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Halftime Report: Are We In A Melt-Up?

Stocks remained on a slow-but-steady upward path as the Dow hit fresh 2010 highs with commodity names and financials among Wednesday’s big winners.

How should you be positioned now?

We’re in a melt-up, explains veteran trader Gary Kaminksy and I expect it to continue through the end of the quarter. Right now fundamentals don’t matter. The fear of not owning stocks should drive the indexes. I’m a buyer of the broad market and expect larger names to see money flow.

I agree that investors are rotating into big names – especially those that have been lagging because of their finance arms, muses Brian Kelly. I’m talking names such as GE and Deere. As long as the Fed keeps rates low I’m a buyer of this market.

Patterns in the charts suggest to me the S&P could drift up to 1225 within the next two months, speculates Todd Gordon of Forex.com. But I think it’s going to be a sloppy, choppy trip.

I’m watching the Vix , adds Jared Levy of Peak6 as well as the put / call ratio which is very low. It suggests that complacency is becoming a factor in this market. It makes me concerned as we melt-up. I’m cautious.

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TOPPING TAPE: COMMODITIES

Oil prices rose above $82 a barrel Wednesday after a report showed U.S. crude inventories grew less than expected last week and OPEC decided to keep its output targets unchanged.

What’s the trade?

The forward curve of oil is flattening, explains Jared Levy. I’d be a buyer of the USO but a seller of an aggressive covered call.

None of that matters, says Gary Kaminksy. I expect commodities to melt-up as well as the indexes. Again the underlying feeling among portfolio managers is fear of not participating.

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TEMPLE INLAND 'ON WATCH' FOR UPGRADE.

Standard & Poor's on Tuesday placed all of its ratings for timber company Temple-Inland on credit watch with positive implications because, it said, the company could cut its debt and boost its earnings.

The ratings agency said Temple-Inland reduced its debt about $440 million last year, and it expects its building products segment's profit to rise during the next two years

What’s the trade?

In the timber space, I like Plum Creek, says Brian Kelly.



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CHART OF THE DAY: U.S. DOLLAR

Despite the chatter that the dollar won't make further gains as long as interest rates stay low technical analysis suggests otherwise.

Patterns in the charts of the Dollar Index suggest to me the dollar goes higher, reveals Todd Gordon. I’d get long the dollar against the euro, he muses.

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TOPPING THE TAPE: FORD

With Ford trading a 5-year highs, how should you game the auto space?

GM is expected to price an IPO this year, explains Gary Kaninsky. That could have a short-term negative impact on Ford.

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EAR TO THE WALL: CLOROX

On Tuesday Barclays upgraded shares of Clorox from Equal Weight to Overweight and raised its price target on the stock to $71 from $67 citing revenue momentum.

What should you make of it?

I like this stock. Not only is Clorox is a potential takeover target, explains Gary Kaminksy, but it’s also experiencing organic growth.

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TAKE YOUR POSITION: NIKE

With Nike on deck to report earnings after the bell on Wednesday, what’s the trade?

Options action suggests to me the stock could pop after earnings and then pull back to where it is now, reveals Jon Najarian.

The charts look explosive to the upside, adds Todd Gordon. I think $79 is the level.

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TRADE TO GO: PAG

I’m bullish Penske, reveals Brian Kelly. They performed well in the recession and are levered to the high-end consumer. If the economy is turning it’s a great stock.

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CALL THE CLOSE

Gary Kaminsky: Nothing matters, this is a melt-up and fear of not-to own will drive stocks. I’d buy the broad market on the expectation that larger names will continue to see money flow.

Jared Levy: I’m cautious.

Brian Kelly: As long as the Fed keeps rates low I’m a buyer.

Todd Gordon: I’m long the equity markets but I’d short my position with the euro.


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Trader disclosure: On March 17th, 2010, 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 Is Short (SPY), (IWM), (MDY), (IJR), (SPY), (USO); Finerman's Firm Owns (IYR) Puts; Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (TJX); Seymour Owns (AAPL), (BAC), (BX), (F), (GE), (TSO), (XOM), (SSL); Najarian Owns (AA) Calls; Najarian Owns (BAC) Call Spread; Najarian Owns (C); Najarian Owns (F) Calls; Najarian Owns (GE) Calls; Najarian Owns (TSO) Calls; Najarian Owns (YHOO) Call Spread; Terranova Owns (QCOM) April Calls; Terranova Owns (TER); Terranova Is Short (AMR); Terranova Is Short (UAUA); Terranova Is Short (CAL); Terranova Is Long Dec. 2010 Crude Oil Futures; Edwards Owns (AAPL) For Clients; Edwards Owns (BAC) For Clients; Edwards Owns (CVX) For Clients; Edwards Owns (GS) For Clients; Edwards Owns (GE) For Clients; Edwards Owns (JPM) For Clients; Edwards Owns (MSFT) For Clients; Edwards Owns (NKE) For Clients; Edwards Owns (PG) For Clients; Edwards Owns (QQQQ) For Clients; Edwards Owns (SPY) For Clients; Edwards Owns (SNE) For Clients; Edwards Owns (WFC) For Clients; Edwards Owns (XOM) For Clients

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