so we will have two years of experience before the olympic games to kind of deal with these large crowds. and they also -- you know, they host carnaval every year, which is a big kind of party and international event. so they do have experience in large crowd control. so crime is an issue but i think they should be able to take care of it. >> thanks, ed. see you later. thanks so much for watching. "fast money" is up next here on cnbc. thanks so much for watching. you have a good night. ♪

>> announcer: this is cnbc.com "news now." sources tell cnbc's david faber that comcast and our parent company, general electric, hope to have a deal within three weeks for the spinoff of nbc universal. the "wall street journal" reports that blackstone group is in talks to buy anheuser-busch imbev's theme parks for about 2.5 to 3 billion dollars. the deal could be announced as soon as next week. that's cnbc.com "news now." first in business worldwide. i'm bertha coombs. "fast money" with melissa lee starts right now. live from the nasdaq marketsite, this is "fast money." i'm melissa lee. worst week since july. the fourth quarter opens with profit taking. should you do the same? these "fast money" traders know when to fold them and when to hold them. let's stay all over this cracking market tonight. a top strategist will tell us why this correction will be shallow and short. and tim, welcome back, will break down brazil's olympic win

telling you which south mefrn stocks you should samba with. but first let's get to the word on the street today. i have to tell you i was at the stock exchange prior to the open and it looked like all doom and gloom on the back of that jobs report and then somehow we struggled higher. that seems to be very good price action, debbie downer. >> yeah, let's not get carried away there, though, young lady. i know you were down there on the nyse feeling all frisky and stuff, but it wasn't as great a day as you would like to portray. yeah, it struggled back to unchanged. but you know what? actually, it struggled to unchanged. it never really made it back through. if it was a did day, it would have closed positive today after yesterday's debacle. and frankly, the week was pretty lousy. i thought today was not as good as it should have been. >> no, and we still finished on the lows. and i do think that if you look at the s&p, although we held -- you know, we certainly held the 50-day, we held the trend line, there's a lot -- look at the people that have had a good rally this year. you've got mutual funds actually going into their last month of the year. i think you could see some profit taking there. then there's all the hedge funds we talk about all the time that

have missed this rally that want this thing to go lower. i think they're positioned to the weaker data giving them what they want and we start with non-farm payroll. >> steve, what did you make of the action? >> i tend to disagree. i thought the action was really interesting and the fact they started buying it down there when it looked like it was every xue excuse in the world to keep on selling, keep the pressure on. but the banks, when they started to turn over, that was what was relate interesting. turn over back to the up side. that's what led the options world. 15 million contracts. he had an average day, which actually is above average for a friday. very, very nice activity there. and i look at the big cap banks. every one of them led the charge. and for the most part you look at wells fargo, jpmorgan, citi, bank of america, all traded over their 20-day moving average as far as the contracts are concerned. a lot of activity. bulk of the activity on the call side looking for up side. >> the tell once again in today's market was the financials as pete had mentioned, goldman sachs as soon as that started turning it seemed like the whole market was turning. karen, what did you make of it? we did manage to hold the 50-day moving average on the s&p 500.

>> i agree with pete. i didn't think the action was that bad at all. the volatility index moved only slightly. there really didn't seem to be any sense of panic out there. and i still found stuff i wanted to buy. >> such? >> becketten dickinson say name we like in the medical supplies business. trading at 13 times earnings. that's an attractive thing to own. the market's giving you a chance here. >> so you were one of those money managers out there waiting for that pullback to pile in? >> right. only to be smashed probably on monday. >> i agree with karen, by the way, on the volatility itself. you look at the volatility, it didn't panic. you saw bigs whooshed in the day early right out of the gate. then once we started to flatline you look at that volatility index, it pulled back dramatically. really pulling back toward 28 after getting 2960, that was a big pullback, pushed back up toward the end of the day. still under 30. that's the new norm or the old norm again. looking at 30 for the next signs of panic. >> but listen, my golden gopher friend. that's the university of

minnesota's mascot. what is a golden gopher? >> they're going to beat which is which is this week. >> i don't know about that. but look at wells fargo, we talked about shorting that for a while that was actually down a percent in the quarter here and i still think it has further room to the down side. some financials did well, some not so well. i thought most interesting stock of the day was am, again another apple upgrade out of nowhere. that stock has some giddy-up. >> when you're moving to a 265 price target which ubs did on apple that is giddy-up. let's look at the chart of the day. this was the tell of the markets over the past three days, and that is the dollar. you know, at least for today i remember talking to bob pisani and as we were speaking the dollar was giving up some of its strength and we were seeing at that moment the markets turned. >> we were sort of the dollar is the daekt star in our shop because it kills emerging markets and kilds commodities and it is definitely a leader and it is what happened today. intraday the dollar after the non-farm payroll disappointment spiexd higher and intraday when we started to woshlg and get to the positive trend pete's

