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All Clear For The Correction?

The risk trade was back on Tuesday with investors snapping up January's losers such as commodities and financials.

By the end of trade the Dow had closed higher by triple digits and the S&P had made its biggest one-day percentage run-up in three months.

Investor optimism was largely fueled by new efforts out of the EU to control the financial crisis in Greece.

That development gave the euro a boost against the dollar.

Does Tuesday’s market action mean it's "all clear" for the correction or was this simply a bounce based on the fear of being left behind?

Strategy Session with the Fast Money traders

I think the correction will be shallow, says Joe Terrranova. Over the next few days I would expect to see an extension of this rally.

Also the current correction reached 9%, adds Steve Grasso. I think investors may have decided that was close enough to 10% and they started buying.

But don’t forget that China is on vacation, reminds Tim Seymour. And options expire on Friday. I’m suspicious of this rally; at least to say the correction is over.

It wouldn’t surprise me to see the market climb on Wednesday, muses Karen Finerman. With Evan Bayh retiring, it suggests the Wall Street crackdown may hit gridlock and that would be bullish for financials.

If you’re looking for a trade, look at the ag sector, counsels Tim Seymour. I think demand in the space is substantial and I’d be comfortable establishing a new position in this space.

In commodities, I’m concerned about the steel trade, adds Steve Grasso. Recent gains feels like short covering to me and not a bullish bet.

Also, every investor should watch the dollar , adds Tim Seymour. Although it closed lower on Tuesday, for the near term I think it heads higher. I just don’t believe the troubles are over on ‘the continent.”

But -- I think we could start to see a stronger dollar and stronger commodities, adds Steve Grasso. Commodities can rally from demand and not just moves in the dollar. In fact, I think strong dollar and strong commodities may be a new trend that’s emerging.

I just can’t get on board with the bullish commodities trade, adds Brian Kelly of Kanundrum. With China slowing down I just don’t see where demand is going to come from over the next year. And with China actively trying to slow down their real estate market, I’d be short the TAO or EJ .

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WHALE WATCHING

With 13F filings starting to hit the Street, what do the Fast Money traders find noteworthy?

- In late breaking news the desk learns that Eddie Lampert upped his stake in BofA and also increased his stake in Citi .

- Also after hours we heard that John Paulson increased his stake in Citi . And that he sold out of his position in Merck and added to his position in BofA.

- In addition, the desk learned Bill Ackman has sold out of his position in McDonald’s and EMC and bought Hyatt and Landry .

What must you know?

Don’t chase BofA or Citi, counsels Joe Terranova. Lampert is making a long term bet.

With Citi holding $3.15 I'd add to my position, counsels Brian Kelly, but as a long term investment.

I like seeing whales in Citi, says Karen Finerman, but I just can't get on board.




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Trader disclosure: On February 16, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm And Finerman Own (GGWPQ); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred, (BAC) Leaps; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT); Finerman's Firm Owns (NOK), (TGT), (WMT); Seymour Owns (AAPL), (AA), (CCJ), (FXE), (INC). (VALE), (X); Terranova Owns (AAPL), (GOOG), (RIMM), (JPM), (QCOM), (IBM), (MSFT), (DELL), (EMC), (PALM); Terranova Is Long Dec. 2010 Crude Oil Futures; Terranova Is Long Dec. 2011 Crude Oil Futures; Grasso Owns (ABK), (AAPL), (ASTM), (BAC), (BGP), (C), (COST), (CSCO), (FAZ), (PFE), (PRST), (WMT), (V); Seymour Owns (X); Jon Najarian Owns (AMR), (BAC), (BCS), (C), (GS), (HD), (MS), (SPG), (UBS), (TRA), (WFMI)

For Tim Seymour
Seygem Asset Management Owns (POT)
Seygem Asset Management Owns (GFI)
Seygem Asset Management Owns (POT)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
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 (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Steve Grasso
Stuart Frankel & Co. Inc And Its Partners Own (AIZ)
Stuart Frankel & Co. Inc And Its Partners Own (ABX)
Stuart Frankel & Co. Inc And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc And Its Partners Own (GERN)
Stuart Frankel & Co. Inc And Its Partners Own (GLG)
Stuart Frankel & Co. Inc And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc And Its Partners Own (NXST)
Stuart Frankel & Co. Inc And Its Partners Own (NYX)
Stuart Frankel & Co. Inc And Its Partners Own (PDE)
Stuart Frankel & Co. Inc And Its Partners Own (PRST)
Stuart Frankel & Co. Inc And Its Partners Own (RDC)
Stuart Frankel & Co. Inc And Its Partners Own (ROK)
Stuart Frankel & Co. Inc And Its Partners Own (TLM)
Stuart Frankel & Co. Inc And Its Partners Own (TOL)
Stuart Frankel & Co. Inc And Its Partners Own (XRX)
Stuart Frankel & Co. Inc And Its Partners Own (SDS)
Stuart Frankel & Co. Inc And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc And Its Partners Are Short (CL)

