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Halftime: Technicals, Fundamentals To Push S&P Lower?

On Friday the traders were closely watching the action in the S&P, which traded beneath its 200-day moving average around 1,115.

The move lower was largely triggered by a weaker than expected jobs report and word that Goldman Sachs had ratcheted down their growth expectations for the economy?

What should you make of it?

Instant Insights with the Fast Money traders

I'm one of those traders watching the action in the S&P, says Steve Grasso from the floor of the NYSE. But I wouldn't jump to conclusions, yet. Now it’s all about whether the S&P closes above or below the 200-day – about 1115.

I still see pockets of strength especially in steel and coal. That says to me the risk-trade remains ‘on.’ I’d buy the dip.

I agree that this market is trading on technicals, adds Pete Najarian. I'm watching the Bank ETF which couldn’t break above 15. Also Goldman failed to get above 158 and JPMorgan failed at its 200-day. I’m not sure stocks can go significantly higher without the financials.

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IT’S ALL ABOUT JOBS

As we mentioned above, on Friday Wall Street was chattering about Goldman's decision to reduce their growth expectations for the economy.

And their reasons really got the desk talking.

Goldman took down their 2010 estimates due heightened concerns of Congressional resistance to do what is necessary in terms of fiscal stimulus, explains host Melissa Lee.

They also expect the jobless rate to rise to 10% in early 2011 and stay there for the rest of that year.

That forecast comes on the same day that the latest data from the Labor Department showed employment fell for a second straight month with the economy shedding 131,000 jobs.

How should you position now?

If we’re looking at higher unemployment then the retailers will remain undress pressure, says Patty Edwards. I’d start to pull off.

Also keep an eye on the staffing companies such as Manpower and Robert Half, says Pete Najarian. They’re trading at very high multiples but if they pull back I’d think about nibbling.

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MARKET BUZZKILL: INDUSTRIALS, COMMODITY STOCKS

Our market buzz kill on Friday: industrials and commodities. Both took a hit on concerns that the recent run higher may have been generated by euphoria and not solid fundamentals.

What’s the trade?

Yes we’re seeing a pullback but we’ve had quite a run in this space, reminds Pete Najarian. I’m still bullish. I just think this trade is just pausing.


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WHEAT PARES GAINS AFTER MONSTER WEEK

The traders are closely watching the action in wheat after Russia said it would temporarily halt grain exports.

As we told you on Thursday Prime Minister Vladimir Putin called for a ban on grain exports, with a spokesman later saying it would go into effect beginning August 15 and would apply to contracts that had been already signed.

However one day after the news hit the Street, the spot price of wheat traded lower?

What should you make of it?

We’re probably seeing some profit taking but I like the wheat story, says Joe Terranova. It speaks to demand from emerging markets. I’m a buyer of this story on a dip. I’m long Potash and Mosaic .

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SAGA OF THE WEEK: RIM AND THE SAUDIS

Still no resolution to the stand-off between RIM and the Saudi government. RIM has been facing mounting pressure to open its super-secure network to government scrutiny.

A growing number of countries, especially in the Mideast, are demanding access to encrypted communications sent through RIM's BlackBerry device, saying national security may be at risk.

What’s the trade?

My clients are largely out of RIM and into other names in the space, says Steve Grasso.

I’m looking at Motorola , adds Patty Edwards. I don’t like RIM.

If you’re looking for a fast money trade it seems to me RIM has found short-term support near the low $50s, adds Pete Najarian. I know they’re losing market share and that’s a problem long term -- but short term I think the stock could pop.

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CHART OF THE DAY: CISCO

It's may be make or break time for Cisco which is trading right around its 200-day moving average ahead of earnings Wednesday after the close.

What’s the trade?

I’m seeing a great deal of options activity in the 24-strike, says Pete Najarian. That suggests to me there’s upside in this stock.

In the space I’m watching Juniper , says Joe Terranova. I like this name on a dip.

I’ve been playing tech with Hewlett Packard, F5 and Akamai , says Patty Edwards.


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PRICELINE – STOCK OF THE WEEK

Priceline shares surged this week, hitting 10-year highs, after the company’s latest earnings report led many investors to speculate that this online travel service is sitting squarely in an economic sweet spot.

They provide a quick and easy ways for price conscious travelers to book an inexpensive trip. And it appears that’s exactly what the public wants! The company reported a 71 percent surge in second-quarter net income as travelers booked more trips.

Specifically, the company said the strong performance was driven by growth in global hotel reservations, as hotel room nights booked rose 48 percent year-over-year.

International gross travel bookings increased 59 percent, due to rising travel demand and an improvement in room rates, and domestic bookings were up 20 percent, said Jeffery H. Boyd, Priceline's president and CEO.

The results prompted a series of analysts to boost price targets.

Caris & Co. analyst Sandeep Aggarwal said the second-quarter results show the company is "cruising past ... expectations." Maintaining a "Buy" rating on shares, he told investors he expects the stock to eventually climb 30 percent and reach $300 per share in the next year.

RBC Capital put the figure even higher at $310 while Citigroup pegged the stock's eventual rise to $325.

Citi analyst Mark Mahaney agrees. He sees more upside from here. “Our price target is also $325,” he tells the desk.

Hear more from Mark Mahaney. Watch the video above!

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TAKE YOUR POSITION: MCDONALDS

McDonald's comes out with same-store sales results Monday morning.

Will the fast food giant say it was helped or harmed by the weak economy?

I think the report will be strong, says Pete Najarian.

I really want to find out about currency impact, adds Joe Terranova.


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CALL TO THE FLOOR: ALASKA AIR

We may have found Alaska’s biggest breakout since Sarah Palin. We’re talking Alaska Air .The independent air carrier easily topped analyst expectations for the second quarter a couple weeks ago. And its stock is up 50% this year alone, outperforming the broad airline sector.

What else must you know about this high flier? Find out from Alaska Air chairman and CEO Bill Ayer. Watch the video now!

















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CALL THE CLOSE

Pete Najarian: With volatility coming in I think we go higher.
Patty Edwards: I’d stay on the sidelines.
Steve Grasso: I’m a buyer into the close.
Joe Terranova: The direction of this market is in the hands of our lawmakers.


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Trader disclosure: On August 6th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Pete Najarian owns (CTRP) calls; Pete Najarian owns (DD) short calls; Pete Najarian owns (MCD) calls; Pete Najarian owns (CF) calls; Pete Najarian owns (RIMM) call spread; Terranova owns (AKAM), (APA), (BAX), (COP), (FCX), (GS), (MOS), (MSFT), (PFE), (POT), (SU), (XBI); Grasso owns (ASTM), (ABK), (BA), (BAC), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (DRYS)
Virtus Investment Partners own more than 1% of (EXR)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (XLK)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)

For Patty Edwards
Edwards owns (WMT) for clients
Edwards owns (COST) for clients
Edwards owns (MCD) for clients
Edwards owns (SBUX) for clients
Edwards owns (KFT) for clients
Edwards owns (GIS) for clients
Edwards owns (DD) for clients
Edwards owns (BRK.B) for clients
Edwards owns (RIMM)
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

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 (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 (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)

CNBC.com with wires.

Symbol
Price
 
Change
%Change
S&P 500
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AKAM
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ALK
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CSCO
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FFIV
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GS
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HPQ
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JNPR
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JPM MLP ETN
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MA
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MOS
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PCLN
---
POT
---
RHI
---
SPDR FIN SEL
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SPDR IND SEL
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SPDR SPRET
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MCD
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