talking about and financials rallied, it weakened 1 per. if you look at the dxy, it started to strengthen into the close. i pointed out 77.50 on the dxy. for people playing that at home you can do that with the uup, which is an etf which is essentially that same basket. if we break through that on the up side i think the dollar's going to be tough to stop in the short run but i don't see anything here that tells me the dollar is going to go through that area and i think if you look at the dxy today it is the story of today's market. we were all over the place and i think the dollar's finding direction now. zwlt other place we saw the reaction very sharply and very quickly to the jobs report today was the bond market. we did see that yield on the 30 go below 4 prs%, remain below 4% i is schsay. the ten-year hitting 3.16. karen, your position on the tlt -- >> that's not what i want to happen. rabbitt rather the tbt rallied. the tlt short started to go down. maybe overreaction -- this has been coming for the last few

weeks. and the strengthening in the bond market. the long end of the bond market has actually obviously not worked for this trade. when the market started to come back, i am more optimistic this data we've had in the last few days is not indicative of a trend south but that the recovery isn't going to be straight up, it's going to be a little bumpy and that's okay. so i am still keeping that trade on. >> speaking about how the recovery will shake out, let's delve deeper into the story of the day, and that is of course the employment data. 9.8% on the unemployment rate, the highest rate since 198234. are we going to see a double dip recession? let's bring in michelle myers, chief economist at barclays capital. michelle, certainly a weak jobs report almost no matter what you look at in the report. does this make you ratchet down your expectations for the rest of the year or even the first half of next year? >> we can't look past the fact that it was certainly disappointing, not only did the non-farm payrolls come in below

expectations, a drop in the work week, an increase because of a big drop in the labor force and drop in household employment. not a good report. but it doesn't change our overall outlook. we still think we're going to see positive growth in third quarter. we're still looking for a big cyclicality bounce and pretty strong recovery. i think karen hit it exactly right. it's going to be a pretty bumpy beginning of the recovery and that means we're going to see some indicators that don't look that great. >> will we not have a good read on the economy for maybe another month or so? steve liesman this morning was making a point that a lot of the data, especially the manufacturing and the industrial production data for the last month, we were taken by cash for clunkers, we don't have a sense of whether there's any sort of sequential improvement. >> yes and no. i think cash for clunkers is certainly the -- but if you look at the industrial production report, manufacturing x automobiles has actually increased the past two months. so you're seeing improvement even outside the auto sector,

even outside this cash for clunkers stimulus. i don't think it's fair to say it's just policy induced and it will reverse. i think you're seeing fundamental strength, you're seeing the beginning signs of recovery, and i think it should continue. >> michelle, it's guy. mike darda put out a piece today, it said unemployment peaks about two months after the business cycle troughs. do you agree with that, and do you think the business cycle troughed? >> yeah-f you look at his historical analysis, it's about right. i think it the probably going to take a little bit longer in this cycle. we think the recession ended in june, and we don't think we've seen the peak yet in the unemployment rate. part of the reason is there's been such a big shock in this recession where maybe businesses are a little more cautious to start hiring in the beginning but once they do, once the momentum builds in the economy, once you're more confident about this, recovery and demand starts to pick up, then you're going to have to see payrolls increase and the unemployment rate come down steadily. >> michelle, we have to leave it there. have a great weekend, michelle meyers, barclays capital. let's talk tech. >> let's do it.

come on. >> the space led higher today by apple. we mentioned the ubs upgrade as well as the price target increase as well as intel, ubs positive here on a name that just keeps on chugging and chugging and chugging. at this point though, does it start to get a little scare yib, pete? >> i think it probably gets a little scary. but when you look at some of the numbers, you drill down, you're talking about the growth of ipod, applications, so forlth, that was the big story. when we looked at the market early and the market was selling off, apple had given up some of that premarket gain it immediately reacted once the market started to turn and pushed to the up side. i also like that oppenheimer upgrade going in front of the earnings. about two weeks away from intel as well. and the $28 price target. seems a little rich. i'm not sure it can quite debt to that level anytime soon. but when you look at intel and you get the opportunity to see what they're doing right now, the growth in the pc cycle, as well as when you see windows 7 coming down the line-u see the chips continue to have

