on the markets tomorrow. >> thank you for joining us. we will be back here tomorrow on "closing bell." >> "fast money" will start in eight seconds. stocks keep sliding. >> there is a lot of red on the board today. you can see the dow jones almost at the lows of the day. it is down 77 points, down four straight days. >> as investors fear the worst from upcoming earnings. >> he really just futs to rest in the conference call. >> and the fiscal cliff looms large but jamie dimon is ready for battle. >> we will be prepared. >> politics earnings we trade it all on "fast money" right now.

>> live from the nasdaq market site in new york city's times square the s&p and nasdaq dropped for a fourth straight day. should we be bracing for a spooky october or is this just a pause as we kick off earnings season? so far we have had a couple of disappointments and the warning from cummins. >> and then throw chevron in for good measure. sort of the sticks with the camel, you know that whole thing if you throw enough sticks. >> straws. >> not sticks. >> that's going to hurt the camel. >> that is abusive in a lot of towns. >> i think it is finally catching up. i'm in the camp that we bounced off 1425 before. i think we are going to do it again. for example, spain comes out and raises their skmand says we need

help. the s&p is 30 points higher. that is definitely out there. although i'm definitely in the apocalypse side of things i do think the world is an extraordinarily scary place this is risk/reward on a side. >> sort of aali lackluster test it seems like the buyers are fading. volumes have been light forever. so i'm not really pointing to volume. i'm pointing to going into year end there is a list of things people are worried about. >> if you have earnings season right now when we have only had alcoa who cares. we have the meat of the things people need to hear about. i almost feel like the price

action is somewhat without direction. a couple of reports we got tell you what we know. i don't know that we are in such a scary place. technically we had the we need it. >> this list has been in existence probably since the beginning of this year. >> never get hit by the bus that you can see. you have to have some shock out there. the one thing this market hasn't priced in is the improving economy. the numbers aren't that great. in the past the market has looked through this. you do need to be concerned that in the past the market has said policy is going to change this. we will have qe. it is conceivable the market hits a pretty big air pocket. >> you said the risk is that the economy improves. the risk is that your position you don't participate -- >> either you are short or not long enough. everybody that i talk to is saying the economy is terrible

which it is and the position for that. nobody is as long as they should be. look at pension funds. they are not in this market. >> that is probably the least risk right now. that is the reason why. you are pretty much priced in here if you look at the economy improving. i think the market has priced in that and also priced into the down side that bernanke is still here. we are caught in this level of 1,400 for a good reason. >> the biggest ipo week since 2010. people are stuffing a lot of paper into the market. i'm talk about across the world, the largest week of activity. a lot of deals coming to market. a lot of things are trading heavy because of that. >> let's move on here. a survey conducted by insellgence shows 29% show a correction coming up 8% from three weeks ago.

>> 10%. >> acting like i'm supposed to know that. >> you sit on a panel like this every night. >> it's a good question. 10% is generally accepted. >> where do you get scared? it comes to earnings and valuations. right here the s&p is not expensive. i realize that is earnings we need to see. 2013 we are very cheap. >> back to the topic at hand. the question we are asking is should you be bracing for a down turn? joining us is president of ties capital. great to see you as always. you're so bearish at this point. how is your portfolio positioned at this point? >> my portfolio is personal now. i'm invested in a number of hedge funds. i own a vix position that i have had my head handed to with that. i own a bunch of gold stocks and

i have private equity investments. >> in terms of expressing your bearishness through equities whatever it may be, hedge funds or holdings, how has that been in terms of your performance for your own money? it has been hard to be the bear. >> i lost some money this year in my gold stocks which have done horbly. i think they are set up to do well. they are well priced. i believe that gold and silver are going to do very well in this period of extraordinary money. as far as the vix position we talked about that. that has been a horrible trade. i think the vix could go up to 70 or 80 at some point. i'm still expecting a crisis down the road. >> here is the question, though. at what point do you change gears? is it a level on the s&p? is it news? what is it? >> well, i'm not really going to

change positions here. i mean, i ran from '96 to 2008. people thought i was crazy when i was bearish back in '97, '98, '99. i saw that a bubble was developing and we ended up crashing '00 to '02. >> it does make you flip around some positions even if you stay still bearish you have to play around with your strategies. >> i never claimed to be a great trader like you guys on "fast money" are, for sure. i tend to be very, very early. i will tell you what. this really seems like it seemed in early '08. remember in september 08 after lehman went down it wasn't until october and november until the market started crashing. in other words, i believe spain,

