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show. yeah, i'm rick santelli in for melissa lee. these are the "fast money" traders. hey, dell winning streak at eight. first, it's time for after-hours action in dell. tim goldman, our surprise guest again. >> rich santelli, good evening to you. you know, if i'm a surprise guest, dell's numbers are certainly a surprise amongst themselves. the company really just taking everybody off guard, releasing these numbers a couple of minutes before the closing bell. to say we were scrambling is an understatement. nonetheless, the company did beat the street. that 24 cents includes four cents of surprising expenses. so really the apples to apples here is 28 cents. >> so it was bottom line then or top line, buddy? >> it's bottom and top line. that is the one-two punch that analysts were hoping for. it's one thing to look at improvement in the top line, but if that's from netbooks, then, you know, who really cares?

but the real news here is the fact that dell did report improving top-line performance and they were able to translate that to the bottom line. so cost-cutting, improving business. gross margins, 18.7%, even in the face of the netbook sales. this is a full percent better than what wall street was anticipating. when you look at what this company is doing, large enterprise and consumer as far as the units are concerned at dell both did much better than anticipated. >> operating margins up to 5.2%. are they going to talk about acquisitions? seems like they've gotten themselves in good stead right now. the stock is actually outperforming everybody this year. it's had a great run. what is the next step for these guys? pete and i talk about palm being a no-brainer for them. a lot of people say that

wouldn't work. >> a lot of people have been talking about dell acquiring palm. everybody talks about the palm pre. it's referred to as takeover bait, if you will. does dell try to integrate a new company into itself at this moment as it's trying to reposition itself? i don't know if the company wants to bite off something like that at this point. that's not to say they won't be on the acquisition trial from here forward. what we're locking for tonight from dell is what the company is seeing on a macro basis, as far as enterprise spending is concerned, and really where the strength is globally at this company is seeing. >> as far as the -- the emerging markets, they're up to 10% of their revenues. do they see that going to what next level? what are they projecting for the emerging markets? >> that's going to come up on the conference call. i don't know that they are giving on absolute projection as to what they are expecting as far as where those emerging

markets are going to go. let's not forget that dell is also seeing strength in china. the company is now entering the chinese smart phone market. is that going to be a stepping stone for dell as it looks for new revenue streams? very possibly. that's a long shot. we'll see what happens. a lot of new competition. apple is going there, too. nonetheless, emerging markets in china, very important to this company and that's going to come up in the call. >> jim goldman, you are the man. thanks for being our surprise guest twice in one week. thanks for showing up. hey, back to the marketplace. we had 2009 highs again. on a late-day reversal, the outcome was pretty much the same. peter, what do we think? >> normally everybody is looking at the market and talking about the fact that it stalled. of course it stalled. we've gone up 400 points in the last quarter. the last six months, we have gone to 400 points on the s&p 500. we're maintaining over 1,000. look at that volatility index today. it never hardly budged. we were moving to the down side.

everybody talks about the buyers are not convicted. how about the sellers? where was the conviction of the sellers today? the market is moving to the down side. then we turned. >> we're going to need some kind of event to get this thing -- >> we've had event after event to push us to this level. we'll need another event to -- >> when they were all short, where else was it going to go? >> right. but the other issue that you've got to remember, we used to call this basing. now we're calling it stalling. i mean, it's completely changed everybody's perception right now. they look at things and it's like, where is the next move? what is this? if we're basing right now, you look at the financials and technology, i'm telling you what, they look like they're basing. they don't look like they're ready to fall off. >> the market is trading perfectly when you look at the what did it do today? it went down, it challenged. that was the resistant level that we could not elevate above. we talked about being in a range for a while between 975, 1,010. once you break above that level, that level then becomes support. market went down, challenged that support level.

