stay with cnbc. "fast money" is next. it is all about apple and the surge tonight. the "fast money" traders will explain the late day run and it all begins right now. i will see you tomorrow. the iphone 5 it's a little bit thinner. it's a little bit longer. it has a new plug. it's pretty much the same phone. was this enough to keep the world's most valuable company on top? fresh from the trading floor with answers this is "fast money." live from the nasdaq new york city's times square. apple surging and the climb continues. in your view what accounts for this? >> i think it has very little to do with the iphone 5. there was a lot of anticipation about the phone. we already knew everything we needed to know about it. a lot of investors in the late day rally after the event has to

do with what is next which is the rumored ipad mini event. that is how investors are going to be setting up especially as we saw new ipods and new software and changes to itunes. these guys look like they are really set up. >> the ipad mini. how many networks it is hitting all at once. raising the september numbers to 27 million units after the event. it says it is given the confirmation of the iphone 5. >> i think the rally at the end of the day had to do with the fact that they didn't disappoint. were afraid the whole market would fall apart. people were concerned about apple and what that was going to do. you have apple surge at the end of the day. it didn't disappoint. now you have a new product launch cycle with several things coming out. if you look at other stocks there are names that are

vulnerable. apple has reservations. >> there are a lot of those stocks. we will get to those in a minute. you were having a feisty conversation with pete and jerry. he is a big guy, big strong guy there. you were buying protection. what did you do with the trade in the meantime? >> we talked about the price action. you really had to pay attention to it. the other day we bought the 655 puts which expire september 22nd. the stock did not accelerate to the down side today post the announcement sold the 640 put. i have on that put spread between the 40 and 50. still have my apple stock. i'm trading around the position which in this environment is the right thing to do. >> i find the whole thing kind of ludicrous. apple swung 14 billi$14 billione

today, probably the biggest swing -- i just find it so ridiculous that today it is going so much. to me i want to see how it plays out. how many do they sell? how much do they cannibalize on their own business? what else works in the ecosystem. i think it is relevant to something like a pandora where you talk about open table and start getting into other businesses. i am not going to be trading apple today and think i have some edge. >> to joe's point about how he is trading around to me it is interesting. the fever pitch. there is going to come a time when tim cook walks on to the stage and there is half the audience and the stock is not going to have this movement. at that point in time there is risk to this story. every time the stock is at an all-time high there is risk to

it. what joe was talking about about using the equity options to protect gains makes sense. no matter where implied volatilities are it makes sense in a story like this. >> john has been monitoring the apple developments throughout the day. there were some surprises in apple's announcement today. what were they? >> one i would say is the ipod touch and the fact that they built so many features into that. we have seen apple keep the ipod touch a couple of steps behind the iphone. they put in the retina display and the 4 inch diagonal screen and the 299 price point. the ipads and ipods up from $49 up above $500. that is important especially when you think about the

possible ipad mini coming in next month. the other thing that was a total surprise they talked about the launch window for the iphone. they say it will be the biggest launch they have ever done and they will have the international rollout on the 28th. you get maybe a little bit of an extra bit of sales cycle in the current. that's got to be good news. >> what is the buzz in terms of the ipad mini and whether or not there will be another announcement sometime in the next few weeks? >> i think it is above 35%. they will have multiple announcements before the end of the year. this was one. there has to be at least one more. i wouldn't be sfriurprised if is ipad mini. >> are apple products a hit or a miss? colin, we have commended you for your good calls in the past. this one on apple seems like a

bad one. do you stick with it? >> we are saying we wouldn't buy apple right here and right now. it is up over 90 points since they had a relatively disappointing june quarter compared to expectations. it is lighter and faster. it is not cheaper. if there are hiccups it can give you a pullback in the stock. think about the market is slowing down. 42% growth in the june quarter. going to be down to the 30s in the september quarter. expectations are hot. people talking about 50 million smart phones being sold in the december quarter. this is a total market size of 150 million units or so. there are still 8 million iphones in the channel. if you saw the june quarter was going to be weak you will need a big surge to hit the numbers.

