Halftime Report: Setting Up For A Strong Second Half?

STRONG SECOND HALF AHEAD?

The second half of 2009 kicked off with a bang with both the Dow and S&Ptrading higher after reports showed manufacturing began improving, albeit modestly. The data lifted natural resource and energy stocks and offset figures from ADP which showed private employers cut 473,000 jobs in June -- more than expected.

Over on the Nasdaq , the bulls took charge of the tech sector with Microsoft higher after new data showed that its Bing search engine gained market share and Intel up on a positive comments from a Barclay's analyst.

How should you be positioned?

Instant Insights with the Fast Money Traders

I’m watching 93.20 in the SPDRs , reveals Jeff Tomasulo of SMB. And I’m being very selective in my trades because it’s a Holiday week and volume is light.

If you look at the market over the past two months all it's done is go sideways, muses John Kosar of Asbury Research. Right now I'm watching the Vix . Historically if it slips down to around 18 it signals a peak in the S&P.

And as for tech, it looks overextended to me, adds Kosar. I think it’s a risky bet to be long.

It seems to me tech will lead us out if anything can, adds Patty Edwards of Storehouse. But I’m a little skeptical, too.

I did not think Intel would get above $17 but here it is, muses Guy Adami. However I would not chase it at these levels.

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FORD IN THE NEWS

Shares of Ford traded higher after the automaker said its June U.S. sales fell only 10.7 percent from a year earlier, a far smaller drop than in previous months and a sign that auto sales may be recovering.

CRT Capital put a $2 price target on this stock, reminds Guy Adami, but I don’t agree with it. Ford is raising production and gaining marketshare. I think it could go to $8.

If I were to play the sector I’d also play Ford, adds Patty

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TOPPING THE TAPE: CONSUMER SHARES

Consumer shares traded higher on Wednesday after General Millsforecast better-than-expected earnings for the current fiscal year, helped by new products and moderating commodity costs.

What's the trade?

I know that Wal-Mart and Costco have talked about going back to any of their suppliers that had commodity price hikes last year and trying to get that back for the consumers now, explains Patty Edwards. Given that, they may have to roll back prices. But I think General Mills is still a long. Consumers just aren’t spending as much in restaurants.

In the space I like Coca-Cola , counsels Jeff Tomasulo. But wait for a pullback.

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AIG’S REVERSE SPLIT

AIG shares fell on Wednesday despite a 1-for-20 reverse stock split. This would mean if you own 1,000 shares you now own 50.

To me something like this is a death knell, says Guy Adami. I’d run for the hills.

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STRONG CHINA MANUFACTURING. DATA LIFTS COMMODITIES

Strong manufacturing data from China boosted metal prices and helped shares in natural resource companies like Freeport-McMoRan .

China's official purchasing managers' index (PMI) for June rose to 53.2 from 53.1 in May, consolidating for the fourth month in a row above the watershed mark of 50.

A reading over 50 indicates an expansion in manufacturing sector, while one below 50 suggests contraction.

What’s the commodities trade?

I think the game changed just a little bit on Tuesday because of the move in corn, reminds strategic investor Dennis Gartman. The crop is much larger than estimates and with a huge crop coming, grains could be under pressure.

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CNBC.com with wires