1. ARE INVESTERS GETTING COMFORTABLE OR COMPLACEMENT?
After a 7-day winning streak the Dow closed at a new 2010 high on Wednesday. Investors put on new easy money trades; confident interest rates would remain low.
The performance in the S&P was equally bullish with the index touching a new 18-month high led by energy and financials.
What must you know to trade this market?
As the market creeps higher the VIX is getting crushed, muses Karen Finerman. I don’t know what to make of it.
It suggests to me that complacency is becoming a factor in this market, says Jared Levy of Peak6. It makes me concerned as we melt-up. I’d be a cautious buyer.
The VIX isn’t so much complacency as it is investors getting comfortable with the market, counters Joe Terranova. It also suggests to me that the Street is getting comfortable with the jobs report coming in April.
With the VIX at these levels, I’d buy put protection, says Pete Najarian. It’s cheap.
As far as I’m concerned, we’re in a market melt-up, explains veteran trader Gary Kaminksy and I expect it to continue through the end of the quarter. Right now fundamentals don’t matter. The fear of not owning stocks should drive the indexes. I’m a buyer of the broad market and expect larger names to see money flow.
I agree that big investors are freaking out, says Tim Seymour. They’re desperate to get in. And I think it’s because fundamentally the global recovery is stronger than many investors ever thought it would be.
I think the trade is market laggards, adds Terranova. They should do better in a market melt-up. I’d put Alcoa and Qualcomm on the radar – refiners too.
If you’re looking for a trade I’m bullish Intel, says Pete Najarian. I think the stock breaks higher.
3. CHART OF THE DAY: DOW TRANSPORTS
The Fast Money traders are closely watching the action in the Dow Transports, which hit a 52-week high on Wednesday. According to Dow Theory gains in the transports and industrials is typically a bullish sign.
What’s the trade?
In this space I’m bullish on the rails, says Pete Najarian.
I’m bullish FedEx, says Tim Seymour.
I’d be a seller of airlines oil stays above $80, says Joe Terranova.
3. COMMODITY OUTLOOK
On Wednesday Goldman Sachs raised its 12-month forecast for a slew of commodities including aluminum, zinc and gold noting that improving fundamentals for much of the complex will lead to further strength going forward. However, it’s worth noting that the firm cut its copper outlook marginally.
What should you make of it?
Goldman has been spot on when it comes to commodities, says Joe Terranova.
4. GE
Sterne Agee analyst Nicholas Heymann raised his rating on GE to “Neutral” from “Sell,” citing the sale of NBC as well as the potential sales of some of its “classic industrial” assets down the road as a sign GE is focusing on its core business.
I think the stock goes to the low 20’s over the next few months, Heymann says.
What should you make of it?
I’m bullish with a stop at $17.50, says Joe Terranova.
5. TEMPLE INLAND ‘ON WATCH’ FOR UPGRADE.
Standard & Poor’s on Tuesday placed all of its ratings for timber company Temple-Inland on credit watch with positive implications because, it said, the company could cut its debt and boost its earnings.
The ratings agency said Temple-Inland reduced its debt about $440 million last year, and it expects its building products segment’s profit to rise during the next two years
What’s the trade?
In the timber space, I like Plum Creek, says Brian Kelly.
6. U.S. DOLLAR
Despite the chatter that the dollar won’t make further gains as long as interest rates stay low technical analysis suggests otherwise.
Patterns in the charts of the Dollar Index suggest to me the dollar goes higher, reveals Todd Gordon. I’d get long the dollar against the euro, he muses.
7. TOPPING THE TAPE: FORD
With Ford trading a 5-year highs, how should you game the auto space?
GM is expected to price an IPO this year, explains Gary Kaninsky. That could have a short-term negative impact on Ford.
8. YOUR FIRST MOVE FOR THURSDAY
Tim Seymour suggests long XOM.
Joe Terranova recommends long QCOM.
Karen Finerman prefers long TJX.Pete Najarian thinks TSO is a buy.
