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Changing Tide in Market?

Gold was the hot commodity trade in December while tech and financials lagged.

But that wasn’t the case on Tuesday. Gold saw its worst drop in months. What should you make of this changing tide in the market?

How should you position now?

Instant Insights with the Fast Money traders

Joe Terranova thinks gold is facing challenges, "but I don’t think that’s bearish for the S&P," he says. "I suspect weakness in gold is a signal more investors want to participate in the equities market."

Tim Seymour also suggests proceeding with caution - not just in gold but in the entire commodities space. "It wouldn't surprise me to see natural resource names pullback," he says. "However these are also names I’d want to own, lower."

Brian Kelly doesn't think the sell-off in gold is a commentary on anything other than gold. "I think the global growth story remains in tact," he says. "I’d point to the action in the S&P which bounced off 1260. However, it wouldn’t surprise me to see the market pullback."

James West, author of The Midas Letter, remains bullish. "I think gold will continue to rise about $100 a year," he says. "As central banks around the world continue to diversify I expect gold to remain the reserve currency of choice."

New Fast Money trader Josh Brown of TheReformedBroker.com doesn't think the risk/reward ratio in gold is attractive. "Support is probably $1250 with the upside probably $1500," he says. Brown goes on to suggset that if you’re not in already, there are probably better places to put money to work.

Steve Cortes is also solidly bearish. In fact, Cortes thinks investors should also draw a macro conclusion from the gold sell-off. "I don’t think it will be confined to the precious metals," he says. "Since late summer gold and the S&P have been closely correlated."

What do you think? We want to know!

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For more click here and check out our conversation with Dennis Gartman who told us jitters triggered by the sell-off in gold were overblow.

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TECH DEALMAKING TO KICK OFF 2011

Is tech deal-making going to be the big story of 2011? If early signs are any indication, it sure looks like it.

According to the New York Times,Qualcomm is near a deal to buy Atheros Communications , a semiconductor manufacturing company, for about $45 per share, or $3.5 billion.

A deal could be announced as soon as Wednesday, however the paper also added talks were in their final stages but could still fall apart.

A purchase of Atheros would be Qualcomm’s largest acquisition ever.

Over the past year, Qualcomm, based in San Diego, has quietly sat on a pile of more than $10 billion in cash, while its rival Intel has gone on a buying spree. Last August alone, Intel spent nearly $10 billion acquiring McAfee, the antivirus software maker, as well as units of Texas Instruments and Infineon.

What’s the takeaway?

This is an example of company with cash going out and acquiring something they don’t have but need, explains Joe Terranova. I’d now keep an eye on Aruba Networks.

* Find out who else might be the next target from Pacific crest analyst James Faucette. Watch the video above.

Click here to go to the NYTimes website and read "Qualcomm Is Said to Be Near $3.5 Billion Deal for Atheros"


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BP LOOKING JOLLY GOOD?

BP shares hit 6 month highs Tuesday on reports Shell considered buying the company during the oil spill this summer and may still be considering a bid.

What’s the trade?

I’m long BP but not in any way because of the story mentioned above, says Karen Finerman. I think potential liabilities will be less than expected and they getting back to business as usual.

If you want to put money to work in this space, I think there are better places than BP, counters Tim Seymour.

The winner in my book, is Apache , says Joe Terranova. They acquired assets that BP was forced to divest.

I’d play it long Dryships , adds Brian Kelly. I’m a buyer around $5.

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K CALL PREVIEW

CNBC contributing editor Gary Gaminsky has been travelling the globe to find the next great growth story.

It’s the topic of his next K-Call post on the Strategy Session website and he joined the Fast gang with a preview.

Check out the sneak peak. Watch the video now! And on Wednesday you can click here and check out Gary's full report.



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Trader disclosure: On January 4th, 2010, 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); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (GE); Finerman's firm is short (IJR) ; Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman owns (BAC); Finerman's firm owns (BBY); Finerman owns (BP); Finerman's firm owns (BP); Finerman's owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) and (JPM) leaps; Finerman's firm owns (JPM) and (JPM) leaps; Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (WMT); Finerman's firm owns (FCX) puts; Terranova owns (GM); Terranova owns (C); Terranova owns (VRTS); Terranova owns (UPL); Terranova owns (PEP); Terranova owns (OXY); Terranova owns (GS); Terranova owns (SLW) puts; Terranova owns (GLD) puts; Cortes is short Gold; Cortes is short Corn; Cortes is long USD vs. the Yen; Cortes is short (LVS); Cortes is short (BCS); Cortes owns (TSN); Cortes owns (EXC); Cortes is short (XRT) vs. the S&P; Cortes is short (XHB) vs. the S&P

For Brian Kelly
Accounts Managed By Kanundrum Capital Own (BBT)
Accounts Managed By Kanundrum Capital Own (DRYS)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (TM)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Are Short The Euro
Accounts Managed By Kanundrum Capital Are Short The Yen

For 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 (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 (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 (NCRI)
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)

For Chris Whalen
Whalen has no disclosures

For Chris Whalen SOT
Whalen had no disclosures on 1/3/2011

For James West
Funds managed by James West are long gold
Funds managed by James West are long oil
Funds managed by James West are long silver

For Colin Gillis
Gillis has no disclosures on (GOOG), (YHOO), (AAPL)

For Gene Munster
(ROVI) Has In Past 12 Months Been An Investment Banking Client Of Piper Jaffray
Piper Jaffray Is A Market Maker In (ROVI)
(ACOM), (DRIV), (LOGM), (RLOC) Are Or In Past 12 Months Have Been Investment Banking Clients Of Piper Jaffray
Piper Jaffray Expects To Have (DRIV) As Investment Banking Client In Next 3 Months
Piper Jaffray Does Underwriting For: (ACOM), (DRIV), (RLOC)
Piper Jaffray Received Non-Investment Banking Securities-Related Compensation In Past 12 Months For (DRIV)
Piper Jaffray Is A Market Maker In (AAPL), (ACOM), (AMZN), (BIDU), (DRIV), (EBAY), (FMCN), (GOOG), (GSIC), (IACI), (KONG), (LOGM), (MCHX), (MELI), (PRTS), (RLOC), (SINA), (SOHU), (VCLK), (WWWW), (YHOO)

For Scott Nations
Nations has no disclosures

For Josh Brown
* Disclosures Pending

SOTS
Tim Seymour had no disclosure in (BP) on 11/29/2010

GE is the parent company of CNBC
NBC Universal is the parent company of CNBC

Late Additions:

JOSHUA BROWN
Brown owns (BAC)
Brown owns (BAC) for clients
Brown owns (C)
Brown owns (C) for clients
Brown owns (CHK) for clients
Brown owns (DIS) for clients
Brown owns (F) for clients
Brown owns (GE) for clients
Brown owns (GM) for clients
Brown owns (GS) for clients
Brown owns (GDXJ)
Brown owns (GDXJ) for clients
Brown owns (GOOG) for clients
Brown owns (IWM)
Brown owns (IWM) for clients
Brown owns (JPM)
Brown owns (JPM) for clients
Brown owns (MOS) for clients
Brown owns (MS) bonds for clients
Brown owns (VZ) for clients
Brown owns (WFC) for clients
Brown owns (XLF) for clients