i will see you tomorrow. hope you will follow me on twitter and google plus. "fast money" begins right now. >> markets on edge. >> old trader folklore says that often happens when the market is about to reverse. >> is there finally hope for face book? >> i'm a long term investor. i'm willing to make this my long term bet. >> or is everything going off this cliff? >> the cbo is projecting a grim year. >> tan has a lot of friends and bk loves the great outdoors. fresh on the trading floor, this is fast money. >> i'm melissa lee. stocks struggling to hold on to recent highs. help may be on the way. how did you interpret the

minutes? >> perhaps you could say there was a bit of a stronger signal. maybe it is. i am still of the opinion that qe 3 is not going to do anything. the economy is not weakening because rates all of the sudden spiked. the ten year rate is going down to 152 from where it is now. for me, that is where my bearishness comes from. if the market wants to hope that we go higher, let the market hope that. but i'm not in that camp. >> it did feel like it zipped up the back. >> i think they gave us a little bit more in the minutes. i think you have got almost the

reverse action which is when the market is a little disappointed and sold off. it does set the stage for a bigger disappointment at jackson hole and that is the concern for other people on the desk. i think people coming on the show later will give us the technical in a second. when i look at the numbers we have gotten in the home sector and housing sector, we will be getting better numbers. crazy if they're going to ease it here. expelling over to the baseball world. we are juiced up. we don't need it. it is people that don't get too concerned.

>> in a lot of ways, investors have already made their decision about jackson hole and they're going up. so it's hard to fight it right here. >> right. so if you look, i think to add on to what tim was saying. i think you will have a lot of people coming in saying maybe things are better than anticipated. i think that is what sets up for a late end of year rally. >> maybe it should be jackson hole drogy. maybe it should be september when we get the german decision. >> there are three pillars to the bull market which would be fed easing. something happening, good in europe and something happening about the fiscal cliff. if any one of those three become a roadblock gs then this will go lower. you have an awful lot. you have an awful lot of buynary

events that will come out that people will be worried about. city bank has a very controversial set up. it could be as soon as september. the market is not pricing that in. i think there is a lot of good news in the price here. it's just not the same scenario. it is a rally into this moment. back in 2010 we were in a different place. >> it could be as early as september. although he said january 1, 2013. that was his original forecast. >> it's still aggress if. >> it is. >> and it's still going to be havoc. >> but it speaks volumes that

this comes out and there is not a reaction in the market. >> what are the technicals telling us? let's bring in the head of technical and market. bank of america. marry ann, we are heading into labor day, into september. a lot of people get worried about the month of september. what should we expect? >> i'm agreeing with many of the members on the desk. i think this market is actually set up going to into september. it is traditionally the worst performing month. there is a number of times going back to 2008 when we have gotten below 20%. recently we were 13 on the vix and that was the lowest since 2007 and we have these arrows showing low points. we were there earlier this year when the market went down we

think we are set up nor an eight to ten percent correction in the month of september. >> if you are calling for an eight to 10% correction, why would you want to be in the bigger stocks which have led us higher. >> there is a stealth warning in stocks. relative to the s&p 500500. this is showing leadership. this is one of our year aheadpieces. we think over time the relative performance, the 450 are going roll over. so here what we have is the

russell 20,000. we think the stock market stays in a range. they represent growth, quality, yield, i didn't mention technicals. they have big bases and they are breaking out. in a lot of ways these guys are very exposed. they have tons of international exposure. to me it's kind of telling the story. i want to start getting under way those caps. what are the charts saying to you? >> many of these stocks are breaking out from five to ten to 12 year basis.

so we don't think this is crowded. we all think many fund managers. pharmaceuticals would be a great area to look. beverages would be a great area to look. >> the comment is this is not the s&p that we had in 2008. i don't know what the comparisons could be but let's talk about the vix and correlation there. it is a very scary set up and one we have seen before. >> i am with you on that. >> if you do a five day moving average. we do an index on our firm.

i do think you will get a year end rally. >> with the vix at these levels, the market can't rally. if we break above, maybe we can actually go high wer a vix trending lower and staying flat. >> great question. the s&p is struggling with earlier resistance. if you break out of 1422, you are headed up towards 1440. >> always good to see you. >> thanks for having me.

