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Halftime Report: Keep Betting On Banks?

Financials racked up gains again Thursday but after a 10 day winning streak, should you keep betting on the banks?

It appears the short answer is yes.

In fact investors are piling into shares of Citi like there's no tomorrow - after Chief Executive Vikram Pandit forecast returns of 1.25 percent a year or more on the bank's main assets within a few years.

What must you know to trade banks?

Instant Insights with the Fast Money traders

I see institutions buying on the option side, explains OptionsMonster Jon Najarian. There’s a lot of institutional interest in Citi. And if the stock breaks above $5 it’s ‘Katy bar the door.'

Investors should know that the rally in Citi is a low quality rally, adds Zach Karabell of RiverTwice. I liken it to the low quality rallies we used to see in tech 10 years ago. I don’t particularly like Citi, but the rally can go on for a long time as more people pile in. And people are piling in because there’s not a lot of other action in the market.

I’m a fundamental investor, counters Patty Edwards of Storehouse. And fundamentally, I don’t like Citi.

It’s hard for me to do back hand springs about Citigroup, agrees Fast Money trader Guy Adami. If you want to get long a bank stock I’d look at either BofA or Goldman .

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MARKET BUZZKILL: COMMODITIES

Investors sold off commodities and materials names Thursday due to new concerns about inflation in China. Investors worry that keeping inflation under wraps is so important to Beijing that they'll drag down China's growth by any means necessary.

What’s the trade?

The sell-off in commodities doesn’t make sense to me, says strategic investor Dennis Gartman. Higher inflation in China stems from a strong economy. Economic strength should give way to higher commodity prices.

Plus the inflation numbers were based on food costs, explains Zach Karabell. That’s actually a good thing because it transfers wealth from China's wealthy urban areas to the less affluent agricultural parts of the nation. I don’t see any reason for Beijing to tighten right now.

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TAKE YOUR POSITION: 30-YEAR BOND AUCTION

U.S. government debt prices fell slightly on Thursday under pressure from upcoming supply of new 30-year bonds though weaker jobs data stemmed losses.

Prices were lower early in the trading day as the market set up a concession for the $13 billion auction of reopened 30-year bonds, set for 1 p.m. But an uptick in U.S. continuing jobless claims helped push prices back towards the previous session's close.

What’s the trade?

I’m moving clients to the short end of the yield curve, counsels Patty Edwards. I wouldn’t play with long-term bonds.

PIMCO has been aggressively selling strangles and straddles, adds Jon Najarian. That suggests to me they don’t think interest rates are going anywhere anytime soon.

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TAKE YOUR POSITION: MALL STOCKS

With Aeropostale and Zumiez earnings coming out Thursday and Ann Taylor earnigns due Friday , how should you game retail?

I like Aeropostale, says Patty Edwards and I’d be long ahead of earnings.

I like JCrew long-term, but in the short term it may have run too far too fast, adds Guy Adami.

In retail, I’m noticing unusual options action in GameStop, explains Jon Najarian. I don’t like the company but I’m long on speculation it’s a takeover target.


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Trader disclosure: On March 11th, 2010, 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 (INTC), (GS), (AGU), (BTU), (MSFT), (C), (NUE); Grasso Owns (TSO), (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (V), (WMT), (FAZ); Terranova Owns (GOOG), (AAPL), (EMC), (MSFT), (DELL), (XLE); Terranova Owns (CAL) April Puts; Terranova Is Short (XLY); Terranova Works For (VRTS); Najarian Owns (AES) Calls; Najarian Owns (BAC) Call Spread; Najarian Owns (BP); Najarian Owns (C) Calls; Najarian Owns (HOLX) Calls; Najarian Owns (MCD) Call Spread; Najarian Owns (RSH) Call Spread; Najarian Owns (YHOO) Calls; Najarian Owns (CAT) Call Spread; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (USO); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finemran's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (GOOG), (GGP), (JPM), (WFC); Finerman's Firm Owns (MCD), (OSIP), (XBI); Kellly Owns (ELC) Call; Kelly Owns (GMT) Calls; Kelly Owns (AMZN) Calls; Jon Najarian Owns (AIG), Is Short (AIG) Calls; Jon Najarian Owns (BAC), Is Short (BAC) Calls; Jon Najarian Owns (C), Is Short (C) Calls; Jon Najarian Owns (GME), Is Short (GME) Calls; Jon Najarian Owns (GS), Is Short (GS) Calls; Jon Najarian Owns (JPM), Is Short (JPM) Calls; Jon Najarian Owns (MS), Is Short (MS) Calls; Jon Najarian Owns (WFC), Is Short (WFC) Calls; Jon Najarian Owns Seats On CBOE, CME, NYSE; Edwards Owns (ARO); Edwards Owns (BAC) For Clients; Edwards Owns (GS) For Clients; Edwards Owns (BKE) For Clients; Edwards Owns (JPM) For Clients; Edwards Owns (WFC) For Clients; Karabell Owns (C), (FXI), (JPM), (UYG); Funds Managed By Dennis Gartman Own (F), (CMG), (CGM), (DRI), (PNRA), (AGU), (PNR), (JOYG), (GOOG), (GMCR), (EWZ), (FAX), (PGH); Funds Managed By Dennis Gartman Are Short S&P Futures, (BBD), (AMX), (SPLS), (TM); Funds Managed By Dennis Gartman Are Long Canadian Dollar, Australian Dollar, Gold Futures; Funds Managed By Dennis Gartman Are Short EUR, CHF, British Pound Sterling, Yen

For Joe Terranova
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (GOK)
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 (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Steve Grasso
Stuart Frankel & Co. Inc. And Its Partners Own (ABK)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (TOL)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Own (SDS)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)

For Brian Kelly
Kanundrum Capital Owns (C)
Kanundrum Capital Owns (JPM)
Kanundrum Capital Owns (GE)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short Copper
Kanundrum Capital Is Short Treasuries
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short (KRE)
Kanundrum Capital Is Short (RKH)
Kanundrum Capital Is Short (SLX)
Kanundrum Capital Is Short (X)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (ACH)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short (AA)

For Brian Stutland
Stutland Equities Is A Market Maker In VIX Futures And Options
Stutland Equities Is A Market Maker In SPX Options

For Gerard Cassidy
RBC Capital Markets Is Providing Fulton Financial Corp. With Non-Investment Banking Securities-Related Services
RBC Capital Markets Has Provided Fulton Financial Corp. With Non-Investment Banking Securities-Related Services In The Past 12 Months
RBC Capital Markets Has Provided KeyCorp With Non-Securities Services In The Past 12 Months
RBC Capital Markets Has Provided Webster Financial Corp. With Non-Securities Services In The Past 12 Months
Royal Bank of Canada And Affiliates Owns 1% Or More Of Regions Financial Corp.
RBC Capital Markets Has Provided Huntington Bancshares With Non-Securities Services In Past 12 Months



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