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Halftime: Play Offense While Everyone Else Plays Defense?

Investors were ready to pull their hair out on Thursday with market behavior now seeming almost completely unpredictable.

Day after day the market has been bowing to weak economic data and negative developments overseas.

However, on Thursday, investors were again confronted with more negative signs – this time in the form of weaker-than-expected regional factory data, more financials woes in Europe and a record low yield in 2-year Treasuries– yet the market seemed to shrug all it off.

Instead the S&P rallied with bulls driving stocks higher and bears caught almost completely off guard.

What’s going on? And how should you position now?

Instant Insights with the Fast Money traders

The Fast Money traders take Thursday’s market action as a sign that the S&P is trading almost entirely on technicals. “Guys don’t have anything else to go on,” explains trader Steve Grasso.

He says that 1257 or flat on year is a very important level, perhaps all the more important that it now coincides with the 200-day. “The fact that we held is short term bullish,” he says.

Trader Guy Adami again reminds the desk that price is truth. “Let the tape be your guide,” he says. “We’ve seen it before – when it looks the worst we see the best opportunities.”

Adami thinks the bottom may be in. “If we hold these levels and start to bounce I wouldn’t get in the way. Sometimes you have to play offense when everyone else is playing defense.”

It’s important to note that both Grasso and Adami are making short term calls. If you’re anything other than a trader, both Guy Adami and Steve Grasso expect more downside. “I don’t think gains hold for more than a couple days,” says Grasso.

OptionMonster Jon Najarian is also looking to put money to work in the market but not just yet. He says “I’m waiting for Vix to push up to 22 and 23.”

Looking at other market influences, Steve Cortes says he expects the dollar to rally through the end of the year. But the traders aggree that doesn’t necessarily signal a decline in stocks over the same time period.

”I think all relationships are out the window – the dollar can rally and so can the market into year’s end,” says Grasso.

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EXPOSED TO EUROPE?

Again banks landed in the spotlight, this time after Nomura issued a report on which American banks were most exposed to Europe’s financial woes.

Take a look:

Goldman Sachs
* $8.3B Total Ireland Exposure
* $562M Banks
* $22M Gov't
* $7.8B "Other"
Source: Nomura

JPMorgan
* $20B Total Exposure To Portugal, Spain, Ireland, Greece
* But: Dimon Recently Said 'Less Than $15B
* Sovereign Debt Less Than Half Total Exposure
Source: Nomura

Morgan Stanley
* Did not list any specific exposure to Portugal, Ireland, Greece, or Spain
Source: Nomura

Bank of America
* $16.9B Exposure to Greece, Ireland, Portugal and Spain
* $1.5B In Sovereign Exposure, Primarily Italy
Source: Nomura

Citi
* Total Sovereign Exposure: $256B (End of 2010)
* 94% Is Investment Grade
* $176B U.S. Government Exposure
* Next Largest Exposures: Mexico & Japan

Largely Nomura’s note considered the exposure manageable.

Are banks becoming more of a value?

Guy Adami says, “I think banks are grim death long term but in the short term they may have put in a bottom.”

Trader Steve Grasso says to watch 14.83 as a key level in the XLF . How the ETF behaves at that level could determine if we have a 7th down week in banks.

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PANDORA

Again, Pandora landed in the spotlight after the company’s shares dipped below $16, the IPO price.

What should you make of it?

Trader Steve Cortes says he’s not a fan of these IPOs.

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INTEL DOWNGRADED BY CRAIG BERGERIntel also flashed on the radar after FBR analyst Craig Berger suggested investors should rotate out of Intel and into AMD citing the potential for greater earnings growth in AMD during the second half of the year.

Should you follow his advice?

Guy Adami wouldn’t. “I would not pile into AMD here,” he says. "News out of chip stocks has not been all that encouraging over the last few weeks."

Steve Grasso is equally cautious. “I think chips are under pressure,” he says.


AFTER GREECE WHO’S NEXT?

Forget Greece, another of the PIIGS could be on the precipice of default.

Find out why Marc Chandler of BBH, Global Head of Currency Strategy says you should also be watching what’s happening in Ireland.

Get all the details. Watch the video now!




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Trader disclosure: On June 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes Owns (GOOG); Cortes Owns (SVU); Cortes Owns (MS); Cortes Owns (GS); Cortes Is Short Nikkei; Cortes Is Short (BIDU); Cortes Is Short EUR; Cortes Is Short AUD; Cortes Is Short Silver; Cortes Is Short Corn; Cortes Is Short Natural Gas; Grasso Owns (AKS); Grasso Owns (AMD); Grasso Owns (ASTM); Grasso Owns (BA); Grasso Owns (BAC); Grasso Owns (C); Grasso Owns (D); Grasso Owns (HOV); Grasso Owns (JPM); Grasso Owns (LIT); Grasso Owns (LPX); Grasso Owns (MHY); Grasso Owns (NDAQ); Grasso Owns (PFE); Grasso Owns (PRST); Jon Najarian Owns (AAPL) Call Spreads; Jon Najarian Owns (DE) Call Spreads; Jon Najarian Owns (YOKU) Call Spreads; Jon Najarian Owns (SFD) Call Spreads; Dicker Owns (RIG); Dicker Owns (WFT)

For Steve Grasso:
Stuart Frankel & Its Partners Own (ABX)
Stuart Frankel & Its Partners Own (CSCO)
Stuart Frankel & Its Partners Own (CUBA)
Stuart Frankel & Its Partners Own (GERN)
Stuart Frankel & Its Partners Own (HPQ)
Stuart Frankel & Its Partners Own (HSPO)
Stuart Frankel & Its Partners Own (MU)
Stuart Frankel & Its Partners Own (MSFT)
Stuart Frankel & Its Partners Own (NYX)
Stuart Frankel & Its Partners Own (PFE)
Stuart Frankel & Its Partners Own (PFST)
Stuart Frankel & Its Partners Own (SDS)
Stuart Frankel & Its Partners Own (UAL)
Stuart Frankel & Its Partners Own (XRX)
Stuart Frankel & Its Partners Are Short (QQQQ)
Stuart Frankel & Its Partners Are Short (AAPL)


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