technically traded beautifully. rose right back up. >> let's go back to dell for a second. at least we'll get a trade here. dell had a huge run. clearly it's been a monster stock. ran right into the close. huge volume today. if you like dell, you better like hewlett-packard. it's a lot cheaper. i'd be getting out of my dell around here. it's had a huge run. valuation is getting a little rich. they've had a nice quarter. hpq is better. >> oil reversing midday to close up 1.5%. unbelievable. joe? >> you know, i don't know necessarily how unbelievable it is. the trade has been any time oil dips, you buy oil. anyone that tries to sell oil has been a loser so far this year. the oil market dips, you buy it. what's happened over the last week that's been so different about the oil? we know the dollar story. but you're seeing a shift in inventory. last wednesday -- >> you don't think it's the

dollar. i'm sorry, i'm not going to give up on this. that's what's unbelievable. >> joe, i have a question for you. >> the market has not rolled back over. that level where you actually rose from. you are seeing a little bit of a shift. no one comes on and talks about the relationship between short data contracts and long data contracts. >> joe, i have a question for you on oil. i'm on the other side of this trade as far as oil goes. unless it gets above 75, these movements are meaningless. my question about today's price action is that oil stocks did not keep pace with crude itself. crude vaulted. oil stocks didn't move all that much. >> oil stocks opened up significantly lower with the rest of the equities and then rallied the rest of the day. if you look at the oil service names, the integrated names, wherever you want to go, as oil came off the bottom, those names rose as well. you know, we're talking about picking a top in oil.

oil right now tonight went out at $72.80. we're only $2.20 off a ten-month high. i don't understand why it is -- i'll be the first to get off this trade, but the market is not telling you to get off this >> you know what? the markets always tell you what to do. it's the fact that humans have biased and they don't hear it correctly. >> rick, i think the market is telling us to get off the oil. china has gone down in august. it's badly lagging. the u.s. today on this reversal, which was a very impressive reversal today, china lagged, nasdaq lagged. talk about both of those yesterday. the generals of this bullish army are getting shot and that makes an army weaker. >> what about the reversible -- reverse in materials today? handle that one for me today, too. >> looking to short -- it would have been a loser today, but i'm still interested in that trade. material stocks are lagging the physicals. that's a troubling sign for those stocks. when xle can't keep pace with crude, i think it's time to look to short them at least on a relative basis. i'm looking to short xlb against the s&p. >> when you take a look at

freeport mcmoran, look at the great reversal today. you look at copper steel trading, just under $2.90, you look at the names. look at the fact that they went down and then it seemed like the buyers wanted to step right back up again. i listen to the one smart group on the everybody that everyone wants to hate right now, goldman sachs. they moved the coal sector to attractive. they moved chemicals to attractive. they're making money. you want to be in the huddle? you're in the huddle. they're telling you what they think about markets right now. that's exactly what you're seeing. the coal stocks, every time there's a pullback, there are buyers there to take it in. >> one of the chemical stocks we've talked about that's performed well as been eastman chemical. we've been on this for a while. this has been on a roll, trading around 55 now. i love enm. you look at their guidance. i think it's cheap on a valuation basis. >> if the aspect of that that makes them so interesting -- everybody talks about how do you make coal cleaner?

>> it's the gasification proce s process. that's where eastman chemical say their real numbers -- >> if you really want to make the -- >> a long view of resources, water is a much better play than anything else physical we're talking about. pho, ve. if you're looking for a long-term, cyclical-type play that can last for years. >> looking at the resource names, getting a trade off, what you're thinking, when you look at the underlying commodities during the course of the day, you can tee off what the next trade is going to be. look at freeport mcmoran today. look at actual pricing of copper. the copper futures were under pressure. they appeared to be bottoming out. they led freeport mcmoran higher. you actually were able to buy it around $61.80 early in the day. on the copper reversal and it carried through the rest of the day. >> now the dollar led in two different areas. not only on the commodity side, but on the stock side. >> we'll talk about this. everyone talks about the unwind

of the short dollar trade. we'll get into this more, but the -- >> unwind it. you can make a case -- who would want to own the dollar? i mean, seriously. you see what the -- >> and the traders that are in there, the unwinds, that's a real issue. >> oh, it is. >> in this resources area, the one thing that makes that still attractive to me is you want to own these names, you buy puts at the cheapest levels, rick, that you could ever buy your protection. wouldn't you want to be able to buy protection in a hurricane? >> these levels are very reasonable. >> we're going to talk about the dollar. >> there is an input for the dollar. we can solve it with volatility. but it is a give and take. >> who is getting squeezed? who is long in the dollar?

