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Halftime: Buy Stocks Ahead Of Jobs Report?

Caution is again the watch word on Wall Street ahead of Friday's closely followed jobs report.

"People are reluctant to do much of anything today except position themselves for Friday and digest yesterday's gains," says John Canally of LPL Financial in a Reuters interview.

On average, the Street expects the economy to have shed about 100,000 jobs overall in August. That hardly looks bullish but looks can be deceiving.

Maintaining Wednesday’s gains may be enough for the bulls to claim victory. “If we are able to hold through the day and hold on to (Wednesday's) gains that is a good sign," explains Peter Jankovskis of Oakbrook.

How should you position now?

Instant Insights with the Fast Money traders

I think we’re looking at a bottom at least for the near term and possibly for the long term, muses Steve Cortes of Veracruz. The trend started last week when we saw terrible housing data yet housing stocks rallied. It’s constructive price action. Also, the potential for so much M&A has to be making the shorts nervous; that too should buoy stocks.

It’s hard to define a market bottom but I'll know it when I see it, counters Guy Adami, and I don’t think I’ve seen it yet. If you’re a long-term investor I would not chase stocks here. However, if you’re a trader I’d stay long the S&P above 1080.

I’m a buyer of the market because I think the market runs into mid-term elections, says Steve Grasso, but I'm not sure how long the rally lasts. Although 2/3 of all stocks trade with the market, I believe investors will favor companies that have cash rich balance sheets. That's largely tech; as a result I expect to see money will rotate into that space.

I’d buy the dips and sell the rips, counsels Pete Najarian.

What do you think? We want to know!











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THE BIDDING BATTLE THAT WON’T END

The bidding battle that seemed as if it just would not end – did, in fact end. Michael Dell finally folded after HP increased its bid for 3PAR to $33 per share.

What’s the trade?

$32.5 calls were explosive going into this deal which suggests to me investors were anticipating the $33 bid, muses Pete Najarian. As for Dell I suspect they search for somebody else but I wouldn’t play it. Instead I’d trade the space long Akamaiand Riverbed as a bet on cloud computing.

I agree the way to play is long Akamai, adds Guy Adami, although right now it's near a 52-week high.

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BURGER KING POPS ON 3G BID PRICE REPORT

The M&A mojo didn't end in august: After reports yesterday that suggested Brazilian private equity firm 3G was in buyout talks with Burger King, CNBC's David Faber broke news with the terms of the deal: $24 per share, a total price tag of $4 billion dollars.

What’s the trade?

If you want to play fast food I’d do it with McDonald’s, says Pete Najarian.

McDonald’s is at an all time high, but in this case I suggest buying the high, adds Steve Cortes.

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CALL THE CLOSE

Pete Najarian: I’d buy dips and sell rips.
Guy Adami: I’d stay long the S&P above 1080.
Steve Cortes: I’m constructive and I really like BUD.
Steve Grasso: I think the market closes around the 50-day which is 1081, maybe a smidge lower.

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WILL AUGUST'S WORST SECTOR REBOUND IN THE FALL?

The Financial sector, the worst performing sector in August, has made a huge comeback over the last 2 days.

How should you trade it?

If you’re bullish broadly, I’d look at BofA , says Guy Adami and Greenhill is interesting as a high beta name.

Widely followed Sanford Bernstein analyst Brad Hintz tells the desk, “Is this a great time for financials? Probably not," but that doesn’t mean the environment can’t get incrementally better.

How much better? Check out our entire conversation with Hintz. Watch the video now!


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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 Sept. 2nd, 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; Cortes owns (SFD), (FCX), (BHP), (BMO), (TD), (OAS); Cortes is long British Pound; Cortes is long Euros; Cortes is long Crude Oil; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Pete Najarian; Pete Najarian owns (BRCD) call; Pete Najarian owns (AKAM) call spread

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 (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
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 (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 Dennis Gartman
Funds managed by Gartman own Wheat, Corn


CNBC.com with wires.

Symbol
Price
 
Change
%Change
AKAM
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GHL
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HPQ
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PAR
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RVBD
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SPDR FIN SEL
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MCD
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