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Halftime: Is John Chambers Trying To Tell You Something?

The bulls struggled to get a foothold in a choppy session on Wall Street, Thursday, as metal names showed strength but tech names experienced selling pressure.

Cisco was among the biggest drags on the Dow. Despite beating expectations, investors turned bearish after comments from CEO John Chambers sounded a cautionary note about the recovery and unforeseen impediments.

If John Chambers is cautious, shouldn't you be cautious too?

Strategy Session with the Fast Money Traders

John Chambers has been spot on with his market calls, explains JJ Kinahan of TD Ameritrade. It makes me nervous that he was a little bit of a wet blanket. That bears watching for the overall market. If you go back through his commentary over the past few years, he’s been telling us what to expect 6 months out.

Looking at the market broadly, The S&P needs to close above 1173 in order for me to feel bullish, says Guy Adami. I think if we stay below that level for a couple days the sell-off resumes.

The 50-day on the S&P is 1174 and the market has had a tough time breaking above that level, echoes Steve Grasso. I’d be a seller. Also, based on the action in the euro and oil , my clients are telling me that they think the market should be lower.

I always keep stocks that are on the move on my radar to get a sense of the overall market, adds Hilary Kramer of A&G and right now it’s all about the action in Citi , Goldman , BofA.

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TECH TALK

Cisco wasn’t the only tech stock in the spotlight. Investors were also gaming German software company SAP which agreed to buy smaller U.S. rival Sybase for $5.8 billion.

What’s the tech trade?

In the space, I’d add to my position in Microsoft, says Hilary Kramer. It’s a good play in a volatile market. They’re going into a product cycle upgrade and it pays a dividend.

If you’re looking to play Cisco, I think it’s interesting, but lower, adds Guy Adami. I wouldn’t pick up the stock just yet. However another 3-4% lower and I’d be a buyer.

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30-YEAR AUCTION RESULTS AT 1PM

A $16 billion 30-year bond sale wrapped up a big week of Treasury auctions this week.

Wednesday's the government auctioned $24 billion in 10-year notes while on Tuesday’s they sold $38 billion in 3-year notes. All were met with solid demand.

Although investors had been concerned about the appeal of Treasuries, demand has remained robust largely due to the sovereign debt crisis in Europe.

*Find out what Steve Liesman has to say about the most recent auctions. Watch the video above.

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TOPPING THE TAPE: METAL NAMES

The traders were closely watching the metal names on Thursday after Goldman added US Steel to its Conviction Buy list.

What’s the trade?

I would not be buying steel here, says Hilary Kramer. I think chances of a hiccup are too great.

I’m bullish steel, counters JJ Kinahan. I don’t think we fall off the cliff like we did in 2008.

If you’re looking for a play, I’d look at a related name; Freeport , counsels Guy Adami. A close above 75.5 suggests to me it could go to $90.

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TOPPING THE TAPE: HAL

The traders were also keeping a close eye on Halliburton after FBR upgraded the stock to ‘Outperform’ with a price target of $44 citing less headline risk from the gulf coast oil spill.

What’s the energy trade?

I’m long BP, says Steve Grasso. Although there could be more downside, bigger picture, I think the sell-off was overdone.

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TRADE TO GO: CREE

Guy Adami recommends putting Cree on the radar.

It’s been bullet proof in any tape and Oppenheimer just upgraded the stock. I’d get long ahead of a JPMorgan Confernece on May 17th -- an event where they're speaking, he counsels.

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CALL THE CLOSE:

Guy Adami: I think the market goes lower.
Steve Grasso: The 50-day is 1174 and the market has had a tough time breaking above. I’d be a seller.
JJ Kinahan: I’m a buyer. I think the S&P goes up and tests 1173.
Hilary Kramer: I’m a seller, Volumes are too low.


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Trader disclosure: On May 13, 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 (GS), (INTC), (MSFT), (AGU), (BTU), (NUE), (C); Finerman's Firm Is Short (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Calls; Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (BP), (BP) Calls; Finerman Owns (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (KFT); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman's Firm Owns (TGT); Finerman Owns (WFC) Preferred; Finerman's Firm Owns (WMT); Finerman Owns (IBM); Finerman Owns (GS) Calls; Finerman's Firm Owns (MCD), (IBM); Seymour Owns (AAPL), (BAC), (HAL), (MSFT); Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts; Kelly Owns (SPY) Puts; Stutland Owns (SLV) Calls, Is Short (SLV) Puts; Kinahan Owns (AKS), (C), (MSFT), (CSCO), (WFC), (YHOO); Kinahan Is Short (SPY); Grasso Owns (BP), (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (PRST), (PFE), (BA), (T), (CSCO), (X)

For Brian Kelly
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (AUY)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short Franc
Kanundrum Capital Is Short (IBM)
Kanundrum Capital Is Short (XOM)
Kanundrum Capital Is Short (HES)
Kanundrum Capital Is Short (NUE)
Kanundrum Capital Is Short (DB)
Kanundrum Capital Is Short (BCS)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (XLK)
Kanundrum Capital Is Short (XLI)
Kanundrum Capital Is Short (XLY)
Kanundrum Capital Is Short (XLV)

For Hilary Kramer
A&G Capital Is Short (VZ)
A&G Capital Is Short (QQQQ)
A&G Capital Owns (RIG)
A&G Capital Owns (SCHN)
A&G Capital Owns (GS)
A&G Capital Owns (MSFT)
A&G Capital Owns (SLB)
Kramer Is A Hedge Fund Client Of (GS)


For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
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 (NYX)
Stuart Frankel And Its Partners Own (PALM)
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)

For Patty Edwards
Edwards Owns (HD) For Clients
Edwards Owns (BKE) For Clients
Edwards Owns (COST) For Clients
Edwards Owns (JCG) For Clients
Edwards Owns (COH) For Clients

For Robert Mackenzie
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (RIG)
FBR Capital Markets Analyst(s) Own (RIG)
FBR Capital Markets Is A Market Maker Or Liquidity Provider For (SLB)

CNBC.com with wires

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C
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CREE
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CSCO
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FCX
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GS
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HAL
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MSFT
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SAP
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X
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