welcome back. believe it or not, it is here. christmas eve is almost upon us. historically it has been the start of a santa claus rally. it starts the day before christmas and continue through the first two trading days of the year. on average, they have gained 2%. when we break it down, since the first santa claus rally back in 1896, the average gains of 1.96, with the biggest being december of 1917. as for the s&p 500, since the first santa claus rally back in 1928, the index is up 1.7%, the biggest coming in 1941 when the index was up 17.8%. and in 1971, the index has averaged gains of 2.3% in that

time frame. a drop between christmas eve and the first two days of the new year typically precedes a bear market. we will see what kind of surprises santa may have in store for investors. we had a quiet session on wall street today. we did not lose much ground given the fact that the market is still up. tonight the dow with a gain of a fraction today. 1.5 points. the nasdaq is the winner in 2009. up better than 40%. and the s&p 500 today up 2.5 points at 1120. fast money is up next. see you tomorrow.

this is "fast money." i am melissa lee. we are all over the trains that could make you money. tim has got an all or nothing commodity trade for you but you will need an iron stomach. let's get to the word on the street now. follow the crowd in? something tells me no. >> hi, mel. this show we can't speak in platitudes. we can't say this year the market will go up between 8 to 10%. they say that every year. i have no idea will it go up just 1% a month or up 10% down 5%. don't listen to these jerks.

the reality is you have to trade the markets that are in front of you each day. >> i would prefer to hear predictions that it will be a stock pickers' year. you will have to roll up your sleeves and follow companies. you will have to not play ma crow trends as much. i think we will be in a year where we will not see the volatility we had. i think it will be about rotation to higher quality companies and bottom up stock picking. >> call me a cynic but a lot of the portfolio managers always say it is a stock pickers' market. because the average person cannot pick their own stocks. >> i completely agree with tim. if anything, it wasn't just this year but the last, probably,

almost since the middle of '07 that it really wasn't a stock pickers' market. should you be in or out? that was the only decision to make. now i do really believe that is changing. and look at the volatility index as an indicator of that. >> a lot of managers are very directional. they will be the first to tell you we do the best at picking directional trends. commodities have gotten a lot more motivation. i think actually this is an exciting time because your work will count for you and i don't think it necessarily has in the last 18 p months. >> i have always thought it is a stock pickers' market. yes, you can go across sectors. it has all been about technology, materials, and that's the areas where we have

seen the strength. there is no way unless we get a global melt down there is no way to see that kind of volatility to buy protection on good companies when you are looking and you want to be the stock picker. material space. they don't become nearly as scary after you have seen where they went from march to the end of this year. if you can buy protection now. >> stock picking with protection. the new mantra for 2010. >> this would be the perfect environment for them. their competition is themselves. they have a huge recurring revenue side. aside from just selling computers. i love their valuation. this is a stock that continues

to go up steadily every day. we are right there oar about and i like hewlitt pack ard. he has done a great job navigating the waters. >> aagree. trading cheap relative to itself. if we are talking about picking stocks based upon fundamentals, they are cheap and their printing business will be an area which was beaten down. they will see growth there. 65% of revenues international. >> a couple of weeks ago, when jim silver came on and we said i like your downgrade but you are late to the party. we said it the other day in the aftermarket the stock was trading 72.5. now is the time to get out of your longs or get short.

and r and i think rim, if you have a set, is worth it. >> a set of what? >> i wonder. >> when you are looking at research in motion, they have record shipments and their guidance being extremely strong. yes there is competition and yes the margins are coming in. i still think research in motion. it was trading $72. it was a $58 stock. it takes profits. the people are lucky enough to get it. now that it has pulled back i think you are getting close to an area where it is an entry area. >> the outages don't scare you?

