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Halftime: Conflicting Signals From Tech?

Wednesday, 13 Oct 2010 | 1:32 PM ET

On Wednesday investors bid Apple as high as $301.96 - an all-time record - in anticipation of a strong earnings report from the iPhone maker next week.

Adding to the momentum in this stock, investors are excited about an Oct. 20 media event for its Mac line of personal computers.

Apple promised a sneak peek at the next major version of the Mac operating system.

Meanwhile Intel - the world’s largest chip maker – cheered the Street with its strong outlook citing demand from emerging markets and corporations.

The action raised hopes that the technology sector could end 2010 on a strong note. However Fast Money trader Joe Terranova is concerned by the action in another tech stocks - and it's largely gone under the radar.

What must you know?

Instant Insights with the Fast Money traders

I was extremely surprised by earnings from Linear Technology which missed estimates when they reported earnings, says Joe Terranova. Linear makes circuits that touch a broad array of industries, so their results are concerning. We won't know if a tailwind is brewing in this space until we hear from Broadcom. That will tell us if the success of gadgets such as the iPad has long coat tails.

However, the fundamental story in Apple is extremely bullish into the holidays. But at these levels and with potential uncertainty I’d also buy downside puts for protection, Terranova says.

Looking at the Apple trade, if you want to be a little more aggressive, investors can sell out of some shares and buy puts, adds JJ Kinahan. I think you’ll get to buy Apple back a little lower.

The typical pattern for Apple is that it runs up into a product announcement and then sells off, reminds host Melissa Lee.

Elsewhere in the space, if you're looking for a chip play, I see a lot of investors playing SMH because Intel typically hits resistance around 20.5, adds Steve Grasso.

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BROAD MARKET MOVES

The Dow and S&P both traded in the green on Wednesday largely due to a weaker dollar and rising expectations the Federal Reserve will move to prop up the economic recovery.

What should you expect from stocks?

I’m a surfer and I’d ride the wave higher, says Pete Najarian.

I see no reason to sell here, adds JJ Kinahan. Ride the wave higher.

Momentum tends to trump everything in this market, says Steve Grasso. I think the market is going higher but also buy put protection.

I’m actually looking for a pullback before I’d buy, admits Joe Terranova.

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TAKE YOUR POSITION: GOOGLE

One of the most beloved stocks in the S&P – Google reports earnings on Thursday after the bell. How should you position?

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

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INTRADAY MOVER: ST JOE

Shares of St. Joe fell sharply on Wednesday after famed short seller, hedge fund manager David Einhorn warned that the real estate company's development plans have fallen flat, leaving it with empty subdivisions and inevitable writedowns.

Einhorn, who made these market moving comments while speaking at the Value Investing Congress in New York, said he traveled to St. Joe's RiverTown development, located just south of Jacksonville, Florida. "The proposed development site looks more like a moonscape than a luxury development," he said.

What’s the takeaway?

When Einhorn speaks, Wall Street listens, says Steve Grasso. I expect this stock to remain under pressure.

It also shows how much influence one person can have on a stock, adds Pete Najarian

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GO-GO GOLD


Once again, gold traded to the upside on Wednesday, buoyed by weakness in the dollar, which declined after the minutes of a Federal Reserve meeting showed monetary easing might be coming – and coming soon.

What’s the trade?

I agree with Jeff deGraaf who said there’s no ceiling for gold, says Joe Terranova. The path of least resistance in this trade is higher. Click here to go to "No. 1 Chart Analyst Says 'No Resistance For Gold."

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FAST, FAST MONEY: HIGH FREQUENCY TRADING

On May 6th, the Dow plunged 1,000 points and erased a trillion dollars of value in less than ten minutes.

A new system of circuit breakers is supposed to keep such a 'flash crash' from ever happening again, but will it?

Market Pro: More "Flash Crashes" to Come
We're doomed for many more flash crashes, according to Themis Trading's Joseph Saluzzi, a critic of computer-driven flash trades.

Joe Saluzzi, Themis Trading Co-Head of Equity Trading believes that we're doomed for many more flash crashes.

He went on the record on “60 Minutes” Sunday and criticized the use of these computer-driven flash trades.

The Fast gang was so intrigued by his insights they asked him to talk more about it on the Halftime Report. Hear why he’s almost certain another flash crash is inevitable. Watch the video now!

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CALL TO THE FLOOR: GREENPLUM


Forget 3PAR and Netezza, before the bids for these cloud computing names there was data warehouse company Greenplum, bought by EMC in July.

The acquisition forms the foundation of EMC’s new data computing product division.

What must you know about this rapidly developing area of tech. Find out from Greenplum co-founder Scott Yara. Watch our exclusive interview now!

Greenplum Founder on EMC Deal
EMC bought cloud computing company Greenplum in July, and the acquisition set the foundation for EMC's new data computing product division. Scott Yara, co-founder of Greenplum and VP of products at EMC, discusses cloud computing and the EMC deal with the "Fast Money" traders.





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Trader disclosure: On Oct.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 (DD), (GE), (POT), (GDXJ), (BRCD), (CNI); Pete Najarian owns (BEXP) calls; Pete Najarian owns (BP) calls; Pete Najarian owns (BME) calls; Pete Najarian owns (ERTS) calls; Kinahan owns (C), (INTC), (WFC); Terranova Owns (APA), (AAPL), (IBM), (OXY), (RSH), (UPL), (XBI), (JOYG), (C), (AXP), (SWN), (AGU), (EOG), (HES), (OIH), (ORCL), (SU), (VRTS), (FTO), (RIG), (PEP), (POT), (CRM), (CF), (VMW); Terranova Owns (TBT) Calls; Terranova Owns (FFIV) Puts; Terranova Owns (FCX) Put Spread; Terranova Owns (JOYG) Put Spread; Terranova Owns (GLD) Puts; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

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 (DRYS)

For Seve Grasso
Stuart Frankel & Co and it’s partners own (AXP)
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 Saluzzi
***No Disclosures***

For Brad Hintz
Hintz owns (MS)
Hintz owns (CME)
Bernstein own more than 1% of the outstanding common stock of (GS), (MS)
During the past 12 months (GS), (MS) were non-investment banking clients of Bernstein
Bernstein received compensation for non-investment banking-securities related services from (GS), (MS)
Bernstein intends to seek compensation for investment banking services from (GS) (MS) in the next 3 months


CNBC.com with wires.

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