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tv   Fast Money  CNBC  June 25, 2012 5:00pm-6:00pm EDT

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have a fantastic evening, everybody. i will see you july 4. a lot of vacation days and we will be coming to you live from aspen from the aspen ideas festival. have a great night. good night. summer sell-off back on. >> there it is. one green stock out of the dow and it is walmart. >> and a euro solution still seems a far way off. >> the finance minister was unable to accept the position because he underestimated his health issue. they are looking for yet a new finance minister in greece. >> maybe it is time to stop blaming everyone else and look at ourselves. >> there is lots going on with the job claims and the growing evidence that some of the u.s. has something to do with it. that concerns me. >> all we know is that the last
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thing investors want to do here is dive in. but this is not just a trainer, but a fearless triathlete and he will trade anything you put in front of him. fresh from the floor this is "fast money." live from the nasdaq market site, i'm melissa lee. let's get straight to the market sell-off. brian kelly what did you make of the action? >> i think it was just a huge, huge sentiment shift over the weekend. it really happened friday afternoon. every strategist and his brother and sister was out there talking about the european union. that started to permeate its way through the market. it looked terrible out there. it just got worse. the data has not changed that much. when you get these, it can be very tough in this market. this is an expert's market and not a market to be overly long
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or short. >> good news is, i think, the market's become tsh sentiment has changed quickly now. people are overwhelmingly bearish once again. if we can hold 12.92, which is a ways away, we are in for another one of these bounces that catches everybody off guard. the s&p has traded text book in terms of technical levels. the next is 1292 on the downside. if we can close them up 12.24, that puts us up towards the upside. >> you are talking about the sentiment and it is best measured by the volatility index. we finished up about 12% on the day. we have closed above twice. now, today, we are still well below the holding average. so what does that mean? it tells me right now that the s&p 500 wants to stay in the same kind of arrangement it has been in.
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call it 1300. up to 1350. so you have got this range that you can play with right now. i think it's a great opportunity. i was outsearching today. i did not see the option paper that i wanted to see to get me interested in some of the names today but j.p. morgan did stick out. as much as it was getting beaten, it kept going higher and higher, finishing up well above the $35 level again. that will leave the financials. >> 1.9% is terrible, but if you take a look at declines down almost 5%, j.p. morgan was really an out performer within its peer group. does that make you feel better about your holdings? >> it does. i thought it hung in there pretty well, especially considering if there is a renewed bank crisis or a next chapter. then clearly all of the banks are here. i thought it hung in there pretty well.
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both are so spring loaded, by the way. >> does that mean you didn't make a trade today? >> i made a couple of trades. last week i bought on the big dip. it was the wrong thing to do. just flat the market. i still have my positions. and i have really little to no marketplace at this point and i am waiting to see what is going to happen. it seems like every weekend we have these events where the market will be up one or two percent on monday. >> the one financial that stuck out to me. the weakness was note worthy. not only because it was down almost 5%. you would have hoped if you wanted an opportunity, you saw a multiple of the typical trading volume. we didn't see that today. it leads me to believe maybe
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there is another push down towards 4.5. >> i think there is great opportunities out there. i think this continues to be a trader's market and the opportunities continue to present themselves each and every day. i continue to look at this marketplace and i think there has been unbelievable -- when you get the down shots, you have got to jump into some of the names when it couldn't feel so good. i look at a lot of hedge funds that are really struggling and i think a lot of them are the reason. i think it's a lot of hedge funds that i missed it, they chase it up. and i think that's part of it and that's why you have got to try to play them. >> give me the one value stock that you got in today? >> i found no value stocks. we're going to touch on one in a few minutes. i did get an etf. >> the one i didn't get was macy's. it ended the day up pennies.
