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Pro Traders: Stock Market Setting Up For Big Rally?

New developments Thursday triggered chatter that the stock market may be on on the brink of a major momentum shift, in favor of the bulls.

The positive sentiment stemmed from a decline in oil prices and stronger than expected economic data; both catalysts sent the S&P higher.

In the Middle East the Arab League said a peace plan for Libya was under consideration. The plan put forth by Venezuelan President Hugo Chavez, if successful, could end a major headwind for equities.

Meanwhile, here at home, initial jobless claims fell last week to 368,000 -- a 2-1/2 year low and the Institute for Supply Management's non-manufacturing index rose to 59.7 in February, slightly above forecasts and higher than the January result.

”The progressively better data has got hopes up that we are going to see better looking non-farm payrolls numbers" in the Labor Department data, says Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in a Reuters interview.

Considering oil and employment are two major market catalysts, are we looking at a shift in market sentiment?

Instant Insights with the Fast Money traders

Oppenheimer’s Carter Worth tells us he interprets the technicals as bullish. Looking at patterns in the chart of the S&P he says the current weakness is “a normal enough pause in an otherwise intact, comfortable uptrend.”

Joe Terranova is bullish on fundamentals. He thinks Thursday’s (strength) was about money managers wanting to get back in the market ahead of the jobs number on Friday. He thinks there’s potential for stronger than expected employment data triggering a rally.

Tim Seymour also leans on the bullish side. He thinks the market is trading well and he’s not even worried about the potential of a rate hike, which he thinks the market would take a sign of growth.

Guy Adami also believes the market is trading very technically but he skews bearish. He thinks traders may be setting up for a possible disappointment if the jobs number isn't very positive. "If you’re long I’d buy protection,” he says.

Meanwhile, Steve Cortes thinks the winning trade is longoil . “I’m adding to my position if it dips below $100,” he says. Even if troubles in Libya die down, Cortes thinks they continue to escalate in other parts of the region, particularly Iran and Bahrain.

If you’re looking for ways to play oil, Oppeneheimer analyst Fadel Gheit recommends, Whiting , Hess and Occidental , “domestic oil producers that have no exposure to anything that’s happening in the Middle East.”

Value investor Whitney Tilson of T2 reminds the desk that he’s long BP and has been since last June. He likes the stock as a “big cap blue chip that’s trading at a 25% discount to peers.” And he says he’ll likely stay long until the low 50’s.

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TECH TOPPING THE TAPE

Aside from oil and employment, the desk also has tech on the radar a day after Apple announced its next generation iPad.

What’s the trade?

Although he’s an Apple fan, Whitney Tilson of T2 thinks the value tech trade is long Microsoft.

”Apple trades at a high teens multiple while Microsoft trades at half the multiple,” he says."

Also he feels Microsoft is a growth story. “Microsoft is growing like crazy, just last quarter they reported 15% revenue growth and 29% EPS growth. That’s fabulous for a company that’s trading less than ten times earnings.”

Hedge fund manager Karen Finerman agrees that Apple is expensive relative to Microsoft but “it’s not crazy expensive,” she says. “Normally I’m in the camp with Whitney but the potential for revenue growth is so high I don’t find the valuations in Apple a problem.”

Joe Terranova says Apple could sell 200 million tablets by 2015. “I think the growth potential is clearly there for Apple.”

Tim Seymour takes the other side. “It’s not expensive but it’s also not cheap, he says. “Not only do they have to meet they have to exceed.” He thinks Apple could disappoint.

And when asked about Nokia Seymour says, “it’s not a broken company but I don’t see it coming back soon.”

Elsewhere in the space, Guy Adami suggests putting Micron on the radar. He says “it should continue to go higher. Things seem to be lining up quite well for them.”

Joe Terranova is watching NVIDIA and says “I think it falls below $20 before it becomes attractive again.”

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TOPPING THE TAPE: CITI LEADS FINANCIALS HIGHER

Financials also landed center stage with big banks such as Citigroup gaining sharply.

What’s the bank trade?

Carter Worth thinks patterns in the chart of the XLF look promising. “It’s responding perfectly to the April highs,” he says. In other words he thinks the financials march upward.

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MARKET MYSTERY: WHAT'S WRONG WITH THE DOLLAR?

The dollar closed lower against the euro on Thursday.

We know that Thursday’s dollar weakness was partly due to comments from ECB chief Jean Claude Trichet, who said an interest rate hike is possible next month.

But the market is also getting a slew of data points from the US suggesting the recovery in our nation is gaining traction. Why isn’t the dollar performing better?

For insights the desk turned to Peter Boockvar Of Miller Tabak. Get all the details. Watch the vide now!





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Trader disclosure: On March 3, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (GE); Seymour owns (GM); Seymour owns (TTM); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's Firm is short (XRT); Finerman's Firm is short (IJR); Finerman's Firm Is Long S&P Puts; Finerman's Firm Is Long Russell 2000 Puts; Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman Owns (BAC); Finerman's Firm Owns (BBY); Finerman's Firm And Finerman Own (BP); Finerman Owns (GOOG); Finerman's Firm And Finerman Own (HPQ); Finerman's Firm Owns (IBM); Finerman's Firm Owns (JPM), (JPM) Leap; Finerman Owns (JPM); Finerman's Firm And Finerman Own (MSFT); Finerman's Firm owns (TGT); Finerman's Firm Owns (WMT); Terranova owns (VRTS); Terranova owns (C); Terranova owns (UPL); Terranova owns (ABT); Terranova owns (MS); Terranova owns (PBR); Terranova owns (BAX); Terranova owns (TEVA); Terranova owns (CVI); Terranova owns (RSX); Terranova owns (SU); Terranova owns (CNQ); Steve Cortes owns (PM), (TM) and (EXC). Steve Cortes owns (SDY) vs. S&P. Steve Cortes owns Crude. Steve Cortes is short (F). Steve Cortes is short (C). Steve Cortes is short (DBA). Steve Cortes is short Wheat

For Joe Terranova
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (NCRI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (DOM)

For Carter Worth
Worth has no disclosures

For Peter Boockvar
Boockvar is long the Euro
Boockvar is long the Canadian Dollar
Boockvar is long the Australian Dollar

For Ellen Zentner
Zentner has no disclosures

For Whitney Tilson
Funds Managed By Whitney Tilson Own (BRK.A), (BRK.B)
Funds Managed By Whitney Tilson Own (BP)
Funds Managed By Whitney Tilson Own (MSFT)

For Anthony Scaramucci
SkyBridge Capital is a fund of funds manager. Funds held may or may not own the recommended securities.

For Mike Khouw
No disclosures on (DE)

For Matt Hoffman
Hoffman has no disclosures on (AAPL), (MMI)

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