By Roberto Pedone
Posted on Dec. 3, 2009

The traders of CNBC’s “Fast Money” think the path of least resistance for the stock market remains to the upside. On Tuesday’s show, Joe Terranova told viewers the market’s push higher is all about the performance chase of money managers. He expects the chase to continue from now until the end of the year.

Guy Adami cautioned investors that both Goldman Sachs Group (GS) and Apple (AAPL) traded down on Monday, and that is reason for concern. He said both stocks are bellwethers that usually lead the market higher. Karen Finerman also noticed that Goldman traded lower along with JPMorgan Chase (JPM). However, she said the drops in these stocks looked like attractive buying opportunities, and not a reason to be worried.

Finerman said the markets traded higher on Tuesday due to bullish news out of China and off the strength in commodities. Terranova mentioned that Goldman and JPMorgan have been under technical pressure lately, but both companies are in a good position to benefit from any meaningful dollar rally.

On Wednesday’s “Halftime Report” segment, Jared Levy of Peak 6 expressed a more bearish view on the markets. Levy pointed out that for the S&P 500, the 10- and 20-day moving averages are converging, and volume is dissipating. He told viewers the market action right now feels a lot like 2008, where we experienced a sharp reversal. Levy mentioned a reversal might not occur until later this month, but he does believe it will happen.

The “Fast Money” crew has recently highlighted trading ideas that play off the agriculture sector, home improvement stocks and unusual options activity. Here are some highlights from over the past week as aggregated from the show.

Fast Money’s Ag Stock Trades: Over the weekend, Barron’s published a bullish story on Monsanto (MON) that helped to take the ag sector higher. How should you trade this news? On Monday’s “Fast Money” show, Pete Najarian told viewers: “I’m watching Deere (DE), which JPMorgan upgraded recently. The ag sector has been moving to the upside in the past two weeks despite whatever direction the market has moved.” The Fast Money’s Ag Stock Trades portfolio includes Intrepid Potash (IPI) and Potash (POT).

Fast Money’s Options Action & Trades: The traders have noticed some unusual options activity in a number of stocks. On Wednesday’s “Halftime Report” segment, Jared Levy told viewers: “In the options market, I’ve seen a lot of call selling and strangle selling in Bank of America (BAC). I’d be cautious.” The Fast Money’s Options Action & Trades portfolio includes American International Group (AIG) and UAL Corporation (UAUA).

Fast Money’s Holiday Toy Trades: With Christmas fast approaching, the traders offered up their hottest holiday toy trades. On last Wednesday’s “Fast Money” show, Tim Seymour told viewers: “I’m long Apple (AAPL), and I love Apple. I think their gadgets will fly off the shelves.” The Fast Money’s Holiday Toy Trades portfolio includes Activision (ATVI) and Walt Disney (DIS).

Fast Money’s Home Improvement Trades: Due to the success of Cash for Clunkers, the government is now looking to shell out dollars for more energy efficient home improvements. On Tuesday’s “Fast Money” show, Steve Grasso told viewers: “I’d play it with Whirlpool (WHR).” The Fast Money’s Home Improvement Trades portfolio includes Sears Holdings (SHLD) and Home Depot (HD).

Fast Money’s Steel Stock Plays: Recently, Goldman Sachs Group added U.S. Steel (X) to its conviction buy list and upgraded the steel sector to attractive from neutral. The traders offered up their ideas to trade this call. On Monday’s “Fast Money” show, Joe Terranova told viewers: “If you think Goldman Sachs is right, then I’d look at Nucor (NUE).” The Fast Money’s Steel Stock Plays portfolio includes Steel Dynamics (STLD) and Freeport McMoRan Copper & Gold (FCX).

Fast Money’s Specialty Retail Trades: The traders see opportunity in trading the specialty retail sector after preliminary results suggested that “Cyber Monday” sales could set a new record. On Tuesday’s “Fast Money” show, Steve Grasso told viewers: “Be careful of Guess? (GES). I think there’s a lot of risk to the downside if the stock doesn’t trade above $45.” The Fast Money’s Specialty Retail Trades portfolio includes MasterCard (MA) and Abercrombie (ANF).

Roberto Pedone, based out of Pewaukee, Wis., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.


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