>> these are all valid points but your price target is about 11% lower from where we are right now. so the pullback that you are looking for has to be well north of 11%t at this point. >> i would like to see it fall back below 600. it is possible. it's apple. it's a widely owned stock. it is not going to be breaking anytime soon but we gain 90 points. we are up over 15% since july 26th. there is a lot of moves going on in this name. >> it's joe. let me ask the question this way because i think a lot of apple events are becoming about the separation and the distance between themselves and the competition. was there anything about today where you were able to say some of their competitors that are well behind in the race they closed the gap? >> some people would say it was apple that needed to close the gap.

the old 3 1/2 inch screen was really quite small. they are moving it to a slightly bigger screen, 4 inches. the market is selling 4 1/2 and larger screens. there is some traction for that. the thinner is fantastic. the lte is great. the innovations continue to get smaller and smaller and smaller for apple. it is ultimately still just a smart phone. >> i'm curious, if i own apple right now should i sell it and wait for the pullback back to 600 or let it ride and maybe add more if it comes back to 600? >> i'm not going to tell you to sell it. i have a $600 price target. there's a couple of things i want to highlight. i think we saw peak margin for apple a couple of quarters ago. i think the margin for the new phone is lower. i think if you got an ipad mini

remember it is going to be cannibalistic and margins for this company are at risk. >> good to see you. >> thank you. >> seems almost unfair to say good bye to colin. i want to know who agrees with colin? >> to me they talk about and john ford told us this ipod touch at $299 where is the ipad mini price point going to be? because the low end ipad is $400. it is a very tight range. you think about cannibalization. there is a tight window they have to get everything right with google and microsoft and samsung and tablet guys are trying to bring the price point down to $200. i think the margins can be challenging. >> do you think colin is way off base here? >> at least 10% at the moment. i long apple.

i'm not sure if the market is so focused on margins or actual earnings. you can certainly make the argument that margins will come under pressure. to me the question is also one of earnings because at some valuation it is just -- >> i think you are looking at the december quarter and the march quarter of 2013. you are figuring can they hit 50 million in terms of iphone sales. what is it about the iphone 5 that is so different? for those that were there it seems to be the look and feel. the look and feel seems different and the expansion into lte, the 4 g. quaalcomm was the chip set provider for 3 g. they will be the leading provider in 4 g. go back to the economic efforts that verizon has put in to building out their lte network they are bigger than all of

their competition combined. >> i want to button up the conversation. you flagged some of them earlier. pandora spiking on the fact that they announced an itunes overhaul and no mention of some sort of internet radio service. skull candy was down because of the launch of these ear pods, these new ear buds that will stay in your ear and be magical. so skull candy went down and also shutter fly. photo stream was announced and shutter fly went down. >> all of these names and open table because that seems like multiple competition with google and apple coming out with their restaurant reservation system. any of those names you have to be concerned that you have google and apple gutting for the business. with open table there are not many variants to entry. >> in the case of skull candy there is shortage.

fundamentally pandora it is an absolute screaming sale. there are multiple players coming after that model in the near future. people may be willing to pay for a $200 phone but other goods out there. we heard from burrberry. >> it is hard to know if it is specific to burberry. we shorted some coach today on the thinking that it is broader than just a burberry specific and coach has a meaningful amount of sales come from international business and we are starting to see a little bit discount earlier. the stocks had a very nice run up in the last six weeks. it is getting a little pricy. >> a couple of weeks ago american express did a survey of their customers. they said the savings rate among their customers was almost

double what the average savings rate was. you are starting to see high end customers save a bit more. you are not sure what the tax situation is going to be. there are political issues going on where you may have seen the era of conspicuous consumption in china weakening. >> if coach is weak will that bode poorly for macy's? >> probably. yesterday macy's was down on the burberry news. i still like macy's here. >> take a look at this exclusive video video of ben bernanke arriving for his fed meeting. [ laughter ]

