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Halftime Pt. 1: Stocks Looking To Challenge 1100?

Despite blow out earnings from Appleand MorganStanley, bulls were unable to give the markets a lift on Tuesday.

It appears that investors are worried about what Federal Reserve Chairman Ben Bernanke will have to say about the prospects for recovery as he testifies before a Senate committee later Wednesday.

Will jitters about the economy and employment send investors running for the exits?

What should you expect?

Instant Insights with the Fast Money traders

I think the market sets up nicely to challenge 1100 on the S&P, says Joe Terranova.
One day earlier sentiment changed noticeably in the market after the S&P 500 hit a session low then found support around 1,055 - 1,060, the 23% retracement of the index's 2010 high-to-low slide.

As a result I now think 1055-1066 is an important reference point, Terranova adds. It may well be support going forward.

In the wake of Apple results, I can’t help but remind myself that the 85% of Americans that are employed area spending, adds Jon Najarian. As an investors that’s what I’m focused on.

Fundamentally, I’m seeing improvement in casinos, soft drink companies, and the airlines , Terranova adds. People who have jobs are starting to spend again. That's another reason why I think stocks climb from here.

As an investor, I’m listening to Bernanke’s commentary to make sure the Fed remains accommodating, says Patty Edwards. With fin reg, energy reform and health care hanging over stocks, we need to have an accommodative Fed for the market to climb.

I expect Bernanke's commentary to be accommodative and as a result I'd bet the market trades higher into the close, adds Najarian.

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JPMORGAN SLAPS $400 PRICE TARGET ON APPLE

On Wednesday the call of the day came from JPMorgan, which put a $400 price target on Apple following the company's earnings release. The firm said it's trading like a value stock and not as the high-growth story.

What’s the trade?

I own Apple, and I will continue to own it, says Patty Edwards. However I think $400 is reaching for the sky.

I can see $400, says Jon Najarian, but 2 years from now. I think the call is about grabbing headlines; $325 is a more realistic price target.

If Apple can make in-roads in the enterprise market then I think Apple can get to $400, muses Brian Kelly. But it needs a catalyst of that magnitude.

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TOPPING THE TAPE: FCX

Freeport McMoRan topped the tape Wednesday after second quarter profits rose 10%.

How should you game the results?

Iron ore production is at capacity because of China, muses Joe Terranova. I think Freeport is going well above $70.

If you believe in global growth and think China will accelerate again, I’d take a bullish position in copper, says Brian Kelly.

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CRUDE MAKES KEY TECHNICAL MOVE

Market technicans are closely watching the action in crude oil, which broke through the 200-day moving average on Wednesday in a sign that could signal a move above $80 a barrel and into a new trading range, technical analysts say.

What should you make of it?

I think the move higher is more of a a seasonal thing, says Joe Terranova. September through November is an historically weak period for the dollar and that bodes well for oil as well as other resources.

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ANALYZE THIS: BANK EARNINGS

On day after Goldman Sachs spooked investors with a rare miss, investors heard a different story from Morgan Stanley, Wells Fargo , and US Bancorp. All three firms met or beat top line revenue estimates.

What should you make of the results?

We’re seeing better credit quality improvement, says Stifel Nicolaus analyst Chris Mutascio. Consumers are stabilizing, there’s no doubt about that; consumer losses are falling. As a result banks that have consumer exposure are going to move the needle.

Hear more from Mutascio. Watch the video above!




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Trader disclosure: On July 21, 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 (BP) puts; Kelly is short (GS); Jon Najarian owns (AAPL) calls; Jon Najarian owns (BIIB) and (BIIB) calls; Jon Najarian owns (SNDK) calls; Terranova owns (EMC), (CREE), (CRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (GLD), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL); Jon Najarian owns (AAPL) calls; Jon Najarian owns (BIIB) and (BIIB) calls; Jon Najarian owns (SNDK) calls

For Brian Kelly
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (GME)
Accounts managed by Kanundrum Capital own (BIG)
Accounts managed by Kanundrum Capital own (NWL)
Accounts managed by Kanundrum Capital own Japanese Yen
Accounts managed by Kanundrum Capital are short (BA)
Accounts managed by Kanundrum Capital are short (USO)
Accounts managed by Kanundrum Capital are short (GLD)
Accounts managed by Kanundrum Capital are short Aussie Dollar
Accounts managed by Kanundrum Capital are short (KMX)
Accounts managed by Kanundrum Capital are short (FXI)
Accounts managed by Kanundrum Capital are short (EWO)
Accounts managed by Kanundrum Capital are short (EWI)
Accounts managed by Kanundrum Capital are short (JOE)
Accounts managed by Kanundrum Capital are short (RSX)
Accounts managed by Kanundrum Capital are short (SLX)
Accounts managed by Kanundrum Capital are short (CSX)

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (INTC) for clients
Edwards owns (JNJ) for clients
Edwards owns (JPM) for clients
Edwards owns (MS) for clients
Edwards owns (PEP) for clients
Edwards owns (TXN) for clients
Edwards owns (WMT) for clients
Edwards owns (YHOO) for clients
Edwards owns (SBUX) for clients
Edwards owns (MCD) for clients
Edwards owns (GLW) for clients
Edwards owns (EBAY) for clients
Edwards owns (QCOM) for clients
Edwards owns (USB) for clients
Edwards owns (NOK) for clients
Edwards owns the S&P500 for clients

For JoeTerranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (CASS)
Virtus Investment Partners owns more than 1% of (LDR)
Virtus Investment Partners owns more than 1% of (LPHI)
Virtus Investment Partners owns more than 1% of (MGRC)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLP)
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 (XLK)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (SUBK)
Virtus Investment Partners owns more than 1% of (WDFC)
Virtus Investment Partners owns more than 1% of (YDNT)
Virtus Investment Partners owns more than 1% of (DRYS)

For Chris Mutascio
Stifel Nicolaus managed a public offering for Wells Fargo



CNBC.com with wires

Symbol
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FCX
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MS
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USB
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WFC
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ILF
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AAPL
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