Halftime: Does Dow Theory Confirm Bull Rally?

If you're an investor who follows Dow theory — the idea that the market is in an upward trend if one of its averages advances — you may be pleased with the performance of the transports.

Strength in this sector may suggest the rally has legs.

Thought of as a market 'tell', "Fast Money" trader Karen Finerman likes to keep an eye on the transports.

"Chicks love trucks, right?" she said Tuesday, adding that some positive data has her excited about the trucking business.

"I mean this was an industry that was absolutely disseminated," explained Finerman. "You had a lot of capacity coming out. You had a lot of companies enter bankruptcy coming out with new balance sheets. Now we're really starting to see a pick-up in trucks."

Werner Enterprises COO Derek Leathers seemed to confirm the strength on Friday's "Halftime Report." In its most recent quarter, Werner said freight volumes were increasing and seasonal trends were looking good.

Although strength is strength, Leathers tells us it's more to do with lack of supply than robust demand.

"400,00 trucks have left the industry in the past few years," he explained. "So demand is strong."

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THE BEST TECH PLAY?

It's been quite a week for technology stocks.

Shares of Apple hit a new all-time high. Qualcomm's stock surged after the company reported positive earnings results. Research In Motion , however, traded lower Friday on news that Dell plans to move all of its 25,000 employees from RIM's BlackBerry to its own smartphone.

So should you buy RIM on weakness?

No, said Terranova. He has liked the stock, but would only buy at the $45 to $50 level. Right now, he said the trades are all about cloud computing. He's seeing a reallocation out of tech names and into the financial space.

On the other hand, Kanundrum Capital's Brian Kelly would buy RIM at current levels. Sales of its Torch smartphone have been doing very well lately, he said. It's Playbook is also getting good reviews, so he recommends buying RIM and using options to hedge your position.

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TAKE YOUR POSITION: CISCO

Wall Street will be watching when Cisco Systems reports quarterly earnings results after the close Wednesday, as CEO John Chambers tends to make strong statements about the health of the tech space.

The stock usually disappoints on earnings, said Steve Grasso of Stuart Frankel. If you're looking for high beta, this is not the stock for you. But he, like others, will listen to what Chambers has to say.

While this stock has underperformed lately, Najarian thinks it could soon catch up to the rest of the space, being as the Semiconductor exchange-traded fund has traded up lately. Najarian also thinks Cisco may also use its $39 billion in cash to pay investors a dividend.

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UNUSUAL ACTIVITY

In the options market, Las Vegas Sands continues to grab Najarian's attention.

Shares of the gambling giant are almost 20 percent higher this week, as it hit its highest level in more than two weeks. Najarian said the 55, 57.50 and 60 calls had a lot of activity Friday, which shows they are squeezing shorts a bit.

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CALL THE CLOSE

Terranova thinks the market could push higher, but also thinks it's cheap to buy puts.

On the other hand, Grasso said catalysts for the market have passed. He recommends waiting a few days to see where the market goes.

With the printing presses going, Kelly thinks the market could go up.

Looking at the volatility index, Najarian said if you buy this market, also buy protective puts. His bias is higher on "Mutual Fund Monday."

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Trader disclosure: On November 5, 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 (BAC); Pete Najarian owns (MS); Pete Najarian owns (LVS) call spreads & calls; Pete Najarian owns (MRVL) calls; Pete Najarian owns (F) bonds; Terranova owns (APA), (AAPL), (AXP), (C), (GOOG), (GS), (FCX), (HES), (IBM), (MCD), (NKE), (ORCL), (PCP), (PEP), (UPL), (VRTS), (XBI); Terranova owns (FCX) puts; Terranova owns (FFIV) puts; Terranova owns (SLB) puts; Terranova owns (SPX) 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 (CMS)
Virtus Investment Partners own more than 1% of (CSC)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (FCFS)
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 (SOA)
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 (WMB)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Brian Kelly
Accounts managed by Kanundrum Capital own (TLT)
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (JEF)
Accounts managed by Kanundrum Capital own (TD)
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 (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 (HD)
Accounts managed by Kanundrum Capital own (PCL)
Accounts managed by Kanundrum Capital own (XHB)
Accounts managed by Kanundrum Capital own (FCX)
Accounts managed by Kanundrum Capital own (JO)
Accounts managed by Kanundrum Capital own (EWH)
Accounts managed by Kanundrum Capital own Euros
Accounts Managed By Kanundrum Capital Own (POT) Calls
Accounts managed by Kanundrum Capital are short Japanese Yen

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AAPL)
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 (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)
Stuart Frankel & Co and it’s partners are short (MCD)
Stuart Frankel & Co and it’s partners are short (AAPL)
Stuart Frankel & Co and it’s partners are short (RHI)

For Peter Schiff
***No Disclosures***

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