>> let me ask you this, you are a dedicated rim user, are the outages making you think about changing? not for me? >> i don't have a choice. my company buys it. i don't really know. if it were myself, maybe yes. >> these guys are becoming much more than what you are talking about which is company driven. now this is becoming a consumer commodity. >> if unemployment is up 10%. >> who is going to be buying the phones. >> you can buy them at walmart. you can buy them there. the stock was up today on a light volume day where it could have been knocked out. and i agree. i think china might be part of

that. >> when you look at rim now they are getting a huge explosion. only if that starts to fall apart. >> nokia used the same model base and they are floundering. i think they could get cheaper. that means less margins. i think that could hurt the stock. >> let's move on to the chair woman's low risk and high risk. >> low risk? walmart. shocking. you didn't see that coming. wall mat with a beta of .67 or so. could walmart be up 50%? highly unlikely.

in an up market, a down market, a super up market it will do fine. it will trail for sure. that is okay. it is a big position for us. at what point does it not work for walmart if everything is such razor thin margins? >> you have to look at are there expanding margins for them to go to? and yes there are. there is plenty of room out there. i know what you are thinking. >> i was going talk about amazon. outside of the country is exactly where they can grow. they have 18 to 23%. international, plenty of room to grow. walmart, the company itself looking to grow in brazil and

russia where up until this point there haven't been stores big enough for them to buy. look for them to buy. >> high risk trade? >> golar. they are in the liquefied natural gas space. it is really most of the lng ruths are from the middle east to asia and brazil. what i really like about this is they have two businesses. one with locked in long-term contracts that will begin paying a dividend next year and another part which is spot takers that will be aveil nbl the stock market. i think we will see a big move in day rates because the supply is shifting. more lng is being produced. that moves day rates. we talk about business model. >> i think that just on the fact that she has done her home work

on this. if you want to put your portfolio together, a small portion might be go long. >> nice. >> and there is strength outside the united states. we will have pete and tim's low risk and high risk trades, the ones you might want to put on later on in the show. let's move on to the next trade. the inventory reports sent crude up by 3%. natural gas was strong on the day. tim, you called for a rise in crude prices. >> we had the fundamental and the dollar stories. you had a much bigger draw in crude and gas inventories. you are starting to see draw in supply. very good news. but the other side of this is

terrible housing numbers and i think that oil continues to rally. >> i will say this. what has been breaking out sips we had it on, the ceo is this inner oil. we had phil on the show. i know this is a big short position with whitney. they think this is a scam and barry writes fraud discovery and talks about this all the time that karen and i was talking about last night in the green room. i think sit a real company. be aware that that is out there. that being said this is a huge

momentum stock. >> when you see the price of oil going up, up, up, that is a great call. we have seen option activity across that space whether you are talking about american, united, all of the airlines, specifically the legacy carriers really going to the upside and continuing even with oil moving, we are talking about a huge move in oil and yet they keep going higher. you have seen nothing but option activity. very active today. >> before we leave this topic because energy has been strong today. this is a trade that gold man sacs has been recommending to its clients. this was interesting enough that

i thought we would bring it up to you guys. long energy, short financials going into 2010. karen, is this something that you would consider holding on to? >> half way. i am also bullish for banks. i think if we see economic recovery, that is good for energy and financials. >> i think finances have spent the last weeks telling you why they will not normalize their earning. one of the things they have seen is their business model, if we start to see additional crimps on compensation, there is no way they can earn the same amount. i think that banks like bank of

america have stolen market share. i think the whole space looks challenged in the way that energy does not. the takeover tells you that there will be take over in the space. a search to find more resources that will drive up valuations. it was basically trading $30. the lowest, 2501, that they were considering a secondary. so i think the easy short money is over in the financials. so i tend to agree. i think overall, they will go late down early next year. >> you have to look long term. i just wonder how can they start

to move any time have fast. it will be in the secondary. they have got get a lot more going on and it will not happen the first or second quarter. by year end you can see the financials move. i think the investment banks are better positioned. this is really the driver behind the strong materials that we saw today. >> then moodies came in and said we think you are in good shape. this trade has been very complicated. the dollar has traded. the dollar was getting strong

because of weakness. if you start to see growth that is when it will start to go back up. i think we are in the middle of the smile. the strength is not enough there on the economic side. we are stel well above the 50. if we break that i think the dollar is still in this rank. >> they will not see that type of earnings growth going forward but valuations are still fair. you are probably late if you are initiating a trade there. i still this this is a name that you want to be in. >> if there is two news pecks it is burlington northern.

