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Are Easy Money Trades Still On?

The Fed came out Tuesday, and in five short paragraphs suggested that the easy money trades are still on.

What’s your next move?

GE, Intel and IBM led the Dow on Tuesday, says Pete Najarian. That says to me in the wake of low interest rates, investors are going after what they perceive to be growth and companies that could increase dividends. That's where I expect to find performance going forward.

If you think the highs are already in for the S&P you’ve got it wrong, says Joe Terranova. I'd trade on the expectation that the S&P drives toward 1200. And I agree quality names like those listed above will be the drivers.

I bought Schwab as a bet that the retail investors come back into the market in the wake of the Fed decision, says Brian Kelly.

If you’re looking for a trade I’d look at Tiffany, says Guy Adami. I’d be taking profits at these levels.

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THE FED CONUNDRUM

As we mentioned above on Tuesday the Fed pledged to hold interest rates at record lows to foster the economic recovery and ease high unemployment.

But its decision drew one dissent. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City. For the second meeting in a row Hoenig opposed the decision.

On the surface that might seem like minutia – more information than needed by the average investor – but it’s actually a very important piece of this pie.

Hoenig’s dissent illustrates the Fed's challenge in deciding when to signal that higher rates are coming.

Hoenig thinks the economy is strong enough for the Fed to telegraph that rates will rise soon to prevent inflation.

But the others think the low rates will continue to be needed to feed the economic recovery.

And as we first told you on Monday, the Fed has kept the language of its statements essentially unchanged for months. Analysts say the repetitive language is not an accident.

For example, the Fed has said over and over that:

*Inflation is likely to be "subdued for some time;"
* Economic conditions "are likely to warrant exceptionally low levels of federal funds rate for an extended period;"
* Economic activity has "picked up" or strengthened.

Investors are also looking for that language to change.

What must you know?

I think April is a very critical month, says CNBC’s Steve Liesman. I think April is the time when we start to hear the Fed change its language. But a rate hike could be many, many months after the language shifts. We'll know more in the days ahead as we hear about inflation and employment.

According to Todd Gordon of Forex.com patterns in the charts suggest to him that the yield on the 10-year could hit 4% by summer. That means in the short term interest rates go higher.

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TOPPING THE TAPE: OIL

Oil marched higher, above the technically important $80 level on Tuesday, largely buoyed by a weaker dollar .

What’s the trade?

I’m a buyer of the USO , says Joe Terranova, because the front of the board is strengthening relative to the back of the board. And as a second derivative trade I’d be a seller of the airlines. Oil above $80 is not good for the airlines.

I'd closely watch the action in oil on Wednesday, counsels Guy Adami. I think the moves will tell investors if the next $10 in oil is higher or lower.

If you’re looking for a stock, in this space I like BP, says Pete Najarian.

In the space, I like Exxon , says Tim Seymour, especially because it’s underperforming.

I agree that Exxon is cheap here, adds Guy Adami.

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BREAKING NEWS: MASSEY ENERGY TO BUY CUMBERLAND RESOURCES

In a deal worth $960 million Massey Energy agreed to buy Cumberland Resources, a privately held company, to boost its steel-making coal reserves. Cumberland operates primarily underground coal mines in Southwestern Virginia and Eastern Kentucky, and it assets include an estimated 416 million tons of contiguous coal reserves, explains Fast Money host Melissa Lee.

What’s the trade?

If you’re looking for a trade in the space, I’d look at Walter Energy, says Guy Adami.

I like Patriot , says Pete Najarian, especially on pullbacks. Or look at Arch Coal.

In this space I like MTL, says Tim Seymour. As far as I’m concerned it’s cheap even at these prices.

If you think coal is going higher, you might want to play wood pellets, explains Brian Kelly and the play is long Plum Creek.


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COMMODITIES EXPLODE TO UPSIDE

The dollar fell against the euro on Tuesday after European Union finance ministers backed plans to help Greece if needed and Standard & Poor's affirmed its ratings on the debt-stricken country.

In turn the weak dollar sent commodities exploding with gold, copper as well as materials names all rallying in the wake.

What’s the trade?

I think the downtrend in the dollar remains in tact, says Joe Terranova. Trade accordingly.

Looking at charts of the Dollar index, ahead of the broadcast Todd Gordon told our products he expects the greenback to rally further – perhaps to 82.5 by summer.

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TOPPING THE TAPE: CHIPS

Chips were among the big winners on Tuesday with Intel making particularly noteworthy gains.

What’s the trade?

21 had been a difficult level for Intel stock, explains Pete Najarian. It may have broken out.

In this space, I’d get longWDC and let it run, says Guy Adami.

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CURRENCY COLD WAR WITH CHINA

Are we heading for a trade and currency war with China? That’s the chatter on Wall Street with a new bill in the Senate threatening to impose huge tariffs on goods imported from China unless Beijing revalues the Yuan.

What’s the trade?

I’m shortGoogle because of policy headwinds, says Joe Terranova.

According the charts, If Google can’t close above $570 the path of least resistance is lower, adds Todd Gordon of Forex.com

Find out what Daniel Clifton of Strategas has to say about these developments. Watch the video now.




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Trader disclosure: On March 16, 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), (WMT), (FAZ); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (F) Calls; Najarian Owns (GE) Calls; Najarian Owns (HOG) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MCD) Call Spread; Najarian Owns (NSC); Najarian Owns (PCX); Najarian Owns (BP); Seymour Owns (AAPL), (BAC), (F), (GE), (TSO),(XOM); Terranova Is Short (AMR); Terranova Is Short (CAL); Terranova Is Short (GOOG); Terranova Owns (POT); Terranova Owns (TER); Terranova Is Long. Dec. 2010 Crude Oil Futures; Edwards Owns (CBI) For Clients; Edwards Owns (GLD) For Clients; Edwards Owns (GE) For Clients; Edwards Owns (CVX) For Clients; Edwards Owns (QQQQ) For Clients; Edwards Owns (SPY) For Clients; Edwards Owns (XOM) For Clients; Stutland's Firm Is A Market Maker In VIX, Is Short Volatility; Stutland's Firm Is A Market Maker In SPX, Is Short Volatility; Stutland Is Short (GLD); Stutland Owns (CVX), Is Short Options; Stutland Owns (GE) And Is Short (GE) Calls And (GE) Puts

GE Is The Parent Company Of CNBC

For Tim Seymour
Seygem Asset Management Owns (MTL)
Seymour Owns (AA)

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)

For Steve Grasso
Stuart Frankel & Co. Inc. And Its Partners Are Short (AAPL)
Stuart Frankel & Co. Inc. And Its Partners Own (ABK)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (TOL)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Own (SDS)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)

For Brian Kelly
Kanundrum Capital Owns (GE)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (PAG)
Kanundrum Capital Owns (SCHW)
Kanundrum Capital Owns (CVX)
Kanundrum Capital Owns (DE)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (BRCM)
Kanundrum Capital Owns (TXN)
Kanundrum Capital Owns (QCOM)
Kanundrum Capital Owns (POT)
Kanundrum Capital Owns (IPI)
Kanundrum Capital Owns (MOS)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GDXJ)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short (SDS)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short Copper
Kanundrum Capital Is Short Treasuries





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