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Halftime: Meaningful Breakout In Market?

Despite chatter last week that the market was overbought, again the bulls pushed the S&P 500 even higher on Monday after solid earnings combined with a flurry of merger news boosted investor appetite for equities.

Take a look at some of the big deals that went down:


Company Target Industry
Danaher Corp. Beckman Coulter Medical Devices
Ensco Pride International Offshore Drilling
AOL Huffington Post Media

Investors take the deal activity to mean Corporate America views stock valuations as attractive.

In fact the tone of the Street has changed from negative to positive and instead of an impending correction, investors are now chattering about a meaningful breakout with the S&P above the high end of its recent range.

Technically, it's considered a sign of strength; a sign that stocks could go much higher.

What should you make of it? How should you position now?

Instant Insights with the Fast Money traders

Jon Najarian is impressed by all the deal-making. “A lot of folks who thought the market was overextended are now saying if smart guys are stepping in a committing billions, it’s a positive sign. I take it as one more reason not to fight this tape.”

Although Brian Kelly has been bearish, he says “you just can’t fight this market.” In fact, he’s hearing a lot of investors are throwing in the towel on the short side. “A lot of money is being put to work and there’s probably value in the market if you believe the economy is getting better,” he says.

Steve Grasso feels the riots in Egypt were a bullish ‘tell’ because events could have been a much more negative for stocks than they were. “Egypt showed us point blank what the support is in the market. And its 1275.” In other words, despite the negative catalyst stocks didn’t slip lower than 1273 and Grasso thinks that makes investors more confident.

Zach Karabell thinks recent strength in the market should be put in context. “The strength comes off a decade that has been a big fat zero. I think we could still have a significant move higher but remain in the context of a very middling period of time.”

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APPLE BULL

Again the traders are watching the action in Apple after Needham & Co raised its price target on Apple to $450 from $375, upping its iPad and iPhone sales forecast.

And in a live interview Needham analyst Charles Wolf tells us he has a unique thesis behind his price target increase; "there is no iPad killer nor will there ever be.”

Get all the details. Watch the video now!




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Trader disclosure: On Feb. 7, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian owns (AET), is short (AET) calls. Jon Najarian owns (AKAM), is short (AKAM) calls. Jon Najarian owns (BX), is short (BX) calls. Jon Najarian owns (CAM), is short (CAM) calls. . Jon Najarian owns (RIMM), is short (RIMM) calls. Jon Najarian owns (GM), is short (GM) calls. Jon Najarian owns (V), is short (V) calls. Jon Najarian owns (HPQ), is short (HPQ) calls. Jon Najarian owns (CSCO) call spreads. Jon Najarian owns (GS) call spreads. Jon Najarian owns (JNPR) call spreads. Jon Najarian owns (RSH) call spreads. Charles Wolf owns (AAPL). Zachary Karabell owns (CSCO), (FCX), (BRCM), (IBM), (GOOG), (AAPL), (RIMM), (GS), (C), (FXI) and (AOL). Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MT), (MHY), (NDAQ), (PFE), (PRST) and (S).

Comcast is the parent company of CNBC
Comcast is the parent company of NBCUniversal
GE owns 49% of NBCUniversal
GE owns 49% of CNBC

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (BAC)
Accounts Managed By Kanundrum Capital Own (DO)
Accounts Managed By Kanundrum Capital Own (APA)
Accounts Managed By Kanundrum Capital Own (DRYS)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Own (UAL)
Accounts Managed By Kanundrum Capital Own (DAL)
Accounts Managed By Kanundrum Capital Are Long the US Dollar
Accounts Managed By Kanundrum Capital Are Short The Yen
Accounts Managed By Kanundrum Capital Are Short The Australian Dollar

STEVE GRASSO
Stuart Frankel & Co and its partners own (AAPL)
Stuart Frankel & Co and its partners own (ABT)
Stuart Frankel & Co and its partners own (ABX)
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 (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (S)
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)

ZACHARY KARABELL
River Twice Capital is short (SPY)
River Twice Capital is short (ELF)
River Twice Capital is short (XLI)
River Twice Capital is short (SMH)
River Twice Capital owns (BRCM)
River Twice Capital owns (CSCO)
River Twice Capital owns (IBM)
River Twice Capital owns (MSFT)
River Twice Capital owns (GS)

CNBC.com with wires. Reuters contributed to this report.



CNBC.com with wires.