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tv   Fast Money  CNBC  December 4, 2018 5:00pm-6:00pm EST

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mechanical forced selling in the treasury if any of that relaxes i think we see if those lows around 2,700 in the s&p might close. >> that does it for "closing bell." thank you for sitting here with me today what a day it's been. >> great to go through the two hours. and "fast money" begins right now with plenty to talk about. "fast money" starts right now. live from the nasdaq market site over looking times square. traitors are tim seymour, brian kelly, guy adami selling sweeping across the broader markets but a stop strategist says do not panic, the year-end rally will happen he joins us to explain why plus the pain doesn't seem to end for apple getting slammed again. how much worse could it get for the tech giant we start off the selloff, the dow crushed and once the selling started it didn't stop the dow closed down 800 points,
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having the worst day since october 10th this is the shock wave, the inversion of the yield curve, where the 2-year went above the 10, the five-year yield it's an indicator that things are weakening and recession perhaps around the corner. are things getting worse what do you do. >> you asked me what i thought last night i thought the market grinds higher rest of the year. maybe fits and starts. but in terms of the seasonality december brings we go higher so much for that for today brian steve and tim all talked about the fading but in terms of the yield curve a couple of things i thought it would flatten tim says 3.5% is long aways away that wouldn't have been that bad because it would have demonstrated maybe we are seeing the economy strengthen we are seeing it flatten the other way with the back end of the curve going down that's not necessarily a good
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thing. something tim alluded to here we are 2710 is number steve pointed out. i brought it up. effectively the market closed at 2,700 today. that's the pivot point i'm worried the vix didn't trade higher that says people are complacent. what does it mean? maybe i was wrong last night. >> 2,700 being the pivot. >> i think we are going to february lows. i don't know if they hold. use the trump trade truce. that's been shot you have 90 days on 90-day war of headlines and the fed powell is no longer a put. it's over. i think the market is over yesterday when the market was up i was negative on technicals and the back drop fundamentally. i'm not positive on a downday today, even more negative today. >> in the short-term we got low. but let me give you the positive to the yield curve. >> brian kelly will be the shining light.
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wow! >> when you look at the yield curve and look at when recessions happen they typically don't happen when the curve inconverts it's when the yield curve resteepens so that period of time is usually 12 to 24 months. and you get a 25% to 35% rice in the stock market from the point that the yield curve inconverts to the resteepening. so thereby a silver lining here. that being said. >> what else was going on. >> we got crushed with news today. >> there you go. >> trump issues, stronger dollar, sprinkle problems with the brexit sprinkle in a hawkish fed potentially. and that really that's why i think in the short-term we have more lows to go. i agree, fwras o maybe the february lows don't hold but in the longer run there is opportunity. >> the sense that growth is disappearing overnight when a couple months aigt we were talking about things getting too hot, you have to take the kind of rational kind of middle of the road look at this and say what markets are pricing in is
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that there is no question we are slowing. you can't tell me we are getting stronger but the growth isn't falling off the cliff. the bottom line is the technically the market is in a challenged place i agree with these guys that think it goes lower. first of all, you're at a death cross in the s&p if you want to look at these you you have the 250 to cross over the 200 downside we talked about that with other less important indices i don't think the data is falling apart. the move in the yield curve is alarming. >> 11 years though it's more than just alarming and i appreciate your calm cool handed approach. >> 11 years meaning since the 2s, 5s inverted. the last time was 2007 shall we discount today because part of what was going on in the longer end of the yoel curve was technical, heck funds positioned short going into the week. >> couldn't you always say that when the yield curve inconverts. there is always an excuse it
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inconverts it inconverts that's the negative part of the market. when you look at the back drop there is nothing to be positive about from now to the year end the fed is burning 5 billion each month he is raising rates even if he became dovish. >> the risk is that yes the yield curve is flattening all year all of a sudden everybody worries about it today my view it's because of the other things the risk is something guy talks about every day. we are sitting here saying recession coming and everybody puts the brakes on therefore the yield curve in the financial markets create a recession or create a slowdown because everybody gets concerned. that's a relevant risk out there. >> it's like kikkchicken and eg. >> we talked about earlier today. i do think i know the answer i think the market selloff causes recessions because 73% of the economy is the consumer to me my opinion is the consumer confidence is an overlay of the
