Credit Suisse, should you buy?
I’m long and I would be a buyer, says Jon Najarian.
CALL THE CLOSE
Joe Terranova: As long as the S&P stays above 1100 I’d be long.
Mike Khouw: It’s hard to say be short. I’d be long.
Zach Karabell: I’d be long.
Jon Najarian: I’m right along with these guys. I go long.
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Trader disclosure: On November 16th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;
Terranova owns crude oil futures; Terranova owns (SU)
Najarian owns (PALM)
Najarian owns (S)
Najarian owns (LO) & (LO) options
CNBC.com with wires