The usually bullish Joe Terranova agrees. “I wouldn’t trust this rally (long-term). The market has been very technically driven.”
And the technical don’t set up well, according to top technical analyst Mary Ann Bartels of BankofAmerica Merrill Lynch. She tells us there’s every reason to be cautious. “It’s a rally but not a real break away rally,” she says.
“Looking at 10-year yields – the channel is still coming down – I think we can see yields as low as 1.4%,” Bartels explains.
That suggests risk off.
“And we have a break out in the US dollar – the DXY looks like it wants to go to 85 even 87. “
Lately the stronger dollar has been a drag on the S&P making the price of commodities nominated in dollars more expensive for buyers using other currencies. In turn that’s dragged down natural resource related names.
She thinks the path of least resistance is lower. How low? “We probably have to retest the October lows of 1100 even 1074,” she says.
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Trader disclosure: On Jan. 3, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami is long (C), (GS), (INTC), (BTU), (AGU), (MSFT), (NUE); Seymour is long (INTC), (BAC); Terranova is long (VRTS), (IBM), (LQD), (MUB), (EMC), (CSCO), (AXP), (SBUX), (CSX), (APC), (OXY), (XOM), (TRLG), (SWN), (V), (SU); Finerman is long (AAPL), (BAC), (JPM), (GOOG); Weiss is long (CHK), (KO), (RIMM), (QCOM), (GM), (EUO), (HPQ), (VZ), (BRCM), (AMLP), (NS); Weiss is short (FXA)
Karen Finerman, Metropolitan Capital
Fund is long (AAPL)
Fund is long (JPM)
Fund is long (IBM)
Fund is long (CF)
Fund is long S&P 500 puts
Fund is long (IWM) Puts
Fund is short (SPY)
Mike Khouw, Cantor Fitzgerald
Mary Ann Bartels, Bank of America Merrill Lynch
George Goncalves, Nomura Securities
11 Liquidity provider
Nomura International plc and/or its affiliates (collectively "Nomura") is a primary dealer and/or liquidity provider in European, United States and Japanese government bonds. As such, Nomura will generally always hold positions in these bonds, which from time to time, may be considered a significant financial interest.
Jim Iuorio, TJM Institutional Services
Has positions in (VXX) and (TBT) ETF
Tavis McCourt, Morgan Keegan
Firm makes market in AAPL, RIMM shares
Pavel Molchanov, Raymond James
Firm expects to receive or seek investment banking services from BP in the next 12 months
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