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Market Pros: S&P To Blow Past Upper-End Resistance?

After the best two-day stock market gain since July investors were at odds over what comes next for stocks.

Some worry that the S&P is nearing the upper end of its range and about to slide lower.

Others are adamant that stocks are off to the races and expect the S&P to crash through resistance and surge higher in the days ahead.

How should you position? What’s the trade?

Instant Insights with the Fast Money traders

I think the right trade is the hard trade and that’s to hold onto long positions, says Joe Terranova. It’s so easy to take profits and cash out, especially if Friday's jobs report is worse than expected. But I turn the desk’s attention to the Vix , which is sharply lower.

The Vix got crushed on Thursday; it broke below 20, adds Jon Najarian, that's a big deal. I take it as a sign that investors now believe in the rally. Personally, I don’t think we’ve seen the highs for the year yet.

The 1220 level - which is where we are on Thursday close is where the S&P has had trouble in the past, reminds Guy Adami.

However, I have to admit it feels like the S&P wants to blast right past it. On the downside, 1173 is also a key level. The market has tested that level several times and its held. But when it ends I think it ends badly.

I think we may be at the upper end of a range, adds Steve Grasso. However technicals suggest if the S&P blows past 1228 – the market could go up, up and away.

If you believe global systemic risk is under control then this is a good time to buy the market, says Tim Seymour. I think valuations are still very impressive. Stocks are cheap.

What do you think? We want to know!

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*please note comments above were compiled from Fast at 5 and the Halftime Report

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GOLDMAN SACHS LIFTS FINANCIALS

Chatter on the Street suggsets Goldman Sachs may have moved the market on Thursday after they upgraded the banking sector to overweight; this is the first time Goldman has been this positive on the sector since 2008.

"When you get a shop like Goldman out supporting the sector, it can't help but boost investor confidence," says Michael Nix, principal at Greenwood Capital Associates in a Retuers interview.

Because Goldman is predicting a steeper yield curve, they say long The BKX is their best trade going into 2011, explains host Melissa Lee. Following are some other favorites

Goldman Sachs' Top Bank Picks
JPMorgan
Citi
Bank of America
Principal Financial Group
Blackstone Group
Invesco
Evercore
TD Ameritrade
Stifel
State Street
Simon Property Group
Dr Horton

What’s the trade?

I’m buying calls in JPMorgan, Citi , Bank of America and in Goldman, reveals Jon Najarian. I’m looking for a breakout to the upside.

I agree with the yield curve argument and I’m long JPMorgan, Citi and Wells Fargo, says Brian Kelly.

The news out of Goldman Sachs suggests to me that exchanges are the places to be, says Joe Terranova.

I think there’s still incredible headline risk in these names, says Guy Adami. I’d take profits and even consider putting shorts out.

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TOPPING THE TAPE: OIL BLASTS PAST $90

The traders suggest keeping a close eye on oil after ICE Brent crude oil futures rose above $90 a barrel on Thursday for the first time since October 2008.

U.S. crude futures were up 72 cents at $87.47 a barrel.

What’s the trade?

The next two weeks in oil are historically bullish, says Joe Terranova. I’d play it through the OIH, Occidental or Hess . But once January or February rolls around it wouldn’t surprise me to see a correction in the futures market.

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EAR TO THE WALL: WHO’S HOARDING COPPER?

The desk collectively has its ear to the wall, listening for chatter about who's hoarding copper.

The WSJ reports that a mystery buyer holds between 50% and 80% of the copper stock at the London Metal Exchange.

If speculation is driving the price higher and not demand, how should you play it?

What’s going on?

I’m playing copper with charts, says Richard Ilczyszyn. If the equity markets breaks out on Friday I think copper will retest $4. If it closes above $4.08 I think it’s off to the races.

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THE PLAYBOOK FOR THE BIGGEST REPORT LEFT IN 2010

Onto the playbook for the biggest report left in 2010, Friday’s jobs report.

The U.S. government's monthly employment report on Friday is forecast to show another month of job gains in both the private and public sectors. In a Reuters poll, nonfarm payrolls are seen up 140,000 in November while private payrolls are seen up 153,000.

What’s the trade?

I’d play the thesis that the economy is improving, says Brian Kelly. However, I’m still concerned about the cost of labor.

Hear more about the jobs report from top-ranked economist Joe LaVorgna. Watch the video now!





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Trader disclosure: On December 2, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
Joe Terranova Owns (FCX), (CMA), (UPL), (C), (PEP), (VRTS), (OXY), (GS), (POT), (AAPL), (NKE) and (OIH). Guy Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC) and (MSFT). Tim Seymour owns (AAPL), (BAC) and (F). Jon Najarian owns (AAPL), Is Short (AAPL) Calls. Jon Najarian owns (GS), Is Short (GS) Calls. Jon Najarian owns (JPM), Is Short (JPM) Calls. Jon Najarian owns (CME), Is Short (CME) Calls. Jon Najarian owns (TIF), Is Short (TIF) Calls. Jon Najarian owns (RIMM), Is Short (RIMM) Calls. Jon Najarian is long (AMZN) call spreads. Jon Najarian is long (IBM) call spreads. Jon Najarian is long (NFLX) call spreads. Jon Najarian is long (DE) call spreads. Jon Najarian is long (GT) calls. Jon Najarian is long (AA) calls. Jon Najarian is long (CMC) calls. Steve Cortes is short (XRT). Steve Cortes is long S&P 500. Steve Cortes is short (LVS). Steve Cortes is long (TSN). Steve Cortes is long USD vs. Mexican Peso, Australian Dollar, Euro. Steve Cortes is long U.S. 2-year Treasuries.

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
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 (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

GUY ADAMI
Adami’s wife works at Merck

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GT)
Accounts Managed By Kanundrum Capital Own (DE)
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (BG)
Accounts Managed By Kanundrum Capital Own (TBT)

SIMON BAKER
Baker Ave owns (AAPL) for clients
Baker Ave owns (C) for clients
Baker Ave owns (CML) for clients
Baker Ave owns (F) for clients
Baker Ave owns (GT) for clients
Baker Ave owns (LEN) for clients

JOE LAVORGNA
***No Disclosures***

PATRICK MCKEEVER
***No Disclosures***

ANTHONY SCARAMUCCI
Scaramucci and SkyBridge Capital owns (KIRK)

BRIAN STUTLAND
pending...

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