>> yeah but i think you probably want to do it on a buy back. if we do get this correction, then you want to look at the caps that point. >> apple has become 5% of the s&p almost. the top ten names make up about 20% of the waiting. if you listen to a smart analyst like maryan telling you that she thinks there is an eight to ten% pull back, those are the ones where everyone heads for the door at the same time. >> john has been tracking the conference call. ten minutes into the conference call. what's the latest there? >> they are doing what they said they were going to do. the trajectory has flattened.

i want to highlight a couple of things that she told me. pointed out specifically tough areas. and that the consumer got worse towards the end of the quarter. things like that did particularly well. laserjet did well. she said they are not ready to commit to that yet. so that was one of the more positive lines that i saw. they're not sure whether that margin will continue. >> i'm curious.

how do you interpret the full year guidance? when they did that by the same margin. seemed like a back door way to bring down the second half of the year guidance. >> i think that's a fair lead. i'm just looking at the gap numbers because the non-gap has got so much stuff from buy outs and layouts. when you look at those numbers they were towards the lower end in this quarter. i asked kathy about that. she said that has to do with tax and the impairment charge. look, the macro environment, there were other bright spots. the pc business is big and the printing business is so big. >> john, jump back on the call. you can see in the afterhours session, hp initially comped on the news. they basically met with

revenues. the full year guidance less than it had been expecked. it had been a very, very messy quarter. basically we are down. we are flat with the 3.7% decline from today. >> it's almost another quarter. a big mark down. this is an area where they are gearing up. this is a transformational company. when we invest in companies we probably define them three ways. one is a repeatable of trades and evaluations rates. then there are companies really on the move and probably in a two to three year process. so buying a stock here is not something i want to do. >> so if one were to buy a transformational stage? would it be hp or dell? >> both are show me stories. i don't see any reason to jump into either one of them now. i think the near term catalyst for dell would be if they get

taken private. >> show many state. >> show many state. >> what is the show me state? >> is it missouri? >> nice. >> wow. >> if it weren't for the mic, i could have claimed credit for it. some key metal prices are dropping hard and fast. where is he finding it? find out when fast returns. road trip buddy. let's put some music on.

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welcome back to fast money. take a look at shares of apple. the world's most valuable company getting a little more valuable today.

87 cents. reiterating their buy earlier. remember the deliberations are continuing over the trial. fighting over those patents. the street does not seem to be too worried about it. >> weekly call buying was immense. it is interesting that the stock opened up. >> take a little profit here. there you go. >> real quick, four straight down days this is for the stock that has been the ale of korea and this is why i'm concerned. this is 23% of the index.

>> crude up more than 5%. cnbc has been taking an in-depth look at oil throughout the day. do prices have more room to run? nice to see you in person. you say the previous high is possible? >> absolutely. especially if we see a lot of stimulus coming from the fed, the ecb. we're going to need all of that to get to 110 barring some situation in the middle east. >> when we had the notion that perhaps there would be an spr release, that really sent crude lower. in your view how much of that is going to be a factor? >> it's a tough call. the election is, you know, he can't be seen to be playing with oil to try to buy votes. at the same time, iran is not really being hurt by sanctions because the oil price keeps going up.

they are selling it at a higher price. . from the iea. >> when i look at oil and the price of oil everybody in the middle east needs to support the budget. >> what about a strategy of selling puts against oil or something like that on the idea that there is always a bid there someplace. >> that absolutely will work but you have to think about we were trading $77 not that long ago. that's a strategy that could absolutely work. the $90, the saukis will let it go. >> that's my point. i think they want to smoke out iraq and iran. they are in role. >> more than people think. that's why i think there is more downside here.

the numbers don't necessarily. is that a threat. that's a better thing for obama than being aggressive in the middle east. rr and the they keep the political situation at bay. you're absolutely right. i think that oil is going go lower eventually. all of. >> he said we're going to do anything we can to support the euro. get this out of the way and i think oil starts to trade lower. >> we're going to to leave it there. thanks iffer co s for coming by >> the play on oil is just to sell puts against oil. particularly against spreads.

i still think there is a bid down there. >> you know what that means? >> i do. it's garbage talk. >> prolonged an idle discussion. >> there is a lot of that that comes out of my mouth on this show. russia actually suffers dramatically when oil goes down. they are probably more sensitive in a negative way. don't be scared of owning russia here. >> bk has been looking for trouble. >> always. >> as he has been known to do. where he is finding it may surprise you. >> when we look at the earnings they talked about china and the numbers there being lower. they talked about nike had weak

numbers in china. bhp, $68 million worth of capex. when i look at the banking system in australia, it is about 20% of gdp. the top four banks which is basically the whole banking system is five times the size of the u.s. banking system right now by market cap. there is no way that a country like australia needs a banking system that is five times as large as the u.s.'s banking system. >> you can short the australian index. you can short the australian dollar on the idea that as the economy shrinks they have to cut rates. >> then you have to get whipped around. >> you may. but, at this point in time, i

