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Halftime Report: Get Long US Banks, Now?

In an otherwise dead tape, financial stocks, led by JPMorgan , were fast and away the best group.

Why did money flow into banks while the rest of the market paused?

Strategy Session with the Fast Money traders

The problems in Europe have made investors around the world feel more comfortable about the banks in the United States, explains veteran trader Gary Kaminksy. Not only do you have the financial woes of Greece, but Europe overall is dealing with a dramatic slowdown of growth.

I agree that in the long-run there could be problems in Europe, says Tim Seymour. But in the short–run I think Europe’s banks have been over-implicated in the troubles.

If you're looking at the options market for insights, activity in the April 50 calls in the KBW Bank Index suggest to me that upside in the banking sector may have a ceiling, adds Mike Khouw of Cantor Fitzgerald.

If you’re looking for a trade, I’d get long best of breed names in the space such as JPMorgan and BofA, high quality money center banks, reveals Joe Terranova. Use the Feb 5th lows as stops – in JP Morgan that's $37.02.

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TRADING THE GLOBE: SCANDAL CHATTER

Accounting scandals are nothing new to stock investors, but recent developments out of Europe suggest some countries are cooking their own books and hiding their debt.

How should you trade it?

I’d play it with a short position in the EPV, reveals Gary Kaminisky. I’m concerned about all the off balance sheet financing I’m hearing about.


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'SECOND DERIVATIVE' TRADE OF RETAIL EARNINGS

A slew of retail earnings lie ahead this week – how can you get an edge? The options action, just might give you a much needed leg up.

Mike Khouw of Cantor Fitzgerald ran the numbers and says options investors are pricing in telling moves in three stocks:

Implied Move Average Last 8 Quarters

JWN 4% 6.7%

TJX 4% 3.5%

M 6% 7.0%

What’s the trade?

This suggests to me Macy’s may be the least attractive and TJX may be the most attractive, at least as far as options investors are concerned, says Mike Khouw.

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ENERGY M&A PICKING UP

Merger Monday appears to be in high gear with oil-service giant Schlumberger agreeing to buy rival Smith International in an $11 billion all-stock deal.

Considering energy has been the second most active sector for deals this year, what must you know?

We’re starting to see deals coming back in this space, says Gary Kaminksy. That’s a good sign. It suggests to me CEOs are comfortable with the price of the commodity.


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BREAKING NEWS: THERMO FISHER

According to Bloomberg,Thermo Fisher Scientific, the world’s largest maker of lab instruments, made an unsolicited takeover offer of about $6 billion for Millipore .

Thermo Fisher, based in Waltham, Massachusetts, makes a range of analytical instruments and laboratory equipment used in manufacturing, health care and environmental industries. Millipore, based in Billerica, Massachusetts, is a supplier of diagnostics and laboratory equipment to the biotechnology industry.

What’s the trade?

I’d look at Pall Corp., says Gary Kaminksy. If the merger happens they would be one of the remaining companies in the space and also a potential takeover target.

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CULT STOCK: LULULEMON

If you want to see a picture of growth, check out the chart to your left of Lululemon . It’s up Over 500% since March.

Anyone who's ever done yoga knows their products well and the company is in the midst of a massive expansion.

But as veteran trader Gary Kaminsky pointed out on Fast Money, and the Wall Street Journal echoed on Monday, that massive growth could crimp profitability.

What must you know before you trade this stock?

Find out from Christine Day, the boss at Lululemon. Then get the play from veteran trader Gay Kaminksy. Watch the video now!

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CALL THE CLOSE

Joe Terranova: Upward momentum in the S&P looks like it’s going to wane. I expect we enter a consolidation pattern.

Tim Seymour: I’m bullish ore and coal.

Mike Khouw : Keep an eye on implied moves.

Gary Kaminsky: I’d stay short LULU.


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Trader disclosure: On February 22nd, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kaminsky Owns (LULU) Puts; Kaminsky Owns (EPV); Seymour Owns (AAPL), (F), (INTC), (BAC), (INTC), (TSL); Najarian Owns (BP); Najarian Owns (CMC) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MYL); Najarian Owns (MS); Najarian Owns (TEVA), (TEVA) Puts; Najarian Owns (TMO) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Is Short (CAKE); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT), (M), (SKS), (TGT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (WMT); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MCD); Finerman's Firm Owns (YUM); Kelly Owns (FXE) Puts; Kelly Owns (QLGC) Calls; Kelly Owns (AMZN) Calls; Kelly Owns (HOV) Calls; Kelly Owns (FXE) Puts; Kelly Owns (FXE) Puts

