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The Rally: Is It All Just A Dream?

Was the market rally a dream come true? Or is it about to become a terrible nightmare!

Over the past month the Dow has soared nearly 500 points and as of Thursday afternoon, it had made gains for 8 consecutive days. But now investors are starting to worry that a correction could be around the corner and they fear the downturn has the potential to be steep.

Here’s what’s got the Street nervous that the rally may not be for real.

Strike One: Volume is not as strong as it appears. The stocks changing hands at the big board aren’t your big slugging blue chips but rather, weaker bench players like Citi, Fannie , and AIG.

Strike Two: The recent good housing numbers have a weak foundation with government incentives, especially the new homebuyer tax credits, artificially boosting prices.

Strike Three: China may be juicing its economic numbers leading investors to factor in a demand for raw materials that’s just not there.

In baseball, it’s three strikes and you’re out but is the same true for stocks?

"What we are seeing here is churning around on light volume. It is best to avoid making grand pronouncements about market trends on this type of trading," counsels CNBC’s Bob Pisani.

Then how should you position yourself?

"The trend has been up and I think fighting that trend right now is crazy," he adds. "You've got to go with what's working and set tight stops. That's how to play the market right now."

And Pisani has one other piece of advice -- "Relax." It's the same advice you'll find on Pisani's blog Trader Talk. Check it out!

What do you think? We want to know!


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Trader disclosure: On Aug 27th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (AMZN), (MSFT), (FCX), (BTU), (SU), (XOM), (WFT); Terranova Is Short (SHLD), (EES); Terranova Owns (CCL) Puts; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Najarian Owns (AAPL) Call Spread; Najarian Owns (BAC); Najarian Owns (BUCY) & Short (BUCY) Calls; Najarian Owns (C) Calls; Najarian Owns (FCX), Is Short (FCX) Calls, Owns (FCX) Puts; Najarian Owns (HGSI) Call Spread; Najarian Owns (JPM) & Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (PALM) Calls; Najarian Owns (TXT) Calls; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFT) Call Spread; Najarian Owns (YHOO) Call Spread; Najarian Owns (XHB) Call Spread; Cortes Owns (SPX), (GS); Cortes Is Short Nasdaq 100; Cortes Is Short (JPM); J. Najarian owns (DELL) Calls ; J. Najarian Owns (AAPL) & Short (AAPL) Calls ; J. Najarian Owns (CHU)

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