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Is Market Struggling or Consolidating?

The traders spent Friday trying to better understand weakness in the market, despite an earnings release from bellwether GE that was bullish by most any standard.

The corporate goliath and parent of CNBC beat the Street helped by the recovery of its finance arm and a rise in revenue at its industrial units, including a sharp pickup in sales of locomotives.

Nonetheless, both the Dow and S&P pared gains into the afternoon.

What should you make of the market action?

Steve Grasso is skeptical. "Investors are just looking for reasons to lighten up the portfolio," he says. However he's doesn't think a sell-off will be terribly severe. "I don’t think that market has cracked. I don’t think we cave here – but I do think we could trade down to 1260."

Brian Kelly is also concerned by the market action. "I was surprised that the market wasn’t up more than it was," he says "GE is a great bellwether. I'd be a seller broadly, or at least a buyer of puts for protection."

Joe Terranova agrees that the market action is discouraging. He's focussed on the lack of leadership. "We lost two market leaders," he says. "Apple and Google. Both sold off at the end of the day."

Patty Edwards is a little more optimistic. She expects the market to hold about where it is. "Although I'm cautious I also think there are buying opportunities. I picked up Oracle ."

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GOOGLE INSIDERS SELL, SHOULD YOU?

Google closed lower on Friday after published reports suggested outgoing CEO Eric Schmidt planned to sell $335 million of his stock. As you may remember on Thursday the company said co-founder Larry Page would replace Schmidt as Chief Executive in April.

Should you cash out too?

It could have been a pre-planned sale, muses Steve Grasso, but as an investor when I see something like this, it makes me want to run for the door.

I'm not a Google shareholder, admits Brian Kelly, but if I was, I’d now ask myself going forward what’s coming up in the next year under Larry Page.

For me the question is can Larry Page now run this company, adds Stephen Weiss, author of The Billion Dollar Mistake. I’m betting he can – that’s he’s learned a lot - but it remains to be seen.

I’d focus on price action, counters Joe Terrranova. And the price action in Google has shifted to the downside.

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INDUSTRIAL STRENGTH - XLI HITS 52 WEEK HIGH

Industrials topped the tape on Friday with the XLI hitting a fresh 52 week high, fueled by a big beat out of our parent company GE. In fact, GE hasn't traded at levels this high since April 30th.

What’s the trade?

I’m fired up about GE’s order book, says Tim Seymour.

I’m bullish GE and think it could break above $20, says Joe Terranova.

With GE at its April highs I'd wait to see if it can break out before hitting the buy button, counsels Steve Grasso.

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STRATEGY SESSION

2 legendary investors on CNBC Friday both made bold calls. Hedgie David Tepper said to buy semis while Marvin Schwartz of Neuberger Berman said Anadarko could be a take out candidate.

But that’s not all.

Schwartz revealed more of his buys in a web only segment. Click here to go to the Strategy Session website and check it out.




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