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s&p 500. but if the market does well, people feel richer if we have a sustained period of market selloff and evening news tonight at 6:00 leads with. >> dow plunging 800 points. >> and people get concerned and they are not as quick to spend money and it feeds on itself. >> who already warned? apple warned retailers warned about the christmas season to guy's point you are a couple weeks outside of christmas you won't see the numbers or results for a couple of months but still you have a reason to sort of hold on to the money in your pocket and be less confident. >> are we concerned that fourth quarter results won't be as strong because consumer read the headlines about the volatility in the markets and they're -- >> the market is looking ahead 9 to 12 minutes months the 4 quarter is priced in the warnings from amazon gives you, no more good news the rest of the year. >> but if the consumer is going home tonight and tune in to the
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evening news and say dow plunges am i going to macies and five five sweaters oh three. >> you buy six because that's how you roll. >> i grow with guy in terms of the welt effect. and the federal reserve targets the waekt effect they've been pushing on the stock market and asset prices, home prices, physical prices but i just want to get to a place here i find it's interesting that people are going from a place expecting run away, 7%, 8% yoegt in s&p to now where it's challenged comes down to valuations the stock market should see a compressed multiple if the fed is tightening. if the fed steps back a bit because they are worried about growth slowing, i think that's significantly better for the stock market. >> but they are not stepping become that's the only pushback i have is even if they are not rising they are raising they are burning 600 billion per
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year that's the equivalent of raising every time they would meet >> of tightening be, yes. >> show of hand here i want to get the bottom line from all of you. are you buying the markets off of this dip in. >> so let me try -- >> yes please. >> raise your hand. >> yes no i don't think there is any reason to step in and buy here i would say we have had a lot of great news at least we were talking about, look the market rallied back 6% to 10% fending whether you are looking at qs. >> you don't buy the broader market do you buy individual stocks. >> last night we had the conversation about cirrus logic and lowered guidance second time in a month what does it mean for apple? steve said probably trades and revisits the 171 level or so my question to you and basically the audience was has of move from the 230 to 175 priced that in that's the calculus you have to make but there are names that if you
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can take the emotion out, which is a difficult thing to do, people will say, i would love to buy amazon at x or apple at x and it's there and they pull away because they didn't think it would get there for the reasons it did the market never gets to your levels for the reasons you want it to. it always looks scarier than it might be. >> can you give us a name. >> well i think apple is interesting. >> okay. >> i do think the selloff from 230 to this 175 level has taken into consideration a lot that cirrus logic said last night. >> i think you have to go with home builders. so beaten up you look at results from toll today it cascaded through the space for a host of reasons. this is a trade that has not worked it hasn't worked thus far but the valuations are becoming compelling maybe you get to the trough. >> i think transports. they have proven the earnings profile are good valueses are good. fedex was downgraded telling us
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stuff we know we knew amazesen is encroaching the amazon air and things. it's not the time mile fedex is one of the best companies in the s&ps and transports preponderate airlines getting a benefit from weaker oil prices and earning despite the delta warnings better than in a long time. >> i'm not buying the dip in equities i look at the macropicture to me it looks like we have to break the february lows. don't feel like the capitulation doesn't feel the vix at the highs. >> there is nothing in this market. >> i would buy tlt there you go. >> i knew that. >> that's positive. >> don't fear the yield can curve or a rally on the which. phil camparellip it's a bold call to say the year-end rally coming as we see the 800 points off on the dow what's the cattle zblieft what a day. go from yesterday everybody is afraid of missing the upside overnight and now everybody is
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worried about downside risk. a couple of things i'll mention. first off, as far as the trade headlines go, we're taking a time out in this this game is not over. mnuchin said this. he says the market has to deal with the fact that we are getting a real deal on trade second thing, cash in the portfolio is part of the asset allocation we didn't add cash when powell or the fed started raising rates from zero. we added cash over the past couple of months when we got a little bit more cautious we are not panicking today i was on a month ago talking about caution. we are not panicking the third thing is for us if you paint a picture that inflation is going to remain contained, okay, and growth goes to trend of 2 to 2.5% joer oem powell should be stopping shouldn't go into restrictive territory. if you paint the picture that powell has to pause because the gloati growth is slowing. but he has no going into
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restrictive territory. >> can you reconcile in? i read that joon-pyo morgan has a overweight and cash. you say year end rally what happens between now and 2019 that u.s. equities will see a rally but cash isn't overweight when the calendar turns. >> folks said overnight i'm using a rally to sell -- the whole cycle i'm going to use a dip. that's what themarket doling with right now but before the end of the year, melissa, there is plenty of reasons to rebalance here. i think clients will be looking for that nobody is looking to be a hero but rebalk and getting the look down before the end of year is going to cause people to come back in. >> fifl, that's a great point. oochlt our viewers are looking at allocation in portfolio bonds have not been a trade until recently do you pile money into the long end of the curve what's your allocation towards fixed income?
