Trading a ‘summer doldrums pullback’

Rising U.S. Treasury bond yields would be favorable for risk assets, even if they were to approach 3.25 percent, Joe Terranova of Virtus Investment Partners said Tuesday.

"You want it to go there," he said. "That's a favorable thing for risk assets."

On CNBC's "Fast Money," Terranova added that he remained bullish on stocks.

"To me this is a summer doldrums pullback," he said.

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Josh Brown of Fusion Analytics said that rising interest rates wouldn't kill the rally in stocks.

"I just think that we're making way too much of this," he added.

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Brown acknowledged that the market didn't want to see rates rise too quickly, but he added that historically it has risen in tandem with equities about one-third of the time.

"I've said for a while this market is in a transition," TheStreet CIO Stephanie Link said, noting the lackluster performance of retail names.

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"I think the consumer is being very selective in what they're buying," she said. "Wage growth has not gone up."

Stephen Weiss of Short Hills Capital said that he was still sitting out the market.

"I'm in more cash than I've been in a year," he said. "I'd rather put money to work because I'm intermediate and long-term bullish."

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Weiss noted that the stock market was "off the highs in a very minor way."

But the idea that the Federal Reserve won't begin drawing down its $85 billion-per-month in asset purchases in September was positive for the market.

"Where you've come out is that I believe the market is now believing that you won't see the taper tomorrow, and that's why the market rallying," he said.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Aug. 20, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long GS; Joe Terranova is long MS; Joe Terranova is long VRTS; Joe Terranova is long OXY; Joe Terranova is long TRV; Joe Terranova is long EMC; Joe Terranova is long SJM; Joe Terranova is long TRIP; Joe Terranova is long SBUX; Joe Terranova is long HOS; Joe Terranova is long AXP; Joe Terranova is long PXD; Joe Terranova is long EOG; Joe Terranova is long CXO; Joe Terranova is long LTD; Joe Terranova is long CAT; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Josh Brown is long XLU; Josh Brown is long XLF; Josh Brown is long BK; Stephen Weiss is long M; Stephen Weiss is long BAC; Stephen Weiss is long C.