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welcome back let's go to market flash. >> maybe lost in the shuffle today. take a look at gold. it touched a six-month high and got slapped down pretty hard. traders hedging bets plus profit taking is harder to see on that. if we squeezed it together a little bit it actually had a little bit more movement there. you see it at the open where the move was and fluttered most of the day. twitter sa

silver same chart. we didn't talk about it so much because of apple. >> thanks for that. if you believe this chart then maybe you believe there is no qe 3 coming. >> i think there is qe 3 coming. >> thanks for boiling that down. >> boil was really about 4:15 in the morning right after the german constitutional court came out and said that it was okay that gold spiked up. it couldn't hold it at all today. a lot of it had to do with a bit of dollar strength. i am still long gold. i think it is the trade for the next six months to a year as everybody starts to debase currency. >> are you saying that position in the options? >> equity traders proxy for gold unlike in the futures the six most active options were calls dated in october. we are looking at about 38 days to expiration. i think people are saying maybe this is my opportunity to get a

little bit of upside leverage. >> economic growth remaining stagnant in the u.s. will the fed announce more qe tomorrow? let's bring in steven chief economist. you say no. does that mean there could be a change in language? >> i think the change in language is pretty much guaranteed. at a minimum they are going to take the guidance out to some time in 2015. there has been talk about doing something more aggressive than that on the language. >> you have had a nice selloff of the u.s. dollar. i would suggest that is kind of problematic in terms of stimulating growth. what would you do with those two particular currencies? >> i mean obviously if they do qe that is not good for the dollar. it probably means commodity prices going up. it is an interesting point. usually when the fed has done qe

part of what has gone on, that spark that has been asset prices have done poorly. the fed is getting worried about things. this time the situation is very different. stock market is close to a five-year high here. there aren't many signs that would suggest the previous patterns that they are going to do qe this time. >> brian kelly. i'm curious. we have seen "wall street journal" come out and talk about qe. in his speech there was one line that said the markets are just beginning to realize how forcefully the federal reserve is going to support the economy. based on that and knowing that ben bernanke is a communication specialist what makes you think he is going to go back on his word? >> i'm not real comfortable -- i am uneasy because at every chance they have had the fed has

done at least as much or more than expected. they have always taken the more easy approach. in this case inflation expectations are higher than they have been. asset prices. i think the case for qe spurring growth is quite weak. bernanke's case that he made was refuted pretty strongly by a number of participants there. i think they would be stepping on operation twists. they pounded the table that this was a big deal and it would be hard for them to justify going back only a couple of months later and saying twist wasn't that big of a deal. i think the election does play a role as much as they talk about not being influenced by politics the fed has a campaign issue this year. they have done a lot of controversial things. i think it would be waving a red flag among conservatives if they were to interject themselves by

doing qe right now when the case is kind of questionable. >> if you think there is no qe 3 tomorrow what are your chances that it will happen in december? >> i think it is possible. it is certainly going to remain on the table after the election. at that point it might make more sense. >> good to speak with you. what are the occupants saying in terms of whether or not they are bracing themselves for the possibility of qe 3? >> the fix is in here. i think if they don't do it people feel that they have the ability to do it whenever they need to do it because of that language. don't fight the fed right here is kind of the thing. a lot of guys were shooting against that level. it seems like now that is support. let's talk about the financials up by more than 11% in the past three months closing

at five-month highs today. is the rally coming to an end? >> we saw a great deal of activity on the october 16 calls. looks like substantial selling there, almost 90,000 contracts trading just over 21 cents. this is the strike that has the greatest open interest. almost half is these october 16 calls. i think there is a big institutional owners of these things probably owned them about half the price they are selling them now. 16.20 would be stretched and i don't think they see it going higher than that. >> you are selling upside calls in bank of america. >> january 10s. i think bank of america has room to run. a lot of good things have happened for the stock. >> you can catch more options actions every friday at 5:00. checkout the show on the new facebook page. please like us. from chips to retail we are telling you how to trade.

