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Dow Snaps 8-Day Winning Streak

On Friday the Dow broke its 8-day winning streak and closed lower. Once again, stocks moved higher in early trading only to give back their gains in the afternoon.

Despite an upbeat forecast from chipmaker Intel and better-than-expected profits from computer maker Dell ,the market couldn’t shake off worries that the weak consumer may drag down the recovery.

How must you know about this market?

Strategy Session with the Fast Money traders

I expected the market to rally strongly on the back of Intel and Dell and it didn’t, says Guy Adami. That scares me.

The market has had an incredible run, counters Steve Grasso of Stuart Frankel. It makes sense to me that investors are taking profits especially on a Friday. I wouldn’t get too worried.

I was not happy at all with the performance out of tech on Friday, adds Joe Terranova. But I am impressed with the market’s ability to hold this level.

*On a related tech note, Apple announced a deal to sell the iPhone -- in China. It's something we first told you about on Thursday's Fast Money. What’s the trade? Click here to find out!
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TOPPING THE TAPE: BANKS END CHOPPY WEEK HIGHER

Banks stocks climbed higher on Friday large due to the ongoing dash for trash as money managers chase performance.

Dash For Trash: 1-Month Performance
Freddie Mac +251%
Fannie Mae +231% |
AIG +170%
Citigroup +71%
CIT +67%

Why are investors buying stocks that may go to zero?



Bose George, an analyst with the investment bank Keefe, Bruyette & Woods has big concerns for retail investors. A lot of the activity in these names involves day traders aiming to profit from short-term price swings, George says. Inexperienced investors might have the misimpression that the companies may recover or be rescued.

That would be kind of unfortunate, he adds. There could be a lot of improvement in the economy, and these companies would still be worth zero.

Paul Miller of FBR says much the same. Given the amount of money that Fannie and Freddie are into the government I think the shares are worth almost nothing.

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CHART OF THE DAY: DOW TRANSPORTS REVVING HIGHER

Rail stocks closed higher on Friday, sending the Dow Transports back near it’s recent 10-month high. Does the action suggest stocks are topping out or confirm the rally?

I think the run is done in Dow Transport component Burlington Northern , speculates Guy Adami. I expect BNI to trade down to the mid-$70s.


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OIL FAILS TO BREAKOUT AGAIN

U.S. crude oil futures ended with pared gains in choppy trade on Friday. Most analysts believe crude prices are currently locked in range, with the top end at $75. Traders are now looking for more definitive moves after the Labor Day holiday weekend.

I think crude pulls back to $60 before it goes to $80, speculates Jon Najarian.

I’m bullish, counters Joe Terranova and I'm long Suncor and Weatherford, he reveals. I expect oil prices to go higher.


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TOPPING THE TAPE: HIGH-END RETAIL TURNING THE CORNER?

High-end retailers moved up on Friday after Tiffany posted better-than-expected quarterly earnings citing a recovering demand for jewelry and they raised full-year outlook.

The jeweler said sales in various markets such as Europe, China and Australia showed modest improvement in the second quarter compared with the first quarter.

What’s the trade?

It seems most retail stocks are overpriced right now, muses Steve Grasso. But the rising tide is lifting all boats.




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Trader disclosure: On Aug 28th, 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); Jon Najarian Owns (AAPL), (BTU), (NVLS); Jon Najarian Owns (C) Calls; Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (C), (COST), (CSCO), (PRST), (V), (WMT), (FAZ); Terranova Owns (AMZN), (FCX), (BTU), (SU), (WFT), (AAPL); Terranova Is Short (SHLD); Terranova Is Short (ESS); Terranova Owns (CCL) Puts

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