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Halftime: All Pistons Firing For December Rally?

Eavesdrop on any bull Wednesday and you’ll hear talk that not only did the S&P and Dow trade extrememly well on the first day of the month - but all pistons are firing for a December rally.

They point to a slew of positive factors that have emerged over the past 24 hours.

For example, here in the US, private sector payrolls rose 93,000 last month, the biggest gain in 3 years and the ISM manufacturing index posted its 16th consecutive monthly gain.

Also China PMI came in better than expected, rising to a 7 month high.

Bulls even found catalysts in Europe; a British Manufacturing Index hit a 16-year high; and retail sales were strong in Germany.

But despite all the green on the screen skeptics such as Todd Gordon of Forex.com can’t be convinced. He thinks bulls are missing something.

What must you know?

Instant Insights with the Fast Money traders

Gordon thinks Australia should be confirming this rally and its not.

”The euro was up .75% while the Aussie group against the rest of the G10 was up .25%, he explains. "I take that to mean the European bounce was nothing more than a short covering rally. The weakest currency was up the most. If it were a true risk-on rally the Australian group should be up, much more.”

”And to take it a step further – look at the safe haven currencies such as the yen and the Swiss franc," Gordon adds. "They should be down much more if the rally is for real.”

As you might imagine Joe Terranova sees the market action a little differently.

He's much more interested in the rotation currently underway; out of bonds and into stocks.

”I think the question money managers are asking is this – should I be exposed to equities or hide out in Treasurys," Terranova says. "And the market is answering that question. We’re seeing a sell-off in Treasurys and muni bonds. I’m seeing money mangers get back into equities with justification.”

Looking at the technicals; they seem to confirm his bullish out look.

The S&P 500 traded above its 14-day moving average for the first time in eleven sessions and was having its best day in almost a month, according to Reuters.

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"If we close above 1,200, the next stop is 1,225 to 1,230," says Tom Alexander, head of Alexander Trading in a Reuters interview. That target area coincides with a recent two-year high and the 61.8 percent Fibonacci retracement of the benchmark's slide from October 2007 to March 2009, a key technical indicator.

What do you think? We want to know!










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AMERICAN TAXPAYER TO FUND EUROPE?

Reports out Wednesday suggested the United States is ready to back a bigger EU stability fund.

According to Reuters, “The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund, a U.S.”

What’s the trade?

The news boosted the euro and I would short those gains, says Brian Kelly.

I was also waiting for this rally as an opportunity to short, says Steve Cortes. I think there’s almost no chance that the US taxpayer will bailout Europe.

Will Americans have foot the bill to restore stability overseas? Get the latest insights from Miller Tabak’s Peter Boockvar. Watch the video now!


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CHINA PMI ...GOLD, COPPER, OIL, SILVER SURGING

As we mentioned above, China helped jumpstart this December rally, after new data showed that nation’s purchasing manufacturing index or PMI rose to a 7 month high in November, beating expectations, with output and export orders fueling the rise.

What’s the trade?

I’m worried that the PMI number was too strong, says Steve Cortes. I think this number triggers more tightenting ahead.

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FED REVEALS EMERGENCY LOAN DATA

The U.S. Federal Reserve on Wednesday revealed the details of some $3.3 trillion in emergency loans it made to financial institutions during the credit crisis as mandated by a revamp of U.S. regulations.

Get all the details from CNBC’s Kate Kelly and Steve Liesman. Watch the video now.

Read More:
> Fed Discloses Details of $3.3 Trillion in Crisis Loans


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Trader disclosure: On December 1, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova Owns (FCX), (UPL), (C), (PEP), (VRTS), (OXY), (AXP), (GS), (POT), (AAPL), (NKE), (OIH); Cortes is short (UNP); Cortes owns (GS); Cortes owns (MS); Cortes owns (BAC); Cortes owns (CME); Cortes is short German DAX; Cortes is long U.S. Dollar vs. Mexican Peso, Euro, Australian Dollar; Cortes is long U.S. 2-year treasury notes

For Brian Kelly
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 (JPM)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (ARMH)
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (QCOM)

For Joe Terranova
Terranova Is Chief Market Strategist Of Virtus Investment Partners, LTD.
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)


For Todd Gordon
Forex.com is a market maker in all currencies
Gordon is long S&P
Gordon is long U.S. Treasuries

For Paul Miller (FBR)
***No Disclosures

CNBC.com with wires.

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