acceleration on the up side, six months in a row they had the report out of growth there. you've got to like everything that's moving for the chip sector. and i useded that as an opportunity to buy intel, sell on the up side call. >> before we leave intel or apple for that matter how's the implied volatile still, pete? >> in app snl. >> yeah. >> unbelievably cheap. i was looking at it today and talking with several folks. 31 volatility in the front month right now. so if you're going to get in there best opportunity you have right now to buy the puts to protect yourself. >> the pc growth that's going to drive intel. that's interesting. it seems like we're getting a delayed reaction from the developer forum last week. as pete pointed out these guys guided positive on the third quarter, they're delivering it and i think they are growing it see the growth. the semiconductor index has been getting crushed over the last few days. intel has been outperforming amd by 9% or 10%. i think this trend shows this stock will trn to outperform. around 18.90 it held up on its 50-day. i think this stock wants to go

higher and it is fundamentally grounded. >> let's talk about that for one second. they put a $28 price target they being oppenheimer on intel. that's a 47% rally from current levels. embelleded within that call is a pretty bullish call in the broader market. if you believe them. we'll see. rimm, we told you folks it will trade down to 65 don't chase it in the 70s. take a look where it traded today. 88.08 was the september 23rd high. the march 9 low was 35.0 pa-5. these current levels are about a 38.2 retracement. we said don't chase it, now it gets interesting. >> i've got a question for pete on the apple options when you're talking about the near month volatility you're talking about october? >> right. with two weeks, by the way. >> but it looks to me like their earnings will be released on the monday following options expiration. so you don't get earnings in that option. >> right. you're exactly right. you're not going to be able to take participation in the earnings but right now if you look at the bumpy ride and today and yesterday gave us an idea of what kind of a bumpy ride we're

in for just over the next couple weeks, this is a very cheap way to buy protection for those two weeks and then maybe you can make your decision and start to ol' out to november after that. >> talking about financials, at the start of the day they were down by as much as 1%, 2% across the board but then we climbed higher. jpmorgan, goldman sachs, teem managed to end the day higher, which indicates there is some willingness by investors to go in and buy on the dip. these are the names that seem to be attracting buyers obligate pullback. >> maybe some short recovery to. jpmorgan was down 11% going into these payroll numbers. they were widely flagged yesterday and a lot of people felt they were being traded into the market yesterday. they're not particularly good when you look at the consumer, the workweek hours to tell you these guys are holding on to their jobs. i think today was more short covering there, wasn't a lot to cie sate financials are turning. there was certainly no data or news flow to tell you they're turning. short covering. >> last year meredith whitney made a lot of news saying some

of the things she said. a lost people didn't listen to her. he should said some things today and if you don't listen to her now it's at your peril. she said we're probably halfway through this credit crisis thing. she talked about credit being a -- >> actually, let's bring up her quote. >> well, bring it up. >> i believe we are only in the early stages of the second half of the credit psych pl p i expect another 1.5 trillion of credit card lines to be removed from the system by the end of 2010. >> let me nail that down. that's not bullish. either you listen to her and agree -- >> wait, wait, wait, wait, wait. >> go ahead. >> i am not disputing anything she's saying. we've seen small companies that really are having trouble accessing the credit markets. the question is everyone knows there's a lot of losses coming. do the stocks already reflect that? have they already taken into account another year of significant losses? i that i lot of them have. so if you're a company looking to borrow money, you're in the midst of the crisis. small company.

but we're starting to see the capital markets -- i mean the big cap companies, the amount of money that they're able to raise in the markets right now, it's amazing. i don't know how long -- >> so this is a tell for the financials, not on some of these large financials, it's more of a tell on small companies out there who are looking for the credit? >> right. >> i was just going to say as karen said if you look at citibank, ge cap, these guys are going out the door at the end of the fdic government-backed paper which is going toex pier at the end of the month, they raised $8.50 billion this week because in fact i think the good getting is gone. so i'm a little concerned by that. i don't think a lot of these guys have in this environment the way to raise that kind of capital and i think that's part of what meredith was talking about. >> and if you're looking for velocity you're looking for movement. goldman sachs we talked about it all the time. jpmorgan, far more violent mover right now on a percentage basis. i'd keep an eye on jpmorgan right now. if you're looking for the place to be, you want to find it, something that's going to give you a bang for your buck,

jpmorgan's moving much faster right now than goldman sachs. >> i have to ask you guys about jefferies, a name you've been positive on for quite some time. it was also among the camp that finished the day higher. >> go figure. >> do you think this is a fundamental move based on its business outlook or is this partly a short squeeze as timmy had brought up? >> i think a lot of people -- listen, people have been short this stox, they've been wrong. i think they have been squeezed they continue to get squeezed. fundamentally, i happen to think the stock is headed higher in the very long term. the valuations, though, right now given what i think is going to happen in the market don't make a lost sense. so if you're buying jefferies right now for a long trade i i think you're in the late stages p the easy money's been made. it doesn't mean it won't continue to go higher but it's not going to ratchet as high -- >> that was a good call, guy. >> richard handler, we should het him on the show. ceo of jefferies. stud. and art hogan was supposed to be on yesterday. art-f you're watching, you'd better be here next week or i'll beat you awith a stick.