they believe in the steel story. if you want to look at coal and steel and you want to see growth, put a chart up and every month, every quarter throughout the year you will see outperformance. >> we kind of have a chart like. that speaking of. we have been joking about lumps of coal in your stocking, maybe you should hope to have a lump of coal. take a look. and you can see that this has really outperformed. this is called a buyout. they are going around to buy this and that. there is a whole big thing. coal is right up the center of that. that is what drove a lot of today's market. >> we talk about a buck fiftiy

copper. if copper could stay over three, just wait for the freak show. >> i got something hitting the inbox. this comes from rick. i don't know where rick is from. u.s. steel was a name we adored last year. it has had ups and downs this year. i think you are a little bit late. i would look for a pull back but i would not be short on that one. >> i might buy some new corps. i think steel prices stay up. >> stay with the space.

all right. we have been talking about predictions for 2010. let's see what the charts hold and bring in todd gordon. for more on that, todd, have you been peering into your crystal balls? >> is there more than one? >> we have a few charts. keep your mind out of the gutter. >> the level i have been focussing on is 1162. it is flying under the radar so to speak. the first was 92 points. we pull back. we have another 292 push ongoing. >> are we going get there from going 13000 first, then 1100 and then 1362? >> it has been a slow crawl and i think we will see 1162 with

the higher rates as a steepening yield curve. >> the u.s. dollar has had an amazing run. let's not forget the point that we have started the dollar back in 2008 gave us a good heads up. the dollar against the euro made a higher low. now we are doing the same thing again. the s&p continues to charge higher but the euro saying that the risk aversion could be on the rise. people are too quick to dispel approximate myth. come 1160, i think we might have a little continuation of dollar strength.

>> are you saying this for fundamental reasons or technical call? >> i agree with what you said in the beginning. i think the dollar will rally on strong economic data. if we get a bit of volatility, risk aversion could drive it again. better economic data, worse data. >> all right. thanks for coming in with your predictions for 2010. >> flash. >> todd, aka flash gordon. don't go anywhere. >> it may be just what you needed but one analyst is not buying this trade. why the other play may be on the other side of the strip mall. and pushing to your t1 line.

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welcome back. will walmart keep christmas going all year long? walmart has been pressuring other retailers to stay the same. who will remain the biggest holiday winners? >> sit not troubling. we have seen them use this strategy before. here is an industry they want to take on. nope can move volume like walmart. >> we have one of the top holiday retail analysts. brian, great to see you. >> thanks for having me. in terms of the walmart impact we have seen it on toys,

groceries, electronics. >> consumer electronics, walmart is a big factor. i think what happened is we are getting more signs of the muscle. we saw that in best buy's results where sales are all right. but they pressured the margin. a big piece is the price competition we are seeing out of walmart. we are seeing pricing on the key products coming down so fast that it is difficult for best buy to get growth on that. >> you do cover best buy. what do you see going forward?

there was expectation to the stock. a lot of people were banking on circuit city going out of business. this is a feeding frenzy. we have best buy, walmart, amazon all going after the business. if i go downstream i am going home dee poe. why lowe's over hd? >> it is a slightly steeper stock. i think lowe's is the market share grabber. would it make that big of a difference? >> what is your top pick? >> tiffany and bed bath and

beyond. >> seems like all wall street is piling on to bed bath and beyond. >> as i talk to clients there is still a decent amount of skepticism. >> we will have you back and see if that pans out. brine, thank you so much. >> wants to bite? all right. let's move on here. we have been talking about trades for to 2010. let us continue and talk about next year's top low risk as well as high risk trades. ambassador? >> low risk is ag. people need fertilizer. they can only delay they cannot divert. it is not just fertilizer it is the underlying crops they need to plant for. we have seen a slight tick up in wheat and corn. i would be a buyer of all of these things because the food trade, if we flash back 18 months we were in a panic about a food shortage.

