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Halftime Report: Market At Near-Term Top?

Both the Dow and S&P traded lower on Friday with energy shares dragging down the market largely due to lower oil prices.

The bulls couldn’t gain traction despite a report that showed existing homes sales surged to their highest level in over two years.

Of the three major indexes, the Nasdaq fared best after a positive outlook for the holidays sent Amazon to a 10-year high and strong sales of Windows software and Halo video games sent Microsoft surging.

But the tech space was not without its dark spots. Disappointing results from Broadcom and MEMC Electronic sent the SMH tumbling.

Is Friday's sell-off simply profit taking or are we heading into a period of weakness? What's your market 'tell'?

Instant Insights with the Fast Money traders

Right now 1080 is holding on the S&P, explains Scott Redler of T3. Looking at the technicals, if we break above 1100 if should clear the way to 1120. And if we break below 1080 we could slide to around 1043. But as long as we hold 1080 on the S&P I’m a buyer into the close.

In the long run I still expect stocks to go higher, adds Steve Grasso of Stuart Frankel. However in the next couple days I think we go lower. (On Fast Money’s 5p show Grasso has said many times that he believes money managers chasing performance will send the S&P higher through the end of the year.)

This week we’ve seen the stock market decouple from the dollar , adds Jim Iurio of TJM. To me that shows a little confusion and suggests we could be at a near-term top. I’m a seller into the close.

Looking at tech, I’m impressed by Amazon and Apple , muses Jeff Tomasulo of SMB. They’re both selling products that people want and they’re both gaining market share. But I’d wait for a pullback. Be patient.

I would never enter a stock at a historic high, counsels Redler. Wait for it to build a base.

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FINANCIALS ROLLING OVER

Financials rolled over on Friday with investors booking profits in Goldman, Morgan and other large financials ahead of the week-end.

However, investors remained solidly bullish on Capital One, which reported its first quarterly profit of the year on Thursday.

What’s the bank trade?

Options action suggests we could see a sharp pull back in financials, explains Jim Iurio of TJM.

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ALSO TOPPING THE TAPE: TIVO

Jon Najarian has spotted unusual options activity in Tivo .

I’m seeing a lot of out of the money call buying, explains Najarian. Calls vs puts are trading at a 300 to 1 ratio. That suggests something is coming and could send the stock zooming to the upside.

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CALL THE CLOSE

Steve Grasso: In the next couple days I think we go lower.

Jeff Tomasulo: I’m a seller.

Scott Redler: As long as we hold 1080 on the S&P I’m a buyer.

Jim Iuorio: This week we’ve seen the stock market decouple from the dollar. To me that shows a little confusion and suggests to me we could be at a hear-term top and I’m a seller.


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Trader disclosure: On Oct. 23th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm And Finerman Own (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Owns (AET) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Owns (BCR; Finerman's Firm Owns (STJ); Seymour Owns (FXI); Seymour Owns (EEM); Seymour Is Short (PBR); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (PRST), (V), (WMT), (FAZ); Terranova Owns (WYNN); Terranova Is Short (AXP), (POT), (OIH), (FCX)

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For Steve Grasso:
Stuart Frankel Corp. And Partners Own (CMCSK)
Stuart Frankel Corp. And Partners Own (CUBA)
Stuart Frankel Corp. And Partners Own (GERN)
Stuart Frankel Corp. And Partners Own (HSPO)
Stuart Frankel Corp. And Partners Own (LMT)
Stuart Frankel Corp. And Partners Own (MSFT)
Stuart Frankel Corp. And Partners Own (NWS.A)
Stuart Frankel Corp. And Partners Own (NXST)
Stuart Frankel Corp. And Partners Own (NYX)
Stuart Frankel Corp. And Partners Own (PDE)
Stuart Frankel Corp. And Partners Own (PRST)
Stuart Frankel Corp. And Partners Own (RDC)
Stuart Frankel Corp. And Partners Own (ROK)
Stuart Frankel Corp. And Partners Own (TBT)
Stuart Frankel Corp. And Partners Own (TLM)
Stuart Frankel Corp. And Partners Own (XOM)
Stuart Frankel Corp. And Partners Own (XRX)
Stuart Frankel Corp. And Partners Own (SDS)
Stuart Frankel Corp. And Partners Are Short (QQQQ)
Stuart Frankel Corp. And Partners Are Short (CL)

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Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
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NASDAQ
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S&P 500
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AMZN
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BRCM
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COF
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GS
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MS
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MSFT
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TIVO
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SUNE
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SPDR NRG SEL
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AAPL
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MV SEMI
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