Investors are wondering if bullish sentiment will continue well into September after a weak dollar lifted the price of oil, gold and other commodities. Chevron and Alcoa were among the top performers on the Dow while the energy sector led the S&P 500 higher .
Also word that another M&A deal may be on the horizon eased investor concerns about valuations.
“Ever since the market's big rally, a lot of folks have been concerned about valuations. But when you see a bid like the one Kraft made for Cadbury, it eases those fears," explains Bruce Bittles, chief investment strategist at Robert W. Baird.
Are the gains a sign of a strong September?
Strategy Session with the Fast Money traders
It was an impressive day, muses Guy Adami. It seems the market is defying gravity. I don't trust it but it seems stocks want to go higher.
There still a great deal of bearish sentiment in the market but money managers have to put money to work, adds Joe Terranova. Money on the sidelines is going into assets.
As a hedge fund manager I feel as if I have to put money to work, adds Karen Finerman. I'm bullish energy but I wouldn't be a buyer after Tuesday's move.
TOPPING THE TAPE: OIL
The price of crude surged Tuesday to over $71, its biggest gain in a month, largely due to dollar weakness. Because oil is priced in dollars it tends to rise when the dollar falls.
Now traders are wondering if other catalysts facing this market will move prices even more.
What’s the trade?
I think money managers will put money to work in this sector, says Joe Terranova. In fact I expect them to stay in the sector for the rest of the year.
I'd keep an eye on engineering stocks, counsels Pete Najarian. In the space I think that's the play.
BREAKING NEWS: BARRICK GOLD
The spot price of gold rose above $1,000 an ounce to its highest level since March 2008 on a wave of buying.
Then, in breaking news, CNBC's Mary Thompson reveals that Barrick Gold will issue $3 billion in stock and use the proceeds to buy back all of its fixed-price gold hedges and a portion of its floating hedges.
Barrick's gold hedges, entered years ago to finance projects, have weighed on the company's shares as the price of the metal has more than tripled over the past seven years.
What's the trade?
Bull markets end on good news, reminds Guy Adami. To me I think the Barrick news is more negative than positive.
I'm going to maintain my position in gold futures, counters Joe Terranova. Historically the next 3 months are weak for the dollar so I think gold continues to climb.
TOPPING THE TAPE: METALS NAMES SHINING
Soaring gold and copper prices pushed miners higher with Freeport McMoRan one of the day’s big winners.
What's the trade?
All these moves are tied to the dollar, reminds Joe Terranova. If the dollar continues to decline I think it provides support in the space.
I'm watching Walter Industries, adds Guy Adami. I think it has more room on the upside.
I like the coal names across the board, adds Pete Najarian. That's Walter, as well as Teck and ANR . I have all those names on my radar.
PIT BULL: DOLLAR DIVING
The dollar fell to a one-month low against the euro on Tuesday, with traders citing gold's rally above $1,000 an ounce as a source of broad downward pressure on the U.S. currency.
Renewed concern over the dollar's long-term status as the world's reserve currency sparked by a United Nations agency report on Monday as well as options action fuelled the broad-based dollar selling.
What’s the trade?
I think the weak dollar play is the multinationals such as McDonald's and Coca-Cola , says Joe Terranova. When they repatriate profits into dollars they benefit.
FAST FLASH: APPLE HITS NEW 52-WEEK HIGH
Shares of Apple hit a new 52-week high after Morgan Stanley raised its price target to $200 from $195. The firm also raised the U.S. systems and PC hardware sector to "attractive" from "in line."
Meanwhile, IBM on Tuesday repeated that it expects to earn "at least" $9.70 a share this year.
In a federal filing, the company also reiterated that it was "well ahead" of its plan of achieving earnings per share of $10 to $11 for 2010.
What's the trade?
If you think the market is going higher, I'd play Apple from the long side, counsels Guy Adami. However in technology I'd look Hewlett Packard, he adds. I think it goes higher in any tape.
I'd look at VMWare and Red Hat, says Joe Terranova.
THE OBAMA TRADE: OBAMA TAKES FIGHT TO THE CAPITAL
Shares of Aetna , UnitedHealth and other HMO stocks fell on Tuesday as investors came to realize that healthcare reform is squarely back on the table.
On Wednesday evening President Obama will address a joint session in Congress in what’s likely to be the make or break moment for health care reform.
The speech sets off a critical period for the administration as they power ahead with efforts to overhaul the nation's healthcare system before the year's end as the president has promised.
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Trader disclosure: On Sept. 8th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (EOG), (AAPL), (WFT), (SU); Terranova Owns December Gold Futures; Terranova Works For (VRTS); Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And Owns (BAC); Finerman Owns (PDE), (RIG); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC), Finerman Owns (WFC) Preferred Shares
Finerman's Firm Owns (WMT), (RIG), (MSFT), (NOK), (PBR), (PDE), (TGT), (BDX); Finerman's Firm Is Short (USO), (IJR), (IYR), (MDY), (SPY), (IWM); Najarian Owns (ENER) Calls; Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls; Najarian OWns (C) Calls; Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (MOS) Call Spread; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (YHOO) Calls
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