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a losing trade on both sides do you dive into allocations toward bond. >> only the fourth year since 1976 that bonds are negative bonds are usually defense. usually playing defense. >> we manufactured 30 bips on the treasury. >> that's defense for our equity overweight if we are long with equities and treasures are at three and not two that's the reason you go into bonds we don't want to make money on the hedge. but the entry point is good. the other thing about 2s/10s that's the other thing have we ever been this flat on 2s/106 base or when they took rates to zero? i haven't seen anyone acquaint that for the curve going down the lines of this time is different. >> banks are not going to lend you had lumber prices come in by 50%. copper provides by 10% recently. you have had the market off
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kilter at this point the fed is -- rates are moving higher we came from 2940 in the s&p no reason to make new high was this back drop the calk will you tell us is changed. why buy the market now. >> are they moving markets or is powell trying to create a pivot. >> do you feel comfort with a basis points spread between 2s 10s? you could say yes the market has gone off but it's been collapsing years. >> you know when else it was flat second and third quarter. second quarter we had growth people picking on the yield curve because the dwou is down 700 points. >> banks don't lend when the yield curve flattens. >> banks become popular to invest if they are getting the dividend. >> how is that going for you. >> going well. dividends are coming back and deregulation is happening. i'm taking a bit of a pause on 2s 10s
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people love talking about them us because but it's different because the fed has a balance sheet that's big they are tapering and selling assets but -- >> shouldn't long rates be selling up i hear what you are saying i'm not freaking about 2s 10ss i think bangs are not bad. but the long end should sell off more if we are double the issuance we have in 2019 as we had in 2017. and the assets are rolling off the balance sheet. >> 10,000 people are turning 65 every day they need fixed income that's number one. number two where the inflation risk in fwloeblly where is it it if it stops at two and the fed becauses of that i want to be long equities. >> do i want to be long this week i'm not sure but long in the environment where inflation is not -- >> if you are not worried about the flat yield curve but you are worried about a situation where the economy slows down to the point of potential recession where the fed has to cut rates, what indicator do investors look at to say, hey, you know, there
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is a recession coming and/or the fed is likely to cut rates. >> yeah, the combination of consumer confidence. i agree with guy what he said about the equity market and tomahawk a confidence indicator. i look at jobs market. it's all about jobs. is anyone talking about a weak labor market no the labor market for us is a real good indicator. jopless claims. >> for peak jobs no where else to go but down. >> but it's a tight labor market people are making more that's a good thing especially in the context of inflation contained. >> phillip of jp morgan. guy, a labor market read, we get that on friday conveniently. >> and it's interesting tomorrowly obviously the markets- dsh it's an interesting week there is no denying. the president at a talks about it all the time. the strongest economy in the history of the republic. and the job market is at record highs tp does that correlate to the market that can continue
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higher maybe it's the opposite. listen, it's -- i've been so wrong for so long it's confusing. imeye taking a pause but what's going on in europe, the yield turf o curve it's never different in my opinion. that's what steve is saying as well. >> what are you saying >> to reason to buy equities right now. equities have a long drop ahead. >> what is that. >> below 2532 for starters let's talk about. >> february lows >> let's talk about another 170 handles. >> would you be short the market >> i have wanted to sell the market you sit on your positions you say it's coming become coming back. this is a buy the dip opportunity. this is reversed and it's a sell the pop opportunity opinion. and i think you should make sales in equities. i wouldn't short it. i don't short stocks i wod investment. >> you are a good investor you can short the market yesterday's high is a stop out it's a wide stop away. maybe you use puts or something.
