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Stocks Stuck In Neutral

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STOCKS STUCK IN NEUTRAL

The Dow closed lower after the Commerce Department reported that the savings rate rose in May to a 15-year high. The trend suggests consumers are being extremely careful with their money. That's good for the individual, but not great for the overall economy in the short-term.

Money did move into tech, however, after Palm posted a smaller than expected loss and its CEO said, “Such significant growth means there is room for three to five players to win in this space. We don't have to beat each other to prosper."

How should you be positioned?

Strategy Session with the Fast Money Traders

I don’t love the market here, muses Guy Adami. I still think the S&P 500 pushes down to 870 but the longer it stays at this level the more I have to reevaluate.

I think the market has shown an amazing ability to digest negative information and hang in there, adds Joe Terranova. And that might be enough.

The fact that the Vix pulled back as much as it did this week tells me that there’s a lot less participation in this market, adds Pete Najarian. Volume is light and I wouldn’t read too much into the action.

The consumer savings rate mentioned above got a lot of investors worked up, muses Tim Seymour. And although it’s bad for many sectors it is good for banks.

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CHART OF THE DAY: THE GOLDEN CROSS

Technical traders are closely watching something called The Golden Cross. It’s a pattern that emerges when the 50-day moving average for a security crosses above the 200-day moving average. And that occurred in the S&P 500 on Tuesday. Tim Seymour says it could be part of an overall bullish recipe for July.



Fast Money series producer John Melloy wrote about this trend in depth in his blog “Behind The Money.”Click here to read more.---------------

TOPPING THE TAPE: PALM LEADS TECH HIGHER

As we told you above, investors appeared somewhat bullish on technology Friday after Palm posted a smaller than expected loss and its CEO said, “Such significant growth means there is room for three to five players to win in this space. We don't have to beat each other to prosper."

Palm’s stock surge has been unbelievable, says Pete Najarian. I like it. I think it could be a takeover target. Also, in the space I put a position on in Oracle , he reveals. I think it could go to $24.

I’d be careful of Oracle , counters Guy Adami. To me it looks a little toppy.

I’m bullish Nokia, reminds Tim Seymour.

I think the script has been written, adds Joe Terranova. I think technology is where investors should be for the rest of 2009. The chip sector has been amazingly resilient. And in the smartphone space I’m long RIMM.

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OIL CAN’T STAY ABOVE $70

U.S. crude oil futures fell back on Friday as oil traders took profits after new data showed a jump in the savings rate. Oil traders took the results to mean consumers are saving more and spending less – and as a result hampering the road to economic recovery.

The day's losses erased overnight gains spurred by supply disruptions in Nigeria and amid a weaker dollar.

What’s the trade?

It seems to me if oil can just stay around $70 the big integrated oil companies could still go higher, speculates Tim Seymour.

I would craft exposure to the energy equities such as Hess, Petrobras and Suncor, counsels Joe Terranova.

I happen to think oil is heading lower and as a result oil services names such as Schlumberger will also head lower, counters Guy Adami.

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GOLDMAN GETTING IT ON

Shares of Goldman Sachs have been running higher with the stock in striking distance of a new 2009 high? What’s the trade?

It seems FBR and others have a $160 price target on this stock, reminds Guy Adami. Although I think the stock is a buy for the long term but I would not initiate a new position at current levels.

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ETF FRIDAY...WORKING ETF'S INTO YOUR STRATEGY

As money comes off the sidelines it seems investors are putting a substantial chunk of it to work in ETFs. According to JP Morgan there are currently 2100 ETFs traded in the US and Europe worth approximately $900 billion.

The ETF Boom

-ETF Assets Up 16% In Past 18 Mos.
-ETF Assets Valued At Over $900 Bln. Worldwide -Over 2100 ETFs in the U.S. and Europe
-33% Of US Equity Trading Volume In Past Yr. From ETFs
Source: JPMorgan

If the concept of ETFs or exchange traded funds is unfamiliar here’s a two sentence explanation.

ETFs are designed to mimic an index that they track and are bought and sold throughout the day. Since ETFs are made up of a basket of stocks (or other securities) they should, in theory, spread out risk.

How should you work ETFs into your trading strategy?

We turned to a highly esteemed expert, Luciano Siracusano of WisdomTree Investment.

Although there's a multitude of ways to use ETFs right now he suggests using them to protect yourself from declining dollar. And he suggests playing the falling dollar by getting with the Brazil ETF and the South Africa ETF.

Joe Terranova has some ideas too. Curious?

Watch the video now!





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Trader disclosure: On June 26th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Seymour Owns (AAPL), (BAC), (EEM), (FXI), (NOK), (TSO), (TUR); Seygem Asset Management Is Short (RSX); Adami Owns (AGU), (C), (GS), (MSFT), (INTC), (NUE), (BTU); Najarian Owns (GS) Call Spreads; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (PALM) Call Spread; Najarian Owns (S) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Call Spread; Najarian Owns (ESI) Call Spread; Terranova Owns (TER), (XBI), (BTU), (ABT), (RIMM), (HES), (MS),(MSFT)

Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; 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); 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 (CLB); Virtus Investment Partners Owns More Than 1% Of (DLR); Virtus Investment Partners Owns More Than 1% Of (EPR); 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 (MEE); 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 (DBA); Virtus Investment Partners Owns More Than 1% Of (SKT); Virtus Investment Partners Owns More Than 1% Of (UA); Virtus Investment Partners Owns More Than 1% Of (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights

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Siracusano Is Chief Investment Strategist Of WisdomTree And Is An Investor In WisdomTree ETFs

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