how about foreign central banks. they're the ones that are actually long the dollar right now and they're getting squeezed. >> are you really concerned about them, big guy? >> what you have to be concerned about -- >> you need to be. >> you have to be concerned about them. >> that's what i was getting at. >> you'll see the dollar crater. you're going to see a disorderly decline of the dollar. >> the dollar is going down. it's just a question of if it's an anvil drop or a feather drop. topping the tape, aig up 27%. well, hey, when will its stash for trash end? i don't know. i love saying dash for trash. pete -- >> we don't even know what the trash really is. all we know, you have to trade the markets that you're given right now. what you're given through, aig, fannie, freddie, cit, those are the names where you're getting the most bang for your buck. look at mbi today. this is a stock that just a week or two ago, jpmorgan downgraded the stock underneath $5. they were buying them for 50 and 55 cents. those doubled by the end of the day. that gives you the idea what kind of moves we're talking about. interday moves in all of these areas. they might be trash, but you're getting your beta.

>> you're late in this game. you know, the dash for -- look at -- another name we want to talk about, i said yesterday take profits. i'll say it again. that's had a tremendous run since they reported earnings. they will be profitable this year. due to make 4 bucks next year. go back to april. they guided down from six bucks down to a nickel. >> you're on a roll. >> i'd be taking profit. >> boeing up 9%. >> that's one you want to stay away from. these guys throw you curve balls all the time. the way you want to go is rockwell collins. look what that stock did today. we had the ceo of the company on about a month or so ago. he said great things. this is where you want to be if you think boeing is going to at least stabilize. collins has had trouble, but that's the -- >> i agree, but when you look at boeing, you have a point of

reference now. you have certainty, an understanding of what's going on with the 787. you've got a nice price gap now. if you're long $48.77, that's your out. it's really -- >> you know, in the old days we didn't have 24-hour trading. gaps really packed some horse power. gets tough to pick them out now. let's go outside stocks. who loved the fixed income markets? i do. seven-year auction, 28 billion. capping $109 billion week. we gave it an a-minus this week. think about this. i have e-mails, great questions. when i give an auction on a-minus, does that mean they're giving the stock market on f-minus? why are they stepping up and buying these options? i want to see what you think about that. >> they've really been astounding. the ability of the market to take down this kind of supply with this kind of frequency, these are staggering. the market is doing it very

successfully. part of what's going on is an asset allocation move. >> i agree. >> we've shown tlt. and the s&p, spy. if we look at these two, starting in march if we take a wider view, starting in march when the equity rally began, the tlt was trading about 1.5 times the price of the s&p. the s&p was down in the 60s. tlt at 105. since then, it's reversed. if we take a nearer-term look, it's starting to flatten out. they're trading sideways. bonds are catching up. the fact that bonds are no longer declining is very important. bonds will continue to trade well because of domestic demand and i believe that tlt and spy will meet in price. my prediction is probably just below $100. so we've got spy at about 103. we've got tlt at 96. i think they meet at 99, 100. >> the good trade is that they hold their price and go sideways. i think that's where the debate is. >> do you have fish? a fish tank?

>> of course. >> you know, you put a whole thing of food in there, they'll eat and they'll eat -- >> until they explode. >> until they explode. that's the bond market. think about that. >> you're looking for risk aversion. people -- i think that's part of the rotation you're bringing up. people are seeing the s&ps after this run of 400 pounds. that's a huge run. they're looking for less risk. they're going to the bond market. the other place they're going, they're still chasing dividend yields. you continue to see a lot of names that pay the nice yields. look at the utility sector. look at the telecoms. morgan stanley think the dividends are going to go higher. look at the crash flow, the stability, the wireless growth. the story there is impact. they're doing a great job managing their business. where do we always go to every night when we talk technology? about the wireless trade, apple, research in motion. all of these gadget trades. that all feeds right back to at&t. >> go back one second to the bond market. this is real important to understand. when you look at the bond