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but if you are a trader there is a great tonight to be short here. >> coming up, the trail turmoil continue was more back and forth on the white house and how close the u.s. is to a deal with china. plus bad apple, the stock getting crushed. are we witnessing peak iphone. a top technician weighs in. >> and sea of red on wall street today. if you are worried about things getting uglier in don't be lpo ave four hide out trades t he you weather the storm much more "fast money" right after this it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. -that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies lead with digital.
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well bang back to "fast money. apple a major drag on the market shares more than 4% on the back of another downgrade josh liptak isn't in san francisco with all the details hi, josh. >> melissa, apple bears today out in force capitalizing on the string of tough headlines we saw stock down hard today and in what some traders define as a bear market, down more than 20% from the october 3rd high. today three big worries to focus on one hsbc cuts apple to hold and slashes the price target yes valuation is attractive telling the clients but catalysts are lacking in their words. also bad news from the apple supplier this time cirrus logic slash thing the q 3 guiden talking about weakness in the smartphone
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market check out intel and stai works finish finished the day. finally bloomberg reporting that apple moved marketing staff to work on other projects in what's described as a fire drill. apple declining comment. what do the bulls say? i checked with piperafterry mike olson. he remains upbeat. he says bad news is priced in at these levels and potential iphone weakness, that international iphone units might be disappointing but the u.s. is strong he says and they expect strong services growth in the high teen f2 not higher >> josh, thank you josh liptak 199san francisco are we witnessing peak iphone? and if so bad could it get for the stock? b. k. >> i think we witnessed peak iphone a couple months ago we witnessed the selloff in apple. the tech stocks are the high
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valuation ones i wouldn't argue necessarily apple is high valuation. the headwind is the catalyst sns the service we've been waiting for to come up and be a bigger part of the pie. maybe maybe that's a headwind. but i don't think you get hurt in apple at the relatively low valuations >> part of the hsbc call was gnat installed base would be flat, no cattles for further penetration for apple iphones at this point. >> but i feel like we had that argument -- we could have plead that argument the last couple years. the reason the stock outperformed the s&p by 20% and now it's underperforming i think it's oversold to the s&p. the services is going to be substantial. i could have made the argument of peak iphones a couple years ago. there is no question people looking at units in 2017, '19. >> those mums numbers are flat
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what is different about the company now? the not a lot other than the global marketplace and they're not giving guidancen on units. the services business is something to be excited about. the installed base is something to exploit >> if the install base is flat, isn't that the fly wheel effect? do we need an expanding install base number. >> they feed on itself but it was that question when the market was going town, when that value was being bought over growth, apple was benefitting on both sides when growth was bought buying apple. what he value was rotated they bought apple now you don't see the win/win. and services have to be the growth engine. if people are questioning the services, the 37 billion number is not enough to keep the engine going that's a problem for apple opinion. it has a weighing to go. >> let get another our next guest case the apple fall from grace may be temporary. mark newton at the plasma to
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break it down. what are you looking at? >> how are you we are looking at the market today. down over 3% caught a lot of people off guard many people mentioned the yield curve, that's an area of focus of course the chinese yuan up the last couple day processes. but nasdaq affected very hard. you see the daily chart and we break down under the recent uptrend we saw from last week. what's important to mention is we were up about 8.5% within about six or seven trading days. we did cause momentum to turn higher we also broke out above in downtrend just since october he is those are a couple of positives. process the fact we pulled back today, 3.5%. it's a short-term negative we could pull become a bit more. my thinking is we likely hold the lows from a combination because of momentum near-term positive, also the fact that sentiment is turning more and more negative. when you look at stocks like apple, what's interesting is
