Halftime—'Fast' Traders: Don't Thank Obama for Market Gains

In his State of the Union address to Congress on Tuesday night, President Obama asked lawmakers to work with him to cut the corporate tax rate and simplify the tax code, moves that could lead to higher corporate profits.

It seems Obama's comments, in addition to a strong report on new home sales, helped send stocks higher by midday trading on Wednesday. The Dow rose by more than 10 points, but retreated from the psychologically important 12,000 level. The last time the Dow closed above the benchmark was June 19, 2008.

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The "Fast Money" traders, however, think the gains are misguided.

Dennis Gartman, a currency and commodities trader with more than 30 years of experience, doubts Obama will reduce the corporate tax rate. He said the president is so "overtly left-of-center," that it's unlikely he will move toward middle ground to work with corporate America on taxes.

From the trading floor, Steve Grasso of Stuart Frankel said a lot of people are taking about Obama moving toward the political center, but he pointed out the president "bashed big oil" and criticized health care companies.

JJ Kinahan agreed with Gartman and Grasso. From the options pit, Kinahan said there is little excitement over the prospects that corporate tax rates will go down. For example, there is a lot of put buying of the ProShares Short Russell2000, an exchange-traded fund that tracks small cap businesses. There is a "huge buyer" of the March 77, 72 put spread. With more than 90,000 contracts having traded hands by midday trading, Kinahan said it was a very bearish call.

Grasso noted the S&P 500 is at the critical level of 1,300. On the way up, he thinks resistance could go to the 1,350-1,360 level. The 1,250 level could be resistance on the way down.

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CALL THE CLOSE

As Wednesday's program came to a close, the "Fast Money" traders stated where they think the market is going and how they're playing it.

Steve Cortes, founder of Veracruz, thinks the market could go lower. Both Cortes and Brian Kelly of Kanundrum Capital are sellers of the market.

Kinahan, on the other hand, said he's a buyer of the market.

"If we break through 1,300, you gotta buy it," Grasso said of the S&P. "I don't care where you are in the market."

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Trader disclosure: On Jan. 26, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE) and (BTU). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE), (PRST) and (S). Steve Cortes is short (XME) vs. S&P. Steve Cortes is short (LVS). Steve Cortes owns (GS). Steve Cortes owns (TSN). Steve Cortes owns (SVU). Steve Cortes owns (CLX). Cortes is short Corn. Steve Cortes is long U.S. Treasuries. Steve Cortes is long USD vs. the Mexican Peso. JJ Kinahan is short (SPY) through options. JJ Kinahan is short (NFLX) through options. JJ Kinahan is long (CSCO) through options. JJ Kinahan is long (YHOO) through options. JJ Kinahan is long (MSFT) through options. JJ Kinahan is long (C) through options. JJ Kinahan is long (MCD) through options. JJ Kinahan is long (AKS) through options. JJ Kinahan is long (GE) through options. JJ Kinahan owns (AKS), (CSCO) and (C). Anthony Scaramucci and SkyBridge Capital own (STX). Anthony Scaramucci and SkyBridge Capital own (WDC).

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GUY ADAMI
Adami's wife works for (MRK)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (TBT)
Accounts Managed By Kanundrum Capital Are Long The Euro
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short (XLF)

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (ABX)
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (NEM)
Stuart Frankel & Co and its partners own (NWS.A)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PDE)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (RDC)
Stuart Frankel & Co and its partners own (S)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

DENNIS GARTMAN
Funds managed by Dennis Gartman are long the Australian dollar
Funds managed by Dennis Gartman are short yen
Funds managed by Dennis Gartman are short euros
Funds managed by Dennis Gartman are long gold
Funds managed by Dennis Gartman are short Sterling,
Funds managed by Dennis Gartman are long Nat Gas
Funds managed by Dennis Gartman are long Swiss Franc
Funds managed by Dennis gartman are long wheat
Funds managed by Dennis Gartman are long silver
Funds managed by Dennis Gartman are long Soybeans
Funds Managed by Dennis Gartman are long Sugar
Funds Managed by Dennis Gartman are long Crude.

CNBC.com with wires.