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right around here, i'm happy to own it. >> can we talk about the unusual activity in walmart. it finished higher by one and a third percent. >> i think walmart is a cool trade. i am on -- we have liked it for a while and it has been the right trade but here we are pushing against levels that we last saw in december 1999 or january 2000. if you're in the bearish camp, i think there is a great opportunity to short this stock. what's tight? 69.5 to 70 on the upside. or you can decide to buy the breakout. to sell this with a very high risk reward. the people looked to buy the break. but i think it comes down very clear given the levels we're at today. >> it might be at a 12 year high but they probably earned triple what they earned years ago. the multiple is very, very
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different now. >> let's not forget the discounters. it's not just walmart. take a look at some of the dollar stores. they continue to out perform. look at dollar tree. take a look at target. you are getting some of the folks that are maybe pushing down at different levels to push into these stocks. >> were you trading these market. >> i can make a bullish case for this. people have not been comfortable buying german bonds, there is a ton of money being pumped into the system. i can make a pretty good case in my mind for big cap u.s. something like mcdonald's. everything got pulled down in
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the draft. >> all right. you know, we talk about the volatility in the marks we always talk about a trader's market. and actually the stats back that up. you take a look at some of these stats. the average holding time for the s&p 500, five days. apple, 48 days. stocks in general, 3.2 months. how do you compete with that? you're not in and out of there. >> you're not. i would say the numbers could be skied a bit just from my perspective. you have a portfolio. you have a day like today and you want to sell it short to hedge your portfolio. that holding period, i think that has to do with a function, the hedge fund space is every month, you manage a month. they say what did you make this month. you start to see those swings around and after three months even if you are a buy and hold
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mutual fund, people will be upset. >> i presume this excludes retiring activity but this is probably longer than your typical holding periods. >> i look at the spider. it's funny you bring that up. one of them was the spider itself. pulling all the way back towards 20. suddenly the sentiment started to shift in the middle of the day. it still did give me an opportunity to get into some of the weekly options. i think that the way they have been trading recently, i think now if we get over 13.15 tomorrow, the weeklies absolutely explode. >> what are some of the top traders doing? let's bring in the editor of the gartman letter. that was great to speak with you. >> speaking right in the midst of a terrible thunderstorm. >> speaking of thunderstorms,
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certainly the wild weather has been a boone for people who are long grain, long beans, long corn what are you doing here? >> it is june. it's late in the year. the corn crop is earlier than normal. if we have this kind of heat and a little bit of a drought, we wouldn't be too concerned about it because the period of time when corn tassles and begins to set itself for the year would be sometime in the middle of july. this year the crop is about three weeks early. we thought the crop was going to be in great shape. kansas 114 degrees. other areas around the state well over 100 and drought conditions. so what looked like a huge corn crop two weeks ago is suddenly diminishing. corn will probably trade higher again tomorrow. you have to be careful. weather markets can turn on a dime. the first time you get rain in chicago, everybody on the floor of the board thinks its raining all over the world and you could
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take corn down a great deal. but the market is having to deal with the fact that this crop has gone from being a great-looking crop to one that is under some duress and prices rose sharply today. >> let me ask you, if we don't see rain by when? when would that give you some sense that the gains could actually hold. >> if we don't get rain probably by july 4 of consequence, the corn crop will be diminished dramatically. the soybean crop can go another two or three weeks longer. you can get rain in middle july and the bean crop could be in good shape. if you don't get a good rain, a soaker by the -- by july 4 through 6, the corn crop is going be what we thought would be 14.7 billion bushels becomes much less. >> put your economist hat on real quick and understand that oil has been getting beat up.