For Tim Seymour
Seygem Asset Management Owns (FCX) Puts

For Joe Terranova
Terranova Owns (JPM), (IBM), (QCOM), (GOOG), (EMC), (AAPL), (DELL), (MSFT)
Terranova Is Long December 2010 Crude Oil Futures
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
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 (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Brian Kelly
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (ELX)
Kanundrum Capital Owns (QLGC)
Kanundrum Capital Owns (BRCM)
Kanundrum Capital Owns (EWP)
Kanundrum Capital Owns (NBG)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short Copper Futures
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short Euro, Yen, British Pound, Singapore Dollar
Kanundrum Capital Is Short British Pound
Kanundrum Capital Is Short Yen
Kanundrum Capital Owns (GDXJ)

For Will Landers
BlackRock Latin America Fund Owns (PBR)
BlackRock Latin America Fund Owns (VALE)
BlackRock Latin America Fund Owns (BBD)
BlackRock Latin America Fund Owns (ITUB)
Landers Owns BlackRock Latin America Fund

For Deborah Weinswig
A Director Of Citi Is On The Board And Audit Committee Of (TGT)
An Employee Of Citigroup Global Markets Or Affiliates Is A Trustee Of (TGT)
Citigroup Global Markets Or Affliates Ownes 1% Or More Of (JCP), (SKS)
Citigroup Global Markets Or Affiliates Has Received Investment Banking
Compensation For Services Provided In Past 12 Months From (TGT), (WMT),
(SKS), (KR), (SVU), (DG)
Citigroup Global Markets Or Affiliates Expects To Receive/Seek Investment
Banking Compensation From (WMT) In Next 3 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking
Compensation In past 12 Months From (COST), (M), (JCP), (KSS), (TGT), (WMT), (HD), (WAG), KR), (SWY) (SVU)
(DG), (TGT), (WMT), (SKS), (KR), (SVU) Are Or In Past 12 Months Were Investment Banking Clients Of Citigroup Global Markets
(COST), (M), (JCP), (KSS), (WMT), (HD), (WAG), (KR), (SWY) Are Or In Past 12
Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Securities-Related Services)
(COST), (M), (JCP), (KSS), (TGT), (WMT), (HD), (WAG), (KR), (SWY), (SVU) Are Or In Past 12 Months Were Clients Of Citigroup Global Markets (Non-Investment Banking, Non-Securities Related Services)
Citigroup Global Markets Or Affiliate Received Compensation From (DG) In Past 12 Months
Citigroup Global Markets Is A Market Maker In (COST), (M), (CVS)

For Louis Navellier
Navellier Owns (F) In Personal Or Client Portfolios
Navellier Owns (AMT) In Personal Or Client Portfolios
Navellier Owns (BIDU) In Personal Or Client Portfolios
(F), (AMT), (BIDU) Are Holdings In Navellier's Blue Chip Growth Newsletter
Portfolio

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (AAPL)
Cantor Fitzgerald & Co. Is A Market Maker In (BIDU)
Cantor Fitzgerald & Co. Is A Market Maker In (COST)
Cantor Fitzgerald & Co. Is A Market Maker In (CSCO)
Cantor Fitzgerald & Co. Is A Market Maker In (F)
Cantor Fitzgerald & Co. Is A Market Maker In (GOOG)
Cantor Fitzgerald & Co. Is A Market Maker In (INTC)
Cantor Fitzgerald & Co. Is A Market Maker In (LULU)
Cantor Fitzgerald & Co. Is A Market Maker In (MSFT)
Cantor Fitzgerald & Co. Is A Market Maker In (QCOM)
Cantor Fitzgerald & Co. Is A Market Maker In (T)
Cantor Fitzgerald & Co. Is A Market Maker In (VZ)
Cantor Fitzgerald & Co. Is A Market Maker In (YHOO)
Cantor Fitzgerald & Co. Is A Market Maker In (C)
Cantor Fitzgerald & Co. Is A Market Maker In (GS)
Cantor Fitzgerald & Co. Is A Market Maker In (MS)
Cantor Fitzgerald & Co. Is A Market Maker In (JPM)
Cantor Fitzgerald & Co. Is A Market Maker In (XLF)
Cantor Fitzgerald & Co. Is A Market Maker In (BAC)
Cantor Fitzgerald & Co. Is A Market Maker In (WFC)

For Louis Navellier
Navellier Owns (F) In Personal Or Client Portfolios
Navellier Owns (AMT) In Personal Or Client Portfolios
Navellier Owns (BIDU) In Personal Or Client Portfolios
(F), (AMT), (BIDU) Are Holdings In Navellier's Blue Chip Growth Newsletter Portfolio

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