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Halftime Pt. 1: Is Market Sending Bullish Signals?

With stocks paring early gains investors were closely watching action in the S&P on Thursday, wondering if key technical levels would provide support or resistance.

What should you be watching?

Instant Insights with the Fast Money traders

It looks like the market is going are hold, says Guy Adami. Long-term, I’m largely bearish and believe that market is going much lower. But in the short-term, as long as the S&P trades above 1040, I’d take it as a signal to stay long.

I’m watching 1065 as a key level, adds Steve Grasso. I need to see the market close above that level before I can feel bullish.

For me the key level is 1105, says Brian Kelly. Unless the market can get to 1105, I remain bearish in my outlook.

However there may be a new bullish, sign. The S&P bullish index - an index which tracks the number of stocks with 'buy signals' – has now dropped to 39%, explains host Melissa Lee. That suggests the market is extremely oversold. (This analysis is courtesy of eWallStreeeter.com.)

I’ve taken some of my hedge off so I don’t hit a ceiling on my picks but I still believe investors need to pick and choose, adds Patty Edwards, and not play the market broadly.

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GOLDMAN SACHS: MARKET BAROMETER

Weakness in Goldman Sachs could be one of the reasons the markets are paring gains. The stock traded lower after widely followed analyst Meredith Whitney cut her estimates on the firm, which had been above consensus.

Meredith now sees Goldman reporting Q2 EPS of $1.70, down from her previous estimate of $4.75. By comparison the Street consensus estimate is $2.34.

What must you know?

I think this is Meredith’s second cut, says Guy Adami. Personally, I listen to Meredith. Investors who don’t listen to her, do so at their own peril. The price action in the stock suggests to me it goes below $130.

On top of Meredith’s outlook, Barclays said last week that investment banking revenues would be light, adds Brian Kelly. I see no reason to expect Goldman to do well.

> Click here for more on Meredith Whitney’s estimates

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FAST MONEY POLL OF THE DAY

Is basketball star LeBron James headed to New York? Shares of MSG traded lower on Thursday just hours before the basketball star announces whether he will sign with the New York Kinicks or one of the other teams courting him.

James, a two-time Most Valuable Player for the Cleveland Cavaliers, will reveal which team he will next play for during a one-hour broadcast on ESPN, beginning Thursday at 9pm.

What do you think? We want to know! Cast your vote now!












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RETAILERS’ SALES

Investors are grappling with a mixed picture on the retail front Thursday following same store sales figures that rose 3.1 percent, just shy of the 3.2 percent increase Wall Street predicted, according to reports from 28 retailers tracked by Thomson Reuters.

Teen apparel retailers like Abercrombie & Fitch and Hot Topic were among the best performers, along with department store chains from Macy's to JC Penney .

These companies had benefited from warmer weather and promotions for Memorial Day. Penney cited brisk sales of men's summer apparel ahead of Father's Day as well.

What should you make of it?

The big takeaway from same-store sales data is that largely retailers did not raise guidance, explains Patty Edwards. I’m seeing lots of sales and price cuts out there. However, that’s not to say there’s aren't interesting stocks in the space. I’m watching Nordstrom.

The move in Abercrombie looks like a classic relief rally, muses Guy Adami. I think the rally is an opportunity to get out.

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COMMODITY & COMMODITY STOCKS

Oil rose to around $75 per barrel on Thursday, with gains largely triggered by supply concerns after the Energy Information Administration said inventories fell by 4.96 million barrels last week, more than analysts expected.

What’s the trade?

Longer term, I expect to see oil trade down to $65, says Guy Adami, however right now I think the shorts got ahead of themselves, here.


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Trader disclosure: On July 8, 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 (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Kelly owns (BP) puts; Kelly owns (FCX) puts; Kelly owns (GLD); Kelly owns (GDXJ); Kelly is short (GS); Grasso owns (ASTM), (ABK), (BAC), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST)

For Patty Edwards
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (C) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (FCX) For Clients
Edwards Owns (BP) For Clients
Edwards Owns (AMZN) For Clients
Edwards Owns (EBAY) For Clients
Edwards Owns (AZO) For Clients
Edwards Owns (BRK.B) For Clients
Edwards Owns (ARW) For Clients
Edwards Owns S&P 500 For Clients
Edwards Owns Nasaq 100 For Clients
Edwards Owns Gold For Clients
Edwards Owns Silver For Clients
Edwards Owns (VXX) For Clients

For Brian Kelly
Accounts Managed By Kanundrum Capital Are Long Euro
Accounts managed by Kanundrum Capital own (AUY)
Accounts managed by Kanundrum Capital own (GFI)
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 ARE short (AMZN)
Accounts Managed By Kanundrum Capital Are Short (BCS)
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 (V)
Accounts managed by Kanundrum Capital ARE short (PCAR)
Accounts managed by Kanundrum Capital ARE short (COF)
Accounts managed by Kanundrum Capital ARE short (KMX)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (DHR)
Stuart Frankel & Co and it’s partners own (DYN)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (IP)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (SYMC)
Stuart Frankel & Co and it’s partners own (TBT)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (TRV)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

Meyer Shields
***No Disclosures On BRK.A

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