market, it's going to political now. >> what do you mean unfortunately? from a trader perspective that's a party. >> what do you mean? that's going to be a party. it's the people that are watching that are going to have a hard time. >> bernanke has certainty. what can he do? now he can think about doing his exit strategy. until obama confirmed him, he wasn't doing anything. now he can look at the exit strategy and look today -- quantitative easing. maybe we've got to rethink that one a little bit. >> what he said, you're picking winners and losers. you're going agency over 1.25 trillion. they should only buy products like treasuries. i have a better idea. don't buy anything and let the markets work for itself. the next trade, citigroup's $100 million man. hey, this has been a huge pr nightmare for the company, but my friend charley gasparino always gives it to us like nobody us. >> amazing in that suit and that chair. you've got the tie on.

you look great. i left my tie in the office. this is a huge pr nightmare. it won't end until ken feinberg, who is one of the two or three dozen czars that obama has, the compensation czar, basically rules on the compensation of citigroup, which sources tell cnbc he is looking at their compensation right now. he's going to come to some determination on the compensation of the top 40 people at citi, including hall. at that point, they'll announce what they'll do. this is going to happen over the next couple of weeks. what i hear from inside citigroup is that they are -- and they're terming it a restructuring. what that means, i don't know. >> take a guess. take a guess. >> the relationship will be restructured. what i gather is that there's a very good likelihood that this thing is going to be spun off.

so, you know, they don't have to deal with this anymore. here's the fascinating thing about this whole thing. fibro was a long-time energy training company. it's how the old solomon brothers became public by buying fibro. mark rich worked at fibro. >> i remember. i'm not kidding. >> here's a semiautonomous sort of -- >> when gold was at the all-time high, they overpaid. but i hate to interrupt you. >> this semiautonomous company that existed inside solomon. it existed in there. it existed as part of citigroup. and it made money. then all of a sudden -- you know, when they decided to implode the citigroup model, he was -- he's getting rid of smith barney and all of this stuff. he overlooks fibro. and look what happens. these guys make a lot of money. now we can't overlook it anymore because this mr. hall who runs

it, andrew hall, makes $100 million and they're a t.a.r.p. bank. now he basically -- he has to get rid of it in some way. >> well, good for andy hall. i know andy hall from the '80s. the guy made $700 million. citibank should be kissing his fanny, frankly. $100 million is fair. he's going to get paid 100 million bucks. >> 50 of those guys. >> well, they screwed it up. this is a pr nightmare because they let it be. >> you can make 600 -- you can help your company make a lot of you eat what you kill and you could be penalized. >> citi really screwed this one up. if they were smart, they would have paid andy hall back in july in stock. look what the stock has done since this news has gone public. >> but can they get away with that with the pay czar?

>> they would have had to have worked that out with the government somehow. >> guys, there is no solution to this story other than, you know, don't -- don't make bad bets in a bond market and get bailed out by the government. >> isn't one of the solutions getting rid of vickram? >> i go back and forth on this. the problem is he was handed a really bad hand. there's no doubt about that. he screwed up his hand by not breaking up citigroup earlier. no doubt about that. the situation is right now stabilized. and i don't think that, you know, this hall business is really reflection on him. i mean, listen, if you think about it, you're busy taking apart the bank and also you've got fibro over here. fibro is a good business. so, you know, he overlooks it. he doesn't think maybe i'll have an issue here with how we pay these guys. >> listen, charley, next time i come to new york, you have to buy me that italian dinner. every time i'm in town, you're out of town. >> the best trade right now is the fact that you can't -- call it a dash for trash, call it whatever you want, but the activity is telling you one thing. it was 5 to 1 for puts today. and now citi is back over $5.

