Was Tuesday’s rally a blip in a new bear market? Or is the bull getting ready to rumble?
That’s the trillion dollar question with the S&P rebounding after three days of declines. Optimism prevailed on Wall Street in part due to the latest results from FedEx which investors interpreted as bullish for the recovery broadly. The company lifted its forecast and said gains were driven by "continued growth in the global economy."
However, the bears were hardly out of the game. Headwinds remain significant; ranging from the crisis in Japan to geo-political unrest in the Mideast.
It's also worth noting that despite Thursday’s gains, the S&P 500 remains down 2.3 percent for the week.
Is this the resurgence of the bull market or is it a spike within a larger bear market?
How should you position now?
Instant Insights with the Fast Money traders
Guy Adami thinks the tape has broken down and points to 1275 as a key level on the S&P. “All day Thursday the S&P ran into resistance around 1275 failing a number of times. As a result, I’m a seller of rallies.”
However, he does offer a caveat. “Should the S&P closes above 1275 on Friday, then I think 1300 is in the cards next week. Friday’s action should go a long way to help determine the market's next big move.”
Oppenheimer’s Carter Worth is on the other side of the trade. He thinks the current decline is healthy.
”It’s simple,” he says.” In this current sell-off the S&P is down about 7% over 17 sessions. That’s similar to the decline in December 2010 as well as the one in late summer.” In other words it's another pause that refreshes.
Worth thinks the trade is long. “Buy,” he says.
Click here for Carter Worth's full technical analysis.
FED TO APPROVE BANK DIVIDEND HIKE, FRIDAY?
The Federal Reserve will inform some U.S. banks on Friday that they passed a new round of stress tests, giving them the green light to raise dividends for the first time since the financial crisis, the Wall Street Journal said Thursday.
What's the trade?
Karen Finerman is bullish JPMorgan, as a best of breed play in the space.
In addition to JPMorgan, Joe Terranova thinks PNC, Wells Fargo, and Bank of America should all see a boost.
Traders are keeping a close eye on the yen, after the dollar hit a record low of 76.25 yen. The dollar later bounced back to hover around 79 yen.
What must you know? Find out from CNBC’s Steve Liesman. Click here to read "G-7 Ready to Help Japan But Isn't Sure What Tokyo Wants"
Also hear from Andy Busch of BMO Capital in the video below!
OIL BACK ABOVE $100 AGAIN
Oil prices rallied sharply on Thursday as traders turned attention away from Japan and toward geopolitical tension in the Middle East and North Africa.
"The headlines about Libya's response to any potential foreign military act and the crackdown of protesters in Bahrain are adding fuel to the fire and heightening tensions in the Middle East, says Tom Knight, trader at Truman Arnold in a Reuters interview.
How should you position?
Joe Terranova thinks the current move in oil has more to do with the weak dollar than geo-political concerns. “75.63 is last year’s low in the Dollar Index and we’re perilously near that level. If we break below I think oil continues higher,” he says.
TOPPING THE TAPE: APPLE UP ON NEW BUY RATING
Shares of Apple popped on Thursday after Credit Suisse initiated coverage with a buy. As you may remember, the company was downgraded yesterday by JMP Securities analyst Alex Guana.
What’s the trade?
Joe Terranova is in a holding pattern. “Apple tried to rally but failed. There’s a lot of pressure in this name.”
Guy Adami is looking for Apple to trade down to $285. “I’d add to my position if it gets there.”
HEDGE FUNDS BETTING AGAINST TEPCO
Take a look at the three worst performing Japanese stocks since the earthquake hit on March 11th.
Japan Steel Works -32%
Not surprisingly, Tepco - the power company which runs the Fukushima plant is at the bottom, losing more than 60% in a week's time.
And that kind of move has caught the interest of hedge funds.
Get all the details from CNBC’s Kate Kelly. Watch the video now!