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Did Stock Market Just Put In A Bottom?

Both the Dow and S&P surged higher Wednesday with chatter on Wall Street suggesting stocks may have put in a bottom.

Looking at fundamentals, bullish sentiment was triggered by new data which showed China's manufacturing sector staged a rebound in August and Australia's economy grew at the fastest pace in three years in the second quarter.

And perhaps even more bullish, instead of an expected decline in the ISM number here in the US, the data showed factory output increased.

Ontop of that copper hit its highest level in more than four months. Copper is sometimes called "Dr. Copper" due to its ability to diagnose the state of the economy as well as the ebb and flow of the equity markets.

And looking at the technicals, the S&P closed above its 14-day moving average for the first time since Aug. 11 leading to speculation that 1,068 could be a new level of support.

How should you position now?

Instant Insights with the Fast Money traders

It sure feels like a bottom to me, says OptionMonster Jon Najarian. Coming out of Labor Day with all the political winds blowing in the ‘right’ direction I believe we rally into the fall.

The PMI number drove the gains on Wednesday, but I think it’s short covering, says Brian Kelly of Kanundrum. Underneath the headline PMI, construction spending was down more than expected. I don’t think we’ve hit a bottom. I would not buy stocks now.

I agree that at least some of the move was a short covering rally, says Tim Seymour. But I'm hardly bearish because I believe that the globe is much healthier than people think.

I’m still pessimistic, adds Guy Adami. 1040 has held many times as support and 1131 has held as resistance. And here we are smack in the middle. I wouldn’t chase this rally.

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TOPPING THE TAPE: APPLE

Apple closed higher on Wednesday after CEO Steve Jobs lifted the veil on a new line-up of revamped iPods, and a sleeker, cheaper iTV.

What’s the trade?

Unless Apple can break above $260 I’d stay on the sidelines, says Tim Seymour. Apple has been stuck between $240 - $260.

I’d go downstream and play it long SanDisk, counsels Guy Adami.

I like Apple and in the space I’m also bullish Google, says Brian Kelly.

Or look a downstream play such as Cirrus Logic, adds Jon Najarian.

Get more trades. Click here to read “Trading Trends After Apple Announcement”

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COMMODITY/INDUSTRIAL/TRANSPORT STOCKS

In the wake of strong data out of China, investors bid commodities and related stocks higher with Caterpillar among the best performers in the Dow.

Will the trend continue?

I believe the industrial space is alive, says Tim Seymour.

I also love the space, adds Steve Cortes, largely due to demand from emerging markets. And I’m playing it long Freeport and BHP Billiton.

Joy Global is making a series of higher lows, I’d take a look, counsels Guy Adami.

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TECH TURNAROUND?

Did Wednesday mark the bottom in tech - one of worst sectors in August?

Dan Niles of Alpha One Capital Partners tells Fast Money he’s still bearish. I think the market is going to bounce for a bit and it probably lasts for another 2-3% but then I’m a seller.

*Hear more from Dan Niles including one of the few names he likes in the space. Watch the video now!



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Trader disclosure: On Sept. 1st, 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), (INTC), (MT), (F), (MSFT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Jon Najarian owns (AAPL); Jon Najarian owns (RIMM) calls; Jon Najarian owns (CRUS) and (CRUS) calls; Jon Najarian owns (AKS); Jon Najarian owns (NFLX) short calls; Jon Najarian owns (AMZN) short calls; Cortes is long Crude Oil; Cortes is long (FCX); Cortes is long (BHP); Cortes is long (SFD); Cortes is long (BMO); Cortes is long (TD); Cortes is long the Euro

For Brian Kelly
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (XBI)
Accounts managed by Kanundrum Capital own U.S. Dollars
Accounts managed by Kanundrum Capital own (POT)
Accounts managed by Kanundrum Capital own (TBT)
Accounts managed by Kanundrum Capital own (RAX)
Accounts managed by Kanundrum Capital own (SGG)
Accounts managed by Kanundrum Capital is short (XLF)
Accounts managed by Kanundrum Capital is short (IAI)
Accounts managed by Kanundrum Capital is short (MCO)
Accounts managed by Kanundrum Capital is short the Mexican Peso

For Dan Niles
Funds Managed By Alpha One Capital Partners Own (HP), (AAPL), (PWER)
Niles Owns (HP), (AAPL), (PWER)

For Michael Pachter
***No Disclosures***

For RICHARD VOLPE
***No Disclosures***

For Barry Ritholtz
***No Disclosures***

For Heather Bellini
***No Disclosures***

For Mike Khouw
***No Disclosures***


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