this game. >> he tweets fair tax, a national sale tax eliminate income taxes. continue to send you this comments. >> thanks for watching. fast money is up next. >> it's not a stock market. it's a market of stocks and we will try to hit them all from falling knives. >> that's just yesterday's fish rap. >> yesterday's move. >> no fish wrap. >> $5 billion. >> cutting the fat. >> arena pharmaceuticals just got approved by the fda. shares are currently halted. >> the reality is there will be a flood of imemployees selling their shares. just as a technical matter, it will bring down the price. >> if they do axccelerate revenue, the stock goes up.

the big surprise is the nexus queue. >> if you are not trading this market, you are missing out. >> i'm melissa lee. two days of gains as quarter end approaches. >> it was a great day. we built on yesterday obviously. we had a real opportunity to go lower today. it obviously didn't. in order to take out this down trend we have been in since the april highs, we need to close above -- let's call it 13.65. as long as we stay above 13.25 for the time being, you can stay long in this market. you know i am not optimistic.

i still think the worst is yet to come. the markets would probably work higher until the end of this week. >> here we are in the month of june. we have had a handful of events. we had the greek elections and what has happened. here we are. we are holding on to the gains. now we are the eu summit. this could be a pretty dangerous set up. i think you will want to be cautious as we head into whatever comes out. >> we have the eu summit. we have the decision on health care tomorrow. this will be a head wind to a lot of stocks. costs will go higher. he said home depot. it will probably trade lower if we do see the decision held up. >> one of the reasons that stocks -- the only stock that was up monday is the largest employer and that was walmart. that was, i believe, the

decision that is going to be coming our way tomorrow. we can cover it in whatever point of the show you want some of them have had big runs. >> do you see the decisions being a potential long term impact on stocks in general? >> i don't know. i do think actually in the short term the uncertainty is weighing on them. once the uncertainty is removed, they will trade a little bit higher. i don't have any skin in the game right now. >> right. you're making a point that a lot of the mow mow names it feels like a rotation at this point. why? >> we saw the air come out of

the -- right now on day like today it looked like a broad rally. when you look at the names that have acted well because of the domestic exposure. rr as did dollar tree and as did family dollar. i'm not sounding the alarms here on these names. they have been outstanding stocks to own but it's worth pointing out that all of the stocks are down 2, 2.5%. >> how are you feeling about this market? >> i'm not feeling great about it. i missed the last couple of days. aagree with dan.

>> another solution that won't work. just on health care. i don't think it's over tomorrow. >> you will then hear about if romney gets elected. he will do away with anything regardless of what the supreme court does. >> all right. that's good to keep in mind. a sector that did really well today, housing stocks moving higher over the past two sessions. names like mi homes, lennar. is there finally a reason to believe in the housing recovery story. >> yep. up nearly 100% this year. ryland is up. the stocks have had some of the

options have doubled just in the last two or three sessions. the very short dated options that have done that. going forward we will have very low rates. i believe there is a real reason to be focused on the stocks going forward. >> mike, i am wondering what thoughts on it are. . >> concern for lending practices.

>> a wells fargo or bank of america. they can't get the loan. that is going result in cancellation. loan rates will not help in that since tans. >> i don't think the housing market has womaned. regardless of what you think about the housing market, home depot, that stock will continue to win because i think the world is set up for them to win. i heard what jim said before. you might see a day or two of weakness this. i think in terms of valuation and balance sheet in terms of their mansionment, i think everything still sets up for hp.

>> to me that seems like a fairly ridiculous bet. >> let's join our fast line. david made the point to us yesterday that the numbers were good but you can't draw a line through one data point and get a trend. what's the one major head wind that you see facing the industry at this point? >> i think one -- one impediment could be the labor market. the relationship. housing does better. it spins off job creation.