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that apple in a very similar situation mass actually broken this minor uptrend we look at before that is an important and actually negative development in the short-run. however apple down 25% from i the highs. there are three reasons i think are important that people can buy apple at current levels. one is short term base oyou look at macdp sentiment has turfed negative on apple because of trade war. now downgraded and it's down 20s% from the highs. the third is weekly moment sum close to oversold in the stock it might not be my best pick in technology, yet i think we are closer to the lows in apple. my low would be 160 is a maximum of 10% i think the stock gets up to 195, 205 a stock i like better are stocks like alibaba chinese technology is looking better than u.s. technology. you see the longer term downtrend from in year was
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broken out of over the last few days on signs of this trade war truce. and so that's what's interesting is that you look at stocks like alibaba. ten cent showing meaningful signs of technical strength for the first time this year a lot of fundamental analysts have been pounding the table on the stocks for some time many, many are positive on alibaba fundamentally. technically for the first time i can make a case we might want to step in and buy shares of alibaba particularly on near-term weakness another one is vm ware, a lot of the software enterprise software continuing strong. we saw the longer term bull he shall break out of the pattern went over ten years. right around this time last year we consolidated and in the last couple days we have seen evidence of this little pattern start to show evidence of breaking back out to the upside. so today we did not accomplish that obviously with today's 3.5% downmove in indices. however we are close to the
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construct of longer term pattern. por foes looking at technology i would enterprise software and chinese technology i think that group is great. and of course for those that wish to buy apple, i think near-term you get down to probably 170 at a maximum, 160 is the make or break for longs. >> did you catch the would you rather, obla every apple he answered that. >> i loved that. >> in terms of the alibaba and the chinese tech in general, how correlated if they are correlated with the broader shanghai composite or shen gen even if you think the chinese market has more trouble because of the china/u.s. trade tiff, whatever you want to call it, should you stay away. >> i think the last couple days answered that. if anything the truce seems like it could work because the markets seem to break out. i'm not looking at hang high composite but the more liquid
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indices like the hang seng hs i has brekeen out similar to alibaba. this is part of the chinese etf. cqqq that's one i own and similar to alibaba. i would look at owning at current levels. >> thank you, mark mark newton of newton advisers would you rather rather? apple, alibaba vm ware? >> good question >> vm ware were you not asking me. >> i wasn't but you play. >> guy was taking too long to compute. >> go ahead, guy. >> i'm still thinking it through. >> all right. >> i'm going with vm which are you see the outperformance in that in a down market mm relative for the s&p 500 the growth is okay valuation okay but when you see something in a market like this doing quite well, that's the one you want to stick with. >> have you thought about it. >> i figured it out. you have three choices >> yes. >> and the would i rather rather
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i'll stand by -- i think president trump's tweet about apple a couple weeks ago will put in the bottom. i think that came around 173 or so so in the game you just put forth, apple. >> coming up, the trade truce is on maybe. but will it last we tell you what president trump said that has wall street questioning a real deal. check out the mystery chart. the stock not only ended in the green, but vastly outperformed the market in the last two months we tell you the name, you won't believe it i'm melissa lee. live at the nasdaq market site in times square. much more "fast money" still ahead.
