Finerman tells the desk she added to her position in Cummins and CAT. Looking at the latter, she says CAT is down 16% in only a week – "I don’t think it’s changed in value fundamentally by 16%. Could it trade lower? It could,” she says, “but here the valuation starts to become compelling.”
That’s not to say she would jump in with both feet – she wouldn’t “But am I starting to add to my longs? Yes!” she says.
Tim Seymour shares Finerman’s and Terranova’s outlook. “It feels like capitulation,” he says.
Trader Guy Adami also thinks the next big move is to the upside. “The bounce should feed off itself,” he says. Adami believes the market has effectively made a double bottom off the March lows. “I’d trade high beta names against 1256 as my stop,” he says. It's worth noting that Adami is making a trading call not a long term investor call.
Steve Grasso is on the other side of the trade, completely. He thinks the rally was all about short covering. “It wasn’t great support in the market, it was people locking in profits on the short side,” he says. Grasso says “I would not buy this market, I would sell the rally up to 1300 – I don’t think anything has changed.”
TECH TOPPING THE TAPE
The real strength in Wednesday’s reversal came from tech with Apple, Google and Yahoo! all gaining.
How should you play it?
Joe Terranova is bullish on Oracle , Aruba Networks and Teradyne.
Guy Adami suggests long Juniper as a flier with a stop against the stock's 52-week low. "I think that’s your bogie. I’d go long against that level."
Tim Seymour can't get on board. He worries that high growth names like those mentioned above may be facing serious challenges. "I wouldn’t go in with both feet," he says.
GOLD PRICE TARGET RAISED AT UBS
Much like the energizer bunny, it appears gold just keeps going and going. On Wednesday UBS raised its 12-month target to $1800 an ounce.
How should you play it?
"Although I’d continue to hold gold," says Tim Seymour, "I’d play the gold miners."
Guy Adami thinks long gold is probably the better investment but long silver is probably better trade.
Karen Finerman wouldn't play it at all. "I wouldn’t be long and I wouldn’t be short gold," she says.
IS IT TIME TO SHORT OIL/COPPER AS MACRO WORRIES SPREAD?
On Wednesday the pros were attempting to get a handle on the next big move in oil and copper. Shouldn’t those commodities see larger corrections if the economic backdrop is deteriorating?
Find out from independent oil trader Dan Dicker, author of Oil’s Endless Bid. Watch the video now!