>> fighting words. >> he might enjoy that. >> let's move on. time for bull market or b.s. with the market closing lower the second straight week is it time for the bears to come out of hiding? joining me is jeff scott, chief investment officer of raymond james, joins us from florida. there are so many reasons why at this time, at this jufrpgture, particularly today with the jobs report, why maybe we should see a pullback in the stock market. why do you think maybe not right now? >> i've been unwaveringly bullish since march 2nd on cnbc. that said, i have worried the past week or so that the vacuum created on the up side by the meltup might after quarter's end window dressing is is over just get filled to the down side. so in the near term i think we have the first chance since those march lows of getting something more than a 7% pullback. that said, i do think equities will be higher by year's end. >> that's the question, jeff, because you're a chief investment officer and you make allocations. you're talking about data flow

which you don't think is going to deteriorate rapidly but the stock market has moved and done what it's done, valuations are not cheap. are you putting money into the market right now? >> on a select special situation basis, yes. in the trading side of the account, though, we're pretty flat right here. >> geoff, as far as the trading side of the account, i understand you're flat. but what sector do you like most toward the end of the year? i know you said it's going to be bumpy, we could see some pullbacks, but is there a sector you still like the most right now? >> i till like the technology sector. price monday dwrooirz that do well when they raise prices, nobody's getting pricing. and then you have volume monday tiges companies. companies that do well in pickup in volume and those tend to be technology companies. >> jeff, it's karen, what kind of data would you have to see to make you change your vuf being higher by year end? >> i think you would need to see deteriorating earnings. i think you would need to see policy mistakes by the powers that be, if you wi i think you would need to see deteriorating economic fundamentals. and i don't think you're going

see any of that. >> all right. so what's your best trade, jeff? >> i'm not trading right here. i've got a number of companies i'm interested in. i like this daylight royalty trust up in canada that my canadian analysts follow. it's got a decent yield and we think it's a pretty good situation. >> but you're not -- you're looking at it right now. what's going to get you to pull the trigger on that one? >> we've been buying daylight royalty trust for the pft past couple weeks. >> jeff, great to talk with you. >> pleasure. >> jeff saut, raymond james. >> that's a stance that sounds very similar to the way a lot of guys are positioned in the market. they don't think this is going to be a double dip recession per se but they think the market's gone a long way. i think a lot of people would love to see the s&p come back 20898 to 980 and load the boat again. >> rapid-fire word on the street trades on the way including the best way to profit from brazil's big olympic win. here's what else is coming up on the show. olympic party erupts in rio but

a trade is now emerging in your portfolio. the ambassador shows you the best stocks to samba with. and it was a market's top pupil last quarter but this week it's wearing the dunce cap. as market soothsayers see more trouble brewing, one of those top analysts gives us the answers to this sector's next test. and the tech trade isn't just a bunch of hot air with wall street analysts hoge more love. shu hop on this jet-powered trade this fall? when america's post-market show continues. eseseseseseseseseseseseseseseses

rio de janeiro, the city erupts in celebration. this marks -- >> they always erupt in celebration. >> they erupt at any -- for any -- all right. this marks the first time the south american country will be hosting the world's largest sporting event. it could mean a big boost to brazil's market. so what are your gold medal plays? joining us is zeke karabell. zach karabell, actually. river twice reep management. as well as the author of the new book. this is a very long title. "super fusion, how china and

america became one economy and why the world's prosperity depends on it." >> that's ridiculous, zach. come on. >> we all have -- >> what happened to like jaws? >> can we talk about brazil? >> sorry. >> zeke's book is out on october 13th-n case you're wondering. okay. so zap, how do you play this? >> so this is the bossa nova trade. i do think it says something about the world that we're living in that today when the jobs report came out the thing that we're really focusing on and i think we should be focusing on is yet another of these global growth plays in which brazil has been overshadowed a bit by china but really is beginning to come into its own. and this is maybe a symbolic coming out party although i do agree there always seems to be a shot of rio in celebration. you know, some of these things we know. and tim's been all over this for a long time. which is just the infrastructure play. part of which is a raw material play that is key to china. that's not just a shameless plug for the book. and has been there for the book. you've got vale, which is the

