Strategy Session with the Fast Money traders
I am a skeptic of this rally and I remain a skeptic, says Guy Adami. I don’t believe in the rally but I’ve been wrong. And although I don’t think a rising tide lifts all boats, I ‘do’ think you can trade this market. Bucyrus and Walter Energy both look fine to me. I’d get long those two names on pullbacks.
I think we have a lot to rally on, counters Tim Seymour. PMI data came in from China and US manufacturing data looks fantastic. I was bullish through the end of the year and I remain bullish, broadly.
There’s money on the sidelines, adds Karen Finerman. It seems to me as long as investors think the world is getting better they will put money to work and that will take stocks higher.
But unlike last year, I do think investors need to do homework, she adds. After March 9th 2009, you could have thrown a dart and your stock probably went higher. Take a look.
S&P 500 Top Performing Sectors Since March Lows
As of Dec. 31
Change Since March 9 Low
Consumer Discretionary +87%
Going forward I think we're in more of a stock pickers' market, Finerman counsels.
TOPPING THE TAPE: OIL SURGES PAST $81
Oil rose more than $2 to settle above $81 a barrel on Monday, its highest close in nearly 15 months, as cold weather battered the United States and drove up demand for heating fuel. Also the weak dollar supported higher prices.
What’s the energy trade?
InterOil looks like a huge momentum play, muses Guy Adami. I think there’s more momentum to the upside.
Don’t forget Deutsche boosted its outlook on refiners and its raised rating on several names, including Valero , adds Tim Seymour.
And if you want to play nat gas I think you can do it with Chesapeake or Devon , adds Karen Finerman.
COMMODITIES LEADING THE WAY
Gold rose sharply on Monday as the dollar traded lower against a basket of currencies amid speculation inflation may rise this year.
Meanwhile gold’s strength lifted other precious metals, with palladium climbing to its highest since July 2008, and platinum hitting a 16-month peak. In fact, the traders are looking at the long-term returns on a wide range of commodities. They follow:
Commodities Return Since 2000
S&P 500 -23%
Source: Birinyi Associates
Should you stick with commodities going forward?
I’m not that enthusiastic about staying with commodities long-term, says Mike Khouw of Canter Fitzgerald on the Halftime Report. I wouldn't mind being long some of the oil names but owning gold probably isn't the way I'd go for the long term.
APPLE LEADS TECH 52-WEEK HIGHS ON TABLET TALK
The traders are closely watching the action in tech after Apple hit a 52-week high on tablet talk.
Elsewhere in the sector, chips stocks traded higher after Baird upgraded Intel to "outperform" on expectations for a rebound in corporate PC spending.
And Google also hit a 52 week high after FBR Capital analyst Heath Terry reiterated his outperform rating on Google, and lifted his price target to $810, from $680.
What’s the tech trade?
In this space, I’m watching Western Digital which I think is a value play, says Guy Adami.
I like RIM as a smartphone trade, adds Tim Seymour. I’m a buyer of weakness.
EMC is also worth a look, adds Pete Najarian. I expect to see growth accelerate in data storage.
TRADING 2010: SCHIFF'S OUTLOOK
Never at a loss for words, we asked Peter Schiff, the president of Euro Pacific Capital for 3 predictions for the year ahead.
He told us:
1. U.S. economy will be in worse shape
2. Foreign stocks, gold & commodities to outperform U.S. stocks
3. Dollar will end year lower
Want to hear more from Schiff? Watch the video now!