Trader Tim Seymour said that emerging markets and materials are good buys here. He noted that emerging markets have "outperformed the by 450 basis points over the last four days."
Trader Guy Adami also likes the outperformers here and pointed out that the Market Vectors Gold Miners ETF hit a 52-week high on Tuesday. Adami also likes Coca-Cola which was trading near its all-time intraday high on Tuesday.
Trader Dan Nathan disagreed and said he would prefer to buy the laggards, but added that he is not positioned assuming the market will hit new highs in the short term.
"If the market is really going to break out and make new all-time highs — which I've been very skeptical about — ultimately, it will be because we're in a better place and that means the Fed is going to be more hawkish and then you want to buy the bank stocks," Nathan said.
Trader Karen Finerman said that she's fairly optimistic on the banks because the valuations are compelling. Another sector she finds interesting is retail. But Finerman added that if investors are still skittish on the market, buying puts on the S&P would make sense.
Tim Seymour is long AAPL, AVP, BAC, BBRY, CLF, DO, EDC, EWZ, F, FCX, GM, GOOGL, GRMN, GE, GLNCY, INTC, LQD, MCD, MPEL, NKE, RACE, RAI, RL, SINA, T, TWTR, UA, VALE, VZ, XOM. Tim's firm is long BABA, BIDU, CLF, EWZ, F, HD, KO, MCD, MPEL, NKE, PEP, PF, SAVE, SBUX, SINA, VALE, VIAB, WMT, WEN, YHOO, short HYG, IWM, WYNN
Karen is long BAC, C, FL, GOOG, GOOGL, JPM, LYV, KORS, M, SEDG, SPY puts, URI. Her firm is long ANTM, AAPL, BAC, BOKF, C, C calls, GOOG, GOOGL, JPM, JPM calls, KORS, LYV, M, MOH, NRF, PLCE, SPY puts, URI, her firm is short IWM, MDY. Karen Finerman is on the board of GrafTech International.
Dan is long XLF may/ sept put spread. Dan is long AAPL April Put Fly, long PFE, long TWTR, long GE May 28 puts, long JPM April puts, long INTC April puts , long QCOM April put spreads, long HYG June puts, long IWM May and September puts, long XHB June put spread, long XLE April/June put spread
Guy Adami is long CELG, EXAS, GDX, INTC, Guy Adami's wife, Linda Snow, works at Merck.