Investors should look at reducing their exposure to beta stocks, Joe Terranova of Virtus Investment Partners said Wednesday.
On "Fast Money," Terranova noted that 75 stocks in the S&P 500 set new highs Wednesday.
"Yes, this is right now in essence a short squeeze on pessimism," he said. "You want to have less exposure to beta-type names."
Terranova said that examples of stocks that could slow down after a strong run-up were Caterpillar and Chevron.
"The indicator that's worth watching is the currency market and the euro currency," he said, noting that the euro had "a significant reversal."
The one sector Terranova said he continued to like was financials.
"I'd stay with those," he said.
Rosecliff Capital's Mike Murphy said he saw a sign in General Electric, which traded higher along with Comcast after the cable company agreed to acquire GE's remaining stake in NBC Universal, the parent company of CNBC.
Murphy said GE's stock gains likely came from the company's decision to focus on its industrial business.
The stock market needed a pullback, he said, but he added a longer-term view.
"Watch your technicals, but you have to stay long this market," he said. "You can't be short it, and you can buy protection underneath."
Josh Brown of Fusion Analytics said that he saw more activity in safety sectors of utilities and consumer staples than would normally be warranted in such a market.
It was a perfect time for a pullback, he said, adding, "Most people out there are actually praying for the pullback."
Trader disclosure: On Feb. 13, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long GS; Mike Murphy is long FB; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long XLF; Josh Brown is long TGT; Josh Brown is long HD; Josh Brown is long RAX; Joe Terranova is long VRTS; Joe Terranova is long AAPL; Joe Terranova is long MJN; Joe Terranova is long JPM; Joe Terranova is long DIS; Joe Terranova is long GS; Joe Terranova is long SWN; Joe Terranova is long XOM.