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welcome back to "fast money. the traded turmoil continues today as president trump took to twitter to clarify where the u.s. stand was china eamon javers is in washington, d.c. with more on this developing story hi, eeme >> hi, mel aurora. there are a lot of words in the tweet that the president put
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out. but most people focusing on two. the words tariff man here is what the the president suggested. he says if the talks to don't go well the chines should remember i'm a tariff man when people come in to raid the great wealth of our nation i want them to pay for the privilege. it will be the best way to max out economic power we are taking in billions in tariffs. make america rich again. his treasury secretary, steven mnuchin spoke at "wall street journal" four up here in washington, asked whether or not ultimately this question of market volatility play in the administration decision making about the china deal as the negotiations go on over the next 90 days. here is how he answered that question >> i don't think it's going to have a big impact. i mean, you know from my perspective, first of all, i would just comment, you know, i do think we have a lot more market volatility in general because of the amount of
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electronic trading and trading programs there are and because of kind of the dodd-frank issues, dealers can no longer really principle. >> the treasury secretary suggesting that market volatility won't have a lot of impact on the the decision making in the administration as they go through the 90-day process. as we learned last night, melissa, the the 90-days began december 1st not january 1st the administration clearing thaup overnight as well. >> eamon javers, thank you was the treasury secretary was the selling driven by electronic trading is it as if all the electronic traders got into the market at the end of the yaoer. >> hogwash. >> before that we had no volatility, bare errly 12% moves for a long period. >> it's non-sense. it's non-sense the computers
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showed up today. they've been trading all the year long. any don't blame them when we go up 500 or six hundred. >> the fact of trading is that people put a lot of their positions into algorithms. i think there is enough room for everyone to be heit o right here. >> i think the point is if the administration takes credit for a market that goes higher it's got to take -- it can't blame the algos. >> you can't deny today breaking through the twournd moving average. >> the electronic kicked in then it's not today they didn't cause the selloff. they're of an accelerant on both sides. just like etfs you you can't blame them for the selloff. >> i think we have seen extraordinary moves in the bond market relative to itself. that inspired the equity move. you can't tell me 306 down to 288 intraday on the 10-year and the move in the curve and the expectations the market priced in, that's causing volatility.
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guy pointed out that he is concerned that he thought there should have been more volatility as measured by the vix i would agree with that. in other words, we are not really in sky rocket territory somewhere around 21 on the vix to me is where actually we are close to the long-term average. >> i would have rather have seen -- not an expert in the vix. but i'd rather see it close to 25, 26 maybe peak at 30 that could be capitulation in terms of the market tim's point we're not close. secretary mnuchin comment, it's incriminal knit selling on the way down but he never use the term incriminal knit buyer ing on the way. >> it's both it's both. but there is an electronic element on both sides. he is not calling it on both sides but when we broke up the level. i came in with programs lit up it was an onslaught of selling. >> what is the difference between the traders seeing a level and putting in the order.
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>> there is no difference. >> back 10, a 15, 20 years ago they used to do it but now you have the ability as a trader to sit on a desk and spit out a hundred orders or a thousand where in the past you could do one with, two or three. where b.k. >> it's still an order. >> but the electronics has 10 x, 100 x impact on the markets. >> does it magnifies the moves. >> it does that's what you are seeing >> one of the things i think the market is somewhat inured to the moves. let's be clear i don't think people were panicking. and part of the argument is that the market hasn't panicked there is an argument it did have the washout tp it we'll know it when we get it but we didn't see it yet. >> with the volume today we are saying there hasn't been a cap it laer to moment even at the close there wasn't. >> we you ask who is buying the dip you can't have a bond when you don't have fear there is no
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fear. >> here on the desk there is exception. >> you know. >> you guys. >> across the street everyone is staying where do you buy the market inle you say dump everything, that's the capitulation moment you wait for there is no fear on wall street yet. >> how do the computers factor in the capitulation moment. >> there is no to a fear yet. >> i said i think we see complacency market the two weeks ago we were at extreme bearishness. we have gotten to this place the fed took it up we have we are saying the same thing not that i feel the need to agree with you. >> we were 8% off the bottom in the nasdaq change oversold possibly to overbought. >> still ahead check out this, the one of the few bright spots up nearly 30ners in the past two months as the rest of the market
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plunge. >> transports getting crushed. what could it an fmeor the enacts enacts we explain when "fast money"
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enacts we explain when "fast money" air velocity is reading at fifteen fpm. why would you need to learn every detail about a company? firmness... nine. it's how ibm services helps retailers around the world drive growth and save millions. he's very into this. yeah. is that the standard amount? yes. feels good. when your partners are obsessed with business and technology, you can put smart to work.