i think the biggest impediment will be what happens on the job market side. >> many in prior housing downturns do you see before the actual data of recovery, do you see the stocks recovering. right now in terms of employment and inability to get credit that kind of thing. >> this is similar to what you would see in the retailing

stocks, for example. the retailing stocks will lead the consumer spending numbers. to say to home builders it is a very small component when you consider how it captures our imagination, it is a very tiny group but it has considerable option alty. a wonderful way. because these things can move so wildly. but i think it is -- at this stage it's going to be an overhang for consumer spending is the biggest ticket as far as consumer spending is concerned. i expect that the inventories will be coming into the marketplace. i think the people extrapolating two or three months, most of the

housing price indicators have risen the past two or three months but they might be surprised that they stall out of if the inventories hit the supplies. >> about 80 or so s&p points. what does that mean in terms of the u.s. equity market? >> i think the, you know, there is really two things. there is the multiple. i think that between concerns over the election and the fiscal cliff and by october we will talk about the debt ceiling again and the european situation is probably not going to get resolved any time soon. that really constrains what the market can do. what about corporate earnings? you know in the past three months we have seen the analysts take their number from plus two to minus 1.2. you can see that the upgrade to downgrade ratio is deteriorating very sharply. corporate guidance is as well. i think that, you know, what you guys do which is long short and

focus on hedge funds which is what we're doing, that's probably the way to go. i think the operative word is going to be volatility. i think let's respect the ranges. i think that fair trades are a relative value trades in this environment and totally appropriate. >> we had a downgrade of a high end retail space which took the names down very sharply. >> those projects do seem to be enormous. >> i don't know. i think if we just have a lack of volatility, that will restore some confidence. >> i think some of these stocks

that you mentioned, dan, the consumer stocks that people have shunned over the last little bid, those are the ones that you want to focus on. that's one that i will be looking to pick up tomorrow or friday into the beginning of the third quarter. >> brice? >> go back to the home builders. it's a question of the inventory. the best thing is that the banks are disciplined. they are bleeding inventory out. they have written it down. unless you have income picking up and jobs picking up, the housing recovery will be very, very slow growth. i think you are fully discounting the stocks. >> this is something new. pops and drops. today's market movers that you might have. it's happening right now. >> the most important thing is

that their pension costs have increased. we're going to see that with a bond market where it is and not moving up any higher. >> you know this thing was down more than 3%. i don't think that the analyst community got what they wanted to hear there was more questions than answers that came out of it in a lot of ways, dealer destocking is not the thing that speaks to strong demand. with a high valuation name, investors move to the side. >> i actually think it is looking at where it happened

now. it's 13, 14 times. this stock does not normally trade at that kind of multiple. it's starting to get attractive. i think we're anticipating a decision. this stock also seeing housing reaffirm their ratings on the stock. we have a stock. >> the move 10%. >> this stock showed up on the radar about a week ago or so for unusual option activity.

>> cheese top burger. >> in the philippines. >> that's it in the philippines. i don't eat those things any more. the top biotech buy is on the street and thinks there is another event. stick around to find out what it is as we don't give you your second half play book. one of the traders has dialed up a winning trade of the day. you want to stay tuned.

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>> because of >> because of the explosion in obesity and subsequent diabetes and all the rest. >> we mentioned it what? three weeks ago? when the stock was right around 6 months. blasted this week up to 12. so that was a 100% return. >> shared have opened better than 4%. >> nice trade. shares up as we said. a person has been prescribing this stock. >> you write that? what to you do now?

>> i think you take the money off the table. i think if that was your reason to be in the stock, you take the money off the table. will there be consolidation in the switch? >> as far as for this event you take the money off the table, the money has been born. >> do you think that people will pop pills. >> i get it. >> i think weight watchers.

if it halts 49, risk reward sets up well solely based on this. >> next right here, investors are bracing themselves for tomorrow's ruling on sweeping health care reform. it's already more than double the s&p to date performance. no better person to ask. who has been ranked the top biotech analyst. wow. what a streak. good for you. in terms of the biotech and far ma sector. >> it's probably not as drazmatic.

