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Halftime: S&P Trying To March To 1140?

Wednesday, 15 Sep 2010 | 1:34 PM ET

Stocks were little changed on Wednesday with investors taking profits ahead of what may be a critical test for the market.

Currently the S&P is marching toward the top of its summer range and how stocks behave at these levels could be extremely meaningful for investors, especially those who follow technical signs closely.

Chartology: S&P
Discussing in which direction the S&P is headed next, with Carter Worth, Oppenheimer & Co.

Will bulls be able to push the S&P higher above its current range or will bears prevail and send stocks tumbling?

How should you position now?

Instant Insights with the Fast Money traders

The key levels to watch right now are the two preceding tops; the June top of about 1130 and the August top of about 1130, explains Oppenheimer’s Carter Worth.

Considering this is now the third time stocks are probing this level the presumption is we remove supply and exceed the level – however only a little.

I’d expect the S&P to print 1140 to 1145, Worth adds. That’s about a 2% advance from here and also above the range the S&P has been in for most of the summer.

To me it feels like the market wants to levitate to 1131 – 1135, says Guy Adami on Monday's Fast Money. What happens at that point will be very telling. I still bias toward being bearish.

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CRUDE ROLLING OVER ON NEGATIVES

The traders are closely watching oil with the commodity stuck in a range for the summer much like the S&P.

Considering energy is the worst performing sector year to date, how should you play the space?

I’d fade consumer disretionary which has led the S&P and get long energy, the laggard, counsels Carter Worth. I'm particularly interested in Weatherford, Halliburton and Chevron, he says.

Weatherford has exhibited a bearish to bullish reversal, Worth explains. It’s a stock that’s starting to attract capital. Halliburton is also exhibiting characteristics that suggest it’s attracting capital. And Chevron is a yield play.

Carter is speaking my language, adds Joe Terranova. I’m long energy as a bet that crude breaks to the upside. I expect bullish factors come into play through the end of the year.

In the space, I also like Chevron, says Jon Najarian.

I’m short the OIH, counters Brian Kelly. Chatter suggests the government will lift the moratorium in the Gulf before the election.

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AK STEEL WARNS

One day after steelmaker Nucor warned of a general slowdown in the industry, AK Steel warned that it expects to post an operating loss in the third quarter due to higher raw material and operating costs.

What’s the trade?

I’m not sure just how meaningful these developments are, says Jon Najarian. They’re more backward looking than anything else.

To me it’s just another sign that the economy is slowing down, says Brian Kelly.

Most steel names look broken, says Joe Terranova. Steel Dynamics is the only potential buy, but I’d only do it with a gun to my head.

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TOPPING THE TAPE: THE AG

Soft commodities traded higher on Wednesday due to concerns of hoarding in China and weak production from Europe.

What’s the trade?

The ag trade has seemed to lose some momentum, muses Joe Terranova. I don’t think it stalls out all together but I don’t think it resumes until later in 2010.

I like Andersons, says Brian Kelly.

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TOPPING THE TAPE: HEWLETT PACKARD

Hewlett-Packard shares continued to gain Wednesday after announcing its decision earlier in the week to enter into a deal with ArcSight Inc.

What’s the trade?

I like HP. If you’re a short term investor I think there’s still more of a bump coming when HP announces its new CEO, says Patty Edwards. And if you’re a long-term investors the stock is a value.

I like playing the space with software names such as Oracle and SAP, says Joe Terranova. Also I like F5, Riverbed for growth, as well as Akamai , Aruba Networks and of course, Apple .

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MOVER: YAHOO!

The Street is watching Yahoo, Wednesday, after Chief Executive Carol Bartz said that Alibaba Group "constantly" approaches the Internet search company about repurchasing its stake in the Chinese Internet firm, but that Yahoo has no plans to sell its shares

What’s the take away?

As far as I’m concerned Alibaba is the crown jewel of Yahoo!, says Brian Kelly. If they sell I don’t know what’s left.

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TAKE YOUR POSITION: FEDEX

Shares of FedEx traded modestly higher one day ahead of the company’s much anticipated earnings.

