The bulls prevailed on Wall Street, Monday, with stocks advancing to their highest level in 5 weeks.
Looking at fundamentals, industrials climbed after China released upbeat data about factory orders and financials gained after new global banking rules allowed for extended deadlines.
But perhaps most important, the S&P 500 closed above its 200-day moving average for the first time since early August, a bullish sign for investors who closely follow technical indicators.
How should you position now?
Instant Insights with the Fast Money traders
It feels like the market wants to levitate to 1131 – 1135, says Guy Adami. What happens at that point will be very telling. I still bias toward being bearish.
I'm aware that there's chatter in the market suggesting seasonal weakness happened earlythis year, Adami adds, but there’s still half a month to go.
1130 had been resistance but looking at patterns in the charts I expect we exceed that level, but only a little, says Oppenheimer's Carter Worth. Maybe we go to 1140, he speculates, but probably not more than that. Largely the market appears stuck.
Don’t forget the market tends to struggle in a big way around 1120, says Tim Seymour, and that’s where we are now. I agree it matters that historically September is a terrible month. I’d take some profits.
There’s no denying the market has been range bound, adds Jon Najarian. However, I think we’re going to see more M&A and that could push the market to the upside.
I’ve used this September rally to pare back positions, reveals Karen Finerman. I was a seller of Flowserve , Yum, and Children’s Place on Monday. I wouldn’t be surprised to see sentiment change again.
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MICROSOFT LEADS TECH STOCKS HIGHER
Microsoft led tech stocks higher on Monday after Bloomberg reported the software giant was planning a debt sale for dividends and buybacks.
What’s the take away?
At current levels I think the valuations are very fair, says Guy Adami.
I think it’s a smart move, says Tim Seymour, to use record low financing rates to their advantage.
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TOPPING THE TAPE: CHIP STOCKS
Chip stocks made a comeback on Monday with investors bottom fishing after concerns about PC sales hit hard last week.
What should you make of it?
My sense that this was a one day wonder, says Guy Adami.
I think investors may be bottom picking, says Pete Najarian on the Halftime Report. Chips were so oversold I wouldn’t read too much into it.
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IS EUROPE IN WORSE SHAPE THAN WE THOUGHT.
Financials rallied Monday on relief that banks will have eight years to raise the cash necessary to meet new requirements coming out of Basel III over the weekend.
But could the rather long period be a sign of something more ominous?
To give Europe’s banks that length of time makes me wonder, says strategic investors Dennis Gartman. If you must play financials I’d own the Canadian banks first, Australian banks second, US banks third and I’d avoid European banks.
*Hear more from Gartman. Watch the video above.
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CATERPILLAR, DEERE HIT 52-WEEK HIGHS
Caterpillar and Deere both traded near their 52 week highs on the heels of strong economic data out of China.
How should you trade it?
If you like the space I’d stay with Caterpillar, says Tim Seymour, but broadly the space is looking toppy.
It looks to me like Caterpillar may be making a double top, counters Guy Adami. I’d take profits.
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WILL TAX POLICY HURT STOCKS?
Are we in for a big drop in stocks if the current tax cuts are allowed to expire?
Find out from Jeremy Zirin, chief equity strategist at UBS Wealth Management.
Watch the video now!
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Trader disclosure: On Sept. 13th, 2010, 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), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Seymour owns (AAPL), (BAC), (INTC); Edwards owns (PM); Finerman’s firm owns (BAC); Finerman’s firm owns (GLW); Finerman’s firm owns (HPQ); Finerman’s firm owns (JPM); Finerman’s firm owns (PLCE); Finerman’s firm owns (DTG); Jon Najarian owns (AAPL) call spreads; Jon Najarian owns (ARST) calls; Jon Najarian owns (CSCO) call spreads; Jon Najarian owns (RHT) call spreads
For Patty Edwards
Edwards owns (PM) for clients
Edwards owns (KFT) for clients
Edwards owns (KMB) for clients
Edwards owns (TAL) for clients
Edwards owns (LEG) for clients
Edwards owns (WDFC) for clients
Edwards owns (JNK for clients
Edwards owns (LQD) for clients
Edwards owns (SPY) for clients
Edwards owns (VXX) for clients
Edwards owns (TIF) for clients
Edwards owns (JCG) for clients
Edwards owns (MSFT) for clients
Edwards owns (JPM) for clients
Edwards owns (C) for clients
Edwards owns (BAC) for clients
Edwards owns (HPQ) for clients
Edwards owns (CSCO) for clients
Edwards owns (INTC) for clients
Edwards owns (GLW) for clients
Edwards owns (V) for clients
Edwards owns (AEO) for clients
Edwards owns (SBUX) for clients
For Dennis Gartman
Funds managed by Gartman are short (GS)
Funds managed by Gartman are short (JPM)
Funds managed by Gartman are short (STI)
For Mike Khouw
Cantor Fitzgerald makes a market in (GMCR)
For Jeremy Zirin
***No Disclosures***
For Colin Gillis
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For Carter Worth
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