Despite bearish housing data that showed new homes sales sunk to a 7-month low, stocks closed in positive territory on Wednesday.
Advances largely stemmed from weak dollar plays, as investors bet weakness in housing would compel the Fed to keep interest rates low – to help the economy navigate a rocky recovery.
With investors in a 'buying' mood, should you follow the crowd in?
Strategy Session with the Fast Money traders
I would not follow the crowd, exclaims Guy Adami. Don’t be a lemming. This is a stock picker's market.
I agree with Adami, echoes Tim Seymour. This is a stock picker's market.
If there’s anything to know about this market it’s that you can’t just be all in or all out, adds Karen Finerman. You have to be selective.
And if you’re going to play market picker, make sure you also buy protection, reminds Pete Najarian.
BREAKOUT: CRUDE OIL
Oil made a sharp move higher Wednesday, buoyed by a drawdown in U.S. crude stocks and an unexpected fall in gasoline inventories
What’s the trade?
I expect to see oil continue to rally into year’s end, says Tim Seymour.
Watch InterOil , adds Guy Adami. The momentum is interesting.
I’m watching the airlines , says Pete Najarian. Even with oil moving up the legacy carriers continue to go higher. And I’m also watching Petrohawk , he adds. Options action suggests somebody is making a bet the stock makes a sharp move higher.
In the space I like oil services names , reminds Karen Finerman. If we see economic recovery that’s good for them.
DOLLAR SNAPS WINNING STREAK
As we mentioned above, the dollar declined against a basket of currencies on Wednesday after new data showed home sales unexpectedly fell to a seven-month low last month.
The results dampened optimism about the economy and led to speculation the Fed will have to keep interest rates low for an extended period of time.
What’s the trade?
I don’t expect to see the dollar rally further because we don’t have the economic strength to support it, says Tim Seymour.
For me the weak dollar trade is coal , says Guy Adami. I wouldn’t initiate a new position at current levels but I’d certainly put Walter Energy on the radar. I’m a buyer of WLT on the pullback.
I’m bullish coal too, says Pete Najarian. If you compare the chart of Consol Energy vs. Barrick Gold you can see the relative strength in coal versus gold.
TOPPING THE TAPE: GOOGLE ZOOMS PAST $600
The traders are also closely watching the action in Google which closed above $600, an important technical level.
What’s the tech trade?
I plan on being a Google stock holder for a while, says Karen Finerman. I can see myself holding the stock at $700 a year from now.
WHAT THE TECHNICALS TELL US ABOUT NEXT YEAR
Wondering what lies ahead in 2010? Us too.
We asked senior technical strategist Todd Gordon of Forex.com. Find out why he says "we have about 40 handles to go and then we may be in trouble."
Watch the video now!
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Trader disclosure: On Dec. 23rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman Owns (GLNG); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (MSFT), (WMT), (GLNG); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (BAC), (EEM), (INTC), (POT); Najarian Owns (MS) & Short (MS) Calls; Najarian Owns (MGM); Najarian Owns (HK) Call Spread
For Brian Nagel
Oppenheimer & Co. Inc. makes a market in the securities of (BBBY)
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