What’s the takeaway?

Looking at the booming business at TAL International a maker of shipping containers I think FedEx has a good quarter, muses Patty Edwards.

To me the best trade in the space right now is long UPS , says Joe Terranova.

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UNUSUAL ACTIVITY: HOG

Jon Najarian has spotted unusual action in Harley Davidson.

A larger than usual volume of Sept 28 calls and October 30 calls leads Najarian to speculate this stock could make a sharp move higher.

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CALL TO THE FLOOR: SUPERBUG & INFECTION FIGHTER

With shares up about 5% over the past month or so how should you trade CareFusion?

Don’t make a move until you check out our interview with CEO David Schlotterbeck.

Call to the Floor
Discussing business amid high unemployment and health care reform, with David Schlotterbeck, CareFusion CEO, and the Fast Money team.




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Trader disclosure: On Sept. 15th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman’s firm owns (IBM); Finerman’s firm owns (ORCL); Finerman’s firm owns (HPQ); Finerman’s firm owns (JPM); Finerman’s firm owns (BAC); Finerman’s firm owns (BBY); Finerman’s firm owns (GLW); Seymour owns (AAPL); Seymour owns (MSFT); Terranova Owns (APA), (AAPL), (ARUN), (BMO), (C), (DO), (EOG), (FCX), (FTO), (XBI), (GS), (HES), (IBM), (JOYG), (NBR), (NOV), (OXY), (ORCL), (PEP), (POT), (RSH), (GLD), (SLB), (SWN), (SU), (SPLS), (RIG), (UPL); Jon Najarian owns (AAPL) call spreads; Jon Najarian owns (ARST) calls; Jon Najarian owns (CSCO) call spreads; Jon Najarian owns (RHT) call spreads

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 (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 (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 (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DLUEY)
Virtus Investment Partners own more than 1% of (DRYS)

For Brian Kelly
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (RIMM)
Accounts managed by Kanundrum Capital own (ALK)
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital are short (OIH)
Accounts managed by Kanundrum Capital are short (IAI)
Accounts managed by Kanundrum Capital are short (XLF)
Accounts managed by Kanundrum Capital are short (BA)

For Tim Seymour
Seygem Asset Management owns (MSFT)
Seygem Asset Management is short (FCX)
Seygem Asset Management owns (BAC)
Seygem Asset Management owns (INTC)

For Patty Edwards
Edwards owns (PM) for clients
Edwards owns (KFT) for clients
Edwards owns (KMB) for clients
Edwards owns (TAL) for clients
Edwards owns (LEG) for clients
Edwards owns (WDFC) for clients
Edwards owns (JNK for clients
Edwards owns (LQD) for clients
Edwards owns (SPY) for clients
Edwards owns (VXX) for clients
Edwards owns (TIF) for clients
Edwards owns (JCG) for clients
Edwards owns (MSFT) for clients
Edwards owns (JPM) for clients
Edwards owns (C) for clients
Edwards owns (BAC) for clients
Edwards owns (HPQ) for clients
Edwards owns (CSCO) for clients
Edwards owns (INTC) for clients
Edwards owns (GLW) for clients
Edwards owns (V) for clients
Edwards owns (AEO) for clients
Edwards owns (SBUX) for client

For Lou Kerner
Wedbush Securities makes a market in (YHOO)

For Heather Bellini
ISI does and seeks to do business with (MSFT) and has received non-investment banking compensation in the past 12 months.

For Richard Bernstein
***No Disclosures***

For Pete Dawkins
***No Disclosures***

For Mike Khouw
***No Disclosures***

For Peter Boockvar
***No Disclosures***

For Carter Worth
***No Disclosures***


CNBC.com with wires.

  Price   Change %Change
S&P 500
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AKAM
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AKS
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ANDE
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ARUN
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CVX
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FDX
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FFIV
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HAL
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HOG
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HPQ
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NUE
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ORCL
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RVBD
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SAP
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STLD
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TAL
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UPS
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WFT
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SPDR NRG SEL
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SPDR CD SEL
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YHOO
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AAPL
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MV OIL SVCS
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