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Will August Bring Market Gains Similar To July?

On Friday, the market closed out its best month in a year with the Dow, Nasdaq and S&P all posting 7% gains for July.

Although that seems bullish, investors are concerned that the gains may not hold considering Wall Street is still struggling with conflicting messages; strong earnings versus lackluster economic news.

The angst has left stocks range bound over the past 10 days and generated more technical trading. The S&P 500 has been finding support around 1,100 while struggling to move above its 200-day moving average around 1,115.

A sustained move above that level would be bullish for investors. However, "we have failed up here essentially about three times," explains Nick Kalivas of MF Global in a Retuers interview, and typically that signals a triple top – a bearish sign.

So technically people are using that as something to lean on, on the short side,” Kaliva adds. And of perhaps greater concern "on the surface earnings numbers have been pretty strong, but underneath there was a loss of momentum," he says.

How should you position now?

Instant Insights with the Fast Money traders

I expect the S&P to remain range bound between 1081 to 1113, says Steve Grasso. But longer term I think the market goes lower into year end.

When this market looks bad it looks like it’s going to crater and when it looks good it looks like it’s about to break out, adds Guy Adami. I think we’re on the precipice of something and my bias is also lower.

The question for me as a trader is whether we're in a binary market or if we're moving into a different environment. I expect to see a rotation out of junk and into quality, says Joe Terranova.

If we see the market start to stabilize it makes sense to me that money will rotate into quality blue chips, echoes Karen Finerman. But I don't think we're out of the binary world yet. Lately this has been a one decision market.

If you're looking to establish positions it's important to remember the companies that are performing best are those with international exposure, reminds Patty Edwards.

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RIMM ON A ROLL?

RIM was a big winner Friday due to reports that the Blackberry maker is set to unveil a long-awaited touch-screen handset designed to battle with Apple's popular iPhone at an event scheduled for August 3rd.

Called the Slider 9800, reports say the handset will be carried exclusively by AT&T spacer and should go on sale in time for the holiday season and perhaps in time for back-to-school, the report said.

What’s the trade?

My clients are selling into the strength, says Steve Grasso, but that’s because the stock usually ramps up into a gadget launch.

The valuation in RIM look relatively cheap to me, says Joe Terranova. I'm a buyer; I think it should be closer to $65.

I agree with Joe, says Patty Edwards, And RIM gadgets outsell the iPhone at a ratio of almost 3:1.

I wanted to learn about the new device and found interesting info about it on Blackberrycool.com, says Karen Finerman. From what I can tell, this could be a turnaround story. The new device seem to be pretty impressive.

And that leads to our poll of the day. Tell us what you think.












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HAS GOLDMAN FOUND A BOTTOM?

Goldman Sachs was the big winner for the week, rallying over 3%. The stock appears to have found its footing, up over 16% in July.

What's the trade?

I think the trade is long Goldman, says Joe Terranova. Technically it looks like the stock has found its trough.

I feel like Goldman has run too far and I’m waiting for it to come back to $145 before I get in, says Karen Finerman.

I like Goldman as well as the entire bank sector, says Steve Cortes on the Halftime Report. I also like Jefferies and Morgan Stanley and I’m long those names against the S&P.





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Trader disclosure: On July 30, 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; Terranova owns (AMZN), (EMC), (CREE), (BRCM), (LRCX), (COP), (AXP), (BMO), (CSX), (PEP), (CVS), (GS), (PCP), (C), (APA), (FCX), (JOYG), (MMM), (MOS), (UAUA), (WYNN), (GOOG), (BBY), (SU), (KOL), (XBI), (BAX), (JNPR), (UAUA), (RIMM); Finerman owns (AAPL); Finerman’s firm owns (BDX); Finerman’s firm owns (COV); Finerman’s firm owns (STS); Finerman owns (JPM); Finerman’s firm owns (JPM); Finerman owns (BAC); Finerman’s firm owns (BAC); Finerman’s firm owns (RIMM); Finerman owns (RIMM); Grasso owns (ASTM), (ABK), (BAC), (BA), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (NDAQ), (PFE), (PRST)

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 (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 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 (ESV)
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 (LEN)
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 (KEG)

For Patty Edwards
Edwards owns (AAPL) for clients
Edwards owns (AA) for clients
Edwards owns (CVX) for clients
Edwards owns (COH) for clients
Edwards owns (FCX) for clients
Edwards owns (INTC) for clients
Edwards owns (TXN) for clients
Edwards owns (WFMI) for clients

For John Stephenson
First Asset Investment Management Owns (GLD), (FCX), (AA), (CVX), (CVE)
Stephenson Owns (GLD), (FCX), (CVE)



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