Weekend Developments Could Trigger S&P Breakout
Hope you weren’t planning on a relaxing week-end. According to the Fast Money traders it’s going to be anything but.
“Usually nobody wants to be long going into a week-end,” says trader Steve Grasso, “but this time it’s just the opposite.”
“Absolutely, I want to be long over the week-end,” adds trader Brian Kelly.
That’s because there’s a slew of overseas data as well as expected developments that could send the market soaring. Take a look:
China Industrial Production
China Trade Report
China Retail Sales
Euro Zone Finance Ministers to hold conference call regarding Spanish banks
"Look at all those headlines that are coming," says an enthusiastic Steve Grasso. If China economic data is weak, the Street largely believes more rate cuts are on the table.
And if Spain seeks a bailout as is being so widely reported, European Commission spokesman Amadeu Altafaj has said “the instruments are there, ready to be used.”
“The Street is expecting a recapitalization of Spain’s banks,” says Kelly. “And I think it could be a very big positive that triggers risk-on.”
“It could generate a catalyst for an upside break," adds Steve Grasso. 1333 is now the level to watch."
Kelly says the best way to play the thesis is long JPMorgan. “With so many reports suggesting they’re short CDS in Europe, those CDS should come in, and the ‘bad trade’ so widely reported should either make them a little money or not lose them as much."
Or, if JPMorgan presents too much headline risk for your taste, you can play the thesis long Citi or other big money center banks or long the XLF. They all benefit to the recapitalization, says Kelly.
Rather than banks, Grasso thinks the way to play is long industrials and energy . “They’re higher beta names and should outperform if the market runs.”
Trader Patty Edwards is more cautious. “Gee it would be great if we get a pop, but what if we don’t? Then we’re in a soup. I’d rather focus on US exposure with names such as JNJ or Packaging Corp," she says.
Posted by CNBC's Lee Brodie
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Trader disclosure: On June 8, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long FB CALL SPREADS; Jon Najarian is long FIO CALL SPREADS; Jon Najarian is long ARNA CALL SPREADS; Jon Najarian is long AAPL CALL SPREADS; Jon Najarian is long JPM CALL SPREADS; Jon Najarian is long HLF CALL SPREADS; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long DDMG; Jon Najarian is long GLUU; Brian Kelly is long QQQ Calls; Brian Kelly is long JPM Calls; Patty Edwards is long AAPL; Patty Edwards is long GLD; Patty Edwards is long INTC; Patty Edwards is long JOY; Patty Edwards is long SBUX; Patty Edwards is long COP; Patty Edwards is long AMZN; Patty Edwards is long FB; Patty Edwards is long MCD; Mike Murphy is long LULU
For Richard Repetto
Nothing to disclose
For Sara Senatore
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CNBC.com with wires.