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as you know it was a big day for tech giant apple. we asked which other tech stocks you are betting on out there. here are the poll results. 44% of you like amazon the best. 34% picked google and 22% said microsoft. does this disappoint you in that amazon is the highest valued company? >> it is the highest valued company out there perhaps. we were talking about facebook's valuation to amazon. i love it as a consumer. i love the product. it is fantastic. it is impossible to own. >> access to fast money. polls, clips and behind the scenes photo like us on

facebook.com. we kick it off with a drop. >> yesterday ups took it off a preferred list. the stock broke down at 120 down 4%. it is more money coming out of these somewhat defensive names. >> pop for jp morgan. >> briefly today it went over 40 which is the first time since the london whale incident. i wouldn't be shocked if they are able to resume the buy back again. i wouldn't jump in right here. >> not one mention of jamie dimon. >> i love jamie dimon. >> pop for travellers up 1%. >> the thesis surrounding this and this is a name is if you are having a modest recovery in the auto industry and housing itself and property and casualty on the residential level will do better. you look at a name like

travellers. i like that. i think the entire insurance space is a beneficiary. pop for vulcan materials. >> huge move. martin should renew their takeover bid when the court ruling expires on september 14th. got a big move today. probably would want to buy on a pullback. >> drop for cliffs natural. >> some of the call names had started to lift and then we saw that the q 4 settling down at about $170 a ton. that is down 70% from q 3. there is pressure that doesn't bode well for the stock. >> a pop for mohawks. a hair raising world record for having the world's tallest mohawk. 3 feet. this is roughly the average height of an eight-year-old boy.

it required three cans of hair spray. and took 15 years to grow. hopefully he was trimming along the way so the ends are healthy. >> that's time well spent. >> monster beverage down 9%. >> down 35% from the highs reached this summer. last month after the earnings unspecified attorney general is looking into marketing practices. two senators are inquiring about regulations for high caffeinated drinks. >> cnbc reporting that they have hired goldman sachs to look at what they can do to improve their income statement. i think it is one of the very best activest investors. it is expensive. i wouldn't buy it. >> a pop for pan era.

>> 52-week high. the report is that august sales will come in ahead of july. i think it is a breakout. it is a name i think you stay with. >> a drop today. >> we had the usda crop report and corn dropped quite a bit because the crop was better than people expected. monsano went with it. i still like the name. >> bk thinks you have a great technical breakup. >> pop for office depot. 21% the move. >> this stock has moved sharply since late august. they presented on the 5th at goldman sachs retail conference. all they have to do is affirm and you see short covering. the story is still pretty broken. i think this is just for the most speculative bullish bets. >> a pop for the collins dictionary updated the list of

approved words. it contains user submissions in the latest editions. making the cut aamazeballs. floordrobe and hangry. >> amazeballs i'm going to have to start using. one of our traders is daring to bet on europe. plus known investor reveals latest picks for finding value right now. stick around. 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

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let's head back to headquarters for another market flash. >> housing names partying like it is 2007. some reaching new highs. toll brothers going back to february of 2007 before the housing crisis really hit. also name like pulte up 147%

year to date. >> hgx 2008 levels here. >> it is right into the home builders. look at the timber names. you get a nice dividend. >> i know there is a blog that writes about our show that complains we talk about louisiana pacific too much. >> you do bring it up. >> it's working. 14.23 today. it continues to move higher. it is a second derivative play. continue to own what works and buy more. lpx. >> do you dare to go long parts of the eurozone? bk has decided to make a bet. his biggest decision is centered around that part of the globe. >> absolutely. the eurozone really needs a three-step process here to resolve deleveraging.

