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How Long Will The Market Melt-Up Last?

The S&P hit a 17-month high this week, which at first glance might seem bullish, but there’s something you should know.

Not all the stocks that led the market higher were – how can we say it – best of breed names. In fact some were downright junky.

Take a look:

Top Performers In The S&P 500 This Week
-AIG
-Citigroup
-Zion
-Sprint
-MEMC Electronic

That suggests the gains in the S&P were not generated by a fundamental bullish outlook, but rather a melt-up, with market pros chasing performance and using these names to do it.

How long will the market melt up last? According to the Fast Money desk perhaps as long as the next two weeks.

Strategy Session with the Fast Money Traders

The moves in the market are all about underperformance, explains veteran trader Gary Kaminksy. Money managers are chasing gains. I think the action on Monday will be telling. If we see follow through in the names listed above I think the melt-up continues for the next two weeks through the end of the quarter.

I wouldn’t chase the stocks listed above, counters Joe Terranova. This isn't a year to follow momentum. This is a year to fade and trade. If quality names don't participate I think it will be hard for the S&P to get much above 1150.

Also, this was the 8th lightest volume week on the NYSE in the past 6 years, adds Todd Gordon of Forex.com. Without volume it’s hard to get excited about any kind of rally.

In fact, I sold my shares of Nasdaq, reveals Karen Finerman. And one of the reasons was the light volume in the market.

What do you think? We want to know!








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TOPPING THE TAPE: COMMODITIES

Steel and copper stocks broke out from the rest of the commodity trade on Friday despite concerns of higher rates in China.

Also, the fertilizer names soared higher after Potash sharply raised sales expectations.

What must you know about commodities?

In the ag space, I think China is irrelevant. Supplies are tight and I think ag names are going higher



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FAST FLASH: OIL

U.S. crude oil futures ended lower on Friday with downbeat consumer sentiment data clouding the outlook for economic recovery.

Also, oil, “broke trendline support around $81.64 (a barrel)," says Tom Bentz, broker at BNP Paribas Commodity Futures in New York.

What must you know?

It seems like oil is tired, muses Tim Seymour. For that matter gold looks tired too.

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FAST FLASH: RTH HIGHER

The RTH traded higher on Friday after the latest data showed retail sales rose unexpectedly last month despite heavy snow storms, bolstering hopes of a sustainable economic recovery.

What’s the retail trade?

The RTH has outperformed the broader market since the beginning of January, explains Bill Strazzulo of Bell Curve on the Halftime Report. The short term trade is to buy in front of $94 and look for a move to $101. And it could even go to $108.

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BOMBSHELL REPORT ON LEHMAN

If you bump into Dick Fuld, the beleaguered CEO of Lehman, you might want to hand him a glass of water and two aspirin.

He’s looking at a major headache in the wake of a new report investigating the collapse of his company.

Specifically, the examiner found evidence for breach of fiduciary duty against Fuld for not investigating whether the company was deceiving investors.

At issue is a program known as Repo 105 – in which Lehman would put assets up as collateral while agreeing to buy them back at a later time.

Although the repo market is perfectly legal – and in fact an important mechanism in the financial system – at issue is how Lehman used the program.

Specifically, the report finds they didn’t disclose the use of their program, properly.

What must you know?

I think what we have here is a company that was cooking the books, says Wall Street attorney Jacob Zamansky. I think Dick Fuld and the CFO need to be held accountable. I don’t think its plausible he didn’t know.

What I found disturbing was not that this is happening at Lehman, says Gary Kaminksy, but that the regulators knew and they didn’t intervene.





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Trader disclosure: On March 12, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (TSO), (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (V), (WMT), (FAZ); Edwards Owns (ARO); Edwards Owns (BAC) For Clients; Edwards Owns (GS) For Clients; Edwards Owns (JPM) For Clients; Edwards Owns (MS) For Clients; Edwards Owns (WFC) For Clients; Nations's Firm Trades And Has Positions In S&P Options; Gordon Is Short Australian Dollar; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (SKS), (TJX); Finerman's Firm Is Short (USO); Finemran's Firm And Finerman Own (WFC) Preferred; Seymour Owns (AAPL), (BAC), (INTC); Strazzullo Is Short (SPY) As A Hedge; Strazzullo Owns (GLD)

For Tim Seymour
Seygem Asset Management Owns (POT)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (GOK)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)

Virtus Investment Partners Owns More Than 1% Of (XLI)


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