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With Dow at New Bull High, Buy Leaders or Laggards?

The S&P pushed higher on Friday while the Dow hit its highest mark in almost three years as optimism prevailed on Wall Street.

Looking at the market fundamentals, tailwinds were largely generated bythe latest jobs report which showed a second straight month of solid gains and an unemployment rate at 8.8%, a two-year low.

Also, new data showed the U.S. manufacturing sector continued to grow after accelerating at its fastest rate in nearly seven years in February, according to the Institute for Supply Management.

Investors took the results to mean, "We are growing, we are getting more profitable, we are going to see more jobs. That means consumers are going to do better. That is the better picture," says Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in a Reuters interview.

Technicals seem to confirm the bullish sentiment, too.

The S&P broke above 1,332, a significant level as it represents double the 12-year low hit in March 2009. If the index stays convincingly above that threshold, it may trigger more buying.

Also Dow Theory seems to confirm the bullish momentum with both the Dow Industrials and Dow Transports hitting their highest levels since June 2008.

For the Fast Money traders these are all signals to put money to work, however the question arises should money be put to work in leaders or laggards?

How should you position, now? What’s the trade?

Instant Insights with the Fast Money traders

Fast Money host Melissa Lee reminds the desk of a comment made by Dennis Gartman on Wednesday. “Don’t buy the laggards, buy things that keep making new highs,” he said at the time. “The public buys things that are cheap, but pros buy strength.”

Trader Steve Grasso largely agrees with Gartman. In this market, “You want to look at stocks that are proven and have a great track record.” As examples he points to the price action in Netflix and Apple. And he says laggards are laggards for a reason. He’d avoid Microsoft, Cisco and Intel .

Considering 60% of gains over the last quarter were generated by two sectors, industrials and energy, Brian Kelly suggests looking at leaders in the commodity space. “It’s a commodity led rally, I’d stick with those,” he says.

Trader Patty Edwards agrees. In the same space she likes playing two winners; Syngenta and Potash .

Sticking with that same theme, Pete Najarian says Caterpillar is a leader that he’s put on the radar. “The company seems to have everything behind it to move to the upside. Also look at CNI,” he says.

But that's not to say there's no interest on the Street in laggards. It appears Goldman Sachs sees some value. The firm recently upgraded Nokia from 'Neutral' to 'Buy' saying it's an 'attractive' time to get into this stock and they also upgraded Alcatel-Lucent .

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EXCHANGE WARS

Meanwhile, the traders were closely watching the exchange space after Nasdaq OMX and IntercontinentalExchange unveiled a rival bid to buy NYSE Euronext for about $11.3 billion in cash and stock, a 19 percent premium to the offer made by German competitor Deutsche Boerse.

What’s the trade?

Pete Najarian tells the desk he’s watching the CME. He says options action in NYX suggests that at least some big investors think there could be another bid out there.

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TOPPING THE TAPE: OIL ABOVE $107

Oil prices continued their march higher on Friday after stronger-than-expected U.S. jobs data mentioned above reinforced economic growth expectations.

What’s the trade?

Brian Kelly says, “I’d play it long refiners such as Valero as well as drillers such as RDC and ATW . Or look at PGH.”

As he’s said for several days, Steve Grasso again reminds the Fast Money desk that his clients are shorting the energy space. “Although they’re buying refiners they’re also shorting because energy has spiked higher and they don’t think its sustainable,” he says.

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MARCH AUTO SALES: FORD

Just like its cars and trucks, it looks like Ford is firing on all cylinders. For the first time in more than 10 years, monthly sales at Ford exceeded those at rival General Motors.

What’s the trade?

Patty Edwards thinks Ford is the clear winner. “It seems like they cleaned up what needed to be cleaned up. I’m not so sure GM did,” she says.

Brian Kelly is also wary of GM. “They weren’t able to outsell Ford despite strong incentives. I’d stay away,” he says. Instead, Kelly suggests looking at Toyota as a play on the weaker yen.


