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Halftime Report: Goldman To Move Market, But Which Way?

HALFTIME REPORT: GOLDMAN TO MOVE MARKET, BUT WHICH WAY?

Goldman Sachs drove the financials, if not the entire stock market, higher on Monday with investors betting that strength in banks will flow to the rest of the economy.

The main catalyst behind Goldman's pop stems from analyst Meredith Whitney who upgraded the stock to 'buy' from 'neutral,' and said the company would be a key competitor in the government, corporate and municipal debt markets.

Shares climbed even higher after Whitney appeared on CNBCand offered additional insights into why she had upgraded the bank just one day ahead of earnings.

How should you play it?

Instant Insights From the Fast Money Traders?

I think Monday’s rally is based on anxiety, not strong fundamental conviction, says Zach Karabell of RiverTwice. Meredith Whitney’s call was not a “wow this stock is doing great.” It was more “the tallest midget is golden.” If you’re a trader it’s an opportunity but if you’re a long term investors it’s hard to get into banks because it’s hard to know what’s going on.

I wouldn’t call Goldman a midget, counters Mike Khuow of Cantor Fitzgerald. It’s not only Meredith Whitney who’s forecasting Goldman will report extraordinary trading revenue. But on the other hand I don’t know Goldman is a good bellwether for the entire banking sector either.

I’m long into Meredith Whitney’s call, reveals OptionMoster Jon Najarian. But I’m planning to take profits probably after hours. However, I am seeing strong call activity that suggests the stock could pop as much as 10% in the after hours.

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TAKE YOUR POSITION: INTEL

The U.S. technology sector kicks off a closely watched earnings season this week with Intel offering a pivotal mid-year progress report. Investors are eager to find out if the chip makers results show that Corporate America is starting to invest more in IT in anticipation of a recovery.

I like Intel a lot, says Jon Najarian, I think the big industry conference going on in San Francisco will provide a tailwind and talks with Google could be another driver. I think $15 is support and I’d use weakness as a buying opportunity.

I don’t think Intel will kill you, counters Zach Karabell, but it won’t give you a lot of pop if the market surges higher. If you want to play stocks play elsewhere.

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WATCHING OIL

Oil prices slipped more than 1 percent to near $59 a barrel on Monday, hitting their lowest level in almost two months, on concerns over the state of the global economy.

The market for crude dropped 11 percent last week in its biggest weekly decline since late January as investors raised the possibility of another economic dip before any recovery, which could delay a rebound in demand for fuel.

What’s next?

Patterns in the charts suggest oil could drop to $55, explains Addison Armstrong of Tradition Energy. From there it’s only natural that oil should pause. However, it’s also worth noting that oil is sliding lower while the S&P is rallying. (In the recent past they had been moving in tandem.)

If Addison says we could test $55 then I would not become an aggressive buyer until that happens, adds Jon Najarian.

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OPTIONS ACTION: NETAPP

Jon Najarian has spotted unusual options activity in Netapp . He tells the panel that unusually heavy call buying in both the July & Aug calls suggest to him that big investors are betting this stock goes higher and he’s long.

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OPTIONS ACTION: INTERACTIVE BROKERS

Meanwhile, Najarian has also spotted unusual options activity in Interactive Brokers . He tells the panel the volume of puts suggests to him that at least one investor is looking for the stock to correct lower.


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Trader disclosure: On July 9th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;

Jon Najarian Is Long GS
Jon Najarian Is Long MS
Jon Najarian Is Long JPM
Jon Najarian Is Long INTC
Mike Khouw's Firm Is Long JNJ and Short JNJ Options
Mike Khouw's Firm is Short GS and Long Gs Options

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