On Wednesday, the Fast traders were taking a long hard look at the rally after stocks bounced of a key level of support and charged higher.
The advance was quite remarkable with all ten sectors of the S&P gaining and the Dow surging by triple digits.
Largely the optimism was triggered by a decision from Germany’s top court, which rejected lawsuits aimed at blocking the country from providing aid to Greece and other EU nations.
"While a resolution to the issues in Europe is not immediate, this shows that they seem to be on the path of making some progress," says Howard Ward, chief investment officer at GAMCO Growth in a Reuters interview. "That's a huge positive."
On the news the Vix receded sharply - the index usually moves inversely to the S&P 500. Although most traders don’t think the market gyrations are over by any stretch – the question becomes – is the worst finally behind us?
Instant Insights with the Fast Money traders
OptionsMonster Jon Najarian does in fact think the worst is over. “We’ve seen the lows for the year,” he says. “I think we saw the bottom around 1136 in the pre-market.” Looking at the chart patterns Najarian suggests the bounce makes a bullish double bottom pattern.
”That’s not to say we’re off to the races but I do expect that we go higher – as much as another 100 Dow points by Wednesday’s close,” he says.
Trader Zach Karabell agrees with DocJ that Tuesday’s bounce may be a ‘tell.’ “The S&P bounced off the lows on Tuesday after a terrible day in Europe on Monday. We could have had a 500 point down day but we didn't."
We may be seeing the market starting to distinguish between regional financial crises in Europe and everything else,” he says. "The way we're talking about the globe coming to the brink, ala Lehman 3 years ago is, at best, premature."
Trader Stephen Weiss isn’t buying it. “To call victory after the bounce on Tuesday is premature,” he says. Although he concedes the market could bounce he thinks troubles in Europe are anything but solved.
“The world thinks that every problem is now settled by the German courts.” But that same German court ruling also says the government must get approval from a parliamentary committee before they can act. ”That makes it much more difficult for German Chancellor Angela Merkel to come to the rescue of the EU,” Weiss adds. "I'm not a believer."
NVIDIA LEADS TECH STOCK BOUNCE
Digging down into the market, chip stocks landed on the radar after NVIDIA led the sector higher with a revenue forecast that was stronger than expected.
What’s the trade?
Trader Zach Karabell thinks positive commentary from NVIDIA is probably representative of the entire sector - that is, business is good and can get better. "If you're looking for a play he suggests looking at Apple derivatives."
Although he's overall bearish, trader Stephen Weiss likes the space, however he says you've got to be a stock picker. And his pick is long Qualcomm.
Pete Najarian thinks the strength could be a glimmer of hope that there’s growth in the sector. "I’m watching Verisign due to upside options buying," he adds.
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Trader disclosure: On Sep 7, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian owns (AAPL); Najarian owns (C); Najarian owns (MS); Najarian owns (CLF) calls; Najarian owns (TCK); Najarian owns (ACI) calls; Weiss Owns (AAPL); Weiss Owns (JPM); Weiss Owns (QCOM); Weiss Owns (VZ); Weiss Owns (DE); Weiss Owns (COP); Weiss Owns (EUO); Weiss Owns (KEG); Jon Najarian is long (ACI) call spreads; Jon Najarian is long (BAC) call spreads; Jon Najarian is long (BK) call spreads; Jon Najarian is long (XOM) call spreads; Jon Najarian is long (CIGX); Karabell own (AAPL); Karabell own (BAC); Karabell own (GS); Karabell own (GOOG); Karabell own (JPM)
Rivertwice Capital is short (XLF)
Rivertwice Capital is short (GOOG) puts
Rivertwice Capital is short (GLD)
Rivertwice Capital is short (AAPL)
For Colin Gillis
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CNBC.com with wires.