Stocks slipped on Friday with the Dow closing below the psychologically important 10,000 mark after a stronger dollar hit commodity prices and dragged down the energy names.
Also an RBC analyst cut his price target on Burlington Northern stock to $87 from $91 which helped drive the Dow Jones Transportation Average lower.
How should you be positioned?
It seems to me that people still want to buy into the market but they’re a little spooked, muses Steve Grasso. I still think the market ultimately goes higher. I expect to see the S&P around 1150 by year’s end.
I’m in Grasso’s camp, adds Karen Finerman. We had such a run up into earnings I think it was hard for stocks to gain momentum after earnings. But, ultimately I think fundamentals are improving. That combined with money on the sidelines should send the market higher.
I’m bullish too, adds Gary Kaminsky. I also think money managers chasing performance sends the S&P higher through the end of the year.
The action late day concerns me, counters Joe Terranova. Goldman turned and the market turned. I’ve been bullish but the market just can’t seem to get above 1100 in the S&P. That kind of resistance concerns me. The one thing that could change my mind is unemployment. If that improves then I think the market takes off.
As much as I’d like to see people have jobs, if we see unemployment levels improve dramatically I think the market immediately starts to think about inflation, counters Kaminsky.
It seems to me the best thing for the market is for the unemployment to stay where it is, muses Grasso. That suggests the Fed will leave interest rates alone.
And another thing that bodes well for stocks is revenue growth reported this earnings season was better than expected, adds Finerman. We’ve seen a number of significant revenue beats.
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TOPPING THE TAPE: NASDAQ
Of the three major indexes, the Nasdaq fared best on Friday after strong sales of Windows software and Halo video games sent Microsoft surging and a positive outlook for the holidays sent Amazon to a 10-year high.
After the results, Jefferies & Co upgraded Amazon to "buy" from "hold," while FBR Capital Markets raised it to "outperform" from "market perform," citing accelerating growth in media and international business, and strong cash-flow generation.
But the tech space was not without its dark spots. Disappointing results from Broadcom and MEMC Electronic sent an index of semiconductors .SOXX down 2.6 percent.
What’s the tech trade?
Revenue growth at Microsoft came from the consumer side, muses Joe Terranova. That’s interesting because you’d think strength would come from the PC cycle upgrade.
Consumer strength in Microsoft’s numbers says to me the people are feeling more comfortable spending money, adds Gary Kaminsky.
And as for Amazon, I’m still bullish, says Joe Terranova. E-commerce growth remains poised to explode.
Patterns in charts of Amazon show the stock making higher lows which is also bullish, explains Melissa Lee.
If you’re looking for a trade I’d look at Expeditors as a downstream play, adds Kaminsky. They ship packages that the online shoppers purchase.
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BREAKING NEWS: YAHOO!
In breaking news Melissa Lee reports that billionaire investor Carl Icahn resigned from the board of Yahoo!
What does that mean?
I think that says he wants out of his stock position, says Karen Finerman. I'd expect the stock to go down on the news.
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IS THE BOTTOM IN FOR THE DOLLAR?
Oil prices fell on Friday as the dollar made gains backing away from a 14-month low against the euro.
The inverse relationship between the dollar and commodities such as oil has been a key theme in this market helping to drive the S&P to current levels.
Investors are now starting to question, has the dollar bottomed?
For insights we turned to strategic investors Dennis Gartman.
"It seems to me the dollar index is moving from the upper right to the lower left," says Dennis Gartman. "The long-term trend is lower but is it oversold right now? You bet!"
Find out what else Gartman has to say. Watch the video now!
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Trader disclosure: On Oct. 23th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman's Firm Owns (BKS) Puts, Is Short (BKS); Finerman's Firm Owns (MSFT); Finerman's Firm And Finerman Own (PDE); Finerman's Firm And Finerman Own (RIG); Finerman's Firm Owns (WLP) Calls; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO), (UNG); Finerman's Firm Owns (AET) Calls; Finerman's Firm Owns (UNH) Calls; Finerman's Firm Owns (BCR; Finerman's Firm Owns (STJ); Seymour Owns (FXI); Seymour Owns (EEM); Seymour Is Short (PBR); Grasso Owns (AAPL), (ABK), (ASTM), (BAC), (BGP), (C), (COST), (PRST), (V), (WMT), (FAZ); Terranova Owns (WYNN); Terranova Is Short (AXP), (POT), (OIH), (FCX)
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