The Dow churned higher Thursday after new economic reports showed that inflation remains in check and jobless claims are inching lower.
At the same time, concern about economic troubles in Greece flared again; that triggered dollar strength and, as a result, dragged down the materials names.
What must you know to trade this market?
Although I'm bullish on the economy the technicals make me cautious on the S&P at these levels, says Tim Seymour. I’m starting to put on shorts.
There was a lot of bearish reversals in the market on Thursday, which makes me think stocks could roll over, says Guy Adami. But with that said, I do think the S&P prints 1170 on Friday but only because of options expirations.
I’m not sold on the melt-up theory, adds Joe Terranova. A lot of the quality names are not contributing to the rally and it makes me nervous. I’m keeping an eye on Consumer Discretionary. The XLY is supporting the tape right now and if it rolls over I think the entire market goes with it.
I also took some profits on Thursday, says Karen Finerman. It wouldn’t surprise me to see a 2% correction. I’ve pared back my position in Nestle as well as IBM - stocks that have had a nice run.
I understand the argument but I just don't see it, says Steve Grasso of Stuart Frankel. I think vanilla money is putting a floor under this market. I expect the S&P to go higher from here.
CHEAP MONEY TO TRIGGER INFLATION
The government may say there’s no inflation - but Peter Boockvar of Miller Tabak says that’s -- well, BS.
He tells the desk, “Cheap money is creating asset inflation which creates a distortion in pricing which will lead more broadly to a rise in consumer prices.”
Want to hear more from Boockvar. Watch the video now!
FEDEX SIGNALING ALL CLEAR ON THE GLOBAL ECONOMY?
Looking for a sign of global growth? Check out the latest from FedEx . The transportation name just raised its full year outlook citing an improved global economy.
What’s the trade?
You have to ask yourself if FedEx is going to have about 30% earnings growth, says Guy Adami. Personally, I don’t think they’re going to make those numbers and I’d pull the rip cord.
I’m also get out, adds Tim Seymour.
I’m a buyer of Boeing as a derivative trade, says Brian Kelly.
If you’re looking for a derivative trade look at Rockwell Collins , says Guy Adami.
FEEL THE FLOW: WHERE IS THE BIG MONEY GOING?
Can stocks be so bad they may actually be good. That's the hope of some investors who continue to buy laggards.
Is this sign of a broader rally, or end to the party?
As you may know Steve Grasso of Stuart Frankel spends his days on the floor of the NYSE. On the Halftime Report he says although aggressive portfolio managers are rotating into laggards such as Burger King, he’s only seeing that kind of action from nimble hedge fund money.
However, the vanilla money is still in best of breed stocks, such as McDonald’s , Grasso says.
That suggests it’s a beta chase as portfolio managers try to make up performance and get ahead of the competition.
It wouldn’t surprise me to see the trend reverse in a few days, Grasso says.
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CNBC.com with wires