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Halftime: Are Monday's Gains a Head Fake?

Stocks clawed their way back to near even in seesaw trading on Monday with tech names oil and financials closely watched as market 'tells.'

Again, overseas woes weighed on the market after the government of Spain had to bail out a small bank. In a different environment the developments wouldn’t be particularly noteworthy, but considering the financial woes in Europe investors feared it could be a sign of more trouble to come.

On a bullish note, however, technology shares popped after Morgan Stanleyraised its price target on Apple and Citi added Google to its top picks list.

How should you be positioned?

The important level to watch on the S&P is 1086, explains Steve Grasso of Stuart Frankel. If we close above that level it would be very positive but I don’t expect it to hold. The bullish action is likely a head fake. I think the market is lower by week’s end.

I’m bullish commodities, adds Fast Money trader Tim Seymour. Freeport McMoRan and US Steel likely put in a bottom - the 200-day moving average should provide resistance. I think they’re oversold.

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FINANCIALS FIZZLE

Financials were the big market buzz kill Monday with the notable exception of Citi which was upgraded by Goldman Sachs to a ‘Buy.’

What’s the trade?

Forget Citi, it’s hard not to notice that market bellwether Goldman was trading at session lows into the afternoon, explains OptionMonster Jon Najarian. Although that may seem bearish, I don’t think it shows weakness in the market so much as it shows nervousness.

Considering the XLF tested the flash crash lows of May 6th is that a bullish, sign asks host Melissa Lee.

I don’t think so, I think the move higher is merely traders putting speculative money to work in Bank of America and JPMorgan , two of the ETF’s largest components, says Steve Grasso.

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TECH NAMES CLIMB

As we mentioned above, Citi upgraded Google to its top picks list on Monday with a $640 price target on the name, a 35-percent move higher from where its currently trading.

Citi analyst Mark Mahaney made the call. He tells the desk he’s bullish on the recovery they’ve made in the US and UK. Find out why else he thinks the stock goes sharply higher. Watch the video now.

What’s the trade?

I’m excited about Google’s valuations, says Tim Seymour. It’s trading cheap to its 5-year historical average, explains Tim Seymour.

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UNUSUAL ACTIVITY: AMERICAN AXLE

Najarian has spotted unusual options activity in American Axle & Manufacturing Holdings .

According to published reports, options investors are showing significant interest in the June 9 call and the June 10 calls.

With call volume running around 6 times normal, the action suggests big investors think the stock could make a sharp move higher.

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TRADE TO GO: RIO TINTO

Tim Seymour suggests putting Rio Tinto on your radar. It’s a play on oversold miners, he says. At 6 ½ times earnings it’s a value play.

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CALL THE CLOSE

Tim Seymour: I think the market goes higher on Monday but only because Europe is on vacation.

Zach Karabell: I’d play stock picker along with downside protection

Jon Najarian: I’m a buyer into the close

Steve Grasso: I think the market is lower by week’s end.

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Trader disclosure: On May 24, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (BAC), (BX), (AAPL), (RTP) (F), (IBM); Karabell owns (GS), (C); Jon Najarian owns (AXL); Grasso Owns (BP), (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (C), (JPM), (X); Adami Owns (C), (GS), (INTC), (MSFT), (NUE), BTU); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (ACL); Finerman's Firm Owns (ARG) 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 And Finerman Own (IBM); FInemran's Firm Owns (KFT); Finerman Owns (WFC) Preferred; Kelly owns (CAT) puts; Kelly owns (EMN) puts; Kelly owns (WYNN) puts; Kelly owns (EXPE) puts; Kelly owns (SPY) puts

For Mike Khouw
Cantor Fitzerald & Co. Is A Market Maker In (AAPL)
Cantor Fitzerald & Co. Is A Market Maker In (AMD)
Cantor Fitzerald & Co. Is A Market Maker In (BAC)
Cantor Fitzerald & Co. Is A Market Maker In (C)
Cantor Fitzerald & Co. Is A Market Maker In (DWA)
Cantor Fitzerald & Co. Is A Market Maker In (F)
Cantor Fitzerald & Co. Is A Market Maker In (FCX)
Cantor Fitzerald & Co. Is A Market Maker In (FNF)
Cantor Fitzerald & Co. Is A Market Maker In (GOOG)
Cantor Fitzerald & Co. Is A Market Maker In (GS)
Cantor Fitzerald & Co. Is A Market Maker In (IBM)
Cantor Fitzerald & Co. Is A Market Maker In (INTC)
Cantor Fitzerald & Co. Is A Market Maker In (JEF)
Cantor Fitzerald & Co. Is A Market Maker In (JPM)
Cantor Fitzerald & Co. Is A Market Maker In (MS)
Cantor Fitzerald & Co. Is A Market Maker In (QQQQ)
Cantor Fitzerald & Co. Is A Market Maker In (S)
Cantor Fitzerald & Co. Is A Market Maker In (SPY)
Cantor Fitzerald & Co. Is A Market Maker In (T)
Cantor Fitzerald & Co. Is A Market Maker In (WFC)
Cantor Fitzerald & Co. Is A Market Maker In (X)
Cantor Fitzerald & Co. Is A Market Maker In (XLF)
Cantor Fitzerald & Co. Is A Market Maker In (YHOO)

For Brian Kelly:
Kanundrum Capital Owns U.S. Dollars
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (AUY)
Kanundrum Capital Is Short (EXPE)
Kanundrum Capital Is Short (CAT)
Kanundrum Capital Is Short (EMN)
Kanundrum Capital Is Short (XLK)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (WYNN)
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (RSX)
Kanundrum Capital Is Short (USO)

For Dennis Gartman:
Funds Managed By Gartman Own (GLD)
Funds Managed By Gartman Are Short Sterling, Euros
Funds Managed By Dennis Gartman Own (AAPL)

For Whitney Tilson:
Funds Managed By Whitney Tilson Are Short (ITB)

For Steve Grasso:
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (TRV)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (AAPL)

For Mark Mahaney:
Employees Of Citigroup Own (GOOG), (YHOO)
(GOOG), (YHOO), (AMZN), (EBAY) Are Or In Past 12 Months Were Non-Investment Banking Clients Of Citigroup Global Markets
Citigroup Global Markets Or Affiliate record non-investment banking compensation from (GOOG), (YHOO), (AMZN), (EBAY) in past 12 months
Citigroup Global Markets And/or Affiliates has a significant financial interest in relation to (GOOG), (AMZN), (EBAY)
Citigroup Global Markets Or Affiliates owns 5% or more of (YHOO)
Citigroup Global Markets Is A Liquidity Provider In (GOOG), (EBAY)
Citigroup Global Markets or affiliates owns 1% or more of (YHOO)
Citigroup Global Markets or affiliates owns 1% or more of (AMZN)
Citigroup is a market maker in (GOOG)
Citigroup is a market maker in (YHOO)
Citigroup is a market maker in (EBAY)
Citigroup is a market maker in (AMZN)

Other Relevant Disclosures:
Finerman's Firm And Finerman Owned (JPM) On 4/12/10

CNBC.com with wires

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GS
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SPDR TEC SEL
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NE
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RIG
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AAPL
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GOOGL
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