>> so basically if the whole bill is struck down, which is not my base case assumption. if the whole bill is struck down, technically earnings and revenue estimates are going to go up. and by our estimate it's something between 1 and 10%. it would be a material move. that could move the stocks up. my guess is it's short lived. a lot of things that ding far ma that cost them had broad bipartisan support and are probably coming back. >> what is the base case scenario and your forecasted move for the stocks. >> the require thamt people buy insurance will probably not have a material impact. >> i'm hoping. >> let's move on to some of the

big catalysts in your space. and you're pointing to data points along the way. >> exactly. so there is a lot going on. but if i have to pick one event that is coming right now, it's this summer, probably the biggest in the whole group. alzheimer's drugs made by eli lily. alzheimers is a horrible disease. thereins are approved for it. they don't work very well. if they work, a stock as big, i think could move up as much as 10%. if the lily drug works it could be up as much as 50%. it's a high bar. they may not work but that's what creates a good risk reward in the stocks. >> let's talk about one of your names in the biotech.

then they came and authorized a stock buy back. i think it's too much in terms of the sell off. what are you thinking here? >> aagree with you. they got their drug rejected in europe. what is the stock worth if that drug never comes to europe. i think ultimately they are going to get that drug approved. they are not paying for that. the risk reward is very favorable. >> do you see that continuing or have prices moved up too far? >> i think that will continue. i think the sweet spot is in small names right now. wherever you have unpartnered late stage largely derisked drugs, i think you will continue to see that. when i talked about what their strategy is, there is enormous interest. i think you will probably see

that continue. as you pointed out at the beginning, it would not surprise me if some of the companies slow down a little bit. i think in general that theme will continue. >> we showed a full screen of your top picks. >> i like cheap stocks with low expectations and merck is that stock. it has a good management team. they have several pipeline events coming out in the next three events. the investor community is very bearish. one is a good cholesterol drug. i think all of those have a fair chance at working. so i like the risk reward. you get a 5% dividend it has

been lagging in far ma this year. i'm hoping that if you like that idea, you might want to take a look at it now. >> great to have you with us. karen, you lightened up on some of your positions? >> i did because they have run up so far. there is uncertainty around the bill. i don't know if that matters or not. when they run so far i feel like you have got take a little bit off the table. >> they have been buying upside calls. not huge yet. and then, let me see. lily, they have been buying them out in january. upside call bets. >> did we witness today the unveiling of a kindle killer? we have got all the latest details right after this. ♪

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>> mike, >> mike, what were you seeing today? >> the options traders looked pretty worried today.

in fact, traded about 50% of all the puts traded today which is pretty extraordinary. near term bearish bets. in the last eight quarters, it's best was up maybe 8%. >> does the chart cause you -- >> we did. we mentioned that earlier in the show. you have to mention on a decent take the fact that those stocks, especially dollar general made a new all time high and rolled over. you have to ask yourself what happened today in these dollar stores. >> i mean, we bought macy's today.

macy's says most of their customers will be. >> i would like to throw in family dollar. we do have walmart and target. these are the smaller footprint stores that will compete with these guys. >> 5:00 show on twitter. >> next trade, google. will the an droid powered device be able to compete? will it be a kindle killer?

>> hey, you might to start playing a dirge for the old kindle fire. the back feels nice. it is put together. amazon is fwound update that. this is 199. if amazon was not making money at $199 how much can google make on this. . how competitive is that going to be. they actually put more meat on the bones there. $15

$1500. you know, it's cool. but is it mass market cool? how much risk is google taking on here. >> i think the question is amazon has an eco system. it will promote shopping and reading. >> ways to subsidize the fire. when you think about it, they are putting a piece of hardware out there competing with their main distribution channel. when they really expect an droid to be on all sam sung tablets. >> that made more sense to me than the google part. when you buy an ipad, some 80% of folks are buying some sort of peripheral for it like a cover.

it's not $1500 more when you compare it apples to apples. >> thanks so much for your reporting. >> we have found what may be the perfect investment for you. we will drill down on one sector that we have got our eye on. much more fast straight ahead.

>> welcome back to fast money. we are live in new york city's time square. fertilizer stocks have been on fire this week alone we got an upgrade of the stocks. positive comments yesterday. these stocks have been on a tear. you have held many of those. what have you done with them? >> we had to sell. the games are so volatile. the earnings, multiple is really not so expensive but the run has been so big.

