Halftime: Traders on Pins & Needles Waiting For Intel

The Fast traders are on pins and needles waiting for Intel’s Intel’s earnings report, due after the bell.

As the largest chipmaker in the world, Intel has been a proxy for strength in the tech sector - with strong demand for their products considered a bullish 'market tell.'

And although Intel has climbed about 10% over the past 3 months, it’s seriously lagged the Semiconductors ETF which has gained almost twice that. Now, investors are trying to determine if the weakness is company specific or a sign of a broader headwinds.

”It’s the outlook, the cannibalization of tablets and the lack of presence in smartphones,” that has investors worried, says trader JJ Kinahan of TD Ameritrade. “So many other companies seem to be hitting the ball out of the park and Intel’s not even out of the dug out.”

How should you position? What should you expect?

Instant Insights with the Fast Money traders

Jefferies analyst Adam Benjamin tells the desk to expect Intel to pop but then sell-off.

”The key here is that there may be a short squeeze,” he says. “I think it goes up on earnings but then I expect it drifts lower on Friday because the secular headwinds aren’t going away.”

By secular headwinds, Benjamin is referring to trends that show tablets such as the iPad are cannibalizing segments of the PC market. And Intel has struggled to gain a toe-hold in tablets as well as in smartphones.

"There’s nothing they’re going to say on this earnings call to change investors’ views about the way the world is changing," says Benjamin. As you might imagine, he has an 'Underperform' rating on the stock.

Ever the contrarian, Steve Cortes says although Intel may be down, don’t count them out. “Intel has a massive cash hoard and they’re good at acquisitions – that could turn the stock around.”

Steve Grasso would rather play the space with any name other than Intel. “It just doesn’t attract interest,” he says. If you're looking for ideas he suggests AMD AMD or NVIDIANVIDIA.

Steve Cortes suggests looking at CypressCypress and Xilinx Xilinx . Adam Benjamin recommends overweight Broadcom Broadcom , QualcommQualcomm and Marvel Marvel .

And the desk has been talking about ARM HoldingsARM Holdings at length over the past few days as a ‘Buy’ on a pullback.

What do you think? We want to know!

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ARE STOCKS ABOUT TO BREAK HIGHER

Looking at the market broadly, the S&P S&P was little changed on Thursday, after disappointing data called the strength of the recovery into question.

In fact, weekly initial claims for unemployment benefits rose the most in six months, the Labor Department said, suggesting the jobs market still faces headwinds.

The news offset strength generated by a weaker dollarweaker dollar which typically generates a bid in commodities and natural resource names.

How should you position now?

We’re sitting around the 1283 level on the S&P and we can’t get any momentum in either direction, says Guy Adami. I think we may be looking at resistance but then again, the market doesn’t typically give you this long to sell the highs.

Maybe the weaker dollar is the catalyst the equities market need to finally break higher, muses Steve Grasso.

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TRADE UPDATE: SOFT COMMODITIES

Again the traders are watching the action in soft commodities such as cotton cotton , corn corn , and soybeans soybeans , all of which continued to rally due to dollar weaknessdollar weakness (and after a crop report out earlier in the week suggested supply might be challenged.)

By contrast other commodities – namely metals such as gold gold and coppercopper did not participate in the gains.

What should you make of it?

It’s important to note that there’s a divergence in commodities, explains Fast Money anchor Scott Wopner, who's filling in for Melissa Lee. The metals are going down perhaps on economic data but softs are rising on supply and demand issues.

What’s the trade?

I think Deere Deere works, says Guy Adami.

On Wednesday’s Fast Money strategic investor Dennis Gartman suggested a long position in one of the many grains ETFs. “Pick one and use it, I think they’re going higher,” he said.

Following are some of the biggest:
Powershares DB Ag Fund ETF (DBA)Powershares DB Ag Fund ETF (DBA)
Market Vectors Agribusiness ETF (MOO)Market Vectors Agribusiness ETF (MOO)
Dow Jones UBS Grains Sub Index ETF (JJG)Dow Jones UBS Grains Sub Index ETF (JJG)
ELEMENTS Rogers Int’l Commodity Index (RJA) ELEMENTS Rogers Int’l Commodity Index (RJA

Read More:
Dennis Gartman: Food Supply Has Just Been Materially Reduced

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Trader disclosure: On Jan. 13, 2011, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
Guy Adami owns (AGU), (C), (BTU), (GS), (INTC), (MSFT) and (NUE). Steve Cortes is short (LVS). Steve Cortes is short (XRT) vs. S&P. Cortes is short (XHB) vs. S&P. Steve Cortes is short Nasdaq futures. Steve Cortes owns (TSN), (EXC), (SVU) and (CLX). Steve Cortes is long U.S. Treasuries. Steve Grasso owns (ASTM), (BA), Grasso owns (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE), (PRST) and (S). JJ Kinahan owns (INTC), (MOS), (YHOO), (C) and (TBT). JJ Kinahan is short (SPY). JJ Kinahan is short (NFLX).

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GUY ADAMI
Adami's wife works at (MRK)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (AMGN)
Stuart Frankel & Co and its partners own (BP)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GE)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NY)
Stuart Frankel & Co and its partners own (OPE)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own(TLM)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UNM)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

ADAM BENJAMIN
Jefferies & Co. is a market maker in (INTC)
Within past 12 mos., Jefferies & Co has received non-IB comp. from (INTC)
Jefferies & Co. is a market maker in (QCOM)
Jefferies & Co. is a market maker in (BRCM)
Jefferies & Co. is a market maker in (MRVL)
Jefferies & Co. is a market maker in (CRUS)

NISHU SOOD
Sood has no disclosures

DENNIS GARTMAN SOT (1/12/2011)
Dennis Gartman was long March KC Wheat on 1/12/2011
Dennis Gartman was long soybeans on 1/12/2011
Dennis Gartman was short the Yen on 1/12/2011
Dennis Gartman was long the Canadian Dollar on 1/12/2011
Dennis Gartman was long the Aussie Ddcollar on 1/12/2011
Dennis Gartman was long gold, short sterling on 1/12/2011
Dennis Gartman was short the Euro on 1/12/2011

CNBC.com with wires.