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did the grainmarkets, are they trying to tell us something about the potential for inflation or is it an anom lee based on weather? >> i think it's a one-off. i don't think that the grain market is inflationary. i think it is a weather concern solely. it could be diminished swiftly but it does cause problems for the cattle producers who thought they had a comfortable supply of grain ahead of them and may not have it at all. i don't think that you can construe inflationary pressures predicated solely on the grain market. it does not help but i think it's one-off. >> let me ask you about gold. you have been whip sawed in gold. what do you do now? >> i still own some. i still think you need to own some. it would be illlogical not to own some. but quite honestly, without qe3
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having been preordained, that took a lot of the sporty sponsorship away from the market. it is holding reasonably well. the dollar is so strong. gold seems to want to trade somewhere between 15.30 on the downside and 16.30 on the upside and we're in no man's land between there. >> always great to speak with you. let's key off for the conversation we had with dennis. all of the fertilizer stocks are raised today. the analyst behind the column joins us on the fast line. great to speak with you. you outline a situation where it's win win win whether the crop is big, whether the crop is small. a lot of people are skeptical of
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any situation where it's win win all around. >> what you have got is a situation where they have discounted in the large crop that was already there. that seemed to be testing the thesis of the really big crop. and from that point forward the bad news gets discounted in more and more. so there was limited downside and basically from that point it's flat or slightly up. and a better situation where we are beginning to develop here with the crop coming under some pressure because of weather. it's going to potentially drive corn prices up. where do the shares go in a rising corn market? up. those scenarios lead to upward movement. some of the movement is bigger than others but it's upward movement with a small chance of it going much downward. that would only be in a case if
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this crop fully recovers as we move day to day with no rain. the current forecast is not for much rain over the next few days at least. >> let me ask you something. i read your piece and you say a little ways down the road some additional capacity for various companies for potential competition coming on the market. how far in advance of the new production coming online? >> you probably see -- have already begun to see some of it in the marketplace already. the night generalnitrogen stuff disconnection between supply and demand. in the near term it's really going to be much more focused on corn. long term the supply demand will have an impact on this thing and over time trend down but in
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between there will be plenty of volatility. . >> just a bottom line in here, charles had the biggest rating upgrade. he says to buy these stocks ahead of the next crop report which is july 11. scott what do you see in the options pit around the first? >> we certainly see people trying to get long to define their risk for the very reasons that dennis laid out. on weather that can turn around so quickly. traders know you can get your head handed to you for the wrong direction. we saw some people wanting to get bullish but define their rates. >> you can play these via mo nsa nto as well. >> we're going to take a break here. we are giving you a winning strategy for the second half of the year. we are kicking it off and making a call on whether housing is back on solid ground.
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and you might as well call him the negotiator. to find out what's behind this curtain you will have to stay tuned. much more coming straight ahead. stay tuned. >> want to beat the street? then you better tweet the street. now one of the most followed sights in business news. and when you tweet us back, we put you on tv. follow the fast money. choose control.
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>> >> we were talking about the slb earlier. that is exactly where we were talking about on friday. it popped off of there on friday. we saw a lot of activity concentrated on the weekly options and july options. extremely active out there. a lot of buyers expecking to see more over the next week. >> new home sales rising the most since april 2010. beating expectations even as the job market cools and the access to credit remains limited.
