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Halftime: Market Momentum Starting to Shift?

New developments Thursday triggered chatter that the stock market may be on on the brink of a major momentum shift, in favor of the bulls.

The positive sentiment stemmed from a decline in oil prices and stronger than expected economic data; both catalysts sent the S&P higher.

In the Middle East the Arab League said a peace plan for Libya was under consideration. The plan put forth by Venezuelan President Hugo Chavez, if successful, could end a major headwind for equities.

Meanwhile, here at home, initial jobless claims fell last week to 368,000 -- a 2-1/2 year low and the Institute for Supply Management's non-manufacturing index rose to 59.7 in February, slightly above forecasts and higher than the January result.

”The progressively better data has got hopes up that we are going to see better looking non-farm payrolls numbers" in the Labor Department data, says Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in a Reuters interview.

Considering oil and employment are two major market catalysts, are we looking at a shift in market sentiment?

What should you be watching?

Instant Insights with the Fast Money traders

Fast trader Brian Kelly expects the technicals will either confirm or deny a sentiment shift. “1326 is a 78.6% retracement of the March 1st sell-off,” he explains. “It’s a tipping point. If we close above that level, the sentiment could turn from bearish to bullish.” However, Kelly admits he thinks the path of least resistance remains lower.

Guy Adami also believes the market is trading very technically and he also skews bearish. “I’d fade the rally,” he says. “And if you’re long I’d buy protection.”

Meanwhile, Steve Cortes thinks the winning trade is longoil . “I’m adding to my position if it dips below $100,” he says. Even if troubles in Libya die down, Cortes thinks they continue to escalate in other parts of the region, particularly Iran and Bahrain.

If you’re looking for ways to play oil, Oppeneheimer analyst Fadel Gheit recommends, Whiting , Hess and Occidental , “domestic oil producers that have no exposure to anything that’s happening in the Middle East.”

Value investor Whitney Tilson of T2 reminds the desk that he’s long BP and has been since last June. He likes the stock as a “big cap blue chip that’s trading at a 25% discount to peers.” And he says he’ll likely stay long until the low 50’s.

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TECH TOPPING THE TAPE

Aside from oil and employment, the desk also has tech on the radar a day after Apple announced its next generation iPad.

What’s the trade?

Although he’s an Apple fan, Whitney Tilson of T2 thinks the value tech trade is long Microsoft.

”Apple trades at a high teens multiple while Microsoft trades at half the multiple,” he says."

Also he feels Microsoft is a growth story. “Microsoft is growing like crazy, just last quarter they reported 15% revenue growth and 29% EPS growth. That’s fabulous for a company that’s trading less than ten times earnings.”

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TRADE TO GO: ANHEUSER-BUSCH INBEV

And if you’re looking for another idea, Whitney Tilson also suggests putting Anheuser-Busch InBev on the radar.

It’s a cost cutting story, he says. They just reported earnings on Thursday. Click here for all the details.


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Trader disclosure: On Mar. 3, 2011, the 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), (GS), (INTC), (MSFT), (NUE) and (BTU). Steve Cortes owns (PM), (TM) and (EXC). Steve Cortes owns (SDY) vs. S&P. Steve Cortes owns Crude. Steve Cortes is short (F). Steve Cortes is short (C). Steve Cortes is short (DBA). Steve Cortes is short Wheat

Comcast Is The Parent Company Of CNBC
Comcast Is The Parent Company Of NBCUniversal
GE Owns 49% Of NBCUniversal
GE Owns 49% Of CNBC

GUY ADAMI
Adami's wife works for (MRK)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (FRO)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (PGH)
Accounts Managed By Kanundrum Capital Own (PWE)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own The Euro
Accounts Managed By Kanundrum Capital Own The British Pound
Accounts Managed By Kanundrum Capital Own US T-Bonds
Accounts Managed By Kanundrum Capital Own Corn
Accounts Managed By Kanundrum Capital Own Wheat
Accounts Managed By Kanundrum Capital Own Soybeans
Accounts Managed By Kanundrum Capital Own Copper
Accounts Managed By Kanundrum Capital Own Gold
Accounts Managed By Kanundrum Capital Own Oil
Accounts Managed By Kanundrum Capital Own VIX calls
Accounts Managed By Kanundrum Capital Own SPY puts
Accounts Managed By Kanundrum Capital Are Short the U.S. Dollar
Accounts Managed By Kanundrum Capital Are Short the Australian Dollar
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short S&P Futures

DOUG KASS SOT
Seabreeze Partners Management owned (CL) on 3/2/2011

WHITNEY TILSON
Funds Managed By Whitney Tilson Own (BRK.A), (BRK.B)
Funds Managed By Whitney Tilson Own (BP)
Funds Managed By Whitney Tilson Own (MSFT)

CNBC.com with wires.

Symbol
Price
 
Change
%Change
S&P 500
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BP.
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ABI
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HES
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MSFT
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OXY
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WLL
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AAPL
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