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Don’t Be Deceived by Market Milestone: Pros

By Tuesday’s close all anyone could talk about on Wall Street was the Dow and how it closed at its highest level in more than four years.

And there was similar chatter about the S&P, and how it finished within a stone’s throw of a level it hasn’t printed since May 2008.

A convincing break above these key levels should set the market up for more gains, according to the chatter.

Fundamentals seemed to favor the bulls - the latest economic data showed the pace of growth in the U.S. manufacturing sector picked up in April to its highest level in 10 months.

But the Fast Money pros think the action may be deceiving. They remain cautious, very cautious.

“Much of the world was on holiday,” says Joe Terranova. “We're about to get PMIs from Germany, Italy, Spain and France – that’s important.” It could be back to reality on Wednesday.

Trader Tim Seymour agrees. “Most of the world was on vacation – let’s see what happens on Wednesday.”

Seymour is troubled by the lack of breadth in the market. “55% of the S&Ps move comes from 30 stocks – we need to see it broaden out.”

Keith McCullough says the same and points to weakness in the Russell , something he finds noteworthy on a day when the Dow made a new 4-year high.

“Also the S&P made a higher low,” he says, a bearish sign. “We’re going to have to deal with Europe.”

If you’re wondering how to position, Terranova suggests biding your time until Friday. “Wait and see what the jobs report shows. I wouldn’t get overexcited about anything until you hear about employment on Friday.”




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Trader disclosure: On May 1, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith McCullough is long GLD; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long JNPR; Joe Terranova is long NXPI; Joe Terranova is long JPM; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long FCX; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU; Steven Weiss is long AIG; Steven Weiss is long QCOM

For Timothy Rezvan
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