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Halftime Report: Can Markets Advance Without Oil?

CAN MARKET ADVANCE WITHOUT OIL?

Concerns that recovery may be slow and erratic dominated Monday’s market action leaving investors jittery ahead of a hotly anticipated earnings season. Around lunchtime the S&P 500 was trading in negative territory dragged down by weakness in oil and the overall energy sector.

Unfortunately for the bulls, a better-than-expected ISM number wasn't enough to assuage growing doubts about the economy following disappointing reports last week on consumer confidence and deep job cuts in June.

With a recovery in doubt ahead of earnings how should you be positioned?

Instant Insights with the Fast Money Traders

I’m seeing an explosion in the Vixbut the market isn’t moving, muses OptionMonster Jon Najarian. It suggests to me that traders are looking for protection ahead of earnings season.

If you’re going to watch the Vix, I’d keep an eye on the Vix futures not spot Vix, counters Mike Khouw of Cantor Fitzgerald. The spot Vix can exaggerate upside moves early in the week and downside moves later in the week.

The QQQ is raising red flags about the tech sector, adds Katie Stockton of MKM Partners. It’s trading below it’s 50-day moving average and that reflects a loss of short term momentum. I think it signals a rotation out of technology.

I’m not a buyer of technology either, adds Steve Cortes of Veracruz. I think in the end it’s a consumer sector and the consumer is too weak to support technology.

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OIL SINKS TO 5-WEEK LOW

Oil fell about 2.5 percent on the growing belief that the economy won't be strong enough to lift demand for energy as much as had been expected. Last week, oil hit an eight-month high above $73.

What's the oil trade?

Dow components Chevron and Exxon are trading lower as a result, muses Pete Najarian. But the Dow itself is only down modestly. I think that’s a positive. It suggests to me that lower oil is good for the consumer.

The next stop for crude is probably $61, speculates Addison Armstrong of Tradition Energy. I think Monday’s move is a reaction to poor demand figures we see from the US government.

I agree with Addision, adds Najarian. I think we were over bought and now we’re nearing oversold. I’m a buyer of oil around $60.

On a pullback I’m a buyer of ConocoPhillips , reveals Mike Khouw.




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