Strategy Session with the Fast Money traders
“I think the ultimate strategy is own stocks,” says Joe Terrranova. “Own franchises that you believe in. For me that’s a company like Whole Foods. Then, have singular protection against it.”
Terranova believes that barring a catastrophe, the path of least resistance in the stock market is higher. He says the latest ISM is proof that the US economy will continue to grow, despite all the drama happening overseas.
Specifically, The Institute for Supply Management (ISM) said on Tuesday its services index edged up to 53.7 from 53.5 in April; economists had expected the index to hold steady at April's level.
A reading above 50 indicates expansion in the sector, which accounts for about two-thirds of economic activity.
If you’re looking for other ideas, Terranova also suggests long positions in regional banks including TCBI and PNC.
Trader Stephanie Link is also a buyer of stocks right now. “If we hear good things in the Beige book and good things from Bernanke later in the week the run could last a while.”
However, she thinks the best strategy is to put dividend paying stocks on the radar and then pull the trigger when the yields become attractive. She likes JPMorgan, Eaton and Ensco .
Trader Mike Murphy sees the market differently. He says when the market rallies like it has on Wednesday, the trade is to sell. However, he also recommends buying when the tape is weak. The way to play this market is “buy red and sell green. Then reload and get ready to buy again.”
Like the title says, trader Steve Grasso thinks you’d have to be a fool to buy stocks now. “This market is currently un-investible. Lock in profits where you can.”
Dennis Gartman sides with Grasso. "Usually bottoms are not formed in a pattern of a 'V' - where you simply slide into oblivion and bounce violently higher. Usually you get a bounce, then the market goes back and tests its lows again and again. I'd have very little exposure to equities."
What do you think? We want to know!