Optimism prevailed late Monday with stocks paring their losses late session, as investors focused on reports that Greece is close to reaching a bailout deal.
However Fast Money trader Joe Terranova thinks the next big move in the market won't be determined by Greece -- he says it will be determined by the outcome of the FOMC meeting scheduled for Tuesday and Wednesday of this week.
Although all the catalysts and influences are complex, Terranova says what to watch is simple.
If the Fed makes a move that would reverse the recent upward trend in the US dollar – Terranova thinks the outcomes will be bullish for stocks. “If they’re able to do it – I’d go long materials, industrials builders and energy .
And if you don’t see the Fed making concerted steps to curtail the dollar's climb, Terranova thinks the S&P will remain challenged. If that’s how it plays out, “I’d go with tech , utilities and consumer discretionary ,” he says.
The FOMC statement will be released around 2:15 PM ET on Wednesday.
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Trader disclosure: On Sep 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Nathan is long Apple (AAPL) through call spreads; Nathan is long Goldman Sachs (GS) through call spreads; Nathan is long Intel (INTC) through put spreads; Nathan is JPMorgan (JPM) through put spreads; Nathan is long Oracle (ORCL) through put spreads; Nathan is Sprint (S); Nathan is long DIA puts; Nathan is XLF puts; Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU; 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; Finerman’s firm owns (IBM); Finerman owns (GOOG); Finerman owns (ORCL); Finerman’s firm owns (MSFT); Finerman owns IWM; Finerman owns MDY; Finerman owns SPY; Terranova is long VRTS; Terranova is long OXY; Terranova is long HOS; Terranova is long OIH; Terranova is long CVI; Terranova is long AXP; Terranova is long EMC; Terranova is long WFM; Terranova is long AMZN; Terranova is long WFC; Terranova is long AAPL; Terranova is long IBM
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