GO
Loading...

Halftime: Technical Pattern Signaling 10% Decline?

Investors were again struggling with conflicting signs in the market as they sifted through the latest data.

Looking at fundamentals, retail sales rebounded and consumer sentiment stabilized.

However, on the technical side, in the span of 3 days the S&P has broken below the 200-day, 100-day and 55-day moving average, according to CMC Markets .

The last time we saw this it was in June and it preceded a 10% decline in the market.

Should you position for a sharp move lower?

CNBC

Instant Insight with the Fast Money traders

Although I think the momentum in the market has changed, I would not position for another 10% to the downside, says Joe Terranova.

I think the market has found a floor. The leverage to equities is not what is was in June. That should protect equities on the downside, Terranova says .

I'm watching 1088 on the S&P, says Steve Grasso, a key technical level. Unless we can close above 1088, I'm a seller.
I’m watching the XLF as a market ‘tell’, adds Pete Najarian. It’s breaking down too. And the Vix is trading around 26. I’ve noticed that when the Vix is north of 25.75 we see sellers come into the market. However, on the other side of the coin, if we start to see M&A it could provide a catalyst that drives the S&P above resistance.

----------

BLACKSTONE INKS ENERGY DEAL

Speaking of M&A, a freshly inked may give the bulls a new reason to run. Blackstone said Friday it would buy energy company Dynergy for $542.7 million or $4.50 / a share - a 62% percent premium to the stock's closing price on Thursday.

What’s the trade?

I'm not sure if the deal is broadly bullish but I do think it’s good for NRG , says Joe Terranova. They will acquire 4 power plants from Blackstone and Dynergy in the deal.

----------

TAKE YOUR POSITION: WALMART

A slew of giant retailers are reporting earnings next week. Take a look at what's coming:

Earnings Calendar
Monday: Lowe's, Urban Outfitters
Tuesday: Abercrombie & Fitch, Home Depot, TJX, Walmart
Wednesday: BJ, Target
Thursday: Dollar Tree, Ross Stores, Staples

Out of all these goliaths, perhaps none will be more closely scrutinized than Walmart. Investors will be eager to hear what they say about the state of the consumer.

How are you playing Walmart . We want to know!












----------

EAR TO THE WALL: FORD

The traders are closely watching the action in Ford with chatter on the Street suggesting that automaker could take a hit on the GM IPO.

What must you know?

With the run-up that Ford has had, I’d expect money managers to take profits as they make room for GM in their portfolios, says Steve Grasso.

I’d rather play Tata Motors in this space, says Patty Edwards.

I’m a buyer of Ford on any pullback, says Pete Najarian. I like the management.

----------

THE WEEK: DOLLAR SURGE; GOLD HIGHER

The traders are also keeping a close eye on gold and the dollar. Both safe havens are poised to finish higher for the week.

What’s the trade?

I'm bullish gold, says Joe Terranova. If gold can break above $1225 I think gold goes to $1300. Seasonally, gold climbs this time of year.

Maybe not, counters Steve Grasso. If the GOP wins the House gold could sell-off, he says. It would suggest that the feds are less likely to print money.

----------

COMMODITY/INDUSTRIAL COMPLEX DOWN BIG THIS WEEK

Commodities and industrials tumbled this week, largely due to data out of Beijing which showed imports slowing significantly.

What’s the trade?

I’m a buyer of this space on any pullback, says Pete Najarian. I especially like the rails and I’ve got my eye on CNI .

----------

CALL TO THE FLOOR: CLIFFS NATURAL RESOURCES

In Friday’s call to the floor the Fast Money traders iron out the truth behind the move in materials with Cliffs Natural Resources CEO Joseph Carrabba.

Find out what he has to say about demand from China and elsewhere! Watch the video now!











----------

CALL THE CLOSE

Joe Terranova: I’m a buyer.
Patty Edwards: I’d stay hedged.
Steve Grasso: Below 1088 I’m a seller
Pete Najarian: I think we could be looking at a mutual fund Monday that takes us higher.



______________________________________________________
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 Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Aug 13, 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 (CSCO) calls; Pete Najarian owns (V) call spread; Pete Najarian owns (TCK); Pete Najarian owns (CNI); Pete Najarian owns (SCCO); Grasso owns (ASTM), (ABK), (BA), (BAC), (BGP), (C), (CSCO), (DYN), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Terranova owns (AKAM), (BAX), (FCX), (MOS), (PFE), (SU), (XBI); Terranova owns (GLD) Calls

For Patty Edwards
Edwards owns (CSCO) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (JPM) for clients
Edwards owns (TTM)
Edwards owns (F) for clients
Edwards owns (VXX) for clients
Edwards owns (SPY) for clients
Edwards owns (QQQQ) for clients

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 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)

For Doug Kass
***No Disclosures***

CNBC.com with wires.

Contact Halftime Report

  • Showtimes

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