GO
Loading...

Halftime Pt. 1: S&P 1040, Bulls' Last Stand?

Tuesday could be tell-tale day in the stock market with the bears attempting to force the bulls into full retreat mode.

Around lunchtime investors were watching 1040 on the S&P to see if this former level of support would hold yet again.

Is the market building a base or is the S&P about to break?

Instant Insights with the Fast Money traders

The more times we probe a reference point, in this case a past low, the greater the likelihood that we exceed the low, explains widely followed technical analyst Carter Worth of Oppenheimer.

1040 is a critical level because it was the autumn low of 2009, the February low of 2010 and the May low of 2010.

My expectation is that this time 1040 will give way, says Worth. I think the S&P goes down to 980. But then we’ll probably be at a point where the market is oversold, Worth says.

If the S&P breaks below 1040 it has to trade below that level for at least 24 hours for the analysis to play out, adds OptionMonster Jon Najarian.

If we just break below quickly, it’s entirely possible the S&P pops right back up, Najarian adds. And if that happens I’d take it to mean 1040 is the base.

I’m not ready to think we’re going to make a deep dive either, says Joe Terranova. Gold is only up slightly on Tuesday. If a whoosh to the downside was imminent, the market would have pushed gold much higher.

On a related note, of the 23 companies in the S&P 500 that exceed $100 billion or more in market cap; only 2 have good charts; they are Berkshire and Apple , says Worth. They’re not market related stocks, and that too is bearish, Worth says.



--------------

OPPORTUNITIES IN A TERRIBLE TAPE

Despite the negative market action, the traders are always on the prowl for opportunities. Following are a few ideas:

I’d short Berkshire , says Jon Najarian. I think the stock is overdone to the upside.

If you’re looking for a trade I’d look at long nat gas, says Joe Terranova. I'm a buyer of the pullback which I think is only due to the hurricane not being as damaging as originally thought.

I’d sell short the euro/yen, sell short the Aussie/yen and sell short the Canadian dollar. The commodity trade is starting to unwind, says Brian Kelly.

I’d look at a long position in Corning which is trading less than 8 times earnings, adds Patty Edwards.

What’s working? Gold miners, says Carter Worth. The GDX is toying with well defined tops and the presumption is that is exceeds those tops and breaks out.

--------------

OUTSIDE THE STOCKS: TREASURIES

Concerns that Europe could drag down the recovery triggered a flight to safety on Tuesday sending the 10-year yield below 3-percent. That’s its lowest level since April of 2009

The 30-year bond also hit a bit of milestone, with yields dipping below to 3.95%, the lowest since October 2009.

What does the action mean?

I think we’re going to see lower yields last for a while, says Rick Santelli. Investors are worried that the consumer is dead and they’re going to need a safe place to hide


______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On June 29, 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 (IPSU), (BX), (AGU), (PFE), (TER), (GMCR), (RSX), (TER), (AXP), (KO), (KR), (COST), (AMZN), (TEVA), (BMO), (DIS), (XCO), (SWN), (GMCR), (IPI), (SU), (XOM), (RDS.A), (COP), (OXY), (V), (FXB): Terranova owns (GLD) July 120 puts; Jon Najarian owns (AAPL) call spreads; Jon Najarian owns (MU) call spreads; Jon Najarian owns (SNDK) call spreads; Jon Najarian owns a seat and stock in (CME); Jon Najarian owns a seat and stock in (CBOE); Jon Najarian owns a seat and stock in (NYX); Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Kelly is short (GS)

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (AMZN) for clients
Edwards owns (BAC) for clients
Edwards owns (BBY) for clients
Edwards owns (C) for clients
Edwards owns (COP) for clients
Edwards owns (CVX) for clients
Edwards owns (DELL) for clients
Edwards owns (DO) for clients
Edwards owns (GE) for clients
Edwards owns (GLD) for clients
Edwards owns (GOOG) for clients
Edwards owns (GLW) for clients
Edwards owns (HAL) for clients
Edwards owns (HPQ) for clients
Edwards owns (INTC) for clients
Edwards owns (JPM) for clients
Edwards owns (JNK) for clients
Edwards owns (MS) for clients
Edwards owns (MSFT) for clients
Edwards owns (NE) for clients
Edwards owns (NSC) for clients
Edwards owns (NVDA) for clients
Edwards owns (PNC) for clients
Edwards owns (QQQQ) for clients
Edwards owns (RIG) for clients
Edwards owns (SLB) for clients
Edwards owns (SPY) for clients
Edwards owns (STI) for clients
Edwards owns (STM) for clients
Edwards owns (TXN) for clients
Edwards owns (UNP) for clients
Edwards owns (VXX) for clients
Edwards owns (VZ) for clients
Edwards owns (WFC) for clients
Edwards owns (WFT) for clients
Edwards owns (XOM) for clients
Edwards owns gold for clients
Edwards owns platinum for clients
Edwards owns silver for clients
Edwards owns the Russell 2000 for clients
Edwards owns the S&P500 for clients
Edwards owns (TLSA) for clients

For Brian Kelly
Accounts managed by Kanundrum Capital own (AUY)
Accounts managed by Kanundrum Capital own (GFI)
Accounts managed by Kanundrum Capital own (GDX)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own Gold
Accounts managed by Kanundrum Capital own Treasuries
Accounts managed by Kanundrum Capital own US Dollars
Accounts managed by Kanundrum Capital is short (AMZN)
Accounts managed by Kanundrum Capital are short (RCL)
Accounts managed by Kanundrum Capital are short (XLY)
Accounts managed by Kanundrum Capital are short (XLE)
Accounts managed by Kanundrum Capital are short (AFL)
Accounts managed by Kanundrum Capital are short (CME)
Accounts managed by Kanundrum Capital are short (EWI)
Accounts managed by Kanundrum Capital are short (EWO)
Accounts managed by Kanundrum Capital are short (GS)
Accounts managed by Kanundrum Capital are short (HIG)
Accounts managed by Kanundrum Capital are short (RKH)
Accounts managed by Kanundrum Capital are short (XLF)
Accounts managed by Kanundrum Capital are short (XLI)
Accounts managed by Kanundrum Capital are short (FCX
Accounts managed by Kanundrum Capital are short (GFI)
Accounts managed by Kanundrum Capital are short (JOYG)
Accounts managed by Kanundrum Capital are short (XLB)
Accounts managed by Kanundrum Capital are short (XLK)
Accounts managed by Kanundrum Capital are short Oil
Accounts managed by Kanundrum Capital are short the S&P 500
Accounts managed by Kanundrum Capital are short the Canadian dollar
Accounts managed by Kanundrum Capital are short the Euro vs. Yen
Accounts managed by Kanundrum Capital are short the Aussie Dollar
Accounts managed by Kanundrum Capital are short (CAT)
Accounts managed by Kanundrum Capital are short (MET)
Accounts managed by Kanundrum Capital are short (WYNN)

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)

Carter Worth
***No disclosures**

CNBC.com with wires

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET