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S&P Gains 'Sheer Lunacy', Says Pro Trader
CNBC.com | March 21, 2011 | 06:28 PM EDT

Buyers took a deep breath and dove headfirst into the market on Monday driving the S&P sharply higher and the Dow above the psychologically important 12,000 level.

The bulls found traction early in the session, after a U.S. Nuclear Regulatory Commission official said the nuclear crisis in Japan was "on the verge of stabilizing.” The commentary quelled investors’ worst nightmares for Japan.Adding to the optimism, billionaire investor Warren Buffett suggested that Japan was currently oversold and compared the quake to other extraordinary events that historically have been buying opportunities.

And on another bullish note AT&T said it would buy wireless rival T-Mobile, sparking expectations of more deal activity.

Are Monday's gains a sign that the market wants to break higher? How should you position now?

Instant Insights with the Fast Money tradersBrian Kelly is skeptical of the rally. He calls Monday's gains "sheer lunacy." He reminds that the global economy has seen a series of shocks on both the supply and demand side."To think that everything is going back to normal and no companies are going to get hit and that yield curves are going to stay where they are; that seems crazy," he says. Guy Adami shares Kelly’s outlook. His bias it toward the downside. “I think the market fails at these (pre-quake) levels,” he says. "I think we fail here and sift down on Tuesday," he says.

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