On Thursday pros quickly covered their short positions after unexpected comments from ECB President Mario Draghi changed the game.
“This caught me completely off guard,” admits esteemed investor Dennis Gartman on CNBC's Fast Money Halftime Report.
Draghi pledged to do whatever necessary to save the euro. “And believe me, it will be enough," he said.
“Immediately I sold some of my short positions,” Gartman explains. “And after comments like that, you can’t cover fast enough.”
Trader Stephanie Link agrees that developments are a problem for shorts. And she adds Draghi's commentary isn't the only bullish catalyst in the market. She reminds us that reports earlier in the week that suggested the Fed is closer to QE3. And China appears to be easing.
All told, Link and the other traders believe there’s a floor under the market.
Link says the ways to play is to pick and choose best of breed names. “I added to my position in Schlumberger , established a new position in Wells Fargo and bought Bristol Meyer.
Trader Brian Kelly, founder of Shelter Harbor Capital, agrees but says the way to play is long US dividend payers. (Click here to go to Fast Money's Favorite Dividend Yielders)
But he warns us not to get too aggressive, the road ahead remains bumpy. "Draghi may have put a floor under stocks but he hasn’t solved the crisis.”
Trader Stephen Weiss, managing partner at Short Hills Capital, sides with Kelly. “You can buy stocks on this news,” he admits. But he also says be prepared for a bit of a wild ride. “By making these comments Draghi has now set the bar very high. Now he needs some shock and awe.”
“He looked stern and resolute when he spoke,” adds Gartman. “But I still have my doubts.”
Posted by CNBC's Lee Brodie
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CNBC.com with wires.