Are S&P Gains Anything Other Than Window Dressing?

On Tuesday both the Dow and the S&P closed higher but trading volume was unusually light.

About 6.2 billion shares traded in composite volume on the New York Stock Exchange, NYSE Amex and Nasdaq, the second-weakest day of 2011 and far below last year's estimated daily average of 8.47 billion.

"I don't think a lot of people know what to do," says Shawn Hackett, president of Hackett Advisors in a Reuters interview. "When the market doesn't know what to do, it tends to go up on low volume."

And that combination of low volume and modest gains has led many investors including Fast Money’s Karen Finerman to speculate that the current advances are all about end of quarter window dressing.

(Window dressing refers to a practice in which money managers buy additional shares of their winning stocks into quarter’s end, in an attempt to improve the appearance of their quarterly statements sent to clients.)

"I really think gains are about window dressings. Bad data doesn't seem to matter," says Finerman.

Trader Brian Kelly is skeptical of the rally. And he’s concerned that window dressing is diverting attention away from more important data; things like inflationary expectations, rising rates in Europe and a slow down in China. Kelly is bearish on the market broadly.

Adding to that thesis, host Scott Wapner adds that window dressing may have obscured the fact that, "60% of the S&P gains this quarter have come from only 2 sectors; energy and industrials."

Tim Seymour is on the other side; he's cautiously optimistic. "I don't think we've fallen into a black hole," he says. He points to a slew of catalysts that he thinks are signs of strong global demand.

Joe Terranova is optimistic. “Ahead of such critical data on Friday why is the market so bullish. It’s got to be more than window dressing,” he says.

What do you think? We want to know!

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OIL REGAINS $104

Crude oil prices rose on Tuesday due at least in part to lowered expectations about a quick return of Libya's oil exporting capabilities.

What’s the trade?

Joe Terranova is bullish. "I think the energy story remains unchanged, he says. I'd remain overweight."

Tim Seymour is also bullish energy and suggests long refiners. However he's tells the desk to pick and choose because some stocks have "ridiculous valuations."

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TOPPING THE TAPE: RETAIL JUMP

Retails stocks landed front and center on Tuesday after Home Depot announced a $1 billion dollar buyback; also online retailer Amazon revealed plans to launch its own cloud-based music platform, beating Google and Apple to the punch.

What’s the trade?

The growth prospects for Amazon are intriguing, says Pete Najarian, but at current valuations it’s difficult to pull the trigger. And I’d also keep Ebay on the radar, he says.

I like Amazon’s cloud play too, but it’s hard to ignore that the stock is trading at 70 times earnings, adds Tim Seymour. It’s an overpriced stock and yet it continues to move higher.

Don’t forget about the tax issues facing Amazon, reminds Karen Finerman.


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TOPPING THE TAPE: VERIZON, AT&T LEAD THE DOW HIGHER

Telecom also topped the tape on Tuesday with Verizon hitting a new 52-week high and AT&T approaching a 52-week high.

What’s the trade?

Pete Najarian thinks the stocks mentioned above could could go even higher due unusual options action. He's seen a large volume of call buying in both names.

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BANK OF AMERICA AS MARKET BAROMETER

Financials were largely left out of Tuesday's rally. Are the banks telling us this bull market is broken?

Find out from Fusion IQ CEO Barry Ritholtz. Watch the video now!

Read More:
Click here to go to "Financials Emerging as S&P’s Achilles Heel?"

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Trader disclosure: On March 29, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Finerman's Firm Is Short (IWM; Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (IJR); Finerman's Firm Is Long S&P 500 Put; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leaps; Finerman Owns (BAC); Finerman's Firm And Finerman Own (BP); Finerman's Firm And Finerman Own (CVS); Finerman Owns (GOOG); Finerman's Firm Owns (JPM), (JPM) Leaps; Finerman Owns (JPM); Finerman's Firm And Finerman Own (MSFT); Finerman Owns (USO); Finerman's Firm Owns (WMT); Terranova is long ( C); Terranova is long (GS); Terranova is long (VRTS); Terranova is long (JPM); Terranova is long (UPL); Terranova is long (MS) ; Terranova is long (PBR); Terranova is long (BAX); Terranova is long (TEVA); Terranova is long (IBM) ; Terranova is long (XOM); Terranova is long (JNPR); Terranova is long (DIS); Terranova is long (CVI); Terranova is long (RSX); Terranova is long (CNQ; Terranova is long (AAPL) puts; Terranova owns (AKAM) calls; Najarian is Long (AAPL); Najarian is Long (BAC) calls; Najarian is Long (BTU) call spread; Najarian is Long ( C ); Najarian is Long (CVS) calls; Najarian is Long (GE); Najarian is Long (JPM) calls; Najarian is Long (MS); Najarian is Long (RIMM) call spread

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)
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Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
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Virtus Investment Partners Owns More Than 1% Of (XLU)
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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 (DOM)

For Brian Kelly
Accounts managed by Kanundrum Capital are Long (EBAY)
Accounts managed by Kanundrum Capital are Long (RDC)
Accounts managed by Kanundrum Capital are Long (ATW)
Accounts managed by Kanundrum Capital are Long (VLO)
Accounts managed by Kanundrum Capital are Long (TSO)
Accounts managed by Kanundrum Capital are Long (GLD)
Accounts managed by Kanundrum Capital are Long (SLV)
Accounts managed by Kanundrum Capital are Long gold
Accounts managed by Kanundrum Capital are Long silver
Accounts managed by Kanundrum Capital are Long oil
Accounts managed by Kanundrum Capital are Long U.S. dollar
Accounts managed by Kanundrum Capital are Short yen
Accounts managed by Kanundrum Capital are Short (XLF)
Accounts managed by Kanundrum Capital are Short (IXG)

For Barry Ritholtz
**No Disclosures

For Brian Sozzi
**Brian Sozzi does not have disclosures on HD, TGT, COST, CVS, or URBN

For Ed Groshans
**No Disclosures

For Scott Nations
**No Disclosures

For karen finerman SOT 11/2/10
**No Disclosures

For Michael Gambardella SOT 3/29/11
***MICHAEL GAMABARDELLA HAS DISCLOSED FOR: MOLYCORP, AK STEEL, ALCOA, FREEPORT-MCMORAN, U.S. STEEL
J.P. Morgan Acted As Lead Or Co-Manager In A Public Offering Of Securities For (MCP), (AKS), (AA) In Past 12 Months
(MCP), (AKS), (AA), (FCX), (X) Is Or In Past 12 Months Was An Investment Banking Client Of J.P. Morgan
J.P. Morgan Recieved Investment Banking Compensation From (MCP), (AKS), (AA), (FCX), (X) In Past 12 Months
J.P. Morgan Expects To Recieve/Seek Investment Banking Compensation From (MCP), (AKS), (AA), (FCX), (X) In Next 3 Months
An Affiliate Of JPMS Recieved Non-Investment Banking Compensation From (MCP), (AKS), (AA), (FCX), (X) In Past 12 Months
(AKS), (FCX), (X) Is Or In Past 12 Months Was A Client Of J.P. Morgan (Non-Investment Banking Securirites-Related Service, Non-Securities Related Services)
An Affiliate Of JPMS Recieved Non-Investment Banking Compensation From (AKS), (AA), (FCX), (X) In Past 12 Months
(AA) Was A Client Of J.P. Morgan In Past 12 Months (Non-Investment Banking Securities-Related Service)

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