Top Traders: New Catalyst Could Soon Jolt Market

Think the TARP tax rocked the market? That doesn’t compare to the next possible jolt it may get.

But don’t panic -- this jolt should be bullish and take the market higher.

Now make no mistake – this is strictly chatter from the forex markets and they’re “the Wild West,” explains top trader Brian Kelly of Kanundrum. A lot of currency traders "talk their books all day long.”

But one piece of chatter seems particularly believable to Kelly. “There might be a one-off revaluation of the yuan,” he says.

Next Big Market Shock: China?
Next Big Market Shock: China?   

Although it’s strictly speculation Kelly thinks there could be something to this rumor.

“There’s a political and economic incentive for China to do it. On the economic front -- if inflation continues to increase at this pace it’s in their best interest to let the yuan rise and dampen inflation. And politically it would make it better for them.”

And Kelly adds Beijing could be ready to make their move, now. “There’s word that the Commerce Secretary Locke is going to China. It would be a nice time to make the move,” he speculates.

What does that mean for you as an investor?

If the chatter is accurate, the yuan is about to appreciate against the dollar. That, in turn, would make everything from Coke to Clorox less expensive for the 1.3 billion people living in China – that bodes well for multinationals based in the US.

"It's also positive for commodities," Kelly adds. And that is “a good thing. The knee-jerk reaction should be positive for stocks broadly,” he concludes.


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Trader disclosure: On January 27th, 2010, 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); Najarian Owns (AAPL) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (QCOM) Call Spread; Najarian Owns (XLF) Calls; Terranova Owns (BAC), (JPM), (GS), (XOM), (HAL), (EMC), (AAPL), (DELL), (MSFT), (QCOM); Terranova Owns (XLF) Feb. Calls

Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Brian Kelly
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns April Gold Futures
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Long U.S. Dollars vs. Short Singapore Dollar
Kanundrum Capital Is Long U.S. Dollars vs. Short Yen
Kanundrum Capital Is Long U.S. Dollars vs. Short Euro
Kanundrum Capital Is Long British Pounds vs. Short U.S. Dollars
Kelly Owns (FXE) Puts
Kelly Owns (ELX) Calls
Kelly Owns (QLGC) Calls



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