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Halftime: Market Hits Trifecta, How Should You Bet?

Monday, 3 May 2010 | 1:12 PM ET

Three separate catalysts triggered a strong rally on Monday sending the Dow higher by triple digits.

The bullish tailwinds largely stemmed from the following:

Catalyst 1: New data showed the U.S. manufacturing sector grew in April at its fastest pace in almost six years and at a rate that was above expectations. (A separate government report showed construction spending in the U.S. unexpectedly rose in March to post the first advance since October.)

Despite the bullish economic news the Fast Money traders are more focused on two other positive catalysts; Greece and Goldman Sachs for trading opportunities.

Fast Money Halftime Report
How to invest now, with the Fast Money crew.

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GREECE STILL THE WORD

Catalyst 2: Over the weekend, European countries agreed to a 110 billion-euro ($146.5 billion) aid package for debt-laden Greece, the biggest ever financial bailout of a country. The euro traded lower in the wake of the news.

Where should you put money to work?

The weaker euro should benefit Europe-based companies that make their money from exporting, muses Tim Seymour. I’d look at a long position in Siemens .

I don’t think this is the place for most investors to play, counters Zach Karabell of RiverTwice. Unless you’re an expert in European trade there are better place to put money to work.

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BUFFETT STOPS GOLDMAN BLEEDING

Catalyst 3: Financials rallied after Warren Buffett intensified his feisty defense of a controversial mortgage transaction marketed by Goldman Sachs, saying the investment bank's behavior does not warrant public fury. Buffett also said he is completely behind the firm’s CEO Lloyd Blankfein.

What’s the trade?

Goldman broke above resistance on Monday, explains OptionMonster Jon Najarian. I’m now seeing a lot of upside call buying likely due to a belief that the management team may remain in tact. That’s bullish

Also, when you have a wave of analyst downgrades as Goldman did, typically it’s a good contrarian sign and I’d get back in, muses Zach Karabell.

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BP OIL SPILL

Investors continued to punish shares of BP in the wake of the oil spill threatening wildlife in the Gulf of Mexico.

But there are also some "under the radar" names that are seeing some pop as the gulf coast braces for an oil hit.

What’s the trade?

I’d put Nalco and Clean Harbors on the radar, says Steve Grasso of Stuart Frankel. I think both could have more upside.

I don’t see any long –term structural change in the industry, adds Tim Seymour, but I would look at the oil tankers as a short term trade.

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CREDIT SUISSE UPGRADES CLH

Clean Harbors topped the tape on Monday after the stock was raised to Outperform by Credit Suisse with a $74 price target.

Analyst Hamzah Mazari tells Fast Money the market is underestimating the clean-up work the hazardous waste and environmental-services company may see.

"This is not one-time in nature, and given the magnitude of the disaster it will likely result in an earnings stream for a couple of years rather than a one-time event," he says.

*Check out our entire conversation with Mazari. Watch the video above.

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EAR TO THE WALL: TEX

Jon Najarian has spotted unusual options action in Terex Corp.

The large volume of May 25 calls and May 30 calls suggests to Najarian this stock could make a sharp move higher. Najarian says rumors of an LBO could be behind the move.

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TRADE TO GO: CASINOS

Tim Seymour suggests putting casinos on your radar, especially those with exposure to Macau. In the space, he likes Las Vegas Sands and Melco.

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CALL THE CLOSE:

Tim Seymour: I think the markets go higher.
Jon Najarian: The best time to sell is when the market is going up.
Zach Karabell: It’s been a weird market but I wouldn’t fight the tape.
Steve Grasso: I’m a cautious buyer but I want to see 1220 in the S&P before I can close my eyes and buy.


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Trader disclosure: On May 3, 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 (F), (BAC), (MPEL), (DRYS); Najarian Owns (GS) Call Spreads; Najarian Owns (RIMM) Call Spreads; Najarian Owns (TEX) Call Spreads; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (JPM), Is Short (JPM) Calls; Najarian Owns (BAC), Is Short (BAC) Calls; Najarian Owns (C), Is Short (C) Calls; Najarian Owns (WFC), Is Short (WFC) Calls; Najarian Owns (AAPL), Is Short (AAPL) Calls; Najarian Owns (MMR) Call Spreads; Karabell Owns (GS), (C), (AAPL), (VALE), (RIMM); |Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X)

For Tim Seymour
Seygem Asset Management Is Short (CLF)
Seygem Asset Management Is Short (VALE)

For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PALM)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)

For Hamzah Mazari
(CLH) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (CLH) In Past 12 Months
Credit Suisse Has Managed Or Co-Managed A Public Offering For (CLH) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (CLH) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensation From (CLH) In Next 3 Months
Credit Suisse Is A Market Maker Or Liquidity Provider In (CLH)

CNBC.com with wires

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DJIA
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BP.
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CAH
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GS
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LVS
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6883
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SIE
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TEX
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SPDR FIN SEL
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