But that doesn’t mean Kelly would play it short - not by any means. “Momentum is too strong,” he says. “Right now the market is on some kind of sugar high.”
Trader Steve Cortes is more skeptical. “Around 1120, I liked stocks. I thought the valuation made a lot of sense. But with the S&P around 1200 I’m growing cautious of the market,” he says.
Part of his concerns rest with weakness in China and a decision from Beijing over the week-end to effectively increase reserves which lenders must set aside with China’s central bank.
With China committed to curtailing inflation, he thinks it’s a mistake to pin hopes of a rally on emerging markets growth, especially growth in China. “The Shanghai Composite is performing poorly and I think the under-performance continues.”
Instead, Cortes suggests looking at risk off trades. “For the first time, perhaps in my entire life, I’m actually longgold ,” he says.
Trader Patty Edwards is also cautious. If you’re looking for retail plays she still likes Nordstrom and Target but adds, “in general I fear the middle market consumer is getting squeezed.”
MCDONALD’S NEARS ANOTHER RECORD
McDonald's continued to rise Tuesday, nearing another record. But how much longer can the fast food giant be considered a super value?
What’s the trade?
Pete Najarian thinks P/E levels are fair and the yield at 2.7% is attractive. “Also they’ve got growth in Asia and the menu is drawing in customers,” he says. “I think there’s still upside.”
HOMEBUILDERS POPPING ON UPGRADE
Shares of KB Home were flying high after Susquehanna upgraded the stock to a ‘Neutral’ rating on Tuesday morning. It was just one of several upgrades for the homebuilder space.
Is now the time to jump in?
Brian Kelly doesn't think so. "It’s a great time to buy a house but not housing stocks," he says.
DOLLAR STORE DOMINANCE
Dollar General popped Tuesday after the company raised its full year profit forecast as sales surged. But will the dollar stores keep eating Walmart's lunch?
Find out from Brian Sozzi, Senior Research Analyst, Wall Street Strategies.
Get all the details. Watch the video now!
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Trader disclosure: On August 30, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian owns (AAPL); Najarian owns (C); Najarian owns (MS); Najarian owns (MSFT); Najarian owns (MCP) calls; Najarian owns (CLF) calls; Najarian owns (UNP) calls; Najarian owns (DLTR) calls; Najarian owns (MCD) calls; Najarian owns (NTAP) calls; Cortes is long Gold; Cortes is long (WMT); Cortes is long (SO); Cortes is short the Euro; Cortes is short (BAC); Edwards owns (PM); Edwards own (APA); Edwards owns (XLK)
For Patty Edwards
Trutina Financial owns (AMZN) For Clients
Trutina Financial owns (AAPL) For Clients
Trutina Financial owns (CBI) For Clients
Trutina Financial owns (C) For Clients
Trutina Financial owns (GOOG) For Clients
Trutina Financial owns (MCD) For Clients
Trutina Financial owns (MSFT) For Clients
Trutina Financial owns Gold for Clients
Trutina Financial owns Silver for Clients
For Brian Kelly
Accounts managed by Brian Kelly Capital own the Euro
Accounts managed by Brian Kelly Capital own (MON) calls spreads
Accounts managed by Brian Kelly Capital own (JJG)
Accounts managed by Brian Kelly Capital own (MCP)
Accounts managed by Brian Kelly Capital own (SPY) options
Accounts managed by Brian Kelly Capital are short (SLV) options
Accounts managed by Brian Kelly Capital are short (JJC) options
CNBC.com with wires.