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well back to "fast money." transports getting crushed today. the group closing down by more than 4% for the worst session since june 2016. the transports trading below the 50, 10-day and twournd moving
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average. hello, dominic you have more zblool if you thought it was a rough day for the broader market overall the pain was worse as you point out with economically sensitive the indices like the transportation stocks who got hit hard. while the dow jones industrial average lost 3%. the dow jones transportation index lost 4.5% and every stock in the index lost ground today a handful stood out as real laggards look at package graegt delivery like ups appear fedex. the second and third worst performing stocks. the 6% to 7% plus losses today mean that from its 52-week highs ups has lost around 21% and fedex lost 22% big moves. one of the big drivers was a more negative research note from morgan stanley who lowered the price targets on both ups and fedex citing among others thing
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rightsing competitive fears over amazon's transportation initiatives. more broadly speaking, since the highs, the dows transport in september lost 5% through the october lows rebounded from there to 11% higher yesterday opinion and then slammed today like you pointed out now, melissa if there are fears over the economic slowdown these are the stocks that could be key industry groups and atotes watch if that slowdown thesis plays out. >> thank you, dom, great to have you on the show. one of the hardest working men reporters. >> i know you did that because you wanted to engage in conversation to let people know that he actually is live. >> i'm here. >> he always is. >> i don't exactly -- i don't know what you're talking about we have more time today. i thought i'd engage. >> great to have you guy. >> it's a market sell rof. >> great to have you too. >> you got, guys >> dom chu
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are the transports signaling more trouble for the broader market if you still believe in dow theory i don't know, do you, tim? >> injury it's a useful theory to apply to markets especially considering growth and the transports are the place we often look to rails to get a feel for what's going on below the trenches in the case of fedex and ups, the amazon thing is overdone if you consider the akregs of at any time to fedex earnings it's not even priced in it's 16 times. this is a $300 stock in this environment probably doesn't change at 16 times even at 14 times it's worth owning. >> i think fedex trades around 11 times next year's number. it topped on the at this time basically last year at 275 they report on december 18th i don't know if the -- if there are any tailwinds from the lower energy price but it doesn't hurt i think the setup into earnings on the 18th sets up well on the
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longside. >> fedex ups take them out of the picture they may have some idiosyncratic things with amazon air. the rails don't look good or trade well rail carloading up through september. but the rails themselves are starting to anticipate some weaker rail carloading that's, to me the key rather than the fedex or ups. >> we have a different transportation system np back where the rails were 100% of the story with the dow theory, i don't think it's as much it's still important but look at spirit airlines, sav is the particularer symbol up 40% year to date. every time i look at the chart i i think no way it holds the level pl but they continue to hold the level. >> the bond market spooking investors as the dow and s&p fell more than 3% apiece one trader just made a million dollar bet, about to get worse we have the details. plus as momentum stocks crashed there has been a surpriser we
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tell you what iits and whether you should get in too. more "fast money" right after this
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welcome back to "fast money. amid all the recent volatility one unlikely stock emerge as a surprising safety trade. we are talking about tesla shares of the auto maker up nearly 30% in the last two months, on track for the best quarter in more than three years. shares are slightly higher today making the best perform ner the nasdaq 100 this as cfra raised the price
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target to the infamous 420 level, citing the potential for the lower versions of the model 3. should we seek shelt summer tesla. i never thought i'd utter those words. >> shelterer, no trade it if you want but not shelter. we had a relief rally. because they settled with the s.e.c. and then they made money which we have been waiting for for quite a time but audio tremendous rally remember it's still a highly risky stock and you have the headwind they need to raise money. stock price up here helps but any need to raise money in a potentially environment that's not very good for money raising. as a shelter, no, trade the breakout or wait for the break down if it broke to 280 i'd buy. >> electric a belong saying that ee month sent out a email to employees saying they reached a thousand a day