demand around the world is going up. we have talked about the economies that are growing the quality of life and the earnings power. it seems like this one has huge amounts of volatility. when they head the other way. >> we have the split screen. i will look at the camera. a lot of the commodities. a lot of the froth is out. when i see the deal over the last couple of days, the russians who were the biggest players. at 300 a ton and people think that is devastating. these prices -- these stocks are

priced there. this is the bottom of the cycle. the best company in the world have worked off these cycles. the play here is an m&a play. even though these could fall under a high beta this is it. >> as always, as we all expect. >> you brought the serious questions. >> i think it is -- also for the other trade. for the ag trade dorks you need commodity prices to remain high in order to make the case that people want to buy fertilizer? soybean prices or wheat prices goes lower -- >> the dollar will go higher if the u.s. economy and world

economy is going to go higher. this has been an oversupply. no place to store it. i think there is a motivation to get gas. there is a political and social pressure on nat gas to move up. people will short it. if you move up to 8 bucks for 10,000 btus this is probably 30 bucks. it is a three times bagger if you kbet it. let's get to the low risk. >> low risk is j and j. you have a warren buffet name. everything tells you how disciplined this company is.

growth is there. you got like the name. >> i am with pedro. >> do you like that one? >> we have been. >> that's what it was. if you think about it they spent $16 billion back then to buy the consumer brands business. >> keep an eye on that stock, too. they have the results. this tlr are a lot of areas that will be huge block buster drugs. >> you play to the options? >> you definitely want to play that one through the options.

so you are going have to go out towards probably a june option. >> that will not be cheap. >> no but your risk reward is huge. >> this is for karen. this is for karen. made a comment about walmart. what do you think about amazon as a competitor? >> amazon has a fantastic business. my only issue with amazon is that they are priced for that already and well beyond.

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welcome back to fast money. we are talking about big tech titans who zoomed bast the big level. we really want to focus in on google. this, after the chair made a case of google being a value stock. at what point do you think maybe not so much. i plan on being a google holder for a while. we could be having this discussion a year from now. >> are you going name a google of brazil? >> there is china. there are other googles out there. i think what google has got is this kind of cash in that they will be delivering the next big

thing. now let's talk about president obama appointing the cyber czar. citi denying a system breach at the bank but system attacks are quickly becoming a terrorist weapon of choice. and a company set to join us is top ranked analyst alex hamilton. great to have you with us. >> great to have you as usual. >> we hear about the breaching of data. >> i don't think it is in the stock. let's start with yesterday we had the rim outage. i am not sure what it was but i

am a big fan of conspiracy theory. we had two highly publicized events. we have had twitter and citi up. it gets your antennas up. this is a group that underperformed this year. i think there are many favorable trends that will propel the stocks upward. >> there are some reports that it was a russian program that you can buy on the internet for 40%. when i grew up and played video games, my parents yelled at me. now i encourage you to play video games. these people will be protecting us. let's look for names that have great free cash flow that are into the government which is basically going be the main customer given the cyber czar.

modest valuations. top pick which underperformed the most. why do i think they will do well? obviously cyber is we are hearing about this more and more. there are many things that will bring the stocks forward. >> talk about the mcaffees of the world. do any of them stick out to you as the best play? >> they all have exposure. why is organic growth growing? the market is growing. these guys are able -- it is not that they are necessarily stealing share. they are just growing. all of these names.

