Market Pro: S&P Just Put in a ‘Nice Little Bottom’

Again, investors were trying to make sense of the market Monday after the S&P slipped lower early in the session but then changed direction to close higher.

Part of the gains were sparked by a growing belief that the EU will provide Greece with another 12 billion euros in emergency loans – relieving the fear of contagion, at least for the time being.

And part of the gains may simply be bargain hunting.

”When you're in the midst of a bullish trend since July of last year -- that's when the bottom was -- I think people tend to look for places to buy dips, and this is just an obvious place to expect some buying to come into the market," says John Kosar, director of research at Asbury Research in a Reuters interview.

Nonetheless, the gains were not nearly enough to alleviate a big fear among investors who watch technicals. The S&P is only about 20 points away from 1259, the 200-day moving average and flat on year. And what happens at that point is widely viewed as setting the tone in determining the market’s next big direction.

What should you expect?

Instant Insights with the Fast Money traders

Although he thinks the market is ultimately heading lower. Trader Guy Adami says, “you’ve got to give the tape credit. It’s closed higher 3 days in a row. Adami thinks for the next couple weeks the market may have put in a nice little bottom. Adami suggests going long with a stop out around 1250.

Trader Tim Seymour reminds the desk that the S&P 500 is still up about 22 percent since the end of August. "Let's remember we're only 6.5% off the highs."

In other words, this market has not sold off all that much.” And that means one of two things, “either there’s a lot more room to fall or the market is resilient.”

Sounds like Seymour thinks the market will be resilient. He also says “with the S&P trading at 12.6 times earnings, there’s no reason to get worried about valuations here.”

Joe Terranova suggests the market will stay in a fairly tight range this week. “On Wednesday Bernanke speaks.” That’s certainly something investors will key into but Terranova doesn’t think the Street will get anything market moving.

On a more bullish, note Terranova thinks the start of earnings season in July could provide bulls with a dynamic catalyst, however until then he expects institutional money managers to wait. “They’re going to wait for the calendar to turn. They’re going to wait until Q3.”

Trader Dan Nathan is interested in how the S&P seems to be closing in and around 1270 for about the last week. “That’s a level that traders are sticking too.”

And if you're looking for trades, Seymour says he's been talking with commodity producers and they're all telling him global growth is not dead -- end demand is still there. "I think Deere and Caterpillar are names investors should be looking at," he says.

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Trader disclosure: On June 20, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Seymour Owns (AAPL); Seymour Owns (F); Nathan Owns (JPM) Put Spreads; Nathan Owns (LNKD) Put Spreads; Terranova Owns (VRTS); Terranova Owns (IBM); Terranova Owns (FCX); Terranova Owns (CVI); Terranova Owns (F); Terranova Owns (AAPL); Terranova Owns (CAT); Terranova Owns (BX); Terranova Owns (HPQ); Terranova Owns (MA); Terranova Owns (PEP); Terranova Owns (MCD); Terranova Owns (JWN); Terranova Owns (TM); Terranova Owns (LULU); Terranova Owns (WFM); Terranova Owns (DAR); Terranova Owns (BJ); Terranova Owns (XOM); Terranova Is Short (DELL); Weiss Owns (TWM); Weiss Owns (SDS); Weiss Owns (COP); Weiss Owns (JPM); Weiss Owns (UUP); Weiss Owns (DVN); Weiss Owns (HK); Weiss Owns (CMA); Weiss Owns (MRK); Weiss Owns (AKAM); Weiss Owns (ETP); Weiss Owns (MS); Weiss Owns (QCOM); Weiss Owns (VZ); Weiss Owns (MRK); Weiss is Short (X); Weiss is Short (FWLT); Weiss is Short (FLR); Weiss is Short (SHAW)

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