think the stimulus that china is going to do is going to be for the domestic economy and less towards the mining sector. >> let's talk about that. >> we're going to raise the dividend but not as much as people expected. >> company positives is what you're always worried about. he is ahead of the game. look at iron our prices today this is breaking the lows of 2011 and 2010. oi think the demand factors are about the same. there is not a place for trauders to get in there. it is the true buyers. the chinese want them to go lower. i think you start to take a shot. you know, somewhere in here you

start to look at the charts. a couple of these guys have priced it. and their valuations are very good. >> is that good for coal? >> it's good for the steel producers but that's the input side. you have to believe that the demand side of it is going to be there which i don't think is going to be there. it could be very bad for a lot of things. >> traders will help to turn it into money in your pocket.

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>> time for pops drops and movers you might have missed. >> avx down before the 2:00 announcement finishes up. >> ebay a popper. 2% the move. >> paypal announced a deal with discover in early 2013. paypal users are going to be able to use a special card to buy or sell things. >> got a pop here for third. up 3%? >> big move here. got approval from the reserve for their capital plan. now they might be able to pay a dividend. >> closed right near its 100 day. >> drop here for nasdaq going next. mike? >> it just seems like more and more bad news for trading

venues. basically talks about when you can hit a down tick on an unspecified number of trades and that's hitting the stock today. >> a pop here for government auks. have you ever dreamed of owning your own prison? if so you are in luck. hitting the auction block in early september. but the state is not looking to. >> rich: you blind. the property will be a real steal. >> some people would argue that that is how they feel when they get home. they own it. >> is that the way you feel? >> who would those people be? >> i am just pointing that out. >> this is an insanely interesting chart. i wouldn't catch this yet.

not to be an accident. >> drop here for dell down 5%. >> not too different on what elichs said. consumer sales stink right now. the stock was down 5%. they cut guidance and the balance of the year. >> obviously a big move on the potential. looks like it will probably go higher. i am too worried about china not buying any more. >> mike? >> murphy actually likes titan and i am long titan. this stock has pulled back but looking at the set up, it was up at $30 a share. based on 2013 it is trading at seven times earnings. >> williams sonoma? >> they own pottery barn as well.

they beat by a couple of sense. sales improved by about 16%. probably the exact opposite of what analysts expected this is largely because they are increasing their mix of proprietary products. >> and a pop here for taylor swift, tim's favorite singer. even kanye can't taking this away. we are never ever ever getting back together is the largest hit. the song's video has -- why are you laughing? >> i don't know who kesha is. >> like kesha's hit, tik tok. right over your head. >> i know all of them well. >> nice. next on fast, stocks unable to hold on to new highs is that an

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>> welcome back to fast money. i am back with an update from the hp conference call. well into fiscal 13. that pressure will create top line pressure. pressure on revenue and affect their ability to shift their portfolio and transform their company. currency head winds will create three points and some component costs will be a bit challenging. a lot of tough news to swallow. back to you. >> thanks a lot. in the meantime.

>> i think a lot of people are taking a look at the market as being a little stretched here and the fact that volatile till is quite low. one of the notable ones was a september and then sold the 127s get it. that's an 18-1 pay off on a million to one bet if the market goes down 10%. >> there was more expensive spreads that were alluded to. someone bought 50,000 times the

36 cut spread trying to get the stock down 12%. it seems like a lot of. >> catch more options actions. so we asked for the bullish days of summer over? are we playing call me maybe? >> i couldn't tell you. you tell me. >> no. doug, you are using call me maybe because you say the highs may be in? >> i said it a week ago and i standby what i said. i'm very concerned about the potential. i think bk is right on. we're seeing a likely erosion in china's economy.

we will have a more rapid decline than is generally expected. >> talking about china you are seeing a slow down over there. but what we're waiting for and what history will show you they will do is they will stimulate to get themselves out of the slow down. >> i am not convinced that that stimulus will be successful. it is actually down 40% from the post crash high while the s&p is up 42%. >> are you getting a little call me maybe in the background?