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is the housing market showing signs of real improvement for the second time of the year? joining us now is president of roseta funding. >> i think it has bottomed. i said when were the two last logical housing periods that made sense. during my career, 1985 i recall being normal. if you take it right through the index, we are now at a logical point. i will kidty will come into the market and we will end up in the same place. i believe it's definitely bottomed in your major markets. it's a regional story. some of the states will be very
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long to come by. i think the best news today is that home building, new home construction coming back if you really understand the head winds they are up against where you had over half of the new homes in america were being bought by sub prime borrowers. that's six, seven million new homes are on the market. i'm on the board of the jersey home builders. i think you will see nothing but good news in the major markets. >> whant the access to credit. everybody says you can't get a mortgage at this point. from where you're sitting, what do you see. is it that tough to get a mortgage? >> it is tough but back in the 1980s, you had to put up 10%, it
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was non-negotiationable. people who can't afford a price point they are going for have got to become more logical. if you can't afford to put down 10% you should consider continuing renting or changing your price point. you go to your local bank and your bank will make that loan and hold it. get the government out of the housing market. let the local banks do what they were supposed to do in the first place. let us deposit our money and lend it to the community. >> you talked about being on the bottom. but could we dredge along the bottom for an extended period of time? >> unfortunately, we have a problem in the market and late vintage new homes. you got understand when a home buyer, you go back to 2004 five and six. a homeowner had every interest
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no n making sure the loan kuz cut. they had a great local broker. i was telling the producer is the problem is there are no more donuts involved in sales. if you go to an open house there were pastries, donuts, flowers. today short sales, foreclosures, the homeowner does not have a vested interest and the national servicers can't even pick a broker within five miles of the house. >> there is a lot of money going into buying foreclosed homes on the notion they will refurbish those homes. will we say that was one of the best trades in real estate of the past decade or is it too early? >> it's too granual of a
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business. every house needs something different. one big problem is unlike everything else we talk about on this show, while everybody thinks it's a commodity, it's not. you will see that the local builders that are doing this, that are touching the real estate themselves, picking the doorknobs, deciding the kitchen and getting the best local broker and staging the home sale, they are doing great. the national servicers are going dump all of this stuff on to the funds. anything is better than leaving it to the national servicers. if those funds are smart they will understand that they can't do new jersey or new york or pennsylvania housing from california. even if they will do it in a big way, if you're in california, stay in california. maybe the western states but it's not a national business. if goldman sachs gets ahold of
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something, they freeze the market. >> you are an investor and you have $500,000 to put towards something, would you buy an apartment to rent? what is going to be the greatest upside from here. >> in your neighborhood, go buy two or three houses, whatever you can afford with that money. there is leverage available. if you have $500,000, go borrow another five. hold them for seven years and you will be a happy perp. >> just hold them? >> rent them. fix them up but not crazy because you will have to fix them up again when you put them on the market. >> it might be time to rethink your debt position of safe haven. why they are sounding the alarm on gold and treasuries. stay tuned.
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pointthis >> at this point a lot of people believed that something would happen. and yet nothing yet? >> i thought that seems to be the only thing. i mean, if you can gret into it and there is some value to this company, they have not executed well. but there is some value there. the messaging is very important. it's just a question of getting something in there. if you can split it up and you can get each piece doing well, that is probably the trade. >> i thought it was in tact with 13.5, $14. clearly wrong in terms of stock price. i have been wrong. that's all that matters. what do you do today. it did trade almost 40 million shares today. there is a story the fundamentals are not telling.
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i think sit worth a lot more than nine. it's been impossible to trade. >> we're taking -- >> i think it's worth it. the guy at morgan stanley changed it from eco to under. i don't know how much validity this has. >> i like when people say something is an option at this point. what is it? what are the options? >> i will tell you. my take on this whole thing, it immediately brings me over and i look at which one do i like better at this absolutely plastered 70% over the last two years. both of the stocks are down 60 to 70%. >> hold on. i like that.
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if you look at the mobility, they are valuing these patents. you have a stock that could easily double. i don't see the results in research in motion. i am kicked away from research in motion. plus it's a $9 option. >> exactly. >> they do have quite a bit of cash. >> i think there is room for 18 months. how can you not do more today, downgrading it after it's off the last 52 weeks. too late. don't downgrade it now. >> a lot of people would second that emotion. with uncertainty still lingerin
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lingering. >> good to see you. >> thank you. >> you are right now, under weight in a lot of the safe havens that a lot are fleeing to. the dollar, gold, and more. you are underweight all of those. are we in danger of this confidence steadily rising. >> in the last two recoveries at this time. >> i think that's going be our biggest theme is slowly steady rise in confidence. it comes at a time when everyone
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is used to it. >> jim, we seem to be coming at this at a time when prepares to br going into something worse than we expected. how do you reconcile that? >> i think that one thing i notice about europe is that to me, it's no long aerocrisis status. it's all about surprise. i think it's more of a chronic problem. europe looks a lot like japan of the 90s. that thing collapsed last year during the wave of investor fears about europe. and then it recovered through march of this year. we have had this reintensification about europe. you are comparing europe to
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japan. one government made one decision where sit a political decision. so y hands around the political uncertainty? >> well, but multiple governments never made a good decision to get themselves out of it. it was the second largest economy of the world that went into depression in 1990. we have so many more countries that are contributing to economic growth today than we ever had in 1990. i think losing the eurozone. i think the rest of the world can go on without them. >> you don't like the typical safe haichs.