makes it a pretty interesting stock for a lot of very compelling reasons. use the calls. you don't have to use the stock. cheap way to be involved. if there's more up side, you get to participate. >> make sure you're long premium. you don't want to be selling premium unless you're a seasoned veteran. here's what's coming up next on "fast money." a wild month has investors wondering where crude's move will take us next. is oil in for a bumpy ride this fall? where the oil tread is headed next. ñ

welcome back to "fast money." microsoft cutting the price of x-box video game systems today. hey, what does that say about the health of the video game industry? shane kim is microsoft's vp of strategy for x-box. there he is right there, coming

to us from seattle on the satellite. i have one easy question. i'm a simple guy. why did you cut the price? >> well, this is a great time to offer more value to our customers. we're about bringing as many people as we can to x-box. this is part of our overall strategy. we're entering the important holiday season for our industry. we wanted to provide more value to our customers with the -- with the x-box 360. we still have the lowest-priced console on the market, but customers can get the x-box 360 elite to $299. >> why not just go out and buy electronic arts and make everybody's life easier? does that make any sense or am i just -- >> hey, that's a great idea. let me think about that one. >> tell the boss that one. makes sense to me. wouldn't that make sense? something like that. >> well, you know, that's a great strategy. we're about delivering the best that entertainment experiences and content that we can. we've benefitted from having tremendous third-party support. our focus is really on creating the best eco system that we can for our partners while delivering the best value for customers.

>> shane, when i talk to kids about your system, they say they prefer sony playstation because it has better graphics. do you have plans to upgrade your graphics in blu ray format to match playstation? >> no, we really feel great about the graphical capability that the x-box 360 provides. for us, we're focused on the x-box life service. we have the leading online game service of any console out there. we're adding things like full 1080-p instant on, integrating facebook and twitter and all of the great online gaming that you take advantage of with x-box live. >> are you going to make the difference in the amount of sales that you project going towards the holiday season? >> yeah, we feel really good about the momentum that we have going into this holiday. we've got a great game lineup coming out this holiday, you know, with games for everyone whether you're talking about

halo 3 or call of duty or beatles rock band. we also have the lowest-priced console available in the market, which i think is going to be very important, continuing through the holiday given the economic environment. and we're the only console that's up year over year in terms of sales in the united states. we feel very good about the momentum we have. the price reduction is going to help us as well at the higher end of the market. we look forward to continued success there. >> shane kim, thank you for being our guest. we hope the fourth quarter goes well for you. now we'll look at it from the trade side. what do you think, guys? >> microsoft to me -- i'm sorry. i don't think microsoft -- i think it's dead money.

i think ertz is the place to go. valuation is reasonable. i think somebody gobbles these guys up. >> they're a buyer if they come out with a "fast money" game. that makes them a buy. microsoft, earnings day when the market actually rolled down, the markets bumped up against there. guy may be right. they may act as resistance. i love microsoft. if it does get back above 25, you've got to own the stock. >> hold on. >> i think you own the stock right now. i love the balance sheet. i love all the directions that they've been taking. everything they've done online with the search deal, now with yahoo. i think they've done the right things. i love bing. i use it all the time. i think it's -- i think you can buy it at this level. get your dividends out of the thing. the thing pays the dividends. >> there you go. >> their growth is incredible, i think. potentially. and you can sell calls every month to -- >> you read my mind. >> rick, i really agree with guy.

i think that they need to buy somebody. they have this cash. they're not producing enough internal growth. acquisitions should be their strategy. i'm not interested in the stock until it becomes their strategy. >> we have to move on, guys. let's go to the prop desk. pete, you think tech is at the top or is it going to fall? the same question we've been asking in -- >> if spacing is the answer. look at the xlk. when you look at what the xlk is made up of, it's telecon and big-cap text names. look what cisco dpid during the quarter. they saved $1 billion through cost-cutting, and they still have $35 billion in cash. virtually no debt. you look across the tech sector. and then you can actually come down a little bit further. look at seagate today. the new ceo took over january 12th. he bought a million shares of the company at about $4 a share. yesterday, filed against. he bought another 100,000 shares at 11-month highs. that's telling you something about the conviction of the direction of tech. >> when you look at the other inside activity going on within the equity industry, it seems to be the other way, right?