one is debt monetization and some kind of economic growth. with what has happened with the esm being approved this morning you start down this path of debt monetization and look at a 2009 moment like the u.s. had if you can get growth and currency to valuation, as well. the way i'm playing it is via the german names. you want to be in a lot of german industrials and exporters. it is in either the dax futures which i'm long or your etf. this is run up a little bit in the last week or so. be a little careful here. i don't know if i would get a huge position here. >> we said currency to valuation are you talking about to cut rates? >> not to get too wonky but when you have more inflation your exchange rates starts to converge. germany will have to tolerate

inflation. i think they can do that. that requires them having a little more inflation in germany. >> completely counter to the way i approach the markets but the euro dollar today i don't believe any folks talked about this it settled for the first time since october of 2011. that is significantly but i don't think it sticks. i think it is a tremendous sale and goes to what bk and brian are talking about. germany needs to accept inflation and the periphery they need to beep able to export and the only way is a cheap currency. >> it was well above the moving average. it settled close to 129. for more on this let's bring in andy bush of capital markets from chicago. this is a technical achievement as meaning there is more appreciation to go? >> well, i think the key is

obviously tomorrow. the dollar has been beat up because of what the ecb said about the euro not breaking apart but also at the same time you had the fed reserve come out and indicate that they were going to engage in quantitative easing part three. >> walk through your play book at this point. if there is qe 3 and if there isn't. >> so there are two aspects. if they engage in more quantitative easing the markets expecting the euro to continue to rally. if they don't expect the euro to go down. to me the number one is priced in. i don't see a lot of priced in so i don't see upside if the fed announces the bond buying program. i want to focus on number two more. i want to sell the euro around 129 1/4. leave a stop above 130. and then what i want to do on

the down side is hopefully on the disappointment that the fed is not engaging in quantitative easing part three the euro really tanks i want to go long down there. as you guys were talking about it doesn't mean the fed won't do it eventually. i think the fed wants to with all the major three players wanting to engage it is not going to do a darn thing for the economy and interest rates. >> i want to bring you into the conversation. you indicated interest in shorting your u.s. dollar at this point. would you enter the trade at current levels? >> i'm going to wait to see what happens in terms of qe 3 not telegraphed but over the next couple of days it is a trade i will be putting on shorting the euro dollar. >> andy bush, why is it that shorting doesn't enter the scenario for you? >> well, basically we had a

break out in the euro around the 126 level. for a long time i was advocating people to sell it at 126 and buy it back lower. that worked really well for about a week or two and then we broke above that. that broke out of a long term down trend channel. i want to buy that when we get back to the long term levels because resistance is now support. that should be around the 126 level. i'm going to buy above there because i don't think we will get through it. it is kind of a technical play that the euro broke out. >> see you friday. friday being money in motion. that's at 5:30 p.m. eastern time. next on "fast money" should you be excited by what mark zuckerburg calls a big opportunity? we have an analyst reading between the lines plus famed value investor naming names. tdd#: 1-800-345-2550 you should've seen me today.

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the vast majority of it is people trying to find people but there are also a meaningful portion of queries which are people trying to find pages, brand pages and other business pages and apps. there is a big opportunity there. >> that was facebook founder mark zuckerburg yesterday discussing opportunities in search. facebook seeing its biggest one-day gain. could search save facebook? when you think about search could it be meaningful revenue for facebook? >> it could be meaningful revenue longer term. you can't build a search business overnight. when you compare google to microsoft, google was building it for a long time. microsoft came into the business. i think it would take some time. i wouldn't be surprised to see maybe a partnership with microsoft since they have a strategic interest in facebook.

i think it makes since. search is a big business. facebook has a great user face world wide and close to a billion users. >> if it could be meaningful revenue who does it rob revenue from? in other words who is most threatened? is it google or the likes of a yahoo? >> first and foremost sites like yahoo which aren't generating the query growth that we once saw. facebook is spending more time on fun things and more personal things and less commercial intent. google is focused on commercial intent. when you are searching for a plasma tv or a product you go to google and amazon. you not searching for those products right now on facebook. you are searching for people and companies and things to follow. i think you would have to show a

pretty substantial database, search capability to be able to get people to start searching for queries. >> appreciate it brian pitz. >> how do you translate that into cash flow? >> they can't monetize. >> that is a lot what joe said yesterday that they didn't give you clarity on how they were going to monetize. they want to. we all want to. google wants to but there is no plan as of yet. maybe that is forth coming. >> the sentiment of the stock was so bad he didn't say a lot but he got people thinking about things. as a trader in a lot of ways to me as we get closer to the lockup in november that is in the rear view mirror this could set is up as the trade as we head into the new year. they will start saying things and laying out plans as they mature as a company. this one down to $20 could be

