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Pro Traders: Deciphering Market's Mixed Message

Investors ended the week with a mixed message from the markets. A blowout quarter from Google combined with a frenzy to snap up shares of Apple ahead of earnings sent the Nasdaq sharply higher.

However uncertainty surrounding major banks' exposure to foreclosure losses dragged both the S&P and the Dow lower.

That kind of divergence can't last. Will the bulls or bears win?

Instant Insights with the Fast Money traders

I've been saying that the S&P can't rally without the financials but the S&P certainly has been , muses Guy Adami. At some point I fear all the air comes out of the balloon. However, right now it's all systems go.

And if you're looking for a trade, you can be bearish and still be bullish on some names, Adami adds. Keep an eye on McDonald's , Yum! and IBM - they all just made 52-week highs.

I agree that there are a lot of headwinds but the market doesn't seem to care, says Brian Kelly. I can't help but wonder what the unintended consequences may be from the Fed's willingness ease further.

It wouldn't surprise me if we find out in time to come that the Fed's action triggered very sharp inflation, adds Karen Finerman.

I think tech will drive the market higher, says Joe Terranova. However, my tell is the Treasury market, he adds. We’re seeing money rotate out of bonds and I expect it comes into the stock market and drives the broad index higher.

- BANKS BUSTED?

Taking a closer look at the action in financials, investors are starting to wonder if bank stocks are essentially busted - Bank of America and JPMorgan in particular.

Not only are investors concerned about the impact of the foreclosure moratorium - but also the liability banks could face from the mortgage loan pools that were created to fuel the boom in the mortgage back securities market.

What should you make of it?

I just think the fears are overdone in banks, says Karen Finerman. I'm largely in JPMorgan but I can't help but feel BofA is attractive.

JPMorgan also looks somewhat attracitve to me, says Brian Kelly. I think there's an implied government put under some of these names.

I really think the foreclosure issue is a much bigger deal for BofA becuase of their Countrywide acquisition, adds Joe Terranova. JPM, Citi, Wells and USB all look great to me.

I'm long Jefferies, adds Brian Kelly. I think if the Fed steps in we see an increase in trading volumes.

- TOPPING THE TAPE: TECH

As bad as the banks were on Friday, tech was that good. Here's just a smattering of the headlines. Google and AMD beat estimates; Seagate confirmed it’s in talks to go private and investors gobbled up Apple ahead of earnings Monday.

What should you make of it?

I'm bullish Google and Apple, says Brian Kelly, but I consider them retailers masdquerading as tech companies.

Considering the run Apple has had recently, I'd take profits, counsels Karen Finerman. For a value gal like me it's starting to get pricey.

I agree that investors will get a chance to buy Apple at a lower price before the end of the quarter, says Joe Terranova. And elsewhere in the space I also like Oracle , VMWare and Salesforece .


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ANALYZE THIS: WILL MARKET SELL OFF ON QE2?

The Fast Money desk thought the markets seemed bored with Fed Chairman Bernanke as soon as he started speaking Friday morning.

Is this a sign that the markets have priced in all the QE2 expectations? Is Bernanke now boxed into telling the markets how he'll ease money in November?

Get insights from Fed watcher and Fast Money contributor Peter Boockvar of Miller Tabak. Watch the video now!







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Trader disclosure: On October 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; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Terranova Owns (GLD), (APA), (AAPL), (IBM), (EOG), (HES), (OIH), (OXY), (ORCL), (SU), (VRTS), (XBI), (C), (JOYG), (RIG), (UPL), (PEP), (FCX), (PFE), (HOC), (NOV), (CRM), (MMM), (MCD), (NKE), (CREE), (ISRG), (XLF), (SDS), (GOOG); Terranova is short (APOL); Finerman owns (AAPL); Finerman and Finerman’s owns (BAC); Finerman and Finerman’s owns (JPM); Finerman owns (GOOG); Finerman’s firm owns (IBM); Finerman's firm is short (IJR); 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; Weiss owns (AAPL), (BAC), (INFN), (OCLR), (FNSR), (DVN), (VZ), (QCOM)

For Brian Kelly
Accounts managed by Kanundrum Capital own (ANDE)
Accounts managed by Kanundrum Capital own (GPRE)
Accounts managed by Kanundrum Capital own (JJG)
Accounts managed by Kanundrum Capital own (SGG)
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (AGM)
Accounts managed by Kanundrum Capital own (MSFT)
Accounts managed by Kanundrum Capital own (FRO)
Accounts managed by Kanundrum Capital own (GLGC)
Accounts managed by Kanundrum Capital own (GS)
Accounts managed by Kanundrum Capital own (JEF)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (UUP)
Accounts managed by Kanundrum Capital own (PCL)
Accounts managed by Kanundrum Capital own (LPX)
Accounts managed by Kanundrum Capital are short (HYG)
Accounts managed by Kanundrum Capital are short (SLF)
Accounts managed by Kanundrum Capital are short U.K. Pound
Accounts managed by Kanundrum Capital are short Mexican Peso

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 Peter Boockvar
***No Disclosures***

For Scott O’Neill
William O'Neil & Company Owns (ARMH), (PCLN), (NTAP)


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