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Market Pros: Is Wall Street Finally Back?

All eyes were on the S&P 500 Thursday as investors tried to gauge if stocks were about to break out and whoosh higher.

Some say the technicals looked encouraging. The S&P 500 closed above 1,228.74, the 61.8 percent Fibonacci retracement of the 2007-2009 market slide.

However others found the action almost disappointing. Although the S&P closed with modest gains it was still within a stone’s throw of the 2010 highs. In other words, it didn’t make a dramatic move that would suggest it had embarked on the next leg up.

"A lot of traders thought the market would have a little bigger bump" after breaking a key technical level of 1,228 on the S&P, says Alan Valdes, director of floor trading for DME Securities in a Reuters interview. “They take it up to 1228 (but) they are not really going through it (in a meaningful way).”

How should you position now? What’s the trade?

Instant insights with the Fast Money traders

We’re certainly on the edge of something, says Guy Adami. The market has had every opportunity to sell off but it didn’t. I’d be hard pressed to think it sells off now. But I can’t help but be cautious. If you want to go long, 1220 appears to be support now. I’d use that level as a defined stop to trade against.

I think the market is looking tired, says Barry Ritholtz of Fusion IQ on the Halftime Report. It’s had a great run. I wouldn’t be surprised to see a pullback. I’m cautious.

If you want to stay long, I’d buy protection against your portfolio, counsels Karen Finerman. If you look at the Vix , protection is relatively cheap.

What do you think? We want to know!

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FINANCIALS

The financials led the market higher with investors loading up on bank stocks, which have now climbed 12.4% for the month; Bank of America was the big winner in the space.

What’s the trade?

The yield curve is moving in the banks’ favor, reminds Stephen Weiss. I think that’s behind the strength in the sector.

The financials are not a space to buy and hold, adds Guy Adami. I believe there’s still headline risk. If you get into this space, make sure to take profits.

I like the financials and I don’t expect to see headline risk, counters Brian Kelly. We’re in an improving economy; I don’t think we’ll see the write-offs that we once saw.


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EAR TO THE WALL: EASTMAN KODAK

Shares of Eastman Kodak mysteriously surged Thursday on unusually strong volume.

What’s the take away?

I’ve been hearing that private equity might be interested in this company, says Guy Adami. Takeout chatter is out there. Also this stock has a lot of short interest and the move higher could be short covering.

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TAKE YOUR POSITION: CROP REPORT

Looking at commodities, both cotton and lumber surged Thursday ahead of the big crops report on Friday.

How should you position?

I’ve been playing the crop report long Monsanto , says Brian Kelly. And I’d also look at Plum Creek and Rayonier.

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TRADING THE GLOBE: CHINA AUTOS

The traders are take a close look at the auto sector after China, the world's largest auto market saw vehicle sales jump 27% last month.

What’s the trade?

In this space I like Daimler , says Karen Finerman.

BorgWarner is my favorite auto trade, says Guy Adami.

I’d take a look at Goodyear, adds Jon Najarian.

I also like Goodyear, says Brian Kelly. I'd use $11 as support and wait a day or two to see if it holds.

You can also play autos with a derivative trade, adds Stephen Weiss. I like Stillwater Mining as a bullish bet on platinum that's used in the manufacture of catalytic converters.




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Trader disclosure: On December 9, 2010, 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), (NUE), (BTU), (MSFT), (C), (GS), (INTC). Karen Finerman Owns (AAPL), (BAC), (GOOG) and (JPM). Jon Najarian owns (EK) and is short (EK) calls. Jon Najarian owns (BBT), is short (BBT) calls. Jon Najarian owns (SHAW), is short (SHAW) calls. Jon Najarian owns (MSFT), is short (MSFT) calls. Jon Najarian owns (IBM), is short (IBM) calls. Jon Najarian owns (CME), is short (CME) calls. Jon Najarian owns (CBOE), is short (CBOE) calls. Jon Najarian owns (XLF) call spreads. Jon Najarian owns (GS) call spreads. Jon Najarian owns (JPM) call spreads. Jon Najarian owns (BAC) call spreads. Jon Najarian owns (ERTS) call spreads. Jon Najarian owns (GDX) put spreads. Jon Najarian owns (GDXJ) put spreads. Jon Najarian owns (MGM) put spreads. Jon Najarian owns (SIRI). Jon Najarian owns (C). Jon Najarian owns (SFD). Stephen Weiss Owns (MDRX), (SWC), (VZ), (QCOM) and (FAS). John Stephenson Owns (SLV), (PAAS), (HL) and (SLW).

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GDXJ) straddles
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Own (DE) calls
Accounts Managed By Kanundrum Capital Own (POT) calls
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (TBT) call spread
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (FXY) Puts

GUY ADAMI
Adami's wife works at (MRK)

KAREN FINERMAN
Finerman's firm is short (IJR)
Finerman's firm is short (SPY)
Finerman's firm is short (IWM)
Finerman's firm is short (MDY)
Finerman's firm is long S&P puts
Finerman's firm is long Russell 2000 puts
Finerman's firm owns (JPM), (JPM) leap
Finerman's firm owns (KFT)

BRIAN STUTLAND
Stutland's firm is a Market maker in VIX futures and options holding positions
Stutland's firm is a Market maker in SPX options holding options and futures positions

First Asset Investment Management Is Long Silver Futures
First Asset Investment Management Owns (SLV)
First Asset Investment Management Owns (PAAS)
First Asset Investment Management Owns (HL)
First Asset Investment Management Owns (SLW)

BRIAN MARSHALL
No disclosures on Dell, Compellent, HP, Netezzam, Cisco, Commvault, Quantum, Oracle, NetApp

BRIAN KELLY 10/11/2010 SOT
Accounts managed by Kanundrum Capital owned (ANDE) on 10/11/2010

BRIAN KELLY SOT 12/02/2010 (GT)
No disclosures on (GT) from 12/02/2010



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