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Pro Trader: Goldman Up Friday Or S&P Goes Down

The bulls may be down but they’re sure not out. The Dow closed with a triple digit advance on Thursday and all but four stocks in the S&P 500 finished the day higher.

The sigh of relief on Wall Street was almost audible as investors digested two new pieces data that showed the global recovery hadn’t fallen apart completely.

Beijing confirmed exports jumped 50 percent in May and the government of Spain said demand for its bonds was robust.

The developments triggered a sharp rally especially in materials and energy .

Can the rally last? The Fast Money traders don't agree that it can.

Instant Insights with the Fast Money traders

I got my faced ripped off on Thursday, admits Guy Adami. I thought we were going lower considering the weakness in Goldman shares. Over the past several weeks Goldman has been leading the S&P by about a couple hours, he explains, but on Thursday they decoupled. The market shot higher and Goldman closed sharply lower.

I don't think the relationship is at an end. On Friday I expect that either Goldman shoots up or the S&P turns down. I'd bet that the S&P turns down.

As far as I’m concerned Thursday’s market action confirms comments made by Ben Bernanke earlier in the week, muses Joe Terranova. He said the economy should continue to expand and that the European debt crisis would only have only a "modest" impact on the US. I think the market is digesting and believing those comments. I'm bullish.

I have more conviction on the short side, counters Brian Kelly. China's higher exports suggest higher CPI, which means Beijing gets more concerned about inflation.

I’m not bearish but I’m certainly not bullish, adds Patty Edwards. The market is facing a slew of unknowns, from the Wall Street crackdown to the deep-water drilling moratorium and more. There's just too much uncertainty for me to think the SPYs are about to march higher, blindly.

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ANALYZE THIS: FINALLY THE INVESTMENT CASE FOR BP

Shares of BP traded higher on Thursday after a new report from Oppenheimer Equity Research called Wednesday's sell-off "panic selling," adding, "investors dumped BP shares on fear of unrealistically high potential liabilities."

The report said BP shares currently price in $60 billion worth of potential liabilities, "which we think is very unrealistic."

Oppenheimer also shrugged off fears that the company will go bankrupt, be acquired by a rival or fire chief executive Tony Hayward.

What must you know?

BP is trading 40% below its 200-day moving average and 40% below its enterprise value, explains Barry Ritholtz of Fusion IQ. It’s reached a point beyond being a value trap. Now it’s either a dirt cheap stock or a company that’s going out of business and I don’t think it’s the latter.

*When does Barry Ritholtz recommend stepping in? Watch the video and find out now!

I wouldn’t touch BP, says Brian Kelly. I can’t get a handle on how much oil is coming out of that hole. If the estimates are too conservative I think BP could be in trouble. I just think there are better ways to make money in this space

I’m cautious too, says Joe Terranova There’s no way to know what the value of the company is right now because there’s no way to build a model. BP is a giant unknown.

If you’re looking for a trade, I’d go downstream and look at McDermott , says Guy Adami. At 10 times next year's earnings it's attractive.

I like Ensco reveals Anthony Scaramuuci. It's a great energy name that was punished unjustly.

In this space I'd look at Ormat, says Patty Edwards.


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AFTER HOURS ACTION: DELL

Shares of Dell traded sharply lower in extended trade after the company said it revised its fiscal 2011 first-quarter results to reflect a potential legal liability.

Dell is in talks to settle an SEC investigation into alleged accounting wrong-doing and said it has established a $100 million reserve for a potential settlement.

>Click here for more details.


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GOLDMAN CLOSED IN THE RED

Goldman Sachs was one of the few stocks that ended the session lower. The negative action was largely generated by a new report from the the Financial Times suggesting the SEC may launch a second probe into dealings done by the firm.

The inquiry involves Hudson Mezzanine, a $2bn collaterized debt obligation, and is part of a wider investigation into the CDO activities of Wall Street banks.

People close to the situation said the probe was preliminary and there was no certainty that it would lead to additional actions against Goldman.

What’s the trade?

If you’ve got a long-term time line I think this is an entry point in GS, says Anthony Scaramucci.

I think fin-reg is priced in, says Brian Kelly, but I’m short GS because I don’t think over the next 6-12 months Goldman will generate strong results.


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Trader disclosure: On June 10, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kelly owns (GS) puts; Kelly owns (SPY) puts; Terranova owns (IPSU), (BX), (UDN), (PFE), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (SWN), (GLD), (AAPL), (IPI), (SU), (V), (TEVA), (FXB), (CVS); Adami owns (AGU), (BTU), (C), (GS), (INTC), (MSFT)

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 (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 Anthony Scaramucci
SkyBridge Capital owns the UK Pound
SkyBridge Capital owns Gold
Scaramucci owns (GS) and (GS) Puts
Scaramucci and Skybridge Capital own (JNJ)

Brian Kelly
Kanundrum Capital is short (GS)
Kanundrum Capital is short (FXI)
Kanundrum Capital is short (RSX)
Kanundrum Capital is short (XLY)
Kanundrum Capital is short (XLK)
Kanundrum Capital is short (XLE)
Kanundrum Capital is short (XLB)
Kanundrum Capital is short (FCX)
Kanundrum Capital is short EURO
Kanundrum Capital is short POUND
Kanundrum Capital is short SWILL
Kanundrum Capital U.S. DOLLAR
Kanundrum Capital owns (GLD)
Kanundrum Capital owns (TLT)
Kanundrum Capital owns (GFI)
Kanundrum Capital owns (AUY)
Kanundrum Capital owns (GDXJ)


Patty Edwards
Edwards owns (AA) for clients
Edwards owns (GE) for clients
Edwards owns (NSC) for clients
Edwards owns (UNP) for clients
Edwards owns (INTC) for clients
Edwards owns (STM) for clients
Edwards owns (TXN) for clients
Edwards owns (NVDA) for clients
Edwards owns (AAPL) for clients
Edwards owns (HPQ) for clients
Edwards owns (MSFT) for clients
Edwards owns (DELL) for clients
Edwards owns (GOOG) for clients
Edwards owns (JPM) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (WFC) for clients
Edwards owns (MS) for clients
Edwards owns (RIG) for clients
Edwards owns (NE) for clients
Edwards owns (SLB) for clients
Edwards owns (HAL) for clients
Edwards owns (DO) for clients
Edwards owns (VXX) for clients
Edwards owns (SPY) for clients
Edwards owns (QQQQ) for clients
Edwards owns (GLD) for clients
Edwards owns (ORA) for clients
Edwards owns (KFT) for clients

Barry Ritholtz|
Ritholtz Firm owns (C)

For Edward Mills
**no disclosures **

For Peter Boockvar
Boockvar owns Euros

For Brian Stutland
Stutland Equities makes a market in VIX and SPX options



CNBC.com with wires

Symbol
Price
 
Change
%Change
DJIA
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S&P 500
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BP.
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4331
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ESV
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GS
---
MDR
---
ORA
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SPDR MAT SEL
---
SPDR NRG SEL
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