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Halftime: Tech Poised for a Comeback?

Monday, 16 Aug 2010 | 1:40 PM ET

Although the worst performing sector last week, technology stocks pushed higher in midday trading Monday, as it seems value buyers just couldn't resist any longer.

People saw last week's sell-off as the market "taking a breather" and now they're trying to get back in, said JJ Kinahan of TD Ameritrade. The market was overdone to the upsides, explained Steve Grasso of Stuart Frankel. His clients are now taking out high fliers, which they missed the last time the market rallied.

Pete Najarian of optionMONSTER.com noted that while volume was "terrible" last week, it is quite a different story Monday. The amount of volume in the first hour of trading Monday was the same amount of volume for the first half of Friday.

Fast Money's Halftime Report
The Fast Money team discuss top midday stock picks.

"There is a return. That's part of that volume that came into the market and was willing to sell that premium at those higher levels," said Najarian.

Despite the return, Grasso thinks volume is still terrible and wonders where it will go from here.

"A lot of guys are sitting on their hands, waiting for September. Waiting for traders to get back to their desks," said Grasso, adding that September is historically a bad month for the markets.

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TREASURY BONDS BREAK OUT

While most equities yawned, treasury bonds continued to break out before the Federal Reserve begins its second round of purchases. The Barclays long-term bond exchange-traded fund hit a 52-week high, rising a whopping 2%.

Money is leaving equities and going into bond funds, said Steve Grasso of Stuart Frankel. Until that dynamic changes, you will not see this market rally.

Those that are interested in equities are looking for dividend yields, like DuPont , said Pete Najarian of optionMONSTER.com. Companies with high yields are beginning to find support and are moving to the upside, he added. A 6.2% dividend yield is just another reason Grasso likes Altria Group , he said. Patty Edwards of Storehouse Partners owns several stocks with a high dividend, including Philip Morris International, Kraft and Coca-Cola .

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WILL WHEAT PUSH HIGHER?

Wheat got ahead of itself, but is not over, said Dennis Gartman, hedge fund manager and author of The Gartman Letter. The problems in Russia aren't going away because the country hasn't gotten any rain, he said. With the price of wheat high, he thinks US farmland that would have gone to corn will now go to wheat for next year. Gartman recommends looking into next year's corn market.

As a derivative trade, he would consider Deere. He also likes small banks in the Midwest, which he said will be a beneficiary of the US farming community.

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CALL TO THE FLOOR: SHUTTERFLY

Call to the Floor: Shutterfly
The Fast Money team discuss the future of photo sharing, with Jeffrey Housenbold, Shutterfly CEO.

Is the future of the photo sharing services sector picture perfect or overexposed? For answers, we were happy to host Jeffrey Housenbold, CEO of Shutterfly, on Monday's Fast Money Halftime Report.

Watch the videoto see the full interview with Housenbold.

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POLL OF THE DAY

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Fast Money Live Poll

Not a Scientific Survey. Results may not total 100% due to rounding.truetruefalsetruefalsetruefalsetruetrue

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CALL THE CLOSE

"Hard market to trade," said Patty Edwards of Storehouse Partners. "Pick your place carefully."

JJ Kinahan of TD Ameritrade is a buying into the close. He thinks we need to break that 50-day moving average.

Steve Grasso of Stuart Frankel said the bears had every reason to break the market. They couldn't. We're going higher.

Pete Najarian of optionMONSTER.com said the bulls will win and the market could push higher.

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Trader disclosure: On Aug 16, 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
Pete Najarian owns (CSCO) calls
Pete Najarian owns (TCK)
Pete Najarian owns (SCCO)
Pete Najarian owns (F) bonds
Pete Najarian owns (TJX) calls
Pete Najarian owns (GS) calls
Pete Najarian owns (HPQ) calls

Patty Edwards
Edwards owns (KO) for clients
Edwards owns (KFT) for clients
Edwards owns (PM) for clients
Edwards owns (CSCO) for clients
Edwards owns (INTC) for clients
Edwards owns (HPQ) for clients
Edwards owns (F) for clients
Edwards owns (HD) for clients
Edwards owns (EBAY) for clients
Edwards owns (BAC) for clients

Steve Grasso
Grasso owns (ASTM)
Grasso owns (BA)
Grasso owns (BAC)
Grasso owns (C)
Grasso owns (CSCO)
Grasso owns (JPM)
Grasso owns (LPX)
Grasso owns (MO)
Grasso owns (MOT)
Grasso owns (NDAQ)
Grasso owns (PFE)
Grasso owns (PRST)

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)

JJ Kinahan

Dennis Gartman
Funds managed by Dennis Gartman are long corn
Funds managed by Dennis Gartman own gold

Bill Strazzullo
***No Disclosures***

  Price   Change %Change
DD
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DE
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MDLZ
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KO
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MO
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SFLY
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PM
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