>> i hear it. last night we had japan's july exports which dropped year-over-year expectations less than the 3% decline and exports to china which is japan's largest trading partner notably fell by almost 12%. so i am afraid that air china is in for a crash landing. >> i agree with you. very troubling price action. they have transitioned somewhat from an export driven economy. i noted your fear about the change in leadership.

this is one transition of power that you have no worries about. while i share your view that china as one of the global economies that needs to work is not clicking on all cylinders, i don't think it's doom and gloom. there are set ups that are not that bad. >> you don't have to look at the kpos it that doesn't tell the whole story. they have been telling us for months. a name like yum brands. to me, the shanghai chart is a horror show but i think to your point it's not a great indication of what is going on. >> they talk about the pervasive

macro problems that the company faces. there was an ft interview with the ceo of cat pail lar. earnings statement, namely that it is harder to predict what would happen to the global economy over the coming year. that at any other time in his near 40 year career. >> let's butt ton up this conversation here. tell me how this is playing out. >> my highest gross short position. o me what the fed was s is that the domestic economic recovery is not self sustaining. i fear that the great recession is turning to become a life

sentence of sub par economic growth around the world. it's not the level of interest rates which ails the economies of the world. the problems are structure al. the whole excitement of extension is misplaced. >> got it. thanks for phoning in. >> all right. i think we're going to to take a break here. next on fast, yeah. we're going to talk about high frequency trading. the economic bright spot of the year. we are trading the housing recovery straight ahead.

>> the wait surrounding high speed trading has intensified since bill o'brian defended the roll of technology on the halftime report. >> there is technology on every

intusry. you can control the risks around it and continue to make lives better for investors. >> already. so it's here to say. high frequency trading makes actively traded stocks a lot more expensive. good to see you. a lot more expensive for the average investor? >> yeah. the directional traders who are trading on behalf of investors realize higher trading costs when you see the higher stocks. >> where do the high costs come from? are they from passive orders and get filled at a higher price. >> basically when they work on behalf of investors they want to trade passively.

and pay inferior prices which leads to worse execution. >> are we catching up? i don't feel a whole lot better abwhere we are. >> we have recommended a couple of changes that we thought would address some of the distortions that would make this a problem and specifically that was allowing for a smaller tick size. >> i know you spoke reading your piece. it appears to me that the high frequency trade guides are acting about trade makers but back then you had a 25 cent spread and now you have a penny and that's how we're making money. >> especially for lower priced stocks. there is actually pressure --

price pressure that could allow a narrowing spread. >> anybody would still be paying the offer. and correspondingly, those savings would go to investors. the distortion would be gone. >> david, thanks for coming by. this is a subject we will continue to discuss on fast. his first interview since going public. stay tuned for that. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person.

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>> here is a recovery in the afterhour session after initially troping on its first earnings report. we should note up 18% since july when it started trading. steve joins us now for his first interview. good to have you with us. the headline issue let's walk

through some of the nurls below. for mobile, you have great traction. but your revenue per thousand queer res is only up 2%. >> mobile for us is additive. if you read your time line you don't have to go back to the desktop. it is like an ecommerce site. people are doing a query because they want to buy. they want to travel. we are seeing people doing queries on mobile and booking on desktop. >> you think they are the same people. that's a huge divider. >> people are just using kayak to do a query now on their cell phone. they are more comfortable typing

in credit card information. >> there is market research to support that it's the same user? >> that's right. >> a lot of people are concerned about europe after price line international was 19%. why wr do you stand on europe? >> we are seeing tremendous growth. potentially it's because we are much smaller than they are. we are investing heavily in marketing. >> if there is a market to expand in what would that be? >> we just launched in four new markets. so we are in 18 markets worldwide now. we are taking a hard look at a couple more european markets. >> i am looking at three other big players in the group. how do you make a difference in the space? how do you elbow some space out?

>> we don't consider them monsters because they are business partners of ours. we search all of the monsters that you describe. more search results and we fwif you a choice of where to buy. the transaction happens on their websites. >> you do compete against google. they are a much bigger competitor now that they have had another acquisition. how are you girding up for that fight? >> everyone asks us about google. we have not seen any impact. i doubt any of you use fwoogle to do so. most of the people who go to google are early in their travel research cycle. when they are ready to buy, that is where kayak excels.

>> they go there for content and that may keep them there to buy. it has been success for others, the other social media stock here. you create a net worth and then there is a transaction as well. >> we actually have content on kayak as well. but, you know, ultimately if you go google and you do a query, i think when you're raeddy to buy you're going to go to kayak. >> we will be right back. stay tuned. [ male announcer ] when a major hospital

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>> final trade. let's go around the horn. >> to cut the risk of a down 10% move almost in half. >> tim? >> sell before numbers. >> dan? >> dell and hp numbers make me want to short microsoft's exposed upgrade cycle. >> mike