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can we then connect the dots and assume that funds are primarily and you don't have allocations to the cash or the bonds that you don't like. as far as the asset that i'm involved with, we would lean towards more central callty. we lean towards more of the emerging markets. dupt mean that we don't have allocations. -- utilities, health care. i think it's a good time to lighten up on those and look at the things that have been beat up in here. we have our spring swoon and late year recovery, we know what happens next and they are going
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dump safe havens. i think the values are an excellent entry point. >> good to speak with you. jim pahlsson of wells capital. the next comment i think he would have made is he believes the s&p 500 will be lifted towards 1500 when we do have the lift are you betting on that? are you seeing bets made on that? >> right now in the option pits, everything is short term. they are looking at weekly and monthly options going out to july and maybe stretching all the way to august. we are not seeing people put those bets on towards the end of the year. not yet. it has been a trading environment not investing. >> coming up, the supreme court decision not expected until later this week but we tell you how to play it today. we will break down exactly what you need to watch for. your cash? here's one you may not have thought of -- fidelity.
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>> welcome back to "fast money." i want to bring you some he headlines about a moody's downgrade. what usually happens is that the
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bank downgrades follow afterwards. this partly reflects the expectation that commercial real estate would actually worsen. they didn't take enough write downs along the way. they are not reflected on the balance sheets. >> this was chattered about all day long. it was somewhat anticipated because of this. the one comment i would make is that the downgrades in moody's and s&p matter less now because europe has said they are going to rate the bonds themselves. there is less need now. >> they are going to rate the bonds they take in as collateral. something smells funny about that. >> maybe they are magic beans. >> maybe. >> when they rate the bonds themselves, a downgrade wouldn't trigger additional collateral? >> no, it probably wouldn't. downgrade would not trigger it most likely.
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>> does see a 76% chance that the individual mandate would be ruled unconstitutional. how are options traders positioning themselves ahead of this ruling? scott what have you been noticing. >> the biggest trade we saw was a big call purchase. we saw someone buy 2,000 contracts. that means break even will be about 5% above where the stock was and the interesting thing is we also saw some put selling in merk. they are a little bit longer term bullish positions and this is obviously somebody trying to get a bullish position on top of what is likely to be thursday's announcement from the supreme court. >> merck and other big far ma
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names are seen as having a modest impact from the heltd care decision either way. have you noticed any other sort of trades that indicate how people are betting? >> people have sort of stepped back. o the point that he was talking about, we have seen some big pharma names. all directly related to the news that is coming out to them. recently. >> with the supreme court decision on president obama's health care plan expected by thursday, which companies have the most to gain and which have the most to lose if it gets approved? joining us now, portfolio manager from the worldwide health sciences fund. it's always a pleasure to speak with you. great to have you on the program. >> thank you, thank you. >> ahead of thursday, a lot of people are probably asking out there, is there one trade that
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you must put on if you expect that it would be struck down? >> i like to comment that people are pulling back right now. i think what we will see is a relief rally plus or minus on the decision. i think individual mandate is struck down. i think it goes up if it's maintained. i think people just want to get this out of the way. now, when you look at sub sectors within health care, look at sub sectors, it is true, the hmos and hospitals and medical device companies are most exposed. big pharma less so. we think the outlook is at least satisfactory. we think the mandates could go either way. i am not a constitutional scholar. i can tell you if it's knocked down, then, you know, the hospital companies and insurance companies will go up. >> having decades of experience