For Toni Sacconaghi
Sacconaghi Owns (PLMO), (STX)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (DELL), (HPQ)
Bernstein Is A Market Maker In (DELL)
(DELL), (HPQ) Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking, Securities-Related Services), Bernstein Recieved Compensation
An Affiliate Of Bernstein Received Compensation For Non-Investment Banking-Securities Related Services From (DELL), (HPQ)
Bernstein Or Affiliate Expects To Receive/seek Investment Banking Compensation From (DELL), (HPQ) In Next 3 Months

For Brian Kelly
Kanundrum Capital Is Short (TAO)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short EURUSD
Kanundrum Capital Is Short GBPUSD
Kanundrum Capital Owns (SVU)
Kanundrum Capital Owns USDJPY
Kanundrum Capital Owns USDSGD
Kanundrum Capital Owns USDCHF
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (NBG)
Kanundrum Capital Owns (EWP)
Kanundrum Capital Owns (HOV)
Kanundrum Capital Owns (TOL)
Kanundrum Capital Owns (PHM)
Kanundrum Capital Owns (WY)
Kanundrum Capital Owns (RYN)
Kanundrum Capital Owns (EWA)
Kanundrum Capital Owns (EWJ)
Kanundrum Capital Owns (EWC)
Kanundrum Capital Owns (POT)
Kanundrum Capital Owns (MOS)
Kanundrum Capital Owns (IPI)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (QLGC)
Kanundrum Capital Owns (VMW)
Kanundrum Capital Is Long USDJPY
Kanundrum Capital Is Long USDSGD
Kanundrum Capital Is Long USDCHF
Kelly Owns (HOV) Calls
Kelly Owns (ELX)
Kelly Owns (QLGC) Calls
Kelly Owns (FXE) Puts
Kelly Owns (HOV) Calls
Kelly Owns (AMZN) Calls
Kelly Owns (ELX) Calls
Kelly Owns (QLGC) Calls
Kelly Owns (FXE) Puts

For Brad Hintz
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (BAC)
(BAC) Is Or In Past 12 Months Was A Client Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Or Affiliate Received Compensation For Investment Banking Services From (BAC) In Past 12 Months
Bernstein Or Affiliate Expects To Receive/Seek Investment Banking Compensation From (BAC) In Next 3 Months
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of Barclays PLC, Credit Suisse Group, (C), (GS), (JPM), (MS)
Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), UBS AG Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Received Compensation
An Affiliate Of Bernstein Received Compensation From Barclays PLC, (C), Credit Suisse Group, (JPM), (GS), (MS), UBS AG (Non-Investment Banking-Securities-Related Services)
Bernstein Or Affiliate Received Investment Banking Compensation From (C) In Past 12 Months
Bernstein Or Affiliate Expects To Receive/Seek Investment Banking Compensation From Barclays PLC, (C), Credit Suisse Group, (GS), (JPM), (MS), UBS AG In Next 3 Months
Hintz Owns Morgan Stanley And Discover
Hintz Owns (CME)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investmet Discretion Own More Than 1% Of (GS), (MS)
(GS), (MS) Are Or In Past 12 Months Were Clients Of Bernstein (Non-Investment Banking-Securities Related Services)
An Affiliate Of Bernstein Received Non-Investment Banking Compensation From (GS), (MS) (Securities Related Services)
Accounts Over Which Bernstein And/Or Affiliates Exercise Investment Discretion Own More Than 1% Of (IBM)
(IBM) Is Or In Past 12 Months Was A Client Of Bernstein (Non-Investment Banking-Securities Related Services), Bernstein Received Compensation
An Affiliate Of Bernstein Received Compensation For Non-Investment Banking-Securities Related Services From (IBM)
Bernstein Or Affiliate Intends To Receive/Seek Investment Banking Compensation From (IBM) In Next 3 Months


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