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Back to Record Highs

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BACK TO RECORD HIGHS:

The headline: After One-Day Pause, S&P, Dow Surge Back to Record Highs; Fed is the Gift that Keeps on Giving as Release of Notes Spark Tuesday’s Rally

This is a commodities-driven market, Pete Najarian says. But its getting help from other places, too. The financials – particularly investment banks like Goldman Sachs (GS) – as well as biotech and pharma are supporting the rally.

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Carter Worth says, from the view of a technician, “we have a split market.” While Goldman Sachs and its IB brethren are working, big money centers like Citigroup (C) on the other end of the financial spectrum won’t budge.

HIGH ENERGY MOVES:

The headline:ConocoPhillips (COP), Oil Stocks Jump as Crude Rebounds Nearly 2% to Above $80; Dollar Rallies Against Euro to Highest Level in Almost 2 Weeks

There’s an inverse correlation between energy prices and the U.S. dollar. The Fed expressed worry, buried in its minutes, about the continued depreciation of the dollar, Tim Seymour says. If inflation rises on a depressed dollar, “we’re in trouble.”

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But if the Fed was truly worried about a weak dollar, Jeff Macke says, “they would stop printing money and dumping money into the system.”

AFTER HOURS ACTION: ALCOA

The headline:Alcoa (AA) Earnings Miss Estimates, But Shares Rise on Buyback

Tim Seymour thinks Alcoa will go higher not just on the buyback but also on the global growth story.

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The story behind this buyback – like most these days – is simply that no company wants any cash on its balance sheet when the dollar is so depressed, Jeff Macke says. On the margins, buybacks like Alcoa’s are bullish for U.S. stocks.

BEAUTIFUL MOSAIC:

The headline:Mosaic (MOS), Producer of Crop Nutrients, Surges on Blowout Earnings, Forecast; Profit Nearly Triples as Fertilizer Proces Soar

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Pete Najarian was so excited by Mosaic’s earnings that he bought Monsanto (MON) late in trading Tuesday ahead of its report. The fertilizer names are a part of the global growth story and Pete sees no sign of them stopping.

DRINKING BUDDIES:

The headline: SABMiller, Molson Coors (TAP) to Combine U.S. Operations in New Venture MillerCoors

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This merger is all about shelf space and going after Anheuser-Busch (BUD), which owns nearly half the U.S. beer market, Jeff Macke says. He thinks the deal is “fantastic.” The hidden winner is actually PhillipMorris, subsidiary of Altria (MO), because it owns a 28% stake in SABMiller.

TAKE YOUR POSITION: RETAIL SALES:

The headline:Target (TGT), Major Retailers to Report Sept. Same-Store Sales Thursday

Childrens Place (PLCE) plunged after it cut its profit outlook by 60% this week. That should be an indicator of what to expect out of same-store sales and other retailers, Jeff Macke says. The news is going to be abysmal and it’s too late to short most of the retailers, he says. That said, PLCE looks “interesting” for a trade - and only a trade - Jeff says.

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Carter Worth has a different strategy. Instead of looking for the retailers that bottomed and could rebound, find the ones that have yet to succumb to the contagion and short them all day long. Go for the high-end names like Nordstrom (JWN), Tiffany (TIF) or Coach (COH), Carter says. “Sell ‘em all.”

CREATIONISTS & DOW THEORISTS:

The headline: Dow Theory is Like Intelligent Design – It Doesn’t Explain Much of Anything; Dow Theory: Market in Upward Trend if Industrial, Transport Averages Cross Key Highs

A divergence between the Dow Industrials and the Dow Transports fails to account for all that is shipped from overseas to the U.S., Carter Worth says. Once the shippers are added to the transports, the picture is much different and the chart actually shows a record high.

Tim Seymour is bullish on the overseas shipping companies over domestic transports like the rails.

Within the shipping names, Pete Najarian especially likes the tankers. The shipment of oil from abroad to the U.S. is about as safe a bet you can make. And as rates go higher, the tanker names should too, he says.

BULL MARKET TURNS FIVE:

The headline: Fast Money Celebrates the Bull Market 5 Years to the Day After S&P 500 Bottom;

OCT '02 OCT '07 %CHANGE

S&P 500 768.67 1,555.00 102%

S&P 500 EPS $46.29 $92.98 99%

P/E 16.61 16.85

Will This Young Bull Live to See Its 6th Birthday? Vote Now

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Trader disclosure: On Oct 8, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders

Macke Owns (EMC), (INTC), (SWY), (ATVI), (JWN): Najarian Owns (MON), (NAT), (VCLK): Seygem Asset Management Owns (AA), (AAPL), (ABV), (ITU), (MSFT), (TWX), (GLD), (SBUX), Seygem Asset Management Owns FEMSA: Oppenheimer & Co. Is A Market Maker In (DRYS), (ESEA), (TIVO), (VCLK), (ATVI), (ERTS), (CPKI), (RIMM)

Oppemheimer & Co. Has Received Compensation For Investment Banking Services From (ESEA) Within The Past Year, Oppenheimer & Co. Will Receive Investment Banking Compensation From (ESEA) For Services Performed Within The Past Year, Oppenheimer & Co. Intends To Seek And Expects To Receive Compensation For Investment Banking Services From (ESEA) Within The Next Three Months

Oppenheimer & Co. Is A Market Maker In (CMCSA), Oppenheimer & Co. Has Received Compensation For Investment Banking Services From Comcast Corp. Within The Past Year

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