The market melt-up continued on Friday with both the Dow and S&P ending in positive territory despite some serious headwinds.
At the open gains seemed a foregone conclusion after EU leaders said they had agreed on a standby aid package for Greece, also better-than-expected March consumer sentiment data help drive gains.
However, sentiment quickly turned after the sinking of a South Korean naval ship.
"Depending on what happened, this could raise global tensions, which will unnerve investors," said Charles Lieberman, of Advisors Capital Management. Lieberman noted that South Korea had played down the suggestion of North Korea's involvement, but said that "investors are going to remain cautious until they know what happened for sure."
Also weakness in tech provided a drag after Oracle fell from a nine-year high a day after reporting quarterly results that beat expectations.
All things considered, how should you be positioned now?
Strategy Session with the Fast Money traders
We’re seeing great performance in the financials , says Pete Najarian. BofA, JPMorgan and other money center banks are performing quite well. I’d keep an eye on what’s happening there.
I’d look at laggards, says Anthony Scaramucci. Personally, I’m watching Monsanto which is down about 13% for the year. I expect the ag trade to pick up with the economic recovery.
If you like Monsanto I’d look at SYT , counsels Tim Seymour. It’s the overseas counter-part.
I think Thursday’s intra-day reversal was a bearish signal that the momentum is changing, says Joe Terranova. I’m a seller of airlines and I’m shorting Goldman . For the short-term I would play for a pull back, though I don’t expect a deep dive.
I’m also short Goldman as well Alcoa and ACH , reveals Brian Kelly. I agree that the market is extended and the next move is lower.
CHART OF THE DAY: S&P
We've now seen a 30-day winning streak in the S&P without a 1% decline, the longest period without a pullback in this bull market. This chart all is a graphic representation of the melt-up, explains Melissa Lee.
What should you make of it?
I’d be very careful not to interpret the pattern as a signal to play it short, says Anthony Scaramucci. If this economy can create jobs the market could climb even higher.
It appears that at least some commodities were in demand on Friday with steel names topping the tape. Both US Steel and AKS rallied on Friday.
What’s the trade?
In the space I like Ivanhoe Mines and FMG, says Tim Seymour.
PARTY IN GREECE THIS WEEKEND?
The euro exploded higher on Friday on hopes that the bailout for Greece will stabilize woes in the EU.
What’s the trade?
I’m sticking with a short position in the euro, says Steve Cortes of Veracruz. I don’t think Greece is suddenly solvent. And I’m also concerned about Spain. Ultimately I think Europe’s currency goes much lower. And I’d steer clear of the big mutli-nationals with big exposure to Europe.
I’m bullish Unilever , counters Tim Seymour. They should benefit from a weaker euro.
DEAL MAKING BACK?
Deal making appears to be alive and well with RadioShack rallying on speculation it could be talking with Best Buy about a merger.
What’s the trade?
The chatter about Radio Shack began around March 3rd but it seems to be picking up momentum, reveals Pete Najarian. Options action on Friday absolutely exploded. Somebody thinks they know something.
Of course the real winners in M&A are the financial firms that engineer the deal.
And take a look at this. Blackstone has quietly moved up the league tables, cracking the top ten.
BlackStone Worldwide M&A Advisory:
JAN 1- MARCH 25
2010 NO. 9
2009 NO. 78
Source: Thomson Reuters
What’s the secondary trade?
I like all the publicly traded private equity firms across the board, says Tim Seymour. Maybe take alook at FIG .
FAST FIRE OF THE WEEK: SHIA LABEUOF
Shia LaBouf, who stars in Wall Street 2 this summer- was quoted in this April's edition of GQ saying he likes InterOil a Fast Money favorite.
Well thanks Shia, InterOil dropped 12 percent on Friday!
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Trader disclosure: On March 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (BAC), (BX); Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (TCK); Najarian Owns (YHOO) Calls; Najarian Owns (LMT) Calls; Terranova Owns (IOC) Puts, Strikes; Terranova Is Short (GS), (CAL), (UAUA); Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (WMT), (JPM), (NEM); Stutland Is Short (GLD); Stutland Equities Is A S&P 500 And VIX Options Market Maker; Stutland Equities Is Short VIX Near Term Volatility, Is Long VIX Long Term Volatility; Cortes Is Short Euro vs. U.S. Dollar
For Anthony Scaramucci
Skybridge And Scaramucci Own (AAPL)
Skybridge And Scaramucci Own (C)
Skybridge And Scaramucci Own (GOOG)
Skybridge And Scaramucci Own (GS)
Skybridge And Scaramucci Own (MCD)
Skybridge And Scaramucci Own (MSFT)
Skybridge And Scaramucci Own U.S. Dollar
Skybridge And Scaramucci Own (MON)
For Tim Seymour
Seygem Asset Management Is Short (PBR)
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 Brian Kelly
Kanundrum Capital Owns (S)
Kanundrum Capital Owns U.S. Dollar
Kanundrum Capital Owns (FNM)
Kanundrum Capital Owns (FRE)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short Copper
Kanundrum Capital Is Short Treasuries
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (ACH)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (EWY)
CNBC.com with wires