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Skeptical of Rally? Dennis Gartman Says the Trend Is Up

Rally skeptics found themselves out in the cold on Wednesday.

The S&P made a strong advance while the Dow flirted with a new bull high. Market strength stemmed from a slew of positive catalysts including:
- The ADP jobs report came in better than expected.
- Concerns over Japan's nuclear crisis eased.
- Valeant made an unsolicited offer for Cephelon
- Dupont extended its offer for Danisco
- Salesforce.com inked a $326-million dollar deal to buy privately held Radian6.

Are bears about to get stream-rolled? How should you position now?

Instant Insights with the Fast Money traders

Strategic investor Dennis Gartman thinks standing in the way of the bulls is like standing in front of a high speed freight train. “It’s a bull market,” he says quite plainly.

“Economies around the world are doing well; our economy is doing reasonably well. Stock prices are strong. Money around the world is coming into equities,” he says. “The trend is up.”

Looking at the technicals, Oppenheimer’s Carter Worth largely agrees with Gartman. “We had a steep run and then an important give back and now we’ve reasserted ourselves,” he says.

OptionMonster Jon Najarian shares the bullish outlook. He points to the Vix which is currently trading around its lowest levels since late February.

If you're looking for plays, there was some disagreement on the desk. Carter Worth suggests playing laggards; specifically he likes long Citbank and Bank of America which he thinks will both play catch-up.

Dennis Gartman however just shakes his head. “Don’t buy the laggards but things that keep making new highs,” he says. “The public buys things that are cheap, but pros buy strength.”

Ever the contrarian trader Steve Cortes is skeptical of the rally all together. He’s points to some stealth signs that such as the bond market which broke its longest losing streak since 1990. He also thinks recent weakness in copper and grains is an early signal of trouble. On top of that he’s concerned by macro-economic data which suggest Americans continue to struggle with deflation in wages and housing.

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TOPPING THE TAPE: NATURAL GAS

The traders are also watching the action in nat gas after President Obama’s speech on clean energy.

Key takeaways included a pledge to have federal agencies buy only alt-fuel vehicles by 2015 and a promise to expand U.S. oil exploration and production.

What’s the trade?

Patty Edwards suggests longEnerplus Resources and Kinder Morgan as nat gas plays with yield.

Dennis Gartman agrees with Patty’s thesis but prefers different names, San Juan Basin and Pengrowth.

Jon Najarian suggests the exploration names such as Transocean , Schlumberger, Halliburton and Diamond Offshore – which not only explore for nat gas but crude oil as well. "Those are places where I would play," he says.

Steve Cortes can’t get on board. He’s skeptical of the nat gas trade because of vast supplies but he is bullish crude due to the geo-political unrest in the Mideast.

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CHART OF THE DAY: IBB

The traders are taking a hard look at the iShares NASDAQ Biotech ETF which hit a 9-year high on the back of an unsolicited offer from Valeant Pharma to buy Cephalon for $73/share.

What should you make of it?

Jon Najarian spotted unusual options activity late last week with strong buying of the upside April 60 calls. However he has not seen much speculation in the options market that suggests a higher bid is coming in.

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TOPPING THE TAPE: VISA/MASTERCARD ON DURBIN DELAY

The traders had credit card names on the radar Wednesday after Federal Reserve Chairman Ben Bernanke said that new rules clamping down on interchange fees will not be in place by an April 21 deadline.

Bernanke said the Fed needs more time to analyze the more than 11,000 comment letters it received, but is committed to having a final rule in place by July 21 when the limit is supposed to go into effect.

The short delay could prove a reprieve for banks and card companies if they can use it to convince Congress that a longer delay is needed to study the rule, or a change to the law is needed.

What’s the trade?

The longer the Durbin amendment is delayed the better it is for the credit card companies, says Patty Edwards. I’m long Visa and think it could go higher from here.


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Trader disclosure: On Mar. 30, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Cortes is long (SDY), (EXY), (SO), (RIMM), U.S. Dollar vs. British Pound, U.S. Treasuries. Steve Cortes is short (F), (BAC), (UNP), (DBA), Wheat and Beans. Patty Edwards is Long (GLD), (SLV) and (PGM). Jon Najarian Owns (RSH), Is Short (RSH) Calls. Jon Najarian Owns (AKAM), Is Short (AKAM) Calls. Jon Najarian Owns (AA), Is Short (AA) Calls. Jon Najarian Owns (CBOE), Is Short (CBOE) Calls. Jon Najarian Owns (CME), Is Short (CME) Calls. Jon Najarian Owns (NYX), Is Short (NYX) Calls. Jon Najarian Owns (DANG), Is Short (DANG) Calls. Jon Najarian Owns (GNW), Is Short (GNW) Calls. Jon Najarian Owns (HK), Is Short (HK) Calls. Jon Najarian Owns (NTRI), Is Short (NTRI) Calls. Jon Najarian Owns (ONN), Is Short (ONN) Calls. Jon Najarian Owns (PCX), Is Short (PCX) Calls. Jon Najarian Owns (TER), Is Short (TER) Calls.

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Dennis Gartman
Funds Managed By Dennis Gartman Own (MOS)
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Long Swiss Franc
Funds Managed By Dennis Gartman Are Long Canadian Dollar
Funds Managed By Dennis Gartman Are Short Yen
Funds Managed By Dennis Gartman Are Short Sterling
Funds Managed By Dennis Gartman Are Long (SU)
Funds Managed By Dennis Gartman Are Long (PGH)
Funds Managed By Dennis Gartman Are Long (CHK)
Funds Managed By Dennis Gartman Are Long (SJT)
Funds Managed By Dennis Gartman Are Long (EPD)
Funds Managed By Dennis Gartman Are Long (SWC)
Funds Managed By Dennis Gartman Are Long (MCP)
Funds Managed By Dennis Gartman Are Long (CLF)
Funds Managed By Dennis Gartman Are Long (ANDE)
Funds Managed By Dennis Gartman Are Long (CHK)
Funds Managed By Dennis Gartman Are Short S&P Futures
Funds Managed By Dennis Gartman Are Short Canadian VIX ETFs

Patty Edwards
Edwards is Long (SYT) for Clients
Edwards is Long (POT) for Clients
Edwards is Long (AAPL) for Clients
Edwards is Long (BRK.a) for Clients
Edwards is Long (BRK.b) for Clients
Edwards is Long S&P 500 for Clients
Edwards is Long Nasdaq 100 for Clients
Edwards Owns (EXC) For Clients
Edwards Owns (MAT) For Clients
Edwards Owns (GLW) For Clients
Edwards Owns (QCOM) For Clients
Edwards Owns (EXC) For Clients
Edwards Owns (MAT) For Clients
Edwards Owns (GLW) For Clients
Edwards Owns (QCOM) For Clients
Edwards is Long (V) for Clients

PETER MISEK
Jefferies Is A Market Maker In (AAPL), (CELL), (CRNT), (DRWI), (SMSI), (SWIR), (PWAV), (NVTL), (VELT), (RIMM)
Jefferies & Co. Was Financial Advisor To Enfora On Its Sale To Novatel
Jefferies Was Bookrunner On Velti IPO

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