largest iron ore producer in the world and has been on a roll, although i don't think has actually gone up if you look at the commodity trade since march. i don't think it's up as much as some of these others. it's up about 80%. >> we're six years away from this. so just be careful about getting too excited about this rally right here and now. in fact, the world cup soccer is actually going to be there 12-2014. before that people weren't even talking about this. this is huge. what i will say, zach zach's totalry right, there's no question the infrastructure buildout, literally brazil needs to build out their infrastructure. they are not ready from a transportation, communications perspective, from the stadiums, and they have a lot of work to do. >> you say 2016's a long time away and it is a long time away but at the same time they've got to start putting the shovels in the ground today if they want to have a light rail or whatever it is. >> the reason to look at this is to remind you of where brazil is already make a real contribution in its companies which has to do with its supplying of raw materials to the industrial economies of the world, including itself. even when brazil and rio build

out for these stadiums, that alone is not going to be a huge market mover for global steel or its own steel companies for that matter. but it is a reminder that their steel companies, their iron ore companies, something like petrobras, are in play into a global system that fair fueling. and one play in this i do think is interesting people don't look at is the food play and that would be something like archer daniels midland which is a u.s. company but to the degree it plays into both the corn market and the soybean market, which is a major aspect in bras al's agricultural economy it's probably worth looking at especially given it's lagged the current market. >> couple great consumer plays and also plays moving people around, the two airlines, gol, tam. 52-week highs, though, be careful. the cellular companies, viv, tsu -- tsp. the cellular names, they're all great ways to get poerksz to e

exposure to the consumer. private companies in brazil will be getting these allocations and getting these mandates. that wouldn't be happening in other places. >> are there other u.s. plays you could look to? you bring up adm. is it bucyrus? joy global? the coal plays that we like to trade that are not the adrs but -- >> i wouldn't go into the coal for this because -- >> steel. >> steel. they're very energy efficient with their ethanol and with alternate fuels. you know, another one is am bev, which trades -- that obviously is fueling in a very different way all those crowds celebrating in rio. >> let's just put a button on this conversation before we move on. we want to she you the intraday on the etf that tracks brazil, the ewz, and when we got news that chicago lost we actually saw a spike higher on this. is it like a knee-jerk reaction, there's no fundamental reason why this etf will continue to go higher? >> you're right. there's no fundamental reaction today. but brazil's cost of borrowing,

brazil's valuation coming down. it is rerating. this has a mechanical impact on stock valuations. it is good news. i just think a lot of this had been priced in, people who were following brazil had been expecting this, but i talked about the world cup. i would take this with a grain of salt. brazil's a fantastic investment opportunity. they were upgraded gdp this year to 5.3%. it's a good story. >> statue, thanks so much for coming on. zach's book is called "super fusion with why the u.s. and china became one company and why the world's prosperity depends on it." which is out october 13th. zach karabell. time now for "analyze this." financials rebounding after a rough start this week following ken lewis's revelation that he would be stepping down at the end of the year. could it be that banks will go from worst to first in the fourth quarter? christopher whalen is co-founder and managing director of institutional risk analytics. he joins us on the fast line. christopher, great to have you with us. >> hey. >> right now what is your

assessment of what is happening with bank of america? there are some reports that there is a committee out there to look for the next ceo. our own charlie gasparino is reporting maybe they'll put an interim guy in. is this reason to maybe stay away from these shares? >> i think so. the best thing that happened to bankamerica was ken lewis's exit. he represented the past. the nations bank let's go out and build the organization through m&a. and frankly, the internal situation at bankamerica's a mess. when do you allow your ceo to resign when you don't have a successor in place? this is extraordinary. so you know, leaving that aside, though, the financial situation facing bankamerica's very serious. they're right behind citigroup in my terms in a sense of where they're headed next. and the sad part is investors don't have access to the information they need to understand the situation because it's not in the public disclosure. >> chris, it's karen. let me ask you something.

who do you think would be the right person to -- the right kind of person or a specific name to lead this institution right now. >> someone with heavy restructuring experience who knows how to sell businesses because that's what they're going to be doing tort next couple of years. i think all of the money centers are going to be downsizing dramatically. they're going to have to raise cash. they're going to be dealing both with what you can see right now in their financials and the off balance sheet exposures that nobody wants to talk about. and you know, frankly i think bankamerica could be back in the arms of the government by the middle of next year. >> whales, it's guy. real unemployment's about 16%. what bank is toast if the consumer is in fact done? >> well, look, the good news is the recession's over, right? the bad news is the depression is about to begin, and we've got to realize that if banks are shrinking at 200 to 300 billion dollars a quarter there's not going to be any credit to fuel growth. we're going to be lucky to hold our position where we are in terms of gdp and employment. >> so what do you say? i mean, are banks a short right now? how do you play this,

christopher? >> look, what i've been telling my clients is i don't want to see them with any exposure to the large banks. if you've got to own financials, you want to own the righteous names, the bank of hawaiis, the west americas, cullen frost. even northern trust, bank of new york. these are all solid organizations. we rate every bank in the u.s., and we've still got over 4,000 banks that we rate either a or a-plus. but they're small, by and large. we've got $4 trillion worth of assets we currently rate f. and half of those are going to be resolved. so we've got a big mess ahead of us, and i've got to tell you, i think for now if you can sit on the sidelines, whatever you sell in the fourth quarter you can buy cheaper in the first quarter. >> all right, chris. great to speak with you. chris whales whalen. >> i name everybody. >> you do name everybody. >> that's like bush. george bush. giving them nicknames. >> time for a little poll action. >> oh, yeah! >> poll of the day. tonight's question, are you buying the dip in bank stocks?

