Halftime Report: Is S&P Gunning For 1200?
Stocks traded sideways on Friday as investors swallowed a big gulp, after the latest jobs report caught many completely off guard.
The latest data show U.S. employers cut 85,000 jobs in December, far more than the expected loss of 8,000.
The results cooled optimism on the labor market's recovery and kept stocks under pressure.
How should you be positioned now?
Instant Insights with the Fast Money traders
I don’t think it matters what the jobs number is. You have to hold you nose and buy, says Steve Grasso of Stuart Frankel. I think we see tech , materials and energy lead the market higher in the first quarter. I see nothing but air on the upside and I’m a buyer.
If you dig down into the jobs number, I actually think it shows the recovery is starting to take hold, says Mike Gurka of Empower. November’s jobs number was revised to a positive 4,000 rather than the negative 11,000 initially reported, That breaks a streak of 22 consecutive monthly losses. Personally, I'm bullish, I think the S&P goes to 1235.
I’m also seeing positive signs, adds Brian Stutland of Stutland Equities. The Vix trading lower is rather normal. And action in the VXN is also bullish. I’m a buyer of the market, I think it trends up to 1150.
With the S&P between 1100 and 1150 I think it’s time to take profits, counters Bill Strazzulo of BellCurve. Technical analysis suggests there’s trouble ahead.
If you’re a short term trader there may be a small move higher- the S&P could even go to 1200 but bigger picture the fair value on the S&P is between 950 and 900, he adds. There’s much more to lose on the downside than there is to gain on the upside. The risk reward doesn’t make sense here. It’s time to step back.
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FINANCIALS SLIDING TO END WEEK
Bank shares traded lower on Friday after Citi slashed estimates on a slew of rivals including Goldman, JPMorgan , and Morgan Stanley saying falling trading volumes could hurt the banks' key profit engines.
Should you buy the dip?
Options action suggests to me the financials will move higher, says Brian Stutland. I’m a buyer of dips.
Short -term momentum in bank stocks is probably positive, says Bll Strazzulo. I’d buy the XLF looking for a move to $16 and get out if it closes below $14.60
I’m noticing investors putting money to work in Citi and Bank ofAmerica and taking money off the table in JPMorgan and Goldman. Those stock have already run.
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JPMORGAN RECOMMENDS VISA AND MASTERCARD
JP Morgan raised its price target on MasterCard stock to $328 from $280 and raised its target on Visa stock to $109 from $94. They say large-cap card processors offer best-in-class earnings growth.
What’s the trade?
I like Visa, Mastercard and Discover as synthetic bank plays, says Mike Gurka.
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GOOGLE AND TECH'S ROUGH WEEK
The traders are closely watching the action in Google after the stock broke its upper range on Wednesday when it fell below at $620.
That’s significant from a technical perspective, explains Scott Redler of T3.
The next key level is $598 to $600, which Google seems to be holding, he says. Today was probably a day to re-enter the trade and watch how it acts into earnings.
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TRADE TO GO: INTEL
Brian Stutland suggests putting Intel on your radar. He’s a seller of the Jan 20 puts.
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CALL THE CLOSE
Steve Grasso: I see nothing but air on the upside and I’m a buyer.
Mike Gurka: I think the S&P goes to 1235 and I’m a buyer.
Bill Strazzullo: I’m a buyer infront of 1120 and I'd start taking profits at 1150.
Brian Stutland: I’m a buyer of the market, I think it trends up to 1150.
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Trader disclosure: On Jan 8th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AMAT) Calls; Najarian Owns (TEVA); Najarian Owns (CELG); Najarian Owns (PCX) Calls; Najarian Owns (CLF), Is Short (CLF) Calls; Najarian Owns (FCX), Is Short (FCX) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE) Stock; Najarian Owns (TCK), Is Short (TCK) Calls; Najarian Owns (XLF) Calls; Finerman Owns (AAPL); Finerman's Firm Owns (AXL), (AXL) Calls; Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (JPM) Calls; Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (IBB), (CSCO), (MSFT), (NDAQ); Finerman's Firm Is Short (TLT); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (USO), (UNG); Grasso Owns (ABK), (AAPL), (ASTM), (BAC), (BGP), (C), (COST), (CSCO), (FAZ), (PFE), (PRST), (WMT), (V); Terranova Owns March British Pound Futures; Terranova Is Long Copper Backwardation: Long May 2010, Short July 2010; Terranova Is Short (CMA), (JCI), (ESS), (ICE), (SHLD), (CAL); Terranova Owns (XHB) Puts; Terranova Owns (QCOM), (MSFT), (EMC), (FTO), (XOM), (BAC)
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Additional Disclosures for Steve Grasso:
Stuart Frankel & Co. Inc. And Its Partners Own (AIZ)
Stuart Frankel & Co. Inc. And Its Partners Own (CUBA)
Stuart Frankel & Co. Inc. And Its Partners Own (GERN)
Stuart Frankel & Co. Inc. And Its Partners Own (GLG)
Stuart Frankel & Co. Inc. And Its Partners Own (HSPO)
Stuart Frankel & Co. Inc. And Its Partners Own (NWS.A)
Stuart Frankel & Co. Inc. And Its Partners Own (NXST)
Stuart Frankel & Co. Inc. And Its Partners Own (NYX)
Stuart Frankel & Co. Inc. And Its Partners Own (PDE)
Stuart Frankel & Co. Inc. And Its Partners Own (PRST)
Stuart Frankel & Co. Inc. And Its Partners Own (RDC)
Stuart Frankel & Co. Inc. And Its Partners Own (ROK)
Stuart Frankel & Co. Inc. And Its Partners Own (TLM)
Stuart Frankel & Co. Inc. And Its Partners Own (XRX)
Stuart Frankel & Co. Inc. And Its Partners Own (SDS)
Stuart Frankel & Co. Inc. And Its Partners Own (SBU)
Stuart Frankel & Co. Inc. And Its Partners Are Short (QQQQ)
Stuart Frankel & Co. Inc. And Its Partners Are Short (CL)
Additional Disclosures for Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)
For Tim Seymour
Seymour Owns (EEM)
Seygem Asset Management Owns (EEM) Puts
For Brian Stutland
Stutland Owns (AA) Calls
Stutland Owns (GS) Bonds
Stutland Owns (WFC) Bonds
Stutland Owns (GS) Calls, Is Short (GS) Put Spread
Stutland Is Short (BAC) Volatility
Stutland Is Long (MU) Through Options
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