Transport stocks have been outperforming the market so far this year.
Does it signal a new bull market, or have they just gone too far, too fast?
The one month jump in the Dow transports is “too far too fast,” replies Oppenheimer Chief Market Technician Carter Worth on CNBC’s Closing Bell.
We’re sellers of Ryder ,JB Hunt , DryShips and Genco Shipping because we think they’ve made huge moves that are way overdone. If you’re on the long side you should take profits, says Worth, and this also could be a great opportunity for shorts.
How about the S&P?
There are two data points that I think will set the range for many weeks to come. The S&P’s low at 1270 after the MLK holiday and the bounce to the 1395 high. I think we’re stuck there for quite some time.
Any trading advice?
I think traders need to ask themselves two things; 1) are we in a period of broad economic contraction or not? 2) are we in a bear market or not? Then, trade accordingly, he says.
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Trader disclosure: On Feb.15, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (INTC), (ATVI), (HAS), (DIS); Finerman Owns (GS), (KFT); Finerman's Firm Owns (MSFT), (MO), (SKS), (TSO), (VLO), (WMT), (YHOO), (BR); Finerman's Firm Is Short (SPY), (MDY), (IYR), (IWM), (IJR); Finerman's Firm And Finerman Own (CROX) And (CROX) Options; Finerman's Firm And Finerman Own (HD); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Seymour Owns (DELL), (INTC), (MER); Seygem Asset Management Owns (GFI)