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Does The Rally Have A Next Leg?

Tuesday, 6 Apr 2010 | 5:19 PM ET

The S&P inched higher on Tuesday with latest leg of this slowing rally all about commodities; metals, ag and perhaps most of all – oil.

Crude inched up toward $87 a barrel on Tuesday, rallying for a sixth consecutive session, and the moves came despite a strong dollar.

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

What’s the trade?

In the space I’m watching copper which is trading at a 20-month high, explains Jon Najarian. I don’t think it’s a fear trade I think it’s demand driven.

Peabody bumped their bid for Macarthur, adds Karen Finerman. That too underscores real demand for commodities.

I also like stocks that provide the bare necessities, counsels Joe Terranova. I’m talking about names like Freeport , Halliburton and Schlumberger. And I’d move out of consumer discretionary.

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S&P PERFORMANCE AFTER FED RAISES RATES

Forget all those doom sayers - higher rates don't always mean lower stocks. In fact, since 1962, on average, stocks climb higher both before and after the Fed raises rates.

What’s the trade?

I’d get into names that benefit from a tightening rate cycle, explains Gary Kaminsky.

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STREET FIGHT: AIRLINES...GARY VS. JOE

It appears a Street fight is breaking out on the Fast Money desk over a volatile sector: Airlines

Joe Terranova suggests shorting these names while Gary Kaminksy is a bull.

Who’s got the better argument?

The price increases at the airlines have stuck, says Kaminksy. That’s important. Although I think airlines are a terrible long-term trade I think those higher prices give earnings a boost - and that sends shares higher in the near-term.

But sooner or later the consumer will step back and pull back and the airline space is going to get hurt, counters Joe Terranova. I’d play it short airlines and long oil.

What do you think?


* If you want to play the travel sector, I’d play it with a long position in car rental companies like Avis, adds Brian Kelly.

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TOPPING THE TAPE: REITS FEEL RIGHT

REITs were off the races on Tuesday after an RBC upgraded multifamily residential REITs, citing early signs of improvement for the sector and potential for growth over the next three to five years.

What’s the trade?

I think the space is getting ahead of itself, counsels Karen Finerman.

I think the space has room to the upside, counters Jon Najarian. I’m watching DDR .

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THE RICH CAN SURVIVE HIGHER RATES

If rates are on the rise, where can you hide out? Steve Cortes of Veracruz says one group will be immune - the rich.

As a result he thinks high end retail is the place to play for gains as rates climb higher. In fact he suggests a few pairs trade. They follow:

BUY SELL
Ralph Lauren Wal-Mart
Coach Family Dollar
Nordstrom



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Trader disclosure: On Apr 6, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kelly Owns (FXE) Puts; Kelly Owns (FRE); Profit And His Firm Own (AAPL); Profit And His Firm Own (RIMM); Profit And His Firm Own (JPM); Profit And His Firm Own (GS); Jon Najarian Owns (AMZN), Is Short (AMZN) Calls; Jon Najarian Owns (SLB), Is Short (SLB) Calls; Jon Najarian Owns (WFT), Is Short (WFT) Calls; Jon Najarian Owns (AA), Is Short (AA) Calls; Jon Najarian Owns (AKS) Call Spreads; Jon Najarian Owns (X) Call Spreads; Jon Najarian Owns (NUE) Call Spreads; Jon Najarian Owns (RTP) Call Spreads; Jon Najarian Owns (BHP) Call Spreads; Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (RIMM) Call Spreads; Jon Najarian Owns (MBI); Jon Najarian Owns (C) Preferred; Jon Najarian Owns (BAC) Preferred; Jon Najarian Owns (JPM) Preferred; Jon Najarian Owns (MS) Preferred; Jon Najarian Owns (WFC) Preferred; Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (CMC) Call Spreads; Jon Najarian Owns (FCX), Is Short (FCX) Calls; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (PDE); Jon Najarian Owns (RIG), Is Short (RIG) Calls; Jon Najarian Owns (RIMM), Is Short (RIMM) Calls; Jon Najarian Owns (WMT) Preferred; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (JPM); Finerman Owns (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Is Short (SPY); Finerman's Firm Owns (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT)

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 (XLU)
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 (AWI)
Kanundrum Capital Owns (NWL)
Kanundrum Capital Owns (CCI)
Kanundrum Capital Owns (CCJ)
Kanundrum Capital Owns (PTV)
Kanundrum Capital Owns (TSL)
Kanundrum Capital Owns (TXN)
Kanundrum Capital Owns (FNM)
Kanundrum Capital Owns (FRE)
Kanundrum Capital Owns (BX)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short Treasuries
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Pound

For Steve Cortes
Cortes Is Short Treasuries

For Doug Sipkin
Ticonderoga Securities Is A Market Maker In (LM), (TROW), (JNS), (BLK), (BEN)

For Ian Hague
Firebird Management Owns (LUK)
Firebird Management Owns (WBD)
Firebird Management Owns (NOD)
Firebird Management Owns TNKBP
Firebird Management Owns (BKGGF)
Firebird Management Owns (KKB)

For Regis Philbin
Regis Philbin Owns (BAC), (DIS), (EMC), (HES), (PHM), (PFE)
Regis Philbin Works For Disney



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  Price   Change %Change
S&P 500
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BTU
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CA
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DDR
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FCX
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HAL
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MCC
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SLB
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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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