it's nice to see people that run a company well believe in the company and actually buy the stock. we should have some of those guys -- >> you know why it's not -- it made a 52-week high today. >> yeah. >> all right. i don't know what spacing is, but that sucker is breaking out. >> you've got to like the direction. hewlett-packard still up near these highs. ibm pushing toward the 52-week highs. everybody wants a pullback. they're not getting a pullback. >> because there's a fundamental story behind the sector. you're going to have a corporate upgrade cycle in terms of pc. it works through the supply chain. it's semiconductors, the hewlett-packards, the dells, all of them. the entire technology sector and that sector is void of the contingent that we talk about all the time. >> you are spot on. i talk about inventory cycles. i think that's going to be the bane of this equity move.

but in certain areas when this stuff wears out, you have to buy it. you're spot on. >> rick, i don't want to seem like a grouch. got a phone call from my mother. she said you and that italian guy, you two are like -- >> be more specific. >> she is talking about guy. she said you're negative. the nasdaq is lagging. it led all of 2009 until the last couple of weeks. >> but it doesn't mean you can't pull out specific names. >> that's true. but talking tech in general is a very dangerous -- it's a crowded trade. >> i don't want to even go to break. this is a fun night. everybody is having fun. >> you need to talk to your mother more often. here's what's up next on "fast money." the silk road has left many stocks in the dumps.

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welcome back. hey, second half of "fast money." iphone heads to china. that's what's coming up. and bob, our man on the floor, he's on the way to tell us is this rally real or is it a faux rally? and we'll reveal who made the most money today. but first, back to our secret guest, jim goldman, for an update on dell after hours. we have gps on your tie, buddy. >> that's it. right here. it looks like a microphone, but i know better. this is a pretty optimistic call, as you might expect. despite the fact that year over year, we're talking about significant declines across the board. as far as expectations are concerned, dell is certainly outperforming what wall street was anticipating.

michael dell on the conference call says "you will love your pc again thanks to the windows 7 upcoming release." he also anticipates a big refresh cycle coming through the balance of 2010. he won't quantify exactly what that is or on a percentage basis how many folks will upgrade their dell computers, but he does say it is a big refresh cycle. going down just a little bit further here, he's also looking at a pretty powerful product cycle. a new product cycle, if you will, thanks to windows 7 as well as the new microprocessor from intel. these are the kinds of catalysts that will drive dell's business through the balance of this year and well into 2010. and also there was some questions earlier about how this company is doing geographically. u.s. and asia, the company was up 11% in the americas. 11% in asia. minus japan. up 9% in china and bric up 16%.

emerging markets and the united states doing very well for this company. >> jim goldman, i've enjoyed talking to you this week. >> always a pleasure, rick. thanks so much. >> i love dell right now. i like what jimmy is talking about. i love the growth and i believe in the cycle. what you do is the puts will get absolutely slammed tomorrow. volatility will come out of this stock so fast you won't believe it. by midday, the volatility ought to hit near the low end. >> the decay over the weekend, right? >> right, right, right, right. >> that will get priced in by noon, though. >> i think the most impressive thing about this dell news is that we're not seeing what the low end netbooks cannibalize their higher end. it's very important for dell here. >> excellent. now it's time for "pops and drops." i like this segment. the diamonds and the dogs of the day. let's start with america express, popping 2%. >> if you want a credit card, i'd rather have the transaction than the lender. visa makes more sense. >> all right. we're talking insurance, aren't we, up 18%. pete?

>> sounds scary, but it's five bucks. not as scary as six bucks. it had a huge run today. 17%. you might get a pullback. the options were incredible today. mbi. >> greenhill popped 4%. >> this is a stock we've been on forever. through goldman sachs, see how it trades. it's a name i still like. >> american eagle down 4%. >> even teenagers are scaling back. not buying all those hooded sweatshirts and t-shirts. they're clearly losing business to aeropostale. >> a pop for colon edwin drake. he drilled the first oil well in pennsylvania. hey, joe, this is a pretty need one. hey, by the way, have we drilled any wells since then? >> let's talk about this one second. he didn't patent the process of oil drilling. think about that. so in 1859, he drilled the first well. 1863, he loses all his money. 1880, he's dead. >> wow. what a thing to have on -- i'm sure there's royalties going to one of those relatives somewhere. back to the stocks. oshkosh corp only up 24%.