a, yes. balance sheets are getting better. or b, no, i agree with the whales. credit crunch redux. >> it's whale. >> oh. is it plural or singular i? think whales. log on to fastmoney.cnbc.com and tell us what you think about our poll. up next don't get caught without your umbrella. the best way to protect yourself in a potential market downpour. back in a minute. (announcer) when you need it fast. get it fast. sarah! you're home! (announcer) on the nation's fastest 3g network. at&t. now get 50% g touchscreen phones after mail-in rebate. only from at&t.

welcome back to "fast money." time now for some options action. rough start to the month of october, and that has the volatility index, the vix, going higher. when that happens, prices for options and protection becomes more expensive. in fact, over the last two octobers the vix has spiked by 30%. so what is a cheaper way to get some protection right now? brian sutland is the president of sutland equities. he specializes in the vix. some in fact call him the fear merchant. he is also an "options action" trader. so brian, how do you buy cheaper protection these days? >> well, one thing is that we learn from last year, actually, is that you couldn't just diversify your portfolio and then be a little bit safer if there was a market downturn.

one thing you had to actually do in your portfolio is own volatility, own that as a component to your portfolio. and right now in taking a look at some of the call spreads in the vix, when you buy a call spread, meaning you buy an at the money call and you sell a further out on the money call against that. that allows you to have exposure, direct exposure to the up side in volatility moves. and typically, when the market tanks you're going to spike in volatility and you're protected that way. >> and that typically -- we see that spike in october. what happens for the rest of the year? how long do you -- how far out do you go? >> one thing i was looking at is the second half of the year there typically say spike in the vix about 50% up off its lows in the second half of the year. i tend to put these plays on in the fall time. october's a great time to do it. i'm looking at october, november, december, through the second half of the year until the end of the year is when you buy some volatility, get smex poeshz in your portfolio and you're protected against the downturn in the market. >> all right, fear merchant, let's switch gears and talk about a specific stock strategy. you've got one on bank of america, a name certainly in the news this week. >> you don'talities always have to go out and buy puts or buy

put spreads or get long volatility. there's other ways to bet that protection and get that volatility protection. one thing i do is a own bank of america right now and i'm looking at the stock it's kind of been moving sideways but certainly the market's on some skittish turf right now. so what i've done is taken a look at it and what you can do actually is look at the november 15th put and the november 17th call. this is called a zero cost caller. you don't outlay any cash. so your premium doesn't decay over time. and what you do is you buy that put to the down side. it stops you out on the down side. but you also get called away on your stock if the stock moves above 17 1/2 through november. what that does is when the market moves down and bank of america were to sell off, you actually start to pick up volatility and get long that put down there and it protects from you any sudden down move in the market. >> love that strategy, brian. looking ahead right now as you're looking at the volatility index itself and i know that's where you trade, do you expect -- first of all, it sounds like you expect volatility to go higher and if so when it breaks through 30 is there a target range you're looking for, the traders are

looking for right now in the pit? >> i'm taking a look at the 32 1/2, 35 level. somewhere in the mid 30s if we get a significant sell-off right here. that'sy was talking about a call spread where you buy a 30 call maybe sell a 35 call against it, $35 is my target price right now on the vix. >> thanks. going to see you tonight on options action. >> what time? >> it's on at 8:30 eastern time. >> no kidding. outstanding. >> i'm glad you asked. time now to take your position. alcoa officially kicking off earnings season. reports earnings after the bell on wednesday. the stock has doubled the performance of the broader market in the last three months rising 31%. so do you buy this stock ahead of the result? tim, what do you -- >> i tell you what. i think aluminum prices are going higher. if we were doing the ever-famous "fast money" slow money segment this would be a dock i'd put in there because i think alcoa's a great two to three-year play. i do think aluminum prices will recover, however in the short run there's a supply imbalance

and aluminum is oversupplied. at around 1280 our re69 of resting on the -- i think she should bounce, she being alcoa, right off that level but -- >> how do you know alcoa's a she? >> well, you know, come on. all nice things are women. we all know that. she's going to bounce. >> deutsche bank upgraded them yesterday. the bottom line is they're going lose money this year, you're hoping they make money next year. they're due to make money. to me sort of on timmy's camp long term i think you own alcoa. especially it could be a potential takeout candidate. we've talked about that forever. but the stock has basically gone down forever. at this price it's probably okay to own but not into earnings. >> you're not a fan of hers? >> no, i'm not a fan of hers. >> awful. >> coming up next, jefferies, nike, and abbott labs, i don't know the gender of those stocks but they are just three of the names popping this week's is it time to get out or can the up trend continue? your trades next in "pops and drops." "squawk box" rewind.

