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Halftime: Wednesday's Key Level In The S&P

Stocks pared the worst of their losses, around lunchtime Wednesday, with buyers stepping into financials and consumer staples
cheered by new data on employment which showed the U.S. economy grew private sector jobs for the first time since January 2008.

Though the market remained in the red, the economic data helped to soothe nervous investors who remain concerned about the debt problems in Europe and whether they will hinder global growth.

What must you know to trade this market?

As far as I can tell the market is stretched to the downside, says Brian Kelly of Kanundrum. I wouldn’t be surprised to see more short covering. However, I’d sell the rips.

I’m watching 1170 as a critical level in the S&P, explains Jared Levy of Peak 6. I’m a buyer as long as the S&P holds that level.

For me the important level in the S&P is 1150, adds Hilary Kramer of A&G Capital. As long as we stay above that the market should be fine. For a market ‘tell’ I’m watching the action in Apple and Goldman.

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TRADING GOLDMAN

Speaking of Goldman, Hilary Kramer isn’t the only trader watching the stock.

All the traders are keen to hear from CEO Lloyd Blankfein in a conference call scheduled for Wednesday afternoon – especially after Fitch cut Goldman’s outlook to negative from stable citing the firm's recent legal developments and regulatory challenges that could hurt its reputation and revenue generating capacity.

Veteran trader Gary Kaminksy keeps his ear to the ground and picked up some very interesting tidbits.

You’d have to be naïve to think that JPMorgan and BofA aren’t using this scandal to try and poach some clients, says Kaminksy. Hence the conference call, Goldman needs to get in front of the issue. But I’m hearing that corporate institutional clients are extremely supportive and it’s business as usual at Goldman.

What’s the trade?

If you’re trading the stock expecting to hear revelations about management or an SEC settlement in the conference call, you’re going to be disappointed, says Kaminsky.

If and when fin reg gets passed I’d go long Goldman, says Joe Terranova

Looking at the techincals, I’m bullish, says Hilary Kramer.

Options traders are also bullish, adds Jared Levy of Peak 6.

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OIL GETS CRUSHED

A larger than expected increase in inventories dented crude once again, with the spot price of oil briefly dipping below $80 on Wednesday.

What’s the trade?

I think big player are stepping to the side, says Joe Terranova, but I don’t think the long-term bull run trend is broken.

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CALL THE CLOSE:

Brian Kelly: I’d sell the rips.

Jared Levy: I’m a buyer above 1170.

Hilary Kramer: I think we’re going higher but my tell is the action in Apple and Goldman.

Joe Terranova: I think the market is focused on jobs report Friday morning.


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Trader disclosure: On May 5, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (C) May Calls; Terranova Owns (PFE), (SWN), (XCO), (TER); Terranova Is Long Gold June 2010 Futures; Terranova Is Short (CMA); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (AEO), (AEO) Calls; Finerman's Firm Owns (BAC), (BAC) Calls; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (BP) Calls; Finerman Owns (GOOG); Finerman Owns (GS) Calls; Finerman's Firm Owns (IBM); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman Owns (WFC) Preferred; Najarian Owns (C) Calls; Najarian Owns (CLF) Call Spread; Najarian Owns (LPX) Call Spread; Najarian Owns (MS); Najarian Owns (PFE); Najarian Owns (YHOO) Call Spread; Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts; Levy Owns (GS)

For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
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 (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Brian Kelly
Kanundrum Capital Is Long U.S. Dollars
Kanundrum Capital Owns (TLT)
Kanundrum Capital Is Long (GLD)
Kanundrum Captial Owns (GFI)
Kanundrum Capital Is Long (AUY)
Kanundrum Capital Is Long (GFI)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short (USO)
Kanundrum Capital Is Short (RSX)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (DE)
Kanundrum Capital Is Short (NUE)
Kanundrum Capital Is Short (SU)
Kanundrum Capital Is Short (EXPE)
Kanundrum Capital Is Short (XOM)
Kanundrum Capital Is Short (HES)
Kanundrum Captial Is Short (CLF)
Kanundrum Captial Is Short (TSL)
Kanundrum Captial Is Short (HBC)
Kanundrum Captial Is Short (BCS)
Kanundrum Captial Is Short (DB)
Kanundrum Captial Is Short (NUE)
Kanundrum Captial Is Short (IBM)

For Anthony Scaramucci:
Scaramucci Owns (AAPL), Skybridge Owns (AAPL)
Scaramucci Owns (BAC), Skybridge Owns (BAC)
Scaramucci Owns (C), Skybridge Owns (C)
Scaramucci Owns (GOOG), Skybridge Owns (GOOG)
Scaramucci Owns (GS), Skybridge Owns (GS)
Scaramucci Owns (JPM), Skybridge Owns (JPM)
Scaramucci Is Long U.S. Dollar, Skybridge Is Long U.S. Dollar

For Hilary Kramer
A&G Capital Owns (PMI)
A&G Capital Owns (MTG)
A&G Capital Owns (XCO)
A&G Capital Owns (GS)
A&G Capital Owns (MS)
A&G Capital Owns (QQQQ)
Hilary Kramer Is A Client Of Goldman Sachs

For Jared Levy
Peak6 Investments Is Long And Has An Options Position In (GS)
Peak6 Investments Is Long And Has An Options Position In (JPM)
Peak6 Investments Is Long And Has An Options Position In (C)
Peak6 Investments Is Long And Has An Options Position In (BAC)
Peak6 Investments Is Long And Has An Options Position In (WFC)
Peak6 Investments Is Long And Has An Options Position In (AA)
Peak6 Investments Is Long And Has An Options Position In (USO)
Peak6 Investments Is Long And Has An Options Position In (OIH)
Peak6 Investments Is Long And Has An Options Position In (COP)
Peak6 Investments Is Long And Has An Options Position In (PMI)
Peak6 Investments Is Long And Has An Options Position In (BP)
Peak6 Investments Is Long And Has An Options Position In (AAPL)
Peak6 Investments Is Short And Has An Options Position In (MS)
Peak6 Investments Is Short And Has An Options Position In (XLF)
Peak6 Investments Is Short And Has An Options Position In (FCX)
Peak6 Investments Is Short And Has An Options Position In (SPY)
Peak6 Investments Is Short And Has An Options Position In (QQQQ)
Peak6 Investments Is Short And Has An Options Position In (XOM)
Peak6 Investments Is Short And Has An Options Position In (CVX)
Peak6 Investments Is Short And Has An Options Position In (MTG)
Peak6 Investments Is Short And Has An Options Position In (RDN)
Peak6 Investments Is Short And Has An Options Position In (RIG)

For Mike Khouw
Cantor Firtzgerald & Co. Is A Market Maker In (CLF)

For Stephen Weiss
Weiss Owns (HD), (MWA), (BP), (MRK), (HBAN), (NMM), (FRO), (WCBO)

CNBC.com with wires

Symbol
Price
 
Change
%Change
S&P 500
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BAC
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GS
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JPM MLP ETN
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SPDR TEC SEL
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SPDR CD SEL
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AAPL
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