so there is definitely other plays to do it. the names that are already concentrated on the government. there is no barrier to entry. >> last question is how big will it be two years from now? >> that is a very difficult question. i mentioned about 8%. we really do appreciate you being here. >> i am just dieing to make a joke. >> so am i. >> we have a ways to go. >> we has got a duel to fight. let him go. coming up next the makers of

madden 2010 and more were on the boat today. esesesesesesesesesess

welcome back to fast money. time now for options action. >> the 2011, they are not looking in the near term. there was a lot of activity in the near term. 20 strike. one institutional buyer. paying 70 cents. looking fg something to happen. the stock drifted under $9 today but finished closer to 10. >> we have a message in for you. what happens to the option? >> that is the best example i

can give you. >> it goes right along for the stock? >> right. >> time now for today's edition of pops and drops. kick it off with a pop for google. >> i feel like that was just to make me look good. >> take all the credit. >> our good friend amazon is rumored to be in there. >> we did call those companies. no comment from them. >> now likes the stock, some news that we might be interested. >> pop and moot? >> corporate spenting supposedly coming back.

and richard heene was sentenced. he and his wife are prohibited from earning any money on the balloon event for four years. >> who will watch the kids when they are in jail? >> that is another reality show. >> that was a nice call. a google call. >> my mom is behind this whole show, producing the whole show tonight. i would rather be in google. nice for yahoo. >> and a drop for 3% lower. >> this is one of the many regional banks. they all suffer here. >> health care -- >> and big short interest. if you want to be in the space,

uhs. >> chips went strong. earnings per share revenues,ering is strong. >> and we have a pop for santa elephants. n not. they went to work this week. bringing presents to school children. >> until they step on some kids head. >> or poop. >> that is a whole other kind of cable show. stay tuned. more is next.

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. welcome back to "fast money". we are live at the nasdaq market site. we got another fast message. we want to answer them all. karen, this one is for you.

>> i don't think this is a story that is based off of this quarter's earningsment one of their new products is foing be the google phone. i think that will be the driver for growth. it wouldn't play it just for this quarter. >> and the droid phone. the mote rolla. he swears by this thing and says it is fantastic. this is interesting. you got look at the droid. >> don't throw that one. >> this might be my next phone. who knows. gidy up.

>> mr. fine befrg, your role here is to rain in corporate pay. seems like a whole lot of money. >> that is if you assume he will receive $9.2 million. understand the breakdown of this compensation. he is receiving as a new hire, $950,000. that's a lot of money. but $950,000 is not $9.5 million. now, if over a period of four years this new ceo manages to improve the fortunes of the company, he does receive over $5 million in stock which cannot be sold or redeemed until at least four years.

and the rest of that compensation first requires that he -- that the company repay the tax credit all that has been borrowed. >> let me ask you this. let me ask you this. that's fine. let me ask you this, what's the metric you are using? >> that will depend on the value of the stock? >> there are ways to make the stock go higher without the company improving. >> you can't. the whole point is we are trying to tie individual compensation to the overhaul fortunes of the company as reflected in the value of that stock. >> let's go aig. how about the refusal of executives to repay some of the bonuses.

we are now in the middle of negotiating with aig and discussing with aig how we will deal with the whole subject of salaries, compensation and bonuses in 2010. at the time they repay their top obligation they are supposed to adhere to whatever restrictions have been imposed for that year in the past. for the remainder of 2009. my compensation restrictions in 2010, they will be free to do whatever they please.

>> thank you so much for joining us. we do appreciate your time. that was the pay czar who oversees compensation for the companies that receive extraordinary help from the government. you make a good point as well. when you pay it off, you are fr free. >> merry christmas, everyone. >> go large. >> thank you so much for watching. we will see you tomorrow at

12:30. i am off until 2010. you will be in good hands. merry christmas and happy new year. don't fret. there is still time to get those holiday trades in. and fast money is here. don't miss a special halftime report tomorrow. december to remember sales event. now through january 4th. ♪ special lease offers now available on the 2010 rx 350. ♪ yeah. would you like a pony ?