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Halftime: Unstoppable Metals Still a ‘Buy’?

With the S&P struggling to break above the critical 1220-1225, the Fast traders turned attention to another area of the market – one they say is working. We're taking metals.

The desk is particularly interested in the action in silver after it surged above $30 for the first time since 1980.

Some find the move curious in the wake of comments made by Ben Bernanke over the week-end in a “60 Minutes” interview. The Fed chief said the economy was still struggling to become "self-sustaining" without government help.

If Bernanke's cautious about the economy, why is silver – an industrial metal - at a 3-decade high? And perhaps more important, how should you trade?

Instant Insights with the Fast Money traders

I’ve been bullish silver since August, says Brian Kelly, but I took gains on Monday in my position in the Silver ETF. And I would not establish a new position right here. If anything, I'd consider a stock replacement strategy going forward - if I was bullish, I’d trade calls to limit my downside.

I believe the move higher in silver has everything to do with the competitive currency devaluation that seems to be going on all around the world, says Joe Terranova. And that shows no signs of stopping.

Also, David Einhorn’s comments about precious metals – both silver and gold - on CNBC, probably generated positive catalysts, adds Jon Najarian. But I agree that the competitive devaluation of currencies probably pushes more investors into metals.

(As you may know, on CNBC's Squawk Box, David Einhron came out in favor of gold. ”We own gold and we’re going to continue to own gold as long as we think the monetary and fiscal policies don't make sense,” he said.

Elsewhere in the space, if you’re bullish copper I’d trade it long Freeport McMoRan against puts for protection, adds Terranova.

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ANALYZE THIS: SPRINT

Meanwhile David Einhorn also disclosed a new long position in Sprint on Monday's Squawk Box.

Speaking with Becky Quick and Joe Kernen, Einhorn explained that, “they are in a good spot for a turnaround right now. The churn has improved. The customer service has improved. Their reputation has improved. Their line up with their handsets has improved.”

Should you follow Einhorn into Sprint?

Credit Suisse analyst Jonathan Chaplin agrees with Einhorn; he says he has a $6 price target on the stock.

Check out our entire conversation with Chaplin. Watch the video above!


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UNSTOPPABLE OIL?

The traders are keeping a close eye on oil , which eased from a 26-month high near $90 on Monday due to a stronger dollar.

What’s the trade?

I expect oil to break above $90, says Joe Terranova.

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WHALE WATCHING: BOOKS

Shares of Barnes and Noble surged after billionaire investor Bill Ackman's Pershing Square offered to finance a $16 share Borders Group bid for the struggling bookseller.

Should you trade in the wake?

I don’t understand the move at all, says Brian Kelly. Electronic delivery, that’s the future of the book business -- and both Barnes & Noble and Borders are behind the curve.



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Trader disclosure: On December 6, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long (CME) stock, short (CME) calls. Jon Najarian is long (CBOE) stock, short (CBOE) calls. Jon Najarian is long (DRYS) stock, short (DRYS) calls. Jon Najarian is long (MTW) stock, short (MTW) calls. Jon Najarian is long (WHR) stock, short (WHR) calls. Jon Najarian is long (GAS) stock, short (GAS) calls. Jon Najarian is long (AAPL) call spreads. Jon Najarian is long (YHOO) call spreads. Jon Najarian is long (XLF) call spreads. Jon Najarian is long (MS) call spreads. Jon Najarian is long (GS) call spreads. Jon Najarian is long (NFLX) call spreads; Joe Terranova owns (FCX) puts. Joe Terranova owns (FCX), (PFE), (OIH), (UPL), (C), (GS), (NKE), (PEP), (VRTS), (AAPL), (OXY) and (CMA); Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST), (S) and (X).

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (DRYS)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Own (ARMH)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (DE)

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)

STEVE GRASSO
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
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 (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 Its Partners Own (UNM)
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)

JONATHAN CHAPLIN, CREDIT SUISSE
Credit Suisse Is A Market Maker Or Liquidity Provider In (T), (S), (VZ), (S), (VZ), (T) Is Or In Past 12 Months Was A Client Of Credit Suisse
Credit Suisse Provided Investment Banking Services To (S), (VZ). (T) In Past 12 Months
Credit Suisse Provided Non-Investment Banking Services To (S), (VZ), (T) In Past 12 Months
Credit Suisse Has Received Investment Banking Compensation From (S), (VZ), (T) In Past 12 Months
Credit Suisse Expects To Receive/Seek Investment Banking Compensation From (S), (VZ), (T) In Next 3 Months
Credit Suisse Has Received Non-Investment Banking Compensation From (S) In Past 12 Months



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