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Land Of Confusion

Monday, 29 Mar 2010 | 5:32 PM ET

Stocks continued their slow march higher on Monday even though investors seem to be unsure about the outlook for the rest of the year.

Amid all the uncertainty, what should you be watching?

Strategy Session with the Fast Money traders

LAND OF CONFUSION
Investor Survey
Next 12M High Low Current
S&P 500 1,400 900 1173
10-Year Yield 6.5% 2.5% 3.9%
Crude Oil $110 $62 $82
Gold $1,800 $800 $1110
USD/EUR $0.75 $1.53 $0.74
Source: Strategas Research Partners

Here’s how I’m looking at the world, says Brian Kelly of Kanundrum. I’m looking at 4% and ultimately 5 1/2% in the 10-year yield, I think crude goes to $90, gold goes to $1350 and the euro/dollar goes to 129. That’s how I’m looking at the world right now.

Looking at the S&P, I expect an acceleration in the second quarter, says Anthony Scaramucci. But if you’re worried about a pullback, look at IBM and Johnson & Johnson right here, he says. Both stocks are safe defensive names.

Into earnings, I’m watching JPMorgan, says Pete Najarian. It’s been lagging for the most part. I think it will be a pivotal ‘tell’ early on in the cycle.

I agree that JPMorgan is a bellwether name, says Karen Finerman. I expect to hear good things and it should bode well for the big banks.

I’m concerned that domestically we’re ahead of ourselves, says Joe Terranova. Going forward I'd establish long positions in stocks that are tethered to emerging markets. That's where I think massive rising demand comes from. I’d go global and look at shippers, coal, copper and other commodities names.

It seems like every day somebody raises estimates on Cliffs because of China demand, says Pete Najarian. At 10 times earnings or less I think this and other names are cheap. And I'd also look at railroads, he adds.

Word on the Street
The Fast Money traders take a look at today's top business stories.

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TOPPING THE TAPE: OIL

Commodities ended up being the story of the day as oil finally broke out above $82, the biggest jump in 5 weeks.

A decline in the dollar underpinned the advance in oil as well as commodities broadly.

Is this a sign that the global economy trade is back on, or a mere rotation into this underperforming asset?

Oil seems to fail around $82, reminds Pete Najarian. I haven’t seen any evidence that suggests oil can stay above these levels. And if oil does spike, I think higher prices at the pump harm the consumer.

I expect we see $85 before $79, says Joe Terranova.

In the space, I still like Transocean, Pride and Schlumberger , counsels Karen Finerman.

Don't forget that China is slowing their economy, reminds Brian Kelly and India is already doing it. I’m concerned about this space.

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CHART OF THE DAY: ENERGY VS. CONSUMER DISCRETIONARY

Looking at the leaders and the laggards in this market the consumer discretionary names have outperformed oil almost 10 to 1.

What’s the trade?

With the end of the quarter coming, I’m looking at Sears , specialty apparel and airlines as possible shorts, says Joe Terranova and I'd go long energy against it.

In retail I like being long specific names, such as Target and TJX , adds Karen Finerman.

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EAR TO THE WALL: CITI PUSH

There’s chatter on Wall Street that you may have heard.

Some investors are saying that the action in Citi is not well supported.

They believe that hedge funds are simply buying Citigroup until it hits that magic $5 mark and then they'll dump it on mutual funds – because that’s the level at which many can buy.

However, the desk doesn’t buy it.

It’s a conspiracy theory, says Anthony Scaramucci. I just don’t see it. I like Citi as a long-term speculative play, he says. But there is uncertainty in this trade considering the potential of bank reform.




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Trader disclosure: On March 29th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (YUM) Calls; Najarian Owns (CAT) Calls; Najarian Owns (WFR) Calls; Najarian Owns (TIE) Calls; Nations Owns (SPY); Scaramucci Owns (AAPL); Scaramucci And Skybridge Own (BAC); Scaramucci And Skybridge Own (C); Scaramucci Owns (MS); Scaramucci Owns (MSFT); Scaramucci Is Long U.S. Dollar; Najarian Owns (CLF) Call Spread; Najarian Owns (F) Calls; Najarian Owns (RDC) Calls; Najarian Owns (RRC) Call Spread; Najarian Owns (SWN) Call Spread; Najarian Owns (YHOO) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC); Finerman's Firm And Finemran Own (GGP); Finerman Owns (GOOG); Finerman's Firm Owns (IBM), (MCD), (PDE), (RIG); Finerman's Firm And Finerman Own (WFC) Preferred; Terranova Is Short (GS), (CAL), (UAUA); Terranova Is Long Crude Oil Futures (May 2010); Terranova Works For (VRTS)

For Joe Terranova
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 (SYY)
Kanundrum Capital Owns (PTV)
Kanundrum Capital Owns (PAG)
Kanundrum Capital Owns (TXN)
Kanundrum Capital Owns (IBM)
Kanundrum Capital Owns (S)
Kanundrum Capital Owns (CCI)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short Treasuries
Kanundrum Capital Is Short Copper

For Greg Badishkanian
Citigroup Global Markets Or Affiliates Has Managed Or Co-Managed Offering For (MCD), (YUM) In Past 12 Months
Citigroup Global Markets Or Affiliates Has Received Investment Banking Compensation From (MCD), (YUM) In Past 12 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (MCD), (DPZ), (YUM), (BKC) In Past 12 Months
(MCD), (YUM) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(MCD), (YUM), (BKC) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(MCD), (DPZ), (YUM), (BKC) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities-Related Services)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (MCD), (YUM)


CNBC.com with wires

  Price   Change %Change
S&P 500
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C
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CLF
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IBM
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JNJ
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JPM MLP ETN
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RIG
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SHLD
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SLB
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TGT
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TJX
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  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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