Is Rally Slipping Away?

IS RALLY SLIPPING AWAY?

Investors took profits on Thursday sending both the Dow and S&P into negative territory for the second day in a row. Clearly the Street is nervous ahead of Friday’s crucial jobs report.

A Reuters survey forecasts that the Labor Department report will show 320,000 workers lost their jobs in July, the least for any month since September last year.

But is “less bad” enough to prevent the rally from slipping away?

Strategy Session with the Fast Money traders

I’m starting to worry that we’re looking at a double top in the S&P, muses Guy Adami. They say bull markets end on great data and we could see that on Friday.

I’m keeping an eye on the Vix , adds Pete Najarian. It’s way up because investors are buying protection, and I interpret to mean they aren’t entirely confident the rally will hold.

Meanwhile, the Bank of England increased its quantitative program, which says to me their banks are not lending and their economy is not reflating, adds Tim Seymour. That’s significant. That signals weakness.

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MID-DAY MOVER: CISCO

It appears traders are changing their minds about Cisco. Initially shares opened lower after the firm reported a 46% drop in earnings.

But the stock later turned positive with investors putting a bullish spin on comments from Cisco Chief John Chambers who said although it was too soon to call a recovery, business conditions were improving.

What's the tech trade?

It seems to me that investors bought Cisco on the pullback looking for an entry point, muses Pete Najarian. They took another look at Cisco earnings and didn’t think the news was all that bearish.

If you’re looking for a trade in the space keep an eye on Western Digital, says Guy Adami.

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AFTER HOURS ACTION: NVDA

On Thursday Nvidia   reported better-than-expected results on improved product demand and they set a sales outlook for the current quarter above Wall Street's expectations.

The company reported a net loss of $105.3 million, or 19 cents a share, in the fiscal second quarter ended July 26, versus a year-ago net loss of $120.9 million, or 22 cents a share.

As a result  shares rose as much as 6 percent in the after-hours.

What's the trade?

It’s hard to me to love this stock at current valuations, says Guy Adami.

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99 CENTS STORES

With retailers searching high and low for bargains it makes sense that discounters are among the best performing stocks in the sector. And one of the biggest winners in the space has been 99 Cents Stores.

Chief Executive Eric Schiffer tells Fast Money that customer traffic has been strong, as consumers are looking to save on household items.

But will the company be able to hold onto its newly acquired shoppers once the economy improves?

Find out now. Watch our interview with CEO Eric Schiffer.

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'DASH FOR TRASH' LIFTS BEATEN-UP FINANCIALS

Shares of battered financial companies including insurer American International Group and lender CIT Group continued to soar on Thursday, as investors apparently rushed to buy shares to cover short positions in the companies.

However there could be a fundamental story at play too, reminds host Melissa Lee. AIG reports quarterly earnings on Friday and a new CEO takes up the company's reins on Monday.

What’s the trade?

The only upside I can see in AIG is the possibility that the value of some toxic assets that have been written down so aggressively they will begin to rise, muses Joe Terranova. But that's it.

If you’re looking for a trade look at Hartford , counsels Guy Adami. I think it should have room on the upside.

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OFF THE RECORD WITH CHARLIE GASPARINO

If anyone has his ear to the ground it's CNBC's Charlie Gasparino. And lately he's been hearing rumblings about Morgan Stanley CEO John Mack.

According to Gasparino, expect an announcement on Mack's future next quarter. And if Mack does get handed his walking papers, Gasparino is hearing the most likely replacement is James Gorman Co-President of Morgan's brokerage unit.

We'll keep you posted.

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Trader disclosure: On Aug 6th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AA) Call Spread: Najarian Owns (BUCY) And Is Short (BUCY) Calls; Najarian Owns (CSCO) And Is Short (CSCO) Calls; Najarian Owns (HIG) Calls; Najarian Owns (INTC) And Is Short (INTC) Calls; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (YHOO) Call Spread; Terranova Owns (MSFT), (RIMM), (MCD), (AMZN); Terranova Is Short (F), (WYNN); Seygem Asset Management Is Short (PBR); Seymour Owns (AAPL), (AA), (BAC), (C), (TM)

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For Joe Terranova
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of  (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL)
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  (DBC)
Virtus Investment Partners Owns More Than 1% Of  (DBV)
Virtus Investment Partners Owns More Than 1% Of  (SKT)
Virtus Investment Partners Owns More Than 1% Of  (TNB)
Virtus Investment Partners Owns More Than 1% Of  (UA)
Virtus Investment Partners Owns More Than 1% Of  (CLB)

For Jared Levy
Peak6 Investments Owns And Has An Options Position In (SLV)
Peak6 Investments Owns And Has An Options Position In (GLD)

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