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the long-term production rate. theoretically enabling them to capture efficiencies and put off the need to tap the capital market. >> all of a sudden the balance sheet looks better. >> better. >> we had gene munster a couple months ago i asked him a question, the counterfactual never works but i said to him if you backed out mr. musk's tweet about 420, if gou back to the stock this mere it was on a transigently to get to 40 then the quarter suggests maybe we should by gla you can't go by all the things anyway says. how about the deliveries that aren't close i don't think this company trades on fundamentals, never has, never will. is a calling it a safety stock is border line ludicrous and the stock the last two years it's done nothing. down 10% that's a pushback to say it's no question it's a countertrade in
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a difficult market but it doesn't trade on fundamentals. >> shocking. shocking first of all i thought the stock aft s.e.c. over the summer, is that when it was. >> august. >> i thought look out below i thought was getting cut in half from there it's rallied 48% from those lows. >> it's. >> shocking. >> you could knock it over. >> i thought it was over, lights out for tesla. kudos to him it's tradeable it's not like we can't trade it. you have to admit defeat up 48% i would not buy it now i wouldn't buy it now but it's shocking up 50 sherries%. >> bond daybreak outsending out shock waves. one trader made a hunl bet we have the details. and look at jim on the cramer cam talking about why the fed and president trump are doing more harm than good for the markets. that will be at the top of the hour live at the nasdaq market tesi
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well back to "fast money." the bond spike sending shock waves across the markets the the eltf sending out the highest level. one trader made a huge bet the mike khouw breaks it down in san francisco. hey, mike. >> hi, there, tlt traded well over the daily options volume today, that's notable because it normally trades about 90,000
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contracts. totally trading 36,000 contracts. and its seems like there was hedging activity, speculation things could get worse we saw that here too the january 121-127 call spread in tlt traded over 20,000 for 50 cents. the speculator could betting it could rice or the long call rate fall i think this combined with some of the other trades we saw indicate that people were taking advantage of something guy mentioned a little bit earlier, which is that options premiums didn't spike maybe as much as you would expect given the selloff today. they are trying to take advantage of that and get hedging in while they could. >> given the move today, mike, how high do you think the vix should have been >> well, you know, the way you can look at it is we look at how volatility is -- you can take
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whatever the current level is and divide that number by about 16 that tells you the standard deviation. today's move based on where implied volatility is is about a three standard deviation move. normally i would have expected it to bake in a little bit more of that move and plus we've seen this volatility in the course of the last several weeks so i think maybe because volatility had gotten elevated there is a bit of complacency in options generally. it didn't respond as violently as it often done but i would have thought 2626 or 25 would have been the what we have have seen. >>fare ogss check out the full show friday 5:30 p.m. eastern time up next, final hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable.
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within we have a quick programming note the markets may be closed tomorrow but we will be here for a special "fast money," starting tomorrow at 2:00 p.m. eastern time. >> wait a second what. >> another big day. >> did you hear that. >> mark your calendar. special edition of "fast money." >> we are going to size up the markets tomorrow. >> we are sizing up what we should look ahead thursday and friday. >> it's responsibility for minneapolis. >> final trade. >> take at&t which i think is sell off fast. that's delivering on dividends i want to buy defensive. >> beak zbleers the other risk besides the volatility is the dollar
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the dollar is the up vicks buy that. >> duncan brands that's security safety it's up 13% year to date and then some. >> chicago the markets i be closed tomorrow but we will be here for a special "fast money. that starts tomorrow at 2:00 p.m. eastern time. >> its wawait a second, what? >> mark your calendar. be here 2:00 special edition of "fast money." >> we are going to size up what we should look ahead to for thursday and friday. a big week in trading. >> a lot of responsibility for "fast money." >> and also at&t which i think is going to be selling off fast. actually delivering on dividends. defensive. >> the other risk out there besides the volatility index is the dollar you see dollar is the new pick, buy that one. >> dunckin' is up 13% year to date. >> chicago merck and steel exchange, melissa. >> that does it for us on "fast money. see you back here tomorrow my mission is simple to make you money. i'm here to level the playing field for all investors. there is always homework "mad money" starts now >> hey, i'm cramer welcome to "mad money. welcome to cray-america. want to make friends in my job is to educate, teach you so call me a


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