NEW YORK (TheStreet) -- U.S. stocks finally rose on Wednesday, with the S&P 500 closing higher by 1.20%. This got the CNBC "Fast Money" traders wondering whether stocks are setting up for a breakout to new all-time highs.
Right now, it's all about Greece, according to Steve Grasso, director of institutional sales at Stuart Frankel. The country's possible debt deal with the European Central Bank got stocks moving higher, but the joy will likely be temporary. He believes a larger pullback in the market looms ahead.
Grasso also says the recent pop in utility stocks only occurred because the sector has sold off so much in recent trading. He added that a strong U.S. dollar will help small-cap stocks trade higher.
As long as small-caps continue to trade well, the overall market should do fine, according to Guy Adami, managing director of stockmonster.com. Specifically, he says the iShares Russell 2000 ETF (IWM - Get Report) needs to stay above $121 to keep the rally intact.
"People are very concerned about the Fed" and when it plans to increase interest rates, added Tim Seymour, managing partner of Triogem Asset Management. The impressive labor data are making a strong case for a sooner-than-expected rate hike, which is apparent by the rally in bond yields. Because of higher yields, Seymour is a seller of small cap stocks. However, across the pond, he's a buyer of German equities, which should outperform as the euro goes lower.
Brian Kelly, founder of Brian Kelly Capital, made the case that higher rates will be good for the economy, as banks will increase lending, which will be more profitable thanks to the increase in rates. A more robust economy could push stocks to new highs, but a short-term deal between Greece and the ECB is unlikely to have the same result.
Investors should keep an eye on the retail sales data that will be released on Thursday. If the data are good, look for bonds to sell off and for yields to go even higher, Kelly said.
Netflix (NFLX - Get Report) climbed 3.7% and hit a new all-time high. However, Michael Pachter, managing director at Wedbush Securities, is a Netflix bear and has a sell rating and $270 price target. Shares closed Wednesday at $671.
He acknowledged the stock has moved up a robust 96% in 2015 alone. However, he's focused on earnings and quite frankly, says it's very unlikely that Netflix will be able to generate $30 to $40 in EPS in the next five years, making its valuation far too high. The company's earnings and free-cash flow simply do not warrant the valuation and competition could put a severe crimp in Netflix's growth, Pachter said. As for what company that could be, Pachter says Amazon (AMZN - Get Report) could put pressure on Netflix in the future.
At this point, investors are simply paying for hope and subscriber growth, he concluded.
Seymour reiterated similar concerns, saying too many analysts are now chasing the stock's wild rally and simply upgrading the stock just to keep pace. International expansion in China and India will be tough and competition is likely to intensify, he said.
Since the stock has nearly doubled on the year, Grasso says it only make sense to take some, if not all profits at this point.
For their final trades, Seymour is taking profits Michael Kors (KORS) and Grasso said to take profits in Deere (DE - Get Report). Kelly is buying the ProShares UltraShort 20+ Year Treasury ETF (TBT - Get Report) if Thursday's retail sales number is strong and Adami is a buyer of Lions Gate Entertainment (LGF).