>> huge move, rick. they won a huge military contract. new 52-week high. i'm a buyer. >> tivo is down 3%. pete? >> disappointing quarter maybe, but you look at the stock. it already made a huge pop on the news a couple of months ago. all of the different lawsuits they're battling right now, that continues to hang over it as well. >> retailer guess. my kids love guess. 11% pop. pete? >> a lot of people like guess. not pete, me. do i look like pete? he's the guy with the ugly tie. not me. look at their operating -- they're outrageous. this stock looks like it might still want to go higher, though. >> okay. joanne's stores up 9%. now i'm afraid to go to anybody. joe? >> 52-week high. closed at $27.84. i don't like that action today. >> our final drop is for the men, ben bernanke. a thief nabbed bernanke's wife's purse at starbucks. what, no lifelock, mr. bernanke? we can protect your identity.

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on tonight's "trader radar," we look at the stock lighting up screens across wall street today. this company's stonewashed jeans were in "back to the future" since then, the company's ads have launched the careers of models like claudia schiffer. on the "trader radar" welcome back to "fast money." has this rally really been a dream? some people think a dream, others might think a nightmare. bob has this report. >> reporter: the dow is on a dimaggio-like streak. day after day, reaching base safely despite constant calls to throw it out. it is a bear market rally. the primary trend is down. this market is heading lower. >> play ball! >> reporter: but the splendid rally may have some flaws with its swing. >> strike one! >> reporter: volume is not as strong as it appears. the stocks changing hand on the big board aren't the blue chips but weaker benched players like citi, fannie, and aig. >> strike two! >> reporter: the recent good housing numbers come with assists like new home buyer tax credits and foreclosure moratoriums that may be distorting the statistics. >> strike three! >> reporter: china has been

buying commodities, pushing up prices while stockpiling aluminum and other commodities around the world. >> you're out! >> reporter: before you swing for the fences, you may want to play some ball with your stocks before your money is out of here. >> with us now, the man himself, my friend, co-worker for many years, bob. >> always a pleasure to be here with you guys. business is great. you're looking good. >> you know what? tell us what you think. >> you know, i'll tell you. there are a few things that bother me. one of them is not the churning that we're seeing. all this week i've been getting e-mails from people saying, oh, my heavens, the rally might be over. everybody relax. we're churning on ridiculously low -- you've seen what's going on. four stocks, aig, citigroup, fannie mae and freddie mac, are 25% of the new york stock exchange. >> exactly. exactly. >> all of them have huge

government stakes that are involved in one way or another except for citi, although citi has a big government stake as well. >> 1 billion, i think. >> that's right. and when you get churning on low volume, it means nothing. when you get churning on big volume, now i'm worried. >> tops and bottoms, right? do you guys believe that as well? >> that could mean a sign of distribution. that's people are starting to get out of position. but on this, you do nothing. you wait for more clarity. this is the time of year where -- i don't think so. i think you just sit and watch what's going on right now. the trend has been up. anybody who fights that is crazy at this point. let me talk about something else. can you imagine being a housing analyst today? how would you like to predict what home sales are going to be next year when you've got to first-time home buyer tax credit expiring. we don't know how much, but we know it helps so much. then you've got state-sponsored moratoriums on foreclosures going on. >> yeah, that's a good idea. that's worked so well. >> you've got the government pressuring bank of america and everybody else to not -- to do come kind of workouts.

