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Oct.12

1:16 PM ET

Monday, 12 Oct 2009

Halftime Report: Does Dow 10,000 Really Matter?

Posted By:Lee Brodie

Topics:Oil | U.S. Dollar | Stock Market | Stock Picks

Sectors:Oil and Gas

Halftime Report

The Dow [.DJIA Loading... () ] hit new 2009 highs Monday with energy names driving advances after a weaker dollar [US@DX.1 Loading... ()] pushed oil [US@CL.1 Loading... () ] and other commodities prices higher.

Bullish momentum also stems from growing belief that the Dow could soon break above the psychologically important 10,000 level, especially if earnings continue to be stronger than expected.

Should you be tracking Dow 10,000 as you trade?

Forget 10,000. Greg Troccoli of Opalesque tells Fast Money that as a technician he’s looking at 9918 as key level on the Dow. If we can close above 9918 for the week then we are set to go 300+ points higher; Dow 10,300.

It seems there are a lot of techincals that are critical this week, adds Joe Terranova. I want to see the S&P futures on Friday settle above 1075. And I want to see the Dow settle above 10,000. But we need Friday confirmation.

Elsewhere in the market, Transports [.TRAN Loading... () ] surged higher on Monday, adds OptionMonster Jon Najarian. I’m seeing unusual activity in YRCW [YRCW Loading... () ], he adds. That's probably because they’ve been able to kick the can down the road and carry debt on their books for a longer period of time before any forced liquidation. But the railroads aren’t in the same position. They’re doing wonderfully and I think the recovery plays into what they do best. I’m a buyer of Norfolk Southern [NSC Loading... () ] and CSX [CSX Loading... () ] ahead of earnings.

If you’re playing this market, I’d also buy puts, says Brian Stutland of Stutland Equities. Volatility is cheap right now. However Vix futures suggest volatility could spike through the end of the year.

I don’t think it’s any surprise that energy [XLE Loading... () ] as well as tech [XLK Loading... () ] are both driving stocks, muses Zach Karabell. That’s where we’ve had strength and I think we continue to see it through the end of the year.

-----------

OIL SURGING TOWARDS $74

Oil [US@CL.1 Loading... () ] jumped more than 2 percent on Monday to touch a six-week high on optimism about the pace of global economic recovery and as cold weather across the United States boosted fuel demand.

"Stunning records for cold were set across the nation, increasing the demand for heating fuels over the weekend," explains Phil Flynn, analyst for PFGBest Research.

What’s the oil trade?

I think crude oil could have a potential break out over the next 10 days, says Joe Terranova. I think the timing is right. I’d bet oil goes above $75.

-----------

GOOGLE LEADING TECH HIGHER

On Nasdaq, Google [GOOG Loading... () ] shot higher after several analysts raised their price targets ahead of Google's third-quarter results due this week.

Google's business is strong, and its stock is even stronger, says a Thomas Weisel analyst who raised the company's price target to $620 Monday.

What’s the tech trade?

There’s a lot of optimism about Google in this market but remember that CEO Eric Schmidt said the worst is behind us and he’s hiring. I think optimism continues and we continue to see Google and broad tech move higher.

I think it’s phenomenal that Google has gotten above pre-Lehman levels, says Joe Terranova . I think Google challenges $600 before the end of the year and I think Apple [AAPL Loading... () ] goes above $200.

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BLACK & DECKER LEADING CONSUMER NAMES HIGHER

Black & Decker [BDK Loading... () ] led consumer names [XLY Loading... () ] higher on Monday after the power tools maker raised its third-quarter earnings outlook ahead of series of blue chip earnings reports this week.

What’s the trade?

It’s a sales driven pop out of Black & Decker, explains Jon Najarian. The fact that sales are up this much – that’s huge news. That’s what investors want to hear -- strength from sales and not just cost cutting.

In the space I’m watching Amazon [AMZN Loading... () ], adds Zach Karabell.

-----------

CALL THE CLOSE

Joe Terranova: I’m a buyer. Don’t fight the momentum.

Jon Najarian: I’m a buyer

Zach Karabell: I’m a buyer.

Brian Stutland: Considering it’s an expiration week for options, I’m a buyer.

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Trader disclosure: On October 12, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (F), (MGM), (MSFT), (BX), (POT); Seymour Owns Shares Of Gazprom; Finerman's Firm Owns (BAC), (BAC) Calls, (BAC) Call Spreads, (BAC) Preferred; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (CSCO), (MSFT), (TGT), (WMT), (YUM), (PLCE); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Is Short (IJR), (MDY), (IWM), (UNG), (USO); Finerman's Firm And Finerman Own (WFC) Preferred; Terranova Owns (JPM), (NOV); Terranova Is Short (GRMN); Terranova Is Short (CCL); Terranova Owns Dec. 2009 Gold Futures; Terranova Owns Dec. 2009 Crude Oil Futures; Terranova Owns Dec. 2010 Crude Oil Futures; Terranova Works For (VRTS)

For JoeTerranova:
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (XLY)
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 (XLI)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (DBA)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)

For Craig Berger
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ONNN)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (INTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (BRCM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (NVDA)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MRVL)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LLTC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MXIM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATML)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (LSI)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (SLAB)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (MSCC)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (QCOM)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (ATHR)

For David Trone
FPK Or Affiliates May Seek Investment Banking Compensation From (GS) In Next 3 Months
FPK Or Affiliates May Seek Investment Banking Compensation From (MS) In Next 3 Months
FPK Or Affiliates May Seek Investment Banking Compensation From (JPM) In Next 3 Months
FPK Or Affiliates May Seek Investment Banking Compensation From (C) In Next 3 Months

For Christa Quarles
Thomas Weisel Partners LLC Or Affiliate Has Managed Or Co-Managed A Public Offering Of Securities For (GOOG) In Past 12 Months
Thomas Weisel Partners LLC Or Affiliate Has Received Investment Banking Compensation From (GOOG) In Past 12 Months
Thomas Weisel Partners LLC Or Affiliate Expects To Receive/Seek Investment Banking Comensation From (GOOG) In Next 3 Months
Thomas Weisel Partners LLC Or Affiliate Has Provided Or Is Providing Investment Banking Services To (GOOG) In Past 12 Months
Thomas Weisel Partners LLC Or Affiliate Expects To Receive/Seek Investment Banking Comensation From (YHOO) In Next 3 Months
Thomas Weisel Partners LLC Or Affiliate Has Provided Or Is Providing Non-Investment Banking, Securities-Related Services To And/Or Has Agreed To Provide Services Or Has A Client Relationship With (YHOO)

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