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Expect Bullish Stock Action Into Month's End?

By Friday’s close the S&P notched its fourth week of gains and the Dow surged by triple digits as investors revived the September rally after three days of losses.

Although the latest economic data presented a mixed picture, investors latched on to a rise in August business spending, and interpreted the results as a sign the recovery is on firmer ground.

Perhaps more important, the S&P surged back above the key 1130 level.

Market technicians consider the move rather bullish, considering 1130 was a level where the S&P failed in both June and August. They say it confirms the theory that what was once resistance has now become support.

With positive momentum emerging in both technicals and fundamentals, chatter on the Street suggests the next leg will be higher.

How should you position now?

Instant Insights with the Fast Money traders

Thursday's weakness turned out to be a massive headfake, says Guy Adami. As long as the S&P can stay above 1135 I’d position long.

I'm a buyer of the market, declares Steve Grasso of Stuart Frankel. The next key level is 1150. If we can get above 1150, it opens to door quickly to 1165 as then 1185. Ultimately I expect the market goes to 1200.

Looking at the options markets, I’m seeing a lot of upside call buying, says Mike Khouw. It's a signal of optimism ahead of earnings season.

It’s hard to ignore this powerful rally, says Karen Finerman, but I still believe the way to play the market is with discipline. I’d sell into these gains.

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NO MATTER WHAT STOCKS GO HIGHER?

Comments from hedge fund heavy weight David Tepper of Appaloosa generated tailwinds for bulls. In a CNBC exclusive interview he said he believes the economy will improve and doesn’t expect the S&P to slide much lower than 1100. (Click here for our entire interview.)

More insights with the Fast Money traders

I also think the market is going higher, says Joe Terranova on the Halftime Report. Don’t forget we’re in the end of September which is historically not very good. But, this year we haven’t had the typical sell-off. I have to believe money managers are caught by surprise and now they’re forced to chase performance. To me the play is the Nasdaq, CME and other exchanges as a bet that volume is not as bad as expected.

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TOPPING THE TAPE: FINANCIALS

After a rough week the financials turned around Friday.

What’s the trade?

The lack of participation is enough to give me pause, says Guy Adami, but right now it appears the market does not want to go down.

I think we’re seeing a relative bounce, says Zach Karabell on the Halftime Report, but with so much uncertainty in the space I expect the financials to remain challenged. Don’t look for market dynamism here.

Volatility is coming down in financials and that suggests to me investors don’t expect a lot of movement, adds Pete Najarian. I think they remain in a range.

I think the bottom will be set in financials when a big financial issues a major buy back, says Joe Terranova. That will be a signal that they no longer need to hoard cash.

Find out which 3 stocks analyst David Trone thinks are attractive. Click here to go to "These 3 "Financials Ready To Outperform, Says Analyst"

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GOLD HITS AN INTRADAY RECORD, TOPS $1300

Gold rallied to record highs on Friday trading above $1300 before settling lower as expectations grew that further quantitative easing may lead to increased volatility in the currency markets.

"With the dollar getting definitely weaker with the pass of every session, gold has little work to do other than to head higher to compensate for dollar's slide," says Pradeep Unni, senior analyst at Richcomm Global Services in a Reuters interview.

What’s the trade?

I’m wary of chasing things, says Michael Block of Phoenix.

After the November elections I expect to see a bid come out of gold, says Steve Grasso.

The thought may be that if the GOP wins the House and Senate that we’ll see a more fiscally responsible Congress, muses Karen Finerman. That makes sense.

If you’ve missed the move in gold, silver may be more interesting, says Guy Adami. I’d take a look at Silver Wheaton .


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TOPPING THE TAPE: CHIPMAKERS

Shares of the SMH popped on Friday after Oracle's Larry Ellison said he'd use part of the company's $24 billion in cash to buy start buying semiconductor firms.

What’s the trade?

It’s now very difficult to trade chips on the short side, says Guy Adami. I suspect some of Friday's gains were short covering. But I have to note that Intel took down gross margins forecast.

Also AMD cut their Q3 revenue guidance, adds host Melissa Lee.

Read More:

> Trading Tech w/ Larry Ellison on the Prowl



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Trader disclosure: On Sept. 24th, 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; Finerman’s firm own (ANF); Finerman & Finerman’s firm own (BAC); Finerman & Finerman’s firm own (JPM); Finerman owns (GOOG); Finerman’s firm own (PBR); Finerman & Finerman’s firm own (BBY); Finerman’s firm own (TJX); Finerman’s firm own (TGT); Finerman's firm is short (IYR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Pete Najarian owns (AMZN) call spreads; Pete Najarian owns (NTAP) call spreads; Pete Najarian owns (WFC) put spreads; Terranova Owns (POT), (APA), (AAPL), (ARUN), (BMO), (C), (IBM), (HES), (JOYG), (XBI), (FTO), (OXY), (ORCL), (PEP), (RSH), (SU), (RIG), (UPL), (VRTS); Karabell owns (GS), (RIMM), (AAPL); Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AMGN)
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 (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 (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)

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 Michael Block
***No Disclosures***

For David Trone
JMP Securities makes a market in (BAC), (BLK), (C), (DUF), (ETFC), (EVR), (GLCH), (GS), (GHL), (JPM), (JEF), (KBW), (LAZ), (LM), (MS), (NMR), (PJC), (RJF), (SF), (AMTD), (SCHW), (TRAD), (WFC), (OXPS)



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