Amid S&P Rally, Dr. Doom Is ‘Eyeing the Exits’

As the S&P 500 traded at its best levels since 2008 on Tuesday, Gina Sanchez of Roubini Global Economics said the upside potential may soon be exhausted.

“We’re still long.I would say we’re eyeing the exits. The risks are getting a little more balanced,” she said on “Fast Money.”

Sanchez, who is director of equity and asset allocation strategy at the firm helmed by noted economist and perennial bear Nouriel “Dr. Doom” Roubini, noted that “any piece of bad news in economic data are being shrugged off.”

Europe, she said, is still a risk despite all of the liquidity and intent to cut tail-risk in the hopes of averting a Lehman-like event.

“However, that doesn’t change the fact that Europe is still in a recession, and it’s going to continue to go into a recession, and that’s going to make hitting all of the numbers required for some of these austerity packages very, very difficult, particularly for the periphery – lots of execution risk,” she said.

Sanchez said RGE continued to favor consumer staples.

“We think that’s a safe bet. We also like consumer discretionary, and so those are on opposite ends. One is more risk-on, one is more risk-off,” she said. “Those are the risk-on places that we would be comfortable, even if the market started to turn around.”

Last month, RGE made headlines for what sounded like a bullish outlook.

But Sanchez said that the main positive catalysts for the market may have already occurred, including a long-term refinancing operation, the potential of a bailout for Greece and positive rhetoric in Europe.

“All of those things that we expected would push up the market have happened,” she said. “And so we’re going to basically get back around to the things we said before, that this is a weak economy, and the data is still not convincing to us.”

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Trader disclosure: On Feb. 28, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long (VRTS); Terranova is long (MCD); Terranova is long (OXY); Terranova is long (IBM); Terranova is long (EMC); Terranova is long (LQD); Terranova is long (FXE); Cortes is short (XHB); Cortes is short (FXI); Cortes is short USD vs. JPY;

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