how do you figure out what the numbers are? they're hopelessly distorted at this point. >> prices have to come down. all of the programs and moratoriums, they're noble at heart, but it's like trying to stop an anvil halfway down from the empire state building. >> you've got the hedge fund community coming back in september. you got a really, really strong tape right now. is the move to step in and sell the strength? >> how do you feel? i don't like the market. i think the valuations are stupid. okay. how are you positioned? actually i'm long. that means in their hearts, the bulls and the bears both want the market to drop. when was the last time you saw that? >> that's right. >> the -- you can cast -- >> that's right. >> the check while you're long, you can cash. >> that's right. let me finish the final point. did you see aluminum corporation

of china yesterday? biggest company in china. they come out and say the chinese government, by the way, has been active buyers of aluminum for months now. we don't know exactly how much. 600,000 metric tons in addition to the so-called private stockpiles that are in china. aluminum is up, copper is up. i've got an idea. president obama, let's call timmy geithner up and say, hey, this is president obama. timmy, let's buy copper. it's down 4% today. let's get in now. that's what the chinese government has essentially done. it's another distortion. it's another distortion is my point. then the chinese government comes out yesterday and says they're going to use enhanced management techniques to slow down the growth in the cement and steel industry. here's a great line. i'm from the chinese government and we're here to enhance your management. >> that's going to be the story for the rest of 2009. given that view, it seems like you're somewhat on board with that, that they're tightening their industrial policy through

their command and control government, isn't it time to short them? why are you saying do nothing with all of these factors? >> you asked what's going on with the real numbers. some other time we'll talk about the fact that chinese economic numbers -- they don't gather numbers like we do. i'm not sure how good they are. >> they do set the standard there. >> yes. you've got to go with what's working now. you have to go with the volatility and stay with what the market is doing. you have to have very tight stocks. that's how you play it. do you really think you know what's on a balance sheet of a chinese bank? absolutely not. that's one reason i can't say china. >> guess what. there's more "fast money" coming up. we want to thank bob -- >> a pleasure to be here. always a pleasure. thank you.

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welcome back to "fast money." hey, it looks like the iphone will finally be released in china. china has been a big topic here. but there are a lot more trades here than just apple. here with the plays is the man, jon najarian, my buddy in chicago of optionmonster.com. hi, jon. >> great to be here, rick. thank you. >> tell me about it. listen, you have not only the

iphone. there's various ways we can play this. maybe cheaper plays. give me some trades here, buddy. >> absolutely, sir. well, the iphone, of course, there's going to be a billion people in china, not all of which can afford the iphone, but let's not confuse things here. the chinese people are very brand-conscious. you just look at how well mercedes-benz sells over there, louis vuitton, or nike, and they get full price and then some for all of those. so i think the people that are naysayers here think that apple is not going to get full price for these iphones are kidding themselves. i checked with our friend erica berman at cnbc. with a billion people there's 2 billion ears. i don't think we'll sell 2 billion iphones, but we'll sell a lot of iphones over there. china mobile, chl, was one of the plays. but they're the big dog. they're the 200 billion telcom in china. instead, i focus on china unicom. chu. >> your brother is going to pepper you here a bit. i can see it in your eyes. >> the only issue you ever have

with these telecoms is you looked at at&t before the launch and you were just excited to get into at&t. and apple was still the trade. jon, isn't apple still the trade on the build that it's going to get from over in china? >> you bet, pete. because quite frankly, guys, they're going to just move tons of this product over there. so apple is the play. then the peripherals that feed into it from broadcom and marvell. i own both of those, by the way. but i think i will lift my collar. right now, i own a put and i've sold a call on apple. i will lift that as soon as they start selling this iphone, which could be as soon as september here, guys. and i just think this is going to be a fabulous move for them. steven jobs is going to get another reoccurring revenue stream. great news if you're an apple shareholder. >> jon, it's a pleasure. i really miss seeing you. what really is going to be a drag is you're going to be on the desk tomorrow and i'm going to be back in the windy city. >> we're going to miss each other. >> absolutely. it's great. i have fun talking to you. it's "final trade" next. you have to make sure you come back.

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time for the final money trade. let's go around the horn. joe. >> time to buy gold. >> guy? >> rick, you're the man. thanks for spending 80% of your week with us. we appreciate it. >> my pleasure. steve. >> heading home tonight. long chicago. >> absolutely. >> nbi. >> i'll tell you what. i've never had more fun. thanks for watching "fast money." rick santelli. melissa lee will be back tomorrow. to stay on top of my game after 50,

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