>> non-farm payrolls declined by 263,000 jobs. >> if we did not have the stimulus, we would still be losing 500,000 plus. >> we've got a lot of jobs to create before they even consider raising interest rates. >> the author of this explosive memo that blasts moody's for practices he says broke the law. the biggest problem. >> there are no incentives for a rating agency to say no. >> "squawk box." where business turns first. weekdays 6:00 a.m. eastern on cnbc.

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join me and over a million people who trust liberty medical. welcome back to "fast money." time now for "fast flash" when we alert you to major stocks hitting major milestones. consumer giant pepsi closing the day higher by more than 4%, hitting a fresh -- >> what was that? >> i don't know. >> don't pretend you didn't hear it. i heard it. >> i don't know if the mike picked it up but it was a very unusual sound. unusual sound here. >> back to pepsi here. apparently, pete there, was a little -- >> there was a little options activity. this normally trades 7,000 contracts a day. had some extreme options activity out there they were in october but also moved to november, november 62 calls very active. this is one of those stocks we talked about slightly defensive but also very offensive and very aggressive into the fall. every time the nfl season starts

pepsi goes higher. take a look at this thing. it's going higher. >> by the way, the reason behind the stock today, they filed an s-4 detailing their details with the acquisition of the bottlers, jpmorgan said in large part -- guy's still giggling about the noise. but the -- >> and deutsche bank raised the etf to 420 above the street at 410. a lot of different things going on but all positive. >> children on this side of the desk found that funny. >> and then detailing the details, that was just tremendous. what does that mean? >> you're giggling like a school girl. >> move on. >> let's get back on the rails here. back to the stocks making extreme moves this week. time now for pops and drops. a drop here for cit. it was down 28% this week. karen. >> just this week. and they're tl very well may be more to come. this one is on its last legs, battling just to try to stay alive. i would stay away. >> pop here for jefferies. up 6%. guy. >> they didn't file any s-4s or s-5s for that matter but this stock has been a giddy-up name

four a while. you're in the ninth here but you know what, might go to 29. >> pop for abbott labs on the week up 5%. >> major acquisition announced monday the stock pulled back slightly then off to the races today. big spike for them. it was that drug deal that was up on a $7 billion deal in australia. >> drop here for ford shares. they were down 6% this week. tim? >> overreaction to the auto sales. again, a hangover from cash for clunkers. these guys did very well considering. i'd stay long ford. >> we've got a pop here for rich babies. >> what? >> rich babies. a new study reporting that more than half the babies born in affluent nations since 2000 will live to see 100. humans have seen their life expectancy increase by more than 30 years during the 20th century with no signs of slowing down. >> 2012, though, we're all getting blown up anyway. did you see that movie that's coming out? they've got no shot at seeing 100. >> all the movies come true. >> maybe you're getting blown up. >> still it scared me. jon cusack. i'm scared. >> it's a trailer.

come on. >> that's a takedown. >> that's a drop for guy. >> a drop and a half. >> pop here for nike. up 6% this week. >> nike is the goddess -- it's a she. goddess of victory. >> that a girl. that's my girl. >> nice job, nike. >> drop here for deere, down 6%. guy. >> nothing runs like a deere except they said they don't see growth to resume until mid 2010. $46 has been administrative about five times since january. i think this trades down to 38 1/2, 39. i give you levels. i don't make this up. go look it up. go check out its chart. >> drop here for the home builders etf. the xhp down 4% this week. >> huge run into the end of quarter and now they're giving something back. a lot of the sectors that really ran started offer this october 2nd, 1st and 2nd. >> drop for xinhua, the china etf. she was down 4%, tim. >> she was down and she'll be down and out till next friday because they're take the whole

week off in that market. stock's down. >> pop for rio de janeiro. the brazilian city has won the vote to host the 2016 olympic games the first time the world's largest sporting event will be held in a south american country. after rio beat out brazil, chicago, and tokyo the city erupted in celebration as cross famous cope cabana beach. >> i speak portuguese. >> do you really? >> we can do a whole thing on my portuguese. >> dinero rapido? >> it's good stuff. >> cope ka bana. >> coming up next, some picks gone wrong. tell you what your next move should be. you're watching "fast money" on cnbc. we're first in business worldwide.