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in this space, in terms of positioning your own portfolio, even if you are not a constitutional scholar, what is your best case scenario here and what are the trades you made because of that. >> worldwide health sciences. indeed we are. we are 67% in the united states right now but we are 33% outside of the united states including about 5 points in emerging markets. we are not pumping geography to get away from it all but we are spread around the entire world. with suspected individual trades, i got to tell you we are long on the hmos. we like the discovery biotech. there are stocks that have done well and will continue to do well. so, we're optimistic in general that things are going to go our way no matter what. >> in terms of insurance companies, help us understand a little bit. i am thinking that if you
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require more people to have insurance, that could be good because more people will buy insurance. insurance companies could be forced to take on people that they may have previously rejected. >> that's right. that means everybody has to buy health insurance or pay a penalty. the people who are not. they are young and working. so they do so to the benefit of those who are poor and less happy. there is a transfer of economics here. while it sounds nice to take care of the poor and to take care of the unhealthy, what it does is do so on the backs of the people this is a fairly ugly transfer of wealth with respect to growth in this economy. we shall see what happens. but the law is a difficult choice. >> always great to speak with
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you. thanks for your time. bigger issue here than just the trade of the insurance. making the economy grow. >> clearly these are all bets at this point. i think hma which is down two and a half%. >> if it gets -- >> especially if you get this relief rally that he is talking about. you risk six to look for eight. >> we are helping you stay on tap of all developments with a winning currency strategy. stay tuned right after this.
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wait! [ garth ] great businesses deserve the most rewards! [ male announcer ] the spark business card from capital one. choose unlimited rewards with double miles or 2% cash back on every purchase, every day! what's in your wallet? [ cheers and applause ] >> spain shaping the markets once fwen today. formerly asking for a bailout. and we got news that moody's downgraded 28 spanish banks. >> it has been in a range from
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124.50 to 127.50, and as you said it is obviously trading towards the bottom of that range. i don't want to be long euro thursday and friday. so i'm looking for a range rate to the downside. i put a target down at 120, the figure. >> all right. we're going to leave it there. we will see you friday. and friday is money in motion. that's at 5 welcome 30 p.m. eastern time. >> the time is finally upon us. jim traveled far and wide to find our trade of the day. we will tell you what it is right after this. ♪
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>> sit >> sit time. time to reveal what is pe hind that red curtain. >> my trade of the day is to sell priceline. the market put in a big price premium based on emerging market growth. we have recalibrated what we
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think of emerging marks. it's been trading softly. i don't think it could go forever. i'm short it and i think 600 is my next target. >> i don't like that graphic this is the first time we have had a trade of the day that is shorting a stock. we had to put an x through it. but that is confusing. >> it was a dramatic looking x. >> it's like the family feud x. >> anyway, you want to move on to. the times highlighting guys impressive drive to complete the iron man u.s. championship in august. how is the training? >> remember, dave scott was here.
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40 pounds ligtder and i'm not nearly as thick. if i can get out of the water in august 151, which scares me. >> you are the only one who looks lost. i think there is a shot of me finishing. thanks to the "new york times." thanks to everybody that has donated. we will see what happens. >> august 11, for all of you who want to make a big sign, we will be looking for you. [ male announcer ] this... is the at&t network. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions,
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to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ to help business do more for customers. recently, students from 31 countries took part in a science test. the top academic performers surprised some people. so did the country that came in 17th place. let's raise the bar and elevate our academic standards.
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let's do what's best for our students-by investing in our teachers. let's solve this.
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>> >> biotrade? >> the news can't get any worse so i like selling put spreads. >> sell priceline. >> commodities. >> new addition, carrie does a great job for us. >> congratulations. >> and your trade? >> mozel tov. >> macy's. >> i think mosaic had the most upside. >> thanks for

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