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Late Day Buying Signal Bull Is Back On Track?

Both the S&P and Dow closed higher on Wednesday with investors rushing to buy stocks at potentially bargain prices.

The beaten down energy sector led the way higher with shares of Halliburton jumping sharply after executives said the offshore oil industry had plenty of work even with a six-month moratorium on deep-water drilling.

While investors still are cautious about the outlook for energy stocks, "the genuine blood bath in the sector Tuesday certainly seems to have drawn in some fundamental value seekers," says Craig Peckham, equity trading strategist at Jefferies in a Reuters interview.

What must you know to trade this market?

Instant Insights with the Fast Money traders

Looking at the S&P, 1103 was support and now it becomes resistance, explains Guy Adami. Unless we close above those levels I can’t feel bullish. As far as I'm concerned Wednesday may have looked like a great day but it's actually a dangerous tape.

I’m also concerned that market is overly exuberant, says Tim Seymour. Wedesday's move higher was on light volume. And we're staring at 1105 on the S&P; that's the 200-day. That is a dangerous tape.

I also found it to be a scary tape, adds Karen Finerman. I didn’t see a real reason for the market to close so much higher. We could be down just as much on Thursday.

If you're looking for a reason for the late rally, it was likely triggered by comments from President Obama and VP Biden that the jobs number will be better than expected, adds Jon Najarian. I can’t remember ever hearing a President and VP saying just days ahead of the jobs report what the numbers are going to be.

For me it’s all about Friday’s job numbers, says Joe Terranova. The line in the sand is 150,000. That’s the number to trade around.

If the White House is leaking the number I’d be a seller of the market into the number, adds Seymour. The expectations are very high.

I’m noticing a big sentiment change in this market, counters Brian Kelly. I think investors should be long into the quarter’s end, which is the end of June. I expect long-only portfolio managers will support their names.

If you’re looking for energy trades, I’m bullish nat gas; I’d play it longXCO or SouthWest , Terranova adds. And also I established a long position in RIG on Wednesday.

In the energy sector, I think WTI is oversold, however I still wouldn’t touch BP, adds Seymour.

If you’re looking for a trade elsewhere in the market, I think Visa looks interesting, says Guy Adami. $70 is a really interesting level. It’s a tad more expensive than Mastercard but I like the technicals better.

What do you think? We want to know!

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BUY THE SHALLOW WATER DRILLERS

On Wednesday, Raymond James analyst Collin Gerry upgraded shallow water drillers saying the ripple impact from the spill should be small.

Gerry tells the desk he thinks investors threw out the baby with the bathwater and even with Wednesday’s pop, he still thinks Rowan and Hercules have more upside.

Find out what Collin Gerry has to say about Transocean as well as natural gas. Watch the video now!






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Trader disclosure: On June 2, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (SWN), (GLD), (IPSU), (RSX), (PFE), (TER), (APA), (AXP), (BMO), (BBY), (DIS), (XCO), (AAPL), (CVS), (IPI), (TEVA), (FXB); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT); Kelly Owns (FXE) Calls; Kelly Owns (IBM) Calls; Kelly Owns (STD) Calls; Kelly Owns (NBG) Calls; Jon Najarian Owns (GS), (JPM), (CAM), (BP); Finerman’s Firm Owns (AAPL); Finerman Owns (BAC); Finerman’s Firm Owns (BAC); Finerman Owns (BBY); Finerman’s Firm Owns (BBY); Finerman Owns (BP) Calls; Finerman’s Firm Owns (GOOG); Finerman’s Firm Owns (GS) Calls; Finerman Owns (HPQ); Finerman’s Firm Owns (HPQ); Finerman Owns (JPM) Calls; Finerman’s Firm Owns (JPM); Finerman Owns (RIG) Call, Puts & Stock

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 (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Brian Kelly
Kanundrum Owns (IBM)
Kanundrum Owns (XLK)
Kanundrum Owns (GFI)
Kanundrum Owns (FCX)
Kanundrum Owns (CLF)
Kanundrum Owns (GLD)
Kanundrum Owns (AUY)
Kanundrum Owns (GFI)
Kanundrum Owns (STD)
Kanundrum Owns (NBG)
Kanundrum Is Short (CME)
Kanundrum Is Short (STT)
Kanundrum Is Short (XLF)

For Collin Gerry
Raymond James & Associates co-managed a follow-on offering of (HERO) in Sept. 2009 Raymond James & Associates is a nasdaq market maker in (HERO) Raymond-James & Associates received non-securities-related compensation from (HERO) in past 12 months

For David Levy
Levy Owns U.S. Tresuries
Levy Own Options In Euro-Dollars Futures
Levy Own Gold

For Mike Khouw


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Symbol
Price
 
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%Change
DJIA
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S&P 500
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BP.
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HAL
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HERO
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MA
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RDC
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RIG
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LUV
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V
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WTI
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XCO
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SPDR NRG SEL
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MCD
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