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Halftime Report: Time To Go Cherry-Picking?

Monday, 19 Apr 2010 | 1:30 PM ET

The S&P traded lower on Monday as concerns about fraud charges against Goldman Sachs overshadowed good earnings from Citigroup and upbeat economic data.

Meanwhile, the Fast Money traders were closely watching weakness in the Nasdaq attempting to determine if Goldman's ripple was so wide ranging that it was dragging down tech.

Fast Money Halftime Report
How to invest now, with the Fast Money crew.

What should you make of it?

I think the action in tech is part of the risk-off trade triggered by Goldman, says Steve Grasso of Stuart Frankel. In other words, investors are cashing out of any trade which generated profits – and tech has certainly generated profits.

And to take that a step further, tech will likely remain under pressure, I’d be a seller into the close, adds OptionMonster Jon Najarian. Remember they don’t ring bells at the top, he says. When the Goldman news came out on Friday the feeling on Wall Street was – it’s time to take profits.

I see the weakness as an opportunity to cherry pick if you’re a long-term buyer, counters Zach Karabell of RiverTwice.

Looking at the market broadly, I’d also be a buyer as long as the S&P holds above 1175, counsels Grasso.

I’m watching 1180 as a critical level on the S&P, adds Tim Seymour. But I'd look for opportunities.

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GOLDMAN SACHS EARNINGS

Fraud charges are certainly the big story, but we’d be remiss not to touch on Goldman Sachsearnings. The company is set to report earnings ahead of the bell tomorrow.

What's the trade?

I'm seeing big investors buy Goldman ahead of earnings but I’d be weary of holding it, counsels Steve Grasso. Make no mistake, earnings are the catalyst for this trade.

As a second derivative trade on the Goldman fraud charges I’d short the ratings agencies, counsels Jon Najarian. I think MHP and MCO are in a world of hurt, he says. The question becomes - if they did not properly rate the securities in question, what's their liability?

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COMMODITY NAMES IN FOCUS

Commodities took a big hit on Monday with oil, copper , and gold all falling on the session.

The move was largely triggered by a stronger dollar, which climbed as the euro weakened.

What’s the trade?

Emerging markets and commodities are also a victim of the risk-off trade generated by Goldman, says Tim Seymour. Look at Rio Tinto, Vale and BHP. They received analyst upgrades and yet they’re trading lower. That’s telling. It says to me we could see more downside.

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TRADE TO GO: MONSANTO

Put Monsanto on your radar, counsels Zach Karabell. It’s lagged the market even though business has been strong, he explains. I think it catches up.

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SET THE RECORD STRAIGHT: AMYLIN CEO


Amylin traded lower on Monday despite posting a narrower than expected loss.

Specifically, Amylin posted a net loss of $38.2 million, or 27 cents per share, compared with a net loss of nearly $47 million, or 34 cents per share, a year earlier.

Analysts on average expected a loss of 29 cents per share, according to Thomson Reuters.

What’s the trade?

I’d be an aggressive buyer of Amylin around $20, says Jon Najarian. About a dollar lower it looks good to me.

Want to hear more? Watch the video now and get more details on Amylin’s pipeline from CEO Daniel Bradbury!

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CALL THE CLOSE

Tim Seymour: I’m watching 1180 as a critical level on the S&P.

Zack Karabell: I see the weakness as an opportunity to cherry –pick if you’re a long-term buyer.

Jon Najarian: I think tech remains under pressure and I’d be a seller.

Steve Grasso: The market is a buy above 1175.


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Trader disclosure: On Apr 19, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money Halftime Report were owned by the Fast Money traders; Karabell Owns (GS), (C), (IBM), (FCX), (MON); Jon Najarian Owns (XLF) Put Spreads; Jon Najarian Owns (MS), Is Short (MS) Calls; Jon Najarian Owns (BAC), Is Short (BAC) Calls; Jon Najarian Owns (C), Is Short (C) Calls; Jon Najarian Owns (JPM), Is Short (JPM) Calls; Jon Najarian (CME), (CME) Puts; Jon Najarian Owns A Seat On CME; Jon Najarian Owns (MCO) Puts; Grasso Owns (DYN), (LPX), (ASTM), (ABK), (AAPL), (BAC), (BGP), (C), (CVGI), (COST), (JPM), (NEM), (PRST), (WMT), (PFE), (BA), (T); Seymour Owns (BAC)

For Tim Seymour
Seygem Asset Management Is Short (DB), (X), (VALE)
Karabell Owns (MON)

For Steve Grasso
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)


Late Addition:
Grasso Owns (CSCO)

CNBC.com with wires

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NASDAQ
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S&P 500
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BHP
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C
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GS
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MCO
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MHFI
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MO
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VALE'A
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SPDR TEC SEL
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