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Rally Remains in the Cards: Pro Traders

Monday, 4 Jun 2012 | 7:23 PM ET

As the economic picture darkens and signs of weakness around the globe intensify, what are the pros doing?

“I don’t want to get out of holdings,” says trader Joe Terranova. “There could be a turn in this market tomorrow morning.”

“It feels like the market is paralyzed,” adds trader Simon Baker. But he agrees that’s not a reason to sell.

Yes, both pros concede there are plenty of negative catalysts in the market. “We have the June 16thelections in Greece, an FOMC meeting shortly there after,” explains Baker.

“Also, I’m focused on China and overseas fiscal policies – we need to see fiscal unity in Europe,” adds trader Joe Terranova.

However, despite all those negative catalysts, both pros think a rally remains in the cards.

“If there’s good news the market could take off,” adds Baker. “I want some riskier assets.”

“I wouldn‘t touch my holdings,” Terranova counsels.

Bernanke to the Rescue?
Discussing whether the Fed will inject another round of monetary easing, with the Fast Money traders.

Barry Sine, Director of Research for Drexel Hamilton seems to confirm the bullish thesis.

His proprietary technical analysis suggests the market should find support around the 1250 level. "I don't think there's much further downside to go. I think we're close to the end of a current correction," rather than at the start of something more ominous.

"We seen this," he adds. "We've seen a market correction mid-year and we've come back strong by year's end."

What would drive a rally? Sine thinks dividend payers and quality stocks could drive gains. "I'm not saying the market will go straight up but I do think investors will buy these equities."

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It’s worth noting that both Fast Money traders also believe that market is at an inflection point – and they say investors need to prepare for the worst, even as they hope for the best.

“I also have a large position in cash,” reveals Baker

“I’m hedging,” adds Terranova. And Terranova says retail investors should do the same either by selling mini S&P futures or using options or some other financial instrument.

Read More:

>Wall Street History: Why Are Pessimists Called Bears?

> Wall Street History: Why Are Optimists Called Bulls?

>NEW SLIDESHOW: Learning from the Legends: Simple Strategies Behind Supersized Successes



Posted by CNBC's Lee Brodie

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Trader disclosure: On June 4, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long USB; Joe Terranova is long TCBI; Joe Terranova is long SBUX; Joe Terranova is long SJM; Joe Terranova is long UPL; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long EMC; Joe Terranova is long NXPI; Joe Terranova is long LPX; Joe Terranova is long SNDK; Joe Terranova is long IBM; Joe Terranova is long CNX; Joe Terranova is long HAYG; Joe Terranova is short June Mini S&P Futures; Simon Baker is long C; Simon Baker is long GLD; Simon Baker is long JOYG; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA

For Jeff Kilburg
Jeff Kilburg is long GLD
Jeff Kilburg is long GDXJ

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Barclays Bank PLC and/or an affiliate has received compensation for investment banking services in the past 12 months from DG
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For Keith McCullough
Keith McCullough is long XLU
Keith McCullough is short XLI




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