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Halftime: Tech Weakness a Hiccup, or Serious?

The S&P fell on Wednesday after disappointing results from Goldman Sachs and Wells Fargo deflated hopes for strong bank earnings in the last quarter.

However, the Fast traders are a little more focused on softness in big cap tech land on Wednesday, with the Nasdaq down more than 1 percent.

LED stocks were among the drags, with investors dumping Cree after the company reported worse-then-expected numbers, hurt by lower sales in Asia.

However, there were no other clear catalysts to speak of. In fact, Apple profits blew past expectations, while IBM results also wowed the crowds, yet tech couldn't rally.

Is the action trying to telling you something? What should you make of it?

Instant Insights with the Fast Money traders

Pete Najarian is looking for near term weakness but long term strength. He tells us, “I’m noticing investors rolling out of the January 26 calls and buying the February 27 calls in the XLK. It suggests investors may be looking at a pause near term but more upside in the mid-term. And he adds that makes sense to him with the sharp gains in tech since 2011 began.

Brian Kelly largely agrees. He calls Wednesday's weakness “a minor hiccup,” in part because the latest numbers from Apple suggest the tablet and computer markets remain strong.

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Joe Terranova is cautiously bullish but counsels investors to move strategically, because he believes this space is in the throws of a mean reversion – that is laggards catching up and leaders sliding. “I think the strategy is to not chase anything right now," he says.

And as you might expect Steve Cortes is skeptical. He says, “the biggest problem with technology is that the Nasdaq has underperformed the S&P for several weeks.” Cortes blames Apple which he calls ‘the culprit’, in part because it makes up such a large slice of the Nasdaq 100. “Unless Apple really regains the leadership reigns – I think tech is challenged,” he concludes.

What do you think? We want to know?

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HAS GOLDMAN LOST ITS MOJO?

Financials were the biggest drag on the markets Wednesday after Goldman Sachs earnings showed a 53% decline in quarterly profit.

Perhaps most troublesome, net revenue in fixed income, currency and commodities or FICC slid 39 percent from the third quarter to $1.64 billion, reflecting what Goldman called "generally low client activity levels."

What’s the trade?

I’m a buyer of the pullback, says Steve Cortes. I’d wait and see if the stock pulls back more after Morgan Stanley reports, but then I’d pull the trigger. Q4 was a tough quarter for the bond market and I'm not surprised that Goldman didn’t hit the ball out of the park. But going forward I think Goldman benefits from increased M&A as the economy recovers.

If you believe in the capital markets this year, I think investors should go long Goldman, counsels Joe Terranova.

I’m long Morgan Stanley, says Brian Kelly, but it’s for their wealth management division.


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WHO WILL BUY MOSAIC?

Mosaic was one of the biggest losers on Wednesday after Cargill said it's selling its 64% stake in the company or 286 million shares worth some $24 billion.

The move essentially puts the company up for sale but market consensus on Wednesday was that nobody would step forward.

"If there were a deal on the table it probably would have been announced," said one arbitrage investor who spoke on the condition of anonymity to Reuters.

The investor also said that even though the Cargill deal is not technically dilutive, the number of shares that will be sold was bound to put downward pressure on the shares.

"There's going to be a real overhang on the stock," the arbitrage investor said.

What should you make of it? What’s the trade?

The overhang on the stock could last for 1 to 2 years, explains Soleil Securities analyst Mark Gulley in a live interview on Fast Money. The first offering is expected in June with a second offering in December. If you want to be a Mosaic shareholder, I think there will be lots of opportunity to buy over the year or so.

And in case you're wondering, Gulley tells us his top pick in the space is CF Industries .

Check out our entire interview with Mark Gulley. Watch the video now.



______________________________________________________
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Trader disclosure: On Jan. 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova Owns (GLD) Puts. Joe Terranova Owns (PCX) Puts. Terranova Owns (ACI) Puts. Joe Terranova Owns (TBT) Puts. Joe Terranova Owns (UPL), (VRTS), (PVH), (GM), (CVI), (CNQ), (LTD), (C), (PEP), (OXY), (GS) and (CPX). Joe Terranova Is Short (JOYG). Pete Najarian owns (BBY) calls. Pete Najarian owns (F) bonds. Pete Najarian owns (AXP) call spreads. Pete Najarian owns (V) call spreads. Pete Najarian owns (YHOO) stock. Pete Najarian owns (MSFT) call spreads. Pete Najarian owns (MS). Pete Najarian owns (C). Pete Najarian owns (BAC) call spreads. Pete Najarian owns (GE). Steve Cortes is short (XRT) vs. S&P. Steve Cortes is short (LVS). Steve Cortes owns (TSN). Steve Cortes owns (SVU). Steve Cortes is short Gold. Steve Cortes is long U.S. Treasuries.

GE is the parent company of CNBC

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 (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 (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 (NCRI)
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)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (RKH)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (IPI)
Accounts Managed By Kanundrum Capital Are Long The Euro
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Are Short The Yen

MARK GULLEY
Gulley has no disclosures

YOUSSEF SQUALI
Jefferies & Co. is a market maker in (EBAY)

ANTHONY SCARAMUCCI
Scaramucci has no disclosures





CNBC.com with wires.

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IBM
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MS
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WFC
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AAPL
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