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Fast Money Now – Mid-Day Trades for Wednesday

The Dow Jones Industrial Average was little changed mid-day Wednesday as rising oil prices and nagging concerns about the credit crisis offset a strong profit outlook from Hewlett-Packard.

MARKET CAN'T SHAKE CREDIT FEARS

Shares of Fannie Mae and Freddie Mac. fell to the lowest levels in more than 17 years as concerns mounted that the U.S. housing finance companies may need a government bailout.

Fannie and Freddie are strictly trades, counsels Jon Najarian. In and out.

I think you should either bet on red or black. It’s about the same odds, exclaims an annoyed Jeff Macke.

Meanwhile Sanford C. Bernstein & Co analyst Brad Hintz cut his earnings estimates for Goldman Sachs and Morgan Stanley .

“Weakening credit market conditions in the third quarter indicate that more write-downs and hedging failures will likely impact U.S. investment banks' performance for the period,” the analyst said Wednesday.

Hintz rates Lehman and Goldman "market perform," and has an "outperform" rating on Morgan Stanley.

What’s troubling to me is that we don’t know whether the commercial mortgage backed securities are continuing to weaken, adds Joe Terranova. I think that’s why we’re seeing the downgrades. For a trade I’d get long Goldman and Morgan and short most anything else.

I don’t trust the current rally in Lehman, adds Guy Adami. I don’t think we’ve seen capitulation.

In the space I like JP Morgan best, adds Jon Najarian.


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H-P LEADS TECH.

Hewlett-Packard offered a ray of hope in an otherwise bleak market; the stock is higher on a strong earnings report.

This stock looks cheap on a valuation basis, says Guy Adami, but I didn’t think their quarter was that great.

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OIL GIVES UP GAIN

Oil prices reversed earlier gains following a government report that showed U.S. crude oil inventories rose far more than expected last week while gasoline inventories dipped more than expected.

Despite the downward momentum in oil Goldman Sachs’s reiterated on Wednesday its year-end price forecast of $149 a barrel for U.S. crude oil, and said strong fundamentals were a more important factor than a strengthening dollar.

I agree with the fundamental theme behind that forecast, says Joe Terranova. I think the play is integrated oil.

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What do you think? Answer the Charles Schwab Question of the Day.










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TOPPING THE TAPE: COMMODITY STOCKS

Spooked by financials it appears investors are putting money to work in commodity stocks. From steel to energy the commodities sector is among the biggest gainers mid-day.

Look at US Steel , says Guy Adami. I know the chart is broken but not the company. Otherwise, I think we’re in a sell the rally mode.

I’d stay away from commodities right now, counters Joe Terranova.


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Symbol
Price
 
Change
%Change
LVS
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CASINO STOCKS NEED A MARKER

Both Las Vegas Sands , and MGM are trading lower mid-day after hitting heavy resistance on a technical level.



Symbol
Price
 
Change
%Change
MGM
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CASINO STOCKS NEED A MARKER

Both Las Vegas Sands , and MGM are trading lower mid-day after hitting heavy resistance on a technical level.

The Chinese government came out and threatened to limit business in Macau, explains Jeff Macke. I think China wants a bigger piece of the action. Get ready for a shake-down!

I like Boyd Gaming if you want to play the space, says Guy Adami. They don’t have Macau exposure.

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OPTIONS ACTION

Jon Najarian is seeing unusual options activity in Nvidia.

With Apple doing as well as they are, I’m hearing good things about other chip stocks, he says. I expect Nvidia as well as Marvel to go higher.

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BACK TO SCHOOL TRADE....GOLDMAN SAYS BUY TARGET

Despite posting weak earnings earlier in the week, Goldman Sachs has given Target a “Buy” rating sending shares of this merchant as well as other retailers higher, mid-day.

I’ve been telling you to get long Target , says Guy Adami, through the second half of the year.

I think you’re wrong, counters Jeff Macke. They have credit card exposure and they keep missing same store sales.

I like Ross stores, adds Jon Najarian. I’m impressed with the way that stock has been performing.

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IN THE ZONE: GARTMAN ON OIL, GRAINS

Chicago soybean, corn and wheat futures rose more than 1 percent on Wednesday on active technical buying amid supply concerns, with gains in oil prices and other commodities providing additional support.

How should you trade commodities?

I think investors have beaten the living tarnation out of the grain market over the past month and a half, says strategic investor Dennis Gartman on Fast Money. That’s shaken all of the long-only funds and now they're out. I think it’s time to start taking a look on the longside.

(Before the live broadcast Gartman told our producers he recommends playing it with IPATH AIG GRAINS ETN

Meanwhile, oil prices continue their slide lower after a government report revealed an unexpected increase in supply.

If you want to play crude I’d own Suncor or if you want to play nat gas I’d get long San Juan Basin , counsels Gartman.


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Trader disclosure: On Aug 19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (WMT), (MSFT); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Jon Najarian Owns (MRVL) Calls, (BRCM) Calls, (CSIQ) Calls; Jon Najarian Owns (AAPL) And (AAPL) Calls; Jon Najarian Owns (C), (CSCO); Jon Najarian Owns (TSO) Call Spreads; Jon Najarin Owns (NVDA) And (NVDA) Call Spreads; Jon Najarian Owns (XTO) Call Spreads; Terranova Owns (AAPL), (BNI), (CME), (EOG), (FCX), (GS), (GOOG), (INTC), (KOL), (NOV), (POT), (RIMM), (SA), (XLF), (SU), (X), (VLO), (YHOO); Terranova Owns (AIG) Puts; Terranova Is Short Crude Oil Time Spread (Short Dec. 2009, Long Dec. 2012); Terranova Is Long Crude Oil Futures (Dec. 2012)

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

CIBC Gartman Index Owns Wheat, Corn, Soybeans; CIBC Gartman Index Owns Natural Gas, Is Short Crude Oil; CIBC Gartman Index Owns Gold

Gartman Owns (AFFY), (SJT), (UNH), (DBA), (QCOM), (CSCO), (SDS); Gartman Owns (ANDE) And Is Short (ADM); Gartman Owns (QQQQ) And Is Short (TLT)

Gartman Is Short (X), (TAP), (KBE), (GS), (GRMN)

Symbol
Price
 
Change
%Change
DJIA
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BYD
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FNMA
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FMCC
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GS
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HPQ
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JPM MLP ETN
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LVS
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MGM
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MRVL
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MS
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NVDA
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ROST
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SJT
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SU
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TGT
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X
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JJG
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