No. 1 - Bull Goggles

This raging bull market has some investors so excited, they’re tossing aside their inhibitions and getting in bed with questionable characters. It’s a phenomenon we call “bull goggles.”

Just look at homebuilders, up 4% in just the last 5 days. And the auto stocks - Ford (F) is up 6% in the last week. If investors buy these stocks now, will they regret it later?

There’s three signs you might be engaging in bull goggle behavior, according to Jeff Macke:

1) Buying on hope

2) Ambiguous information

3) Buying euphoria

Hope is not a viable investment vehicle, Jeff says, but it seems to be evident in the homebuilders, where the data is terrible but the stocks keep running.

Guy says auto stocks like Ford seem to be benefiting from hopeful buying.

“It’s especially true for the automakers, who hope the dollar keeps sliding.” Eric Bolling adds. “If it doesn’t and the dollar bottoms, they’ll have serious problems next quarter.”

Another example is Wendy’s (WEN) saying it was for sale, but that’s not really news, Jeff says, and certainly not a reason to own the stock.

If companies are going higher on ambiguous information, it isn’t always their fault, Tim Strazzini says.

Just look to the semiconductor sector. Semi companies are just having a hard time predicting things like inventory levels, he says. Micron (MU) and Advanced Micro Devices (AMD): “If you’re in these names, it has to be for a good time, not a long time,” Tim says.

And when it comes to buying euphoria, look to a stock that's a perennial favorite to debate on Fast Money: (AMZN), where more than half the float just traded on the company’s 52-week high. This is a classic example of buying euphoria, Guy Adami says. “I’ve been short the stock a long time … but this is the time to short it.”

Questions? Comments?

Trader disclosure:
On APR 26, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Strazzini owns (WMT), (YHOO), Bolling owns Gold, Silver, Corn, Is Short Soybeans, owns (AMZN) options.