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Halftime—Market Pro: Oil Failing Against $85?

With oil at six-month highs and trading higher Wednesday, why is "Fast Money" trader Steve Cortes still bearish?

Despite its gains, oil is still not breaking out, noted Cortes, founder of Veracruz. Should oil get and stay above $85 a barrel, he would remove his shorts. But so far, oil stuggled to do so.

Cortes thinks the all commodities look weak, including copper . He expects them to fall and thinks there are at an inflection point. But if they continue to climb higher, he'll take off his shorts.

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UNUSUAL ACTIVITY

Shares of MGM Resorts International popped Wednesday after the gambling giant reported strong earnings Tuesday night.

The past few months have been good for the gaming industry, noted Jon Najarian, co-founder of optionMONSTER.com. Following its strong earnings report, he said MGM traded three times full-session volume by midday Wednesday. People are buying calls.

Najarian said both Las Vegas Sands and Wynn Resorts also experienced greater activity in the options market Wednesday.

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GOLD TRADE STILL ON?

After the largest change in House seats since 1948, it remains to be seen what impact a divided Washington will have on the markets.

The consensus on Wall Street, reports CNBC's Melissa Lee, is that gridlock essentially wipes out any hope of fiscal stimulus. In turn, the Federal Reserve is more likely to act through monetary stimulus, which would be a longer-term weight on the US dollar .

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Kanundrum Capital founder Brian Kelly agrees with the consensus, even though he prefers fiscal stimulus. But because Kelly thinks the Fed will continue to print money in an effort to prop up the economy, he said the gold trade is still on.

"Even if gold goes a little bit lower, I would still be buying some more gold," said Kelly, adding that he's long the precious metal, but hedged.

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CALL THE CLOSE

Patty Edwards, chief investment officer of Trutina Financial, thinks the dollar could remain weak. That said, she recommends overseas names, like Herbalife .

Kelly recommends investors be conservative, be hedged and buy following the Fed statement.

Najarian thinks the momentum could continue to the upside.

Cortes thinks investors should avoid the homebuilders.

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Trader disclosure: On November 3, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes is short (AAPL); Cortes owns (GOOG); Cortes is short (RSX); Cortes is long S&P 500; Cortes owns (K); Cortes owns (TSN); Cortes owns (CLX); Cortes is short crude oil; Cortes is short gold; Cortes owns U.S. Treasuries; Jon Najarian owns (BP) short calls; Jon Najarian owns (LEN) short calls; Jon Najarian owns (WYNN) short calls; Jon Najarian owns (LVS) short calls; Jon Najarian owns (MGM) short calls; Jon Najarian owns (NTRI)

For Patty Edwards
Edwards owns (V) for clients
Edwards owns (F) for clients
Edwards owns (GS) for clients
Edwards owns (AAPL) for clients
Edwards owns (GOOG) for clients
Edwards owns (GLD) for clients
Edwards owns (PGM) for clients
Edwards owns (HLF) for clients
Edwards owns (JNK) for clients
Edwards owns (XOM) for clients
Edwards owns (CVX) for clients
Edwards owns (PFE) for clients
Edwards owns (WFMI) for clients
Edwards owns (KMB) for clients
Edwards owns (EXC) for clients
Edwards owns (DUK) for clients
Edwards owns (AEP) for clients

For Brian Kelly
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (CLF)
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 Euros
Accounts managed by Kanundrum Capital are short Japanese Yen

For Ed Mills
***No Disclosures***

CNBC.com with wires.

Symbol
Price
 
Change
%Change
HLF
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LVS
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MGM
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WYNN
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