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Halftime Report: Is The Rally Really Over?

HALFTIME REPORT: IS THE RALLY REALLY OVER?

The bears were caught by surprise on Friday with the S&P 500 turning positive, despite rather disappointing earnings from Microsoft and weakness from Schlumberger.

Many other companies including Black & Decker have reported better-than-expected earnings and investors have taken the improved results as a sign that the economy is healing.

Is the rally really over?

Instant Insights with the Fast Money traders

It seems to me investors who were shorting the market were surprised it didn’t crack at the opening bell, explains Steve Grasso of Stuart Frankel . When the shorts didn’t crack the bulls came in and started supporting.

Also, the selloff gave investors an opportunity to jump into the market on the pullback, muses Pete Najarian. It seems investors are buying stocks they missed on the way up.

Because the S&P seems to have bottomed in the same area as it did in 2003 I think over the next several weeks the S&P could go to 1000, adds Bill Strazzullo of Bell Curve but, at that point I’d take profits.

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WILL NASDAQ BREAK WINNING STREAK?

With weakness in Microsoft and other technology stocks, the Nasdaq looks like it will close lower, ending its 12 winning day winning streak.

What’s the tech trade, now?

Microsoft has $30 billion in cash, explains Pete Najarian. I like this stock on the dip because eventually they will put that cash to work.

Investors sold off Micron and Cypress on the Microsoft news, explains Jim Iuiro. I understand Micron but not Cypress. I think investors sold off the good with the bad.

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FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE

BUY MEDIA? Big media names including Disney and Time Warner report next week. Are any a buy ahead of results?

I think it’s an opportunity to take some off the table, counsels Pete Najarian.

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BUY WIRELESS? After AT&T's stellar quarter, should you buy rivals ahead of results?

The sector hasn’t made new highs when the rest of the S&P has, muses Jim Iuiro. I’d stay away except for a select few stocks such as RIMM and AT&T.

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BET ON CASINOS? With big casino names out with earnings next week including Wynn and Las Vegas Sands, how should you bet?

On a technical basis I’m a buyer, says Steve Grasso but I also think there’s bad news to come in the space.


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Trader disclosure: On July 24th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Seymour Owns (TSL), (MSFT); Grasso Owns (ASTM), (BAC), (BA), (COST), (FAZ), (OXY), (V), (WMT), (XLF), (T); Terranova Owns (MSFT), (MCD), (GOOG), (AMZN), (AXP); Najarian Owns (CSCO) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (MCD) And Is Short (MCD) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (YHOO) Call Spread; Najarian Owns (V) And Is Short (V) Calls; Najarian Owns (HIG) Calls

For Steve Grasso:
Stuart Frankel And Its Partners Own (ABT)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (MSFT)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (ROK)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XOM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)

For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CBL)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (MEE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (DBA)
Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co
Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (WBMD)

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