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call now for your free information kit... and medicare guide and find out... how you could start saving. while some investors hit the brakes as the jobs report looms, our traders put the pedal to the metal trying to keep you quicker than the ticker. >> 97% of what they're doing is entertainment. 3% search. so they are moving in the right direction. with carol bartz at the helm these guys are starting to move to the up side. >> pit boss searching for growth in the online space after unveiling a new ad campaign and receiving multiple analyst upgrades, yahoo jumped 12%.

>> american axel, axl, it's a risky one but i think it works out. >> the chairwoman going out on a limb with this trade. after reaching a deal with its lenders to amend credit agreements, the stock soared 22%. >> raymond james is a great one to look at. rjf. i think it's trading around 23. it's had a nice run. asset management still the place to be. raymond gyms up 4%. >> negotiator finding fast money in this financial. after saying it had quadrupled its backlog of deals in waiting the stock jumped 8%. >> there's nothing fundamentally good going on there. >> and the ambassador tegg you it was time to take the chips off the table. despite analyst upgrades, this stock stumbled, losing 18%. leaving us with two words -- fams money. >> time now to go from the best to the worst. fast fire. we grill our traders on calls gone cold. september 14th was the date. the pit boss jumping into this

medical name. >> whole logic. this is another company in the diagnostics area that everybody started coming for the up side options once again. september 17 calls, october 20 calls continuing to outperform. >> got a downgrade. the stock fell 7%, petey. >> yep. and i tell you what, i was burned on this one. looks like i'm burned pretty bad. i like this stock, the section they're in right now. the options were telling me something. unfortunately, the markets moved the other way. >> on september 10th the ambassador betting on this foreign casino name. >> love melco international. we talked about it. mpel. this is stanley host's son. they sprung another blossom in the gaming world out there. >> after announcing its first half loss, 32% from a year earlier, the stock tanked 7%. >> she was gun to me. she just was not. >> broke your heart. >> but all casino stocks were not good to me in the last week. so mpel is still something if you're long the sector you want to be there. >> earlier this month the

negotiator steering you toward this entertainment name. >> on august 31st disney acquires or says they're go to acquire marvel, and we've talked about the trade. it was dreamworks. then today william blair upgrades dreamworks. they said an acquisition of dreamworks based on the disney model would make it a $50 stock. i don't know if it gets there, but i i think even on a downgrade it works. >> shares are down 5%. >> a-ha. >> and i was wrong. timing lousy no doubt. but then today goldman puts it on the conviction buy list, says it's 25% of a takeover, $50 would be the price. for that reason alone i'm thinking you should still own it. >> the midas touch today. chairwoman, giving you the retail payer's trade. >> talked about this a lot. the retail index down about 2 1/2% today. i think there's more down side here. it's long walmart, short the xrt. i think we'll see more convergence in that space. >> surprise gain in august retail sales sent the etf higher by 6%. >> yeah, yeah. and i had it on even before i talked about it. so it moved even further against

me. but the last few days it's sort of coming back in line. i still think the retail names, the specialty ones are expensive. i haven't covered. >> let's get to the trade so i know america has been waiting for. >> what's that? >> how to play natural gas. >> oh, yeah. >> i mean, i know that everybody -- the question that i get pretty often have we seen the bottom for natural gas and what are the best ways to play the commodity? the space up 19%. record storage levels. >> you don't get that question that often. >> every day. >> every day walking through the new york stock exchange. >> are you melissa lee? and how do you play nat gas? >> let's get to the trades, karen. >> how do you play natural gas? unfortunately, you have to play the equities, which have run up so far. but i still like names like apache. there's a couple of them. even chesapeake, which i love to hate. that's a way to play natural gas. the ung would be a way but i am really afraid of that instrument because who knows if they dismantle it or what. >> america, you've got your answer. >> there you go.

>> now nobody will ask you ever again. >> "final trade right after this break." all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.

it is time for the final trade. tim. >> the brazil olympics trade is moving passengers and freight around.

gol airlines, gol. >> guy? >> rimm looks interesting now. >> karen. >> we covered some borg warner today. bwa. >> unbelievable cash flow for pepsi. i like the action we saw in there today. highs or not, this thing's going higher. >> all right. that does it for us. i'm melissa lee. thanks so much for watching. tune in tonight at 8:00 p.m. for an instant replay of "fast money" followed by "options action" in its new time slot, 8:30 p.m. eastern time. have a great night, have a great weekend. >> announcer: monday, from recent rally to double dip recession? meet the investor who saw this latest plunge coming. plus, it's not what it looks like. the pit boss reveals a stock with a secret identity. "fast money." 5:00 eastern monday on cnbc, first in business worldwide.