>> i am not short rain, long rain but if i hang on to all of the stocks, i am essentially long trougt. and i don't have a strong drought history. >> limited partnerships have caught flak. are mlbs the perfect place to be? great to speak with you. >> nan gas prices can rise. it just transports. is that right? >> you basically, they are like toll roads. it doesn't matter if oil is at seven bucks we are still going to get it.

it does have an effect on the clients. created hundreds of billions of dollars of infrastructure opportunities. the same thing has happened. higher oil prices did stimulate demand. oil drilling and production. so that has been very, very positive for our mlps. really does not have a big impact. >> i do. >> so. >> kind of unusual with an at the low end but they got interest. >> so that was a closed in fund to invest mlp. about 8 or 9 of them. we have got one. they actually raised 700

million. what happened, i think six months ago, the investment banking community would not have raised that fun. a lot of people looking for yield found it attractive. that was dramatically over. >> gerry? >> the yields have backed off and people find it very attractive. >> real quick. it was a monster up until recently. the stock went from 32 down to 34. if you can speak to individual names, does that sell off an xsl opportunity for the folks watching at home. rsxl is being purchased. actually we bought some the other day because we thought it sold a lot more than it should. with think the deal will go

through. it is bound by the merger business. >> walk us through what your top pick is. >> what our thesis is that the huge change in shale gas technology has opened up tons of re-verns in the united states. . >> a real oil boom. we think about 2012, 2020, there is a decent chance that we will be self-sufficient in the u.s. oldest play in the united states is overflowing with oil now.

so all the pipeline companies are completely full. they are spending billions of dollars. this is giving them five, ten, 15 years of toll road business that is very predictable. companies will have this cash flow for the next ten 15 years. >> the suppliers to these companies that are the most active in building out infrastructure. >> basically the customers of most of them are the major. it's also shale. it's major companies for the

united states. >> in terms of suppliers of the actual equipment. >> there are not a lot of good pure plays in that business. one of them is french. >> a lot of the construction guys. there are not a lot of real good plays on it. >> what's your top pick? >> i bought it at 6.5% yield. i also like the new stock. the ceo or director now owns a ton of stock there and bought a

few month ace go at these levels. >> if you think the situation in europe is only getting worse you will want to stick around for a special trade school. we will tell you all about what you need to know. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. what happens when classroom teachers get the training... ...and support they need? schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our

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hasan >> dan has been looking at apple, flat over the past week or so. >> we talked about the new tablets. stocks are going sideways. that's really interesting to me. the stock is still down 11% from the all time highs. to me, i want to look out about a month or so. and that's when investors started to get ampd up about this thing. you look at the volume in august, it's trading at about 30. it's cheap. but here's the thing. options prem yums are going to get destroyed. one of the things that you can

do, we play next week. if you want to make a bet. >> anybody who wants to use the depression next week to hedge any position, not just apple. >> lower volatility, high volatility can often be a warning sign.

>> it is actually kind of a dumb trade here and the likelihood of you making money is not great but if you have the money sitting around and you want;há take a punch in the trading world. it is not a price. we know it's lights out for this company. they hired bankers because they did that last month.

they are anything. the stock can go above ten. what i did is i bought the june weekly ten calls for 15 cents. that is money i fully expected to go zero. >> you like that? >> sure. you can see a nice boost. why not take a shot. >> you think we're going to be saying that was not a dumb trade? >> when dan speaks, we should listen. >> i mean this seriously. this is money that you should be

prepared to light on fire. if you get this right, it is not a pound the table recommendation. >> can you explain why cat is down and the s&p 500 is up more than 12 points? it is a stock thatç seems to n be able to get out of its own way. >> on a great day, the lows we have seen for quite some time. it is a negative data. i believe that cat is trying to tell you something about the global growth story. >> we have your first trades tomorrow when we come back. stay tuned. [ mechanical humming ]

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i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more. come see why more investors are saying... i'm with scottrade. >> you're in for a checker trade on gas. buy it. >> a mortgage amtg. the yield is up. >> dan? >> steve? >> weight watchers. you can be long. >> karen? >> i actually like dan's smart trade which is to wait until next week to buy apple calls. >> thank you so much for watching. see you tomorrow.