interesting. the search is on for the next great value investor, that is the idea behind the challenge. the value investing congress chaired by whitney tilson. whitney joins us now. great to have you with us. the hope is for the search for the next great value investor. what has been the turnout so far? >> we have had over 100 firms submit investment ideas to the investor challenge. the quality of the content has been fantastic. people have really been submitting very detailed and rigorous reports with the intent of being obviously selected to present their winning idea at the next value investing congress on october 1st. the chance to speak along side some of the speakers who are speaking at this conference is a great way for somebody who is up

and coming who maybe isn't that well known today to stand out. we are happy to be a part of that. >> what are the ideas that seem to be coming up the most? >> it is such a wide range. our requirements for the contest were that the idea be somewhat liquid so we had a market cap minimum of 300 million that no industry specifications. they are fundamentally driven. all of the ideas get into some of the parts and efforts that you would expect from a professional investor. the three winning ideas are actually on value investor challenge.com. one of them is jack in the box and one on fiat. cincinnati bell. >> real diversity. european company, restaurant company. those ideas normally the ideas are coming to the members. the three best of the 115 ideas

that were submitted, a group of judges picked out the three best. those are available to anybody who wants to come. we encourage people to vote and tell us because it is by the vote of the people who go and read these ideas that will determine who wins and who gets to speak at the conference. >> let's switch gears because we want to get to apple. you have a modest position which you don't often talk about. >> apple is one of the half dozen or so stocks that i bought in early july as i was building the portfolio after glen and i separated and i started running the portfolio myself. i sold it down quite a bit. in the belief i bought it in late july after they last reported earnings. iphone sales came in light. i have two or three iphones where people didn't want to buy the iphone 4 because the phone 5 was coming up.

i think there is huge pent up demand for iphone 5. the closest thing i do for a trade is maybe six months. apple is fundamentally cheap. this gave me the opportunity to come in with a six month time horizon. i think the stock will respond. it has gone up 80 bucks or so since then. >> one thing you talked about in the past is jc penney. playing out more slowly or not at all? >> up into the 40s and down to the teens. >> how are you feeling bet the progress? >> i don't own it currently. it was one of the many stocks that as we sold down the portfolio in late june and then i just couldn't quite get there. like i felt like it was going to work but it wasn't certain enough. there is a pretty wide range of potential outcomes. i believe in ron johnson. it's been a lot tougher than he would even have expected i

think. it looks like they are starting to get traction. stock is up 50% in the past month or so. i'm glad it is working out. i haven't benefitted from it. >> we have run out of time. good luck with the contest and be sure to tune in to "fast money" tomorrow when the three finalists will reveal their ideas live on this show. coming up next one of our traders has a play to get you moving in the right direction. we are lifting that curtain on our high energy trade of the day. that's next. ere's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪

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time for trade of the day. joe, take it away. >> fundamentals and technicals aligning for southwestern energy, swn. they have a preimminent position in the marcales shale. you want to use a $30 stock. it is going higher along with natural gas. >> let's do a little trade school here. momentum is improving. >> you have the 50 day crossing the 200 day. you have not seen that formation

in multiple months, close to 18 months. >> do you buy into this golden cross for southwestern energy? >> i mean, i'm rarely the person who talks much about technicals. i will say we are in a situation where these things seem like they are poised to move a little bit. >> we come right back. stay tuned. with the spark cash card from capital one,

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ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no.

if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. time for the final trade. >> i think maybe sealed air. >> i want to buy aig on pullbacks. >> if we get a qe 3 tomorrow you want to buy free port mack. >> children's place spread a little too thin. >> i think when you look at the financials year to date it is indicative that chasing the market higher. i don't think financials is over yet. i look at black stone. >> i'm melissa lee. thanks for watching. got a special interview with the ceo