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Is the Market at an Inflection Point?

If there's one question floating around the Street it's this. Is the market at an inflection point?

Bulls say with the S&P trading above the high end of its recent range, stocks are breaking out in a meaningful way. Technically, this kind of performance is considered a sign of strength; a sign that stocks could go much higher.

However, bears argue that S&P faces new resistance around 1,325. They also argue that light volume suggests the end of the rally is at hand.

How should you position?

Instant Insights with the Fast Money traders

It's possible that both the bulls and the bears may find themselves frustrated. According to Oppenheimer’s Carter Worth patterns in the charts suggests the S&P will grind between 1330 and 1290 for quite some time.

Joe Terranova reminds the desk that historically equities markets are vulnerable in February. He thinks the Street is widely saying, "valuations are getting stretched right now." However, he adds that on a pullback he's a buyer.

Karen Finerman is concerned by the action in the Vix. “With the Vix down at 15 there’s a lot of complacency," she says. "That scares me." She's a buyer of puts for protection.

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TICK BY TICK: TURBULENT DAY FOR OIL

Once again, oil landed in the spotlight with weakness in energy giving the bears some momentum.

Oil slipped on reports that Beijing had raised interest rates by 25 basis points; it’s China’s second increase in six weeks and the move triggered worry that in its quest to temper inflation Beijing could stymie growth.

Meanwhile, analysts at JPMorgan have warned of the potential for downside in the energy space through the rest of the year. They think oil averages $89 this year.

How should you position now?

Joe Terranova sees opportunity in energy. He’s particularly focused on refineries after Valero temporarily took its Port Arthur, Texas, refinery off line. “I think the refiner trade is the trade investors should focus on,” he says. “And I’d focus on mid-continent refiners such as FTO , CVI and Western Refinery," he says.

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GOLD AT 3 WEEK HIGHS

Gold spiked on Tuesday due to China's rate hike and perhaps due to word that JPMorgan began accepting bullion as collateral for trading.

What’s the trade?

I’m a buyer of gold, says Tim Seymour. I also like the miners.

Right now I feel there’s no trade in gold, says Joe Terranova.

Given the strength in copper it’s odd that Freeport isn't trading better, muses Karen Finerman.

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STREET FIGHT:

Investors and analysts alike rely on corporate guidance to value stocks but should they?

With more than 70% of S&P index companies beating estimates, the Fast gang can’t help but wonder if CEOs are setting the bar unrealistically low just so they can wow later?

Barry Ritholtz says trust CEOs at your own peril. Get all the details. Watch the video now!






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Trader disclosure: On Feb 8, 2011, 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); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (TM); Terranova owns (VRTS); Terranova owns (C); Terranova owns (UPL); Terranova owns (GM); Terranova owns (PEP); Terranova owns (LTD); Terranova owns (CVI); Terranova owns (SU); Terranova owns (CNQ); Terranova owns (POT) puts; Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is short (IJR); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman's firm owns (AAPL); Finerman's firm owns (AVP) calls; Finerman owns (BAC); Finerman's firm owns (BAC) leaps; Finerman's firm owns (BBY); Finerman owns (C); Finerman's firm owns (GLW); Finerman owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) ; Finerman's firm owns (JPM) and (JPM) leaps; Finerman's firm owns (MCD); Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (TGT); Finerman's firm owns (WMT); Finerman's firm owns (FCX) puts; Finerman's firm owns (DAI); Weiss owns (AAPL); Weiss owns (FAS); Weiss owns (GLD); Weiss owns (JPM); Weiss owns (HBAN); Weiss owns (BTU); Weiss owns (MEE); Weiss owns (TBT); Weiss owns (UUP); Weiss owns (CSCO); Weiss owns (QCOM); Weiss owns (VZ); Weiss owns (TXN); Weiss owns (MSFT); Weiss owns (FWLT); Weiss owns (SHAW)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
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 (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (DPUKF)

For Brian Kelly
Accounts Managed By Kanundrum Capital Own (BAC)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (DO)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Are Short The Yen


For Barry Ritholtz
Ritholtz has no disclosures

For David Riedel
Riedel has no disclosures

For Eric Noll
Noll has no disclosures

For Scott Nations
Nations has no disclosures

For Amelia Bourdeau
Bourdeau has no disclosures

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