The Dow and the S&P 500 hit record highs on Tuesday after investors digested the Federal Reserve meeting minutes that had nothing to offer bears. The team at CNBC's "Fast Money" pondered the upward movement in the market.

Pete Najarian commented on the strength across the board in commodity stocks, financials and biotech. Tim Seymour of Red Star Asset Management interpreted the Fed minutes as having expressed concerns about the decline in the dollar. Jeff Macke responds that if the Fed was so concerned about the falling dollar then they would stop printing and dumping dollars into the system.

Technology Divergence

Although technology stocks like Apple ( AAPL) and Research In Motion ( RIMM) are hitting new highs daily, the semiconductor stocks aren't following along. Carter Worth, chief market technician at Oppenheimer, reviewed the charts of the S&P 500 tech stocks vs. the performance of the semiconductors over the last four years. What he found was an incredible divergence with the semis declining by 30% against the S&P 500 tech stocks.

There's an opportunity here to sell the technology highfliers and buy semis. Najarian likes the idea, but isn't convinced there is strength in the hot tech stocks like Apple and Research In Motion. Plus, he can't find one semi he likes enough to pull the trigger on. Macke agrees with Worth and would play this divergence by going long Intel ( INTC).

Worth also found it interesting that investment banks like Goldman Sachs ( GS) were flying, but money central banks like Citigroup ( C) were doing nothing.

Super Market Trade

Many of the world's largest consumer staples companies are set to report earnings in the near future. Firms like Coke ( KO), Pepsi ( PEP), Proctor & Gamble ( PG) and Colgate ( CL) will get to show investors how good business is.

Macke believes Procter & Gamble is doing the best by selling off brands that aren't growing fast enough. He's impressed with Coke's decisionmaking on acquisitions to gain shelf space at the grocery stores. Also in the beverage space he favors Molson Coors ( TAP) and Pepsi ( PEP). Najarian agrees that Pepsi still has more upside and Seymour likes it for a play on growth in Russia. The only consumer product company that Macke isn't positive on is Clorox ( CX).

(Check out this portfolio with 80% of its assets in consumer stocks on Consumer Staples.)

Oil Service Trade

Oil rebounded back to over $80 on Tuesday and the Oil Services HOLDRs ( OIH) followed the commodity to the upside. Seymour tells investors to play it by buying oil service companies with exposure to regions like Russia and the Caspian Sea. This would be Halliburton ( HAL) and Baker-Hughes ( BHI).

Najarian is seeing "tons" of bullish activity in the options pits on some oil-service names. He mentioned that activity in the Baker-Hughes November $100 calls was wild with over 18,000 contracts trading hands. The Baker-Hughes and Halliburton trade works for Worth, but he would avoid the Oil Services HOLDRs because it is overweighted with Schlumberger ( SLB).

Word on the Street

Fertilizer play Mosaic ( MOS) reported monster earnings on Tuesday and the stock soared. Najarian points out that there are buyers of the October $90 calls on Monsanto ( MON), which operates in the same space as Mosaic. He presonally bought the October $90 calls and sold the $95 calls on Monsanto Tuesday. According to Najarian, there's a global growth story that is on fire with fertilizer plays.

(An interesting take on agricultural chemicals is at Stockpickr, click on this portfolio, Agricultural chemicals.)

SABMiller and Molson Coors ( TAP) announced plans to combine U.S. operations in a new firm to be named MillerCoors. Macke suggests they combined so they can go after Anheuser-Busch ( BUD). The hidden winner, in Macke's opinion, is Altria ( MO), which has a 28% stake in SABMiller. Seymour favors international beverage plays Companhia de Bebidas ( ABV) and Fomento ( FMX).

Alcoa ( AA) falls short of Wall Street's estimates but the stock doesn't fall after the firm announces a gigantic stock buyback. Seymour thinks Alcoa could be a takeover target and he owns it. Macke states that the buyback is just one more reason to be bullish on U.S. stocks.

Retail same-store sales numbers are set to come out on Thursday. Macke warns investors to expect a lot of misses like the one on Tuesday from Childrens Place ( PLCE). It's too late to short the retail space and instead he advises buying PLCE here for a trade. Worth likes the high-end retailers for shorts. He recommends shorting Nordstrom ( JWN), Tiffany ( TIF) and Coach ( COH).

Pops & Drops

Pops -- Yum! Brands ( YUM) traded up 5% after reporting strong profits and raising full year forecasts. Macke says the growth story is still intact and investors can be long this stock.

ValueClick ( VCLK) traded up 10% after Jim Cramer speculated on CNBC's "Mad Money" that a takeover bid could be coming from Microsoft ( MSFT). Najarian maintains that ValueClick is definitely going higher.

Miramar Mining ( MNG) popped 24% after Newmont Mining ( NEM) bought the firm for $1.5 billion. That's a sign to Worth that gold stocks are free to move higher.

Altair Nanotechnologies ( ALTI) exploded higher by 31% after the firm demonstrated its battery pack in an electric car. Najarian points out that trading volume was big and this was a huge pop for the Altair.

California Pizza Kitchen ( CPKI) traded up 5%. Worth doesn't like the chart and he advises staying away from CPKI.

Drops- Coach ( COH) fell 3% off a bearish Bloomberg report. Worth sees more to come on the downside.


Fans of the show write in with questions on stocks they'd like the team to answer.

Rick writes, "What's up with Nokia ( VCLK)? Does it still have upside potential or should I cut my losses?" Najarian counsels waiting till the takeover of NAVTEQ ( NVT) is digested, and then it will move higher.

Steve from Florida wants to know, "I've made a good profit in XM Radio ( XMSR), buying in at $8 and $9. What do I do now? Sell some XM and then buy some Sirius ( SIRI)?" Macke likes the idea of buying Sirius because he thinks the stock will move higher.

Joe from Michigan asks, "Early last week, EMC ( EMC) put volume surged by over 50,000 contracts for two consecutive days. I read this unusual put volume as a sell signal, but the stock hasn't gone down. What was the significance of the massive put action?" Worth tells Joe that one or two days of put buying are unlikely to change the situation. Najarian adds that put activity can be big investors buying protection against long positions.

Final Trade

The crew and guests give their best ideas of the day.
  • Macke recommends Johnson & Johnson (JNJ).
  • Worth encourages shorting Black & Decker (BDK).
  • Najarian prefers Cypress (CY).
  • Seymour tells investors to play international oil services with Integra Group.
  • Ned Riley, the CEO of Riley Asset Management says stay long PowerShares QQQ Trust (QQQQ).
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