Bulls spent Thursday licking their wounds after suffering the worst 3 day stretch in the stock market since World War II.
Again, the financial woes of Europe dragged down the markets with doubts resurfacing about the political will of Italy and Greece to push through tough budget measures.
To make the situation all the more precarious Germany hardened its stand against providing more aid.
Considering recent developments, how should you position now?
Instant Insights with the Fast Money traders
Although he’s broadly bearish Guy Adami thinks the market action on Tuesday signals that a bear market rally is about to get underway. “The S&P bounced off the lows – I would not sell rallies – I think the S&P now wants to go to 1200,” he says.
Joe Terranova also finds the market action in the near-term constructive. However he’s more focused on the action in the dollar and the new found strength after the Swiss National Bank put limites on the Swiss Franc against the euro.
”As a result the dollar index is challenging the 200-day to the upside, something we haven’t seen in months. What happens at 76.20 will probably dictate the future of the market,” Terranova says.
Trader Tim Seymour expects the greenback to march higher. “The dollar doesn’t have any reason to reverse course and I think it absolutely crushes commodities.”
And looking at the long-term, Seymour sees no reason for the market to rally. “There’s nothing that gives me confidence in this market. I just can’t believe the market put in a low on Tuesday.
As someone who largely invests on fundamentals, Karen Finerman says she just can’t feel optimistic until the nations of Europe appear to stem their woes. “We need more clarity from the EU before the market can get over this hump.”
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Trader disclosure: On Sep 6 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Finerman and Finerman’s firm own (AAPL); Finerman owns (BAC) and Finerman’s firm own (BAC) leaps; Finerman owns (JPM) and Finerman’s firm owns (JPM) stock and (JPM) leaps; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU)
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