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Halftime Report: Should You Jump Back Into This Market, Quickly?

Trades jumped back into this market on Friday sending the Dow and S&P higher, after a better-than-expected jobs report fueled hopes of an economic recovery and provided solid footing for the recent market run-up.

The Labor Department said U.S. employers cut 247,000 non-farm jobs in July, far less than the 320,000 expected and the smallest decline in a year, suggesting the recession was abating.

Also, the July unemployment rate eased to 9.4 percent from 9.5 percent in the prior month, the first time the rate has fallen since April 2008.

How should you be positioned, now?

With those kinds of jobs numbers, investors can feel good about getting long into the weekend, muses Steve Grasso of Stuart Frankel. The shorts are being forced to cover.

Also, investors had bought a lot of put protection ahead of the job number, reminds Brian Stutland of Stutland Equities. That actually gives investors more confidence (because losses are limited) and they become okay with taking more risk.

According to patterns in the charts, it seems to me that there should be another 10% to go in this rally, adds Bill Strazzullo of Bell Curve.

It’s also worth noting, there was also a fundamental change on Friday, adds Brian Kelly of Kanundrum Research. In the past when the market went up, the dollar went down. That didn’t happen on Friday. They both got stronger which suggests investors around the world believe the US economy really is improving.

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TOPPING THE TAPE: FINANCIALS ADDING TO GAINS

The financials helped lead the charge higher with AIG among the top advancers after the embattled insurance giant reported its first profit in seven quarters.

Also, CIT Group jumped after the troubled lender reported progress on its restructuring plans. It suspended payment of preferred dividends and said it had completed a drawdown of its $3 billion secured credit facility.

What’s the trade?

The XLF had been caught between $11 and $13 but now patterns suggest this ETF is breaking out, counsels Bill Strazzullo. From these levels, there could be 15% - 20% on the upside now.


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TAKE YOUR POSITION: RETAIL

Investors are turning their attention to the retail sector with some of the nation’s biggest stores due to report earnings next week.

Take a look at what’s ahead:

Tuesday: Fossil
Wednesday: Macy’s, Liz Claiborne
Thursday: Walmart, Kohl’s, Nordstrom
Friday: Abercrombie, JC Penney

What’s the trade ahead of earnings?

I don’t think the consumer is dead, muses Jon Najarian, but we’ll find out for sure next week. As a result I’m focused on two companies that report not next week but the week following. They are Aeropostale and The Buckle . If the consumer is alive I think both of those stocks are buys ahead of earnings. I think we see a positive pop.


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HOMEBUILDERS JUMPING HIGHER

Shares of Lennar and Putle surged on Friday after after Goldman added rival homebuilder DR Horton to its conviction buy list

What’s the trade?

I’d look at Cemex as an ancillary play, counsels Brian Kelly. But, I think homebuilders are ahead of themselves.


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FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE

BUY BERKSHIRE? With earnings out this afternoon, how should you game Berkshire ?

I’m a long-term buyer of Berkshire, says Brian Kelly. Buy it, put it away and let Warren Buffett do all the work for you.

BUY DOLLAR? The greenback rose broadly on Friday as better-than-expected data on U.S. employment added to evidence the world's largest economy is turning around. What’s the trade?

I’d sell into the strength, says Bill Strazzulo.

BUY AUTOS: Congress sent President Barack Obama legislation Thursday night with an additional $2 billion for "cash for clunkers." Considering the economy-boosting rebate program caught the fancy of car buyers and instantly increased sales for an auto industry long mired in recession, is there a trade here?

I’m not a fan of government subsidies, says Steve Grasso. I’m a seller.

BUY TREASURIES? Treasury debt prices fell on Friday after the pivotal monthly employment report showed the pace of job losses had slowed more than anticipated, supporting investors' impressions that an economic recovery is at hand.

The benchmark 10-year Treasury note's yield , which moves inversely to its price, climbed to the highest in nearly two months and not far below 4 percent. What's the trade?

I’d stay away from Treasuries, counsels Brian Stutland.


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Trader disclosure: On Aug. 7th, 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 (AAPL), (AA), (BAC), (BX), (TCK), (USU); Seygem Asset Management Owns (CZZ); Grasso Owns (ASTM), (BAC), (COST), (CSCO), (FAZ), (PFE), (PRST), (V), (WMT), (XLF); Terranova Owns (MCD), (RIMM), (AMZN), (MSFT); Terranova Is Short (F), (TM); Najarian Owns (AA) Call Spread; Najarian Owns (BUCY) And Is Short (BUCY) Calls; Najarian Owns (GS), Owns (GS) Puts, Is Short (GS) Calls; Najarian Owns (HIG) Calls; Najarian Owns (INTC) And Is Short (INTC) Calls; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Ownws (MS) And Is Sohrt (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (V) And Is Short (V) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (NSC) And Is Short (NSC) Calls; Najarian Owns (CSCO) And Is Short (CSCO) Calls

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