Investors had something to cheer about Tuesday as the markets rallied on a thin trading day.

The

Dow Jones Industrial Average

rose 184.46, or 2.2%, to 8668.39, while the

S&P 500

added 21.22, or 2.4%, to 890.64. The tech-heavy

Nasdaq

jumped 40.38, or 2.7%, to 1550.70.

Pete Najarian said on

CNBC's

"Fast Money" TV show that the market was very volatile in the last 15 minutes when 300 million shares traded.

Quint Tatro said it was nice rally but warned that Treasuries are up again. He said a sustained rally will occur only when Treasury money comes out of that sector.

Jeff Terranova said it's been remarkable that the market has been able to digest horrible economic data the past six weeks. Jeff Macke said his takeaway from today's session is that "it's about regaining trust."

Melissa Lee, the moderator of the show, asked the panel to comment on the $5 billion federal bailout of GMAC, the financing arm of

General Motors

(GM) - Get Report

.

Macke, who has maintained all along that the federal bailout of the auto sector has been "over the top," said it's going to cost GM about $400 million to pay the interest on the preferred shares the government is buying.

Terranova said the way to play this situation is to pick up

Toyota Motor

(TM) - Get Report

. "Forget GM," he said.

Najarian said he believes the 0% loans and lower credit scores will drive people into the showrooms, but Macke insisted that neither GM's self-parking system or low-interest loans make any financial sense.

Lee asked the panel to talk about the rebound in the materials stocks, including

Aloca

(AA) - Get Report

, which was up 10% today.

Tatro said what investors are seeing is trading in "hot" momentum stocks on a thin trading day. Terranova added investors could play these stocks as trading vehicles next year. "In 2009, everything is going to be about hit-and-run trading. It's going to be very tactical," he said.

The trading panel had nothing positive to say about the retail stocks. "Just sell them," said Macke. "They're going bankrupt; they can't afford to pay their debts off. They've had too many stores for years, and that's going to correct itself in the first quarter."

Terranova said to watch out for a fight between the retailers and vendors, who want the retailers to pick up a larger portion of the tab from the heavy discounting that went during the holiday shopping season.

Najarian also sees a trading environment in the homebuilders stocks, which were up today. Terranova said these companies need to work off the glut of inventory.

Jon Najarian came on the show to talk about the eco-friendly LED bulbs that are lighting up the Times Square Ball. He said LEDs are extremely efficient when it comes to energy consumption and do not emit harmful gases when they are disposed.

Najarian said the way to trade on LED bulbs is through

Philips Electronics

(PHG) - Get Report

and

Cree

(CREE) - Get Report

.

Lee introduced Tony Crescenzi, chief bond strategist for Miller Tabak & Co., to talk about the future of the nation's currency system. He told the panel that half the US Treasury is owned by foreign investors who can cause a lot of grief if they decide the U.S. is a banana republic and move their money elsewhere.

However, he doubts that will happen because he believes the U.S., as the pre-eminent political, economic and military power in the world, will preserve its reserve currency status. Sixty percent the world's reserve assets are currently parked in US dollars, he said.

He said money will still come to the US because it has a mature financial and regulatory system.

Lee shifted the discussion to the recent rally in healthcare stocks and what that bodes for 2009. Commenting on the uptick the last couple of days in

Pfizer

(PFE) - Get Report

and

Merck

(MRK) - Get Report

shares, Najarian said a lot of investors who have been chasing the dividend of those stocks should be careful.

"We're looking for growth here and neither of them has put much out there to impress the Street," he said.

Najarian said Merck at least has signaled a jump into the pharmaceutical area, which he regards as "positive." He said he liked biotech names such as

Celgene

(CELG) - Get Report

,

Gilead Sciences

(GILD) - Get Report

and

Teva Pharma

(TEVA) - Get Report

.

Continuing her look at the outlook for 2010 on the assumption that 2009 will be miserable, Lee asked the panel for some trades they would make.

Najarian offered these names:

First Solar

(FSLR) - Get Report

,

Energy Conversion Devices

(ENER)

and

Eastman Chemicals

(EMN) - Get Report

.

Tatro liked

Claymore/Mac Global Solar Energy

(TAN) - Get Report

and

Fuel System Solutions

(FSYS)

.

In the final trades of the day, Tatro liked

UltraShort Utilities ProShares

(SDP) - Get Report

and Najarian said he liked

Charles Schwab

(SCHW) - Get Report

.

"Check out

"'Fast Money'Portfolios of the Week" on Stockpickr every Thursday.