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Stocks Hit Fresh 11-Month Highs

Stocks hit new highs for 2009 after the dollar pulled an about-face from the day before -- and weakened against other major currencies sending oil , gold and other commodities sharply higher.

Also commodity producers whose products are priced in dollars made gains as did international conglomerates such as Procter & Gamble, because the weakder dollar makes their products cheaper for overseas buyers.

The gains came as the Federal Reserve began a two-day meeting on interest rates. Investors are hoping the Fed will provide a clearer indication of when it may raise rates in its statement which will be issued at the conclusion of the meeting on Wednesday around 2:15pm.

How should you be positioned?

Strategy Session with the Fast Money traders

There’s no question that the market is overbought, says Joe Terranova. But the market might not pullback. It could just sit here and consolidate. That would work off the overbought condition. And it’s a distinct possibility that the the S&P is setting up for a super-spike through the end of the year to 1100.

Enjoy it while it lasts because it never does, says Guy Adami. That market wants to go higher and you can’t fight it. But it won’t last forever.

There are so many puts trading, I expect the market to move to the upside, muses Pete Najarian. There’s just so much protection in place I don’t think sellers can get any traction.

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TOPPING THE TAPE: MORGAN STANLEY, GOLDMAN NEW 52-WEEK HIGHS

Positive comments from FBR about Goldman Sachs sent this stock as well as rival Morgan Stanley to 52-week highs on Tuesday.

However it was Bank of America that stole the spotlight after published reports cited widely followed analyst Dick Bove as saying ‘critics are all wrong and that the Merrill deal was great for Bank of America's shareholders.’

However, not everyone is bullish. Michael Mayo of Calyon Securities certainly doesn’t share investor enthusiasm for the space. He tells CNBC, “I didnt get the memo, I didnt get the memo saying that the credit cycle was already over.”

What’s the bank trade?

In the space I’d keep an eye on Greenhill and Raymond James, counsels Guy Adami. As far as I’m concerned, both names continue to work.

I’m watching Wells Fargo, reveals Joe Terranova. I think it breaks above $30. And the CME over $300 is bullish.

I’d keep an eye on Bank of America, counsels Tim Seymour.

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GOLD MAKES RUN AT NEW RECORD

The weak dollar provided a strong tailwind for gold sending the price of this precious metal toward $1,020 an ounce on Tuesday as a sharp deterioration of the dollar's value triggered investment buying in gold as a currency hedge.

What’s the trade?

It seems to me that gold is having trouble going below $996 and above $1025, says Joe Terranova. Those are important reference points.

I’d forget about gold, counsels Pete Najarian. Instead I’d play metals with Freeport McMoRan.

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COMMODITIES GAIN ON DOLLAR’S LOSS

The weak dollar provided a tailwind for oil prices, which rose above $71 a barrel on Tuesday. Copper was another beneficiary with shares jumping substantially.

What’s the trade?

I’d look at nat gas, counsels Joe Terranova. I think it’s found a bottom.

Put Walter Energy on your radar, counsels Guy Adami. I think it probably still has room to run.

In the space, I’d look at Mechel , counsels Tim Seymour.

Or check out Bucyrus or Joy Global, counsels Pete Najarian.

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TOPPING THE TAPE: (AMAT) AS SOLAR TRADE

Shares of Applied Materials closed sharply higher after the company said it plans to improve efficiency and cut the cost of producing solar panels to less than $1 per watt in three years.

The world's largest producer of chipmaking gear also said it is seeing "substantial progress in the global industrialization of the solar industry."

What’s the trade?

It seems to me the solar play is starting to grow, muses Pete Najarian. But there will be bumps along the way.

I think AMAT is a lottery ticket, says Guy Adami, but if they get things right the upside could be tremendous.

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MARKET BUZZKILL: BIOTECH

Investors fell a little bit out of love with biotech on Tuesday with shares of Amgen , Genzyme and others all closing lower.

What’s the trade?

On a pullback I’d look at Celgene, counsels Pete Najarian. And keep a close eye on Amgen .

I’d play the space with the XBI , counsels Joe Terranova.

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PIT BULL: WHAT TO LOOK FOR IN TOMORROW'S FED STATEMENT

What should you look for in Wednesday’s Fed statement? There is perhaps no one better to ask than CNBC’s Rick Santelli. See what he has to say. Watch the video now.

You can see our conversation with Rick Santelli at the end of the Word on the Street video.




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Trader disclosure: On Sept. 22nd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour And Seygem Asset Management Own (MTL); Seymour Owns (AAPL), (BAC), (VALE); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (C) Calls; Najarian Owns (JPM) And Is 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 (RNWK) And (RNWK) Calls; Najarian Owns (SII) Call Spread; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Call Spread; Najarian Owns (FCX) And Is Short (FCX) Call; Najarian Owns (CELG); Najarian Owns (CLX) Calls; Terranova Owns (WFT). (F); Terranova Owns (F) Calls And (F) Puts

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

For David Goldberg
UBS Securities Has Received Compensation From (DHI), (PHM) In Past 12 Months
(DHI), (PHM) Is Or In Past 12 Months Has Been An Investment Banking Client Of UBS Securities
(DHI), (PHM) Is Or In Past 12 Months Has Been A Non-Investment Banking Client Of UBS Securities (Securities-Related Services)

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