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Trader disclosure: On April 1, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Grasso Owns (AMD); Grasso Owns (ASTM); Grasso Owns (BAC); Grasso Owns (BAC); Grasso Owns (C); Grasso Owns (CSCO); Grasso Owns (D); Grasso Owns (JPM); Grasso Owns (LIT); Grasso Owns (LPX); Grasso Owns (MHY); Grasso Owns (MU); Grasso Owns (NDAQ); Grasso Owns (PFE); Grasso Owns (PRST); Najarian owns (GE); Najarian owns (AAPL); Najarian owns (TCK); Najarian owns (CITI); Najarian owns (MS); Najarian owns (AKAM); Najarian owns (HPQ); Najarian owns (HK); Najarian owns (HIG); Najarian owns (KEY); Najarian owns (RSX); Najarian is long (AVL) calls; Najarian is long (CNX) calls; Najarian is long (ADM) calls; Najarian is long (EWZ) calls; Najarian is long (DLTR) calls; Najarian is long (HUN) calls; Najarian is long (NTAP) calls; Najarian is long (RIMM) calls; Najarian is long (XLF) calls; Najarian is long (AKS) calls; Najarian is long (BIG) calls

For Steve Grasso
Stuart Frankel & Co and it's partners own (CSCO)
Stuart Frankel & Co and it's partners own (CUBA)
Stuart Frankel & Co and it's partners own (GERN)
Stuart Frankel & Co and it's partners own (HPQ)
Stuart Frankel & Co and it's partners own (MSFT)
Stuart Frankel & Co and it's partners own (NYX)
Stuart Frankel & Co and it's partners own (PFE)
Stuart Frankel & Co and it's partners own (PRST)
Stuart Frankel & Co and it's partners own (SDS)
Stuart Frankel & Co and it's partners own (XRX)
Stuart Frankel & Co and it's partners own (QQQQ)
Stuart Frankel & Co and it's partners own (AAPL)

For Rebecca Patterson
**No disclosures

For Joe Saluzzi
**No disclosures

For Patty Edwards
Edwards is long (CME) for clients
Edwards is long (T) for clients
Edwards is long (MSFT) for clients
Edwards is long (AAPL) for clients
Edwards is long (TGT) for clients
Edwards is long (TTM) for clients
Edwards is long (GE) for clients
Edwards is long (CVX) for clients
Edwards is long (KO) for clients
Edwards is long s&p 500 for clients
Edwards is long nasdaq 100 for clients
Edwards is long gold for clients
Edwards is long silver for clients
Edwards is long platinum for clients

For Brian Kelly
Accounts Managed by Kanundum Capital Are long (CBOE) calls
Accounts Managed by Kanundum Capital Are long oil
Accounts Managed by Kanundum Capital Are long gold
Accounts Managed by Kanundum Capital Are long silver
Accounts Managed by Kanundum Capital Are long (GLD)
Accounts Managed by Kanundum Capital Are long (SLV)
Accounts Managed by Kanundum Capital Are long (DBA)
Accounts Managed by Kanundum Capital Are long wheat
Accounts Managed by Kanundum Capital Are long (MON)
Accounts Managed by Kanundum Capital Are long natural gas
Accounts Managed by Kanundum Capital Are long (UPL)
Accounts Managed by Kanundum Capital Are long (VLO)
Accounts Managed by Kanundum Capital Are long (TSO)
Accounts Managed by Kanundum Capital Are long (FXY) puts
Accounts Managed by Kanundum Capital Are short yen
Accounts Managed by Kanundum Capital Are short (XLF)

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Comcast Is The Parent Company Of NBCUniversal
GE Owns 49% Of NBCUniversal
GE Owns 49% Of CNBC

CNBC.com with wires.

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GM
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MSFT
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NFLX
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NOK
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POT
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RDC
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VLO
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AAPL
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NYX
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