On Thursday chatter on the floor returned to the potential of a serious end of year rally in the S&P. Just a few days ago, investors had thought a sharp move higher wasoff the table – but optimism has quickly returned to the Street.
Part of the bullish sentiment stems from the latest economic data; new jobless claims hit a 3-1/2 year low last week and consumer sentiment improved in December to its highest level in six months.
Although he’s been bearish, trader Guy Adami is among those traders looking for a whoosh higher. “Price is truth,” he says.
He’s referring to the fact that the S&P has closed higher for the third day in a row. Also, “the market continues to make lower highs,” a bullish sign.
He’s watching the 200-day or 1260, as a point of strong resistance. “If we can close above 1265 - a few points above the 200-day - there's nothing to stop the S&P from going to 1370,” he says. You read that right, the usually skeptical Guy Adami says, “a close above 1265 and get out of the way.”
In other words, the market is trading so technically, he thinks bulls could be off to the races, simply because 1370 is the next big level of resistance after 1260.
Pete Najarian is also bullish. He’s spotted bullish options action in the banks and he believes “financials tend to foretell the direction of the broad market – when they perk up the market does too.”
Top hedge fund manager Keith McCullough agrees with Adami that the 1260 – 1270 level is a key area to watch. However, he's skeptical the market can break through a level of such strong resistance. He doesn’t see a catalyst into year’s end to drive the market.
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Trader disclosure: On Dec 22, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; eymour is long BAC; Seymour is long POT; Seymour’s firm is long BBD; ami owns C; Adami owns GS; Adami owns NUE; Adami owns MSFT; Adami owns AGL; Adami owns BTU; Adami owns INTC; Najarian is long AAPL; Najarian is long C; Najarian is long Long JPM calls; Najarian is long YHOO; Najarian is long TEVA; Najarian is long PFE; Najarian is long MRK; Najarian is long long LLY calls; Najarian is long COP; Weiss owns QCOM; Weiss owns WLP; Weiss owns NIHD; Weiss owns JPM; Weiss owns KO; Weiss owns DE; Weiss owns EUO; Weiss owns MDRX; Dicker owns oil; Dicker has positions in CVH; Dicker has positions in ATPG; Dicker has positions in PXP
McCullough owns TLT
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