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'Fast Money' Recap: JPMorgan's Tell

NEW YORK (TheStreet) -- The markets ended up higher on Thursday on some encouraging reports on bond auctions in Spain and Italy.

The Dow Jones Industrial Average rose 21.57, or 0.17%, to 12,471.02. The S&P 500 added 3.02, or 0.23%, to 1295.50. And the Nasdaq was up 13.94, or 0.51%, to 2724.70.

Guy Adami said on CNBC's "Fast Money" TV show that JPMorgan's (JPM) earnings will be an important tell on whether the surprisingly strong financial rally is about to pause.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Adami said he would be looking at JPMorgan's return on assets and net chargeoff rates for credit card debt. He said he would probably take profits in the stock and return to buy it back at a later time.

Keith McCullough said JPMorgan is in position where its number has to be good and where it has to overdeliver on heightened expectations. He said it is in a difficult situation where shorts are fearful of getting squeezed and the longs are hopeful of getting paid. He said it's not a situation where he would want to be long.

Joe Terranova reiterated the importance of using options in the financials trade. He said investors will be looking to see how JPMorgan is going to control costs.

Moshe Orenbuch, a Credit Suisse analyst, said he would be looking for JPMorgan's comments on capital markets activity and its willingness and ability to return capital. He said the surprisingly strong rallies in Bank of America (BAC) and Citigroup (C) will depend on the health of the consumer and their ability to return capital to shareholders.

Orenbuch said JPMorgan's earnings should be closer to expectations than its peers. He said it wasn't able to do much in dividends and a buyback because it used up its earnings too quickly.

Melissa Lee, the moderator of the show, noted that Diamond Foods (DMND), was falling in after-hours trading on reports of investigations by the Department of Justice and SEC of its walnut grower payments.

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