europe, china, all the things that we see it is going to be recognized. the market will pick up on this. policy makers are throwing money on this. latin america would be the world's leader today. >> i happen to agree with a lot of things you are saying. what's the next major obstacle for the u.s. economy? i just finished harry dent's book and he thinks deflation is the next bugga boo. >> that's the big struggle. i mean, i think you look at bears. the bears are still split between those thinking we will have a deflation ary outcome and the inflation ary outcome. there is risk that velocity does not pick up and we end up going through a horrible deflation.

velocity could pick up and he is going to do everything he can to try to get inflation going and then maybe it does lead to hyperinflation. i wish i was that smart. that is why i love gold because gold does well in deflation and inflation circumstances. >> we will leave it there. always good to see you. david tice of tice capital. >> let's touch on this news. s&p downgrading spain with an outlook of negative. it looks like a one notch downgrade. we are waiting for the moody's assessment of spain and the banks to come out. that was the one that was widely anticipated. >> i think people were disappointed by the stress test and the amount of aid that spain has been asking for. that means they are continuing to forestall a real issue here.

this puts the guys and is says let's get on with this and take what the bad medicine is. i think this is something that markets will endorse. >> it is a two notch downgrade with the outlook negative. >> it will be interesting to see tomorrow. moody's will be the big one if they downgrade then spain loses access to the ecb. they can certainly change the rules which they have done in the past. this will be key. if we get a risk on rally because of this downgrade you will expect spain to ask for a handout. >> that is what we talked about, is it possible for spain -- spain raises a hand and this 1425 level will hold. >> i don't know how that helps global growth. >> it absolutely doesn't. the knee jerk will be -- >> i think we priced it in already. >> we are nearing that 1425 level right now in the futures trade. something we will be watching in the after hours session.

yum brand seeing a pop today. >> i think we priced in a lot of bad numbers. >> we dare to hold. >> tim is daring to hold. >> one of the best. >> can i yell some long and strong and strong and long? >> at the end of the day what are we getting now which is really the question about yum? i think on the charts 74 is where you care and want to breakthrough. there are a couple of upgrades. the keys are to me are they maintaining margins in china. dave no vac said 15% is where we will stay in china even though the chinese economy will be choppy. india is the next china. they are talking 1,000 stores by

2015. the 18 times multiple that this stock is trading at which is not terribly cheap will hold. if you want to know where investor sentiment was that these guys are going to miss. there is a lot of short interest into this number and a lot of people were wrong. their u.s. numbers are what drove that performance today. i think in addition to the fact that china didn't disappoint. watch india. >> who knew a doreteo shell taco. >> i am a -- i haven't been in a while. maybe we should go tonight. >> not with me. you and tim can go. coming up next tensions escalating between china and japan. what is really behind the conflict? find out what opportunity to be creating for two of america's most iconic companies. much more fast ahead.

tensions continue to escalate in china and japan as the countries fight over a string of islands in the east china sea. let's bring in roger baker, vice president of east asia analysis in austin, texas. it is great to have you with us. it seems like its -- can you hear me? >> yes, i can. >> great. it seems like the latest tension is china's governor and the finance minister refusing to go to tokyo for the imf meetings. how serious is this in your view? >> i think that those are fairly

short term issues. remember that the chinese leadership is in the process of undergoing a leadership transition for its own domestic purposes. the relationship between the countries is such that neither wants to see this escalate into a real break in relations. >> the numbers are big. it is a $340 billion trade relationship. to the common people of china who will refuse to go to a 711 this is something different. this is not about seeing the greater good. it is about their nationalistic pride. can you separate those two when it comes to the chinese consumer on the ground? >> i think in the short term those two will remain to be acting in different paths. the chinese government is willing to accept this hit on the japanese businesses. we have seen the impact on name brand japanese items and name brand stores and automobiles. we are not necessarily seeing

the impact as nearly as strongly on things like other elements of manufactured goods and precursor electronics. >> how much of a game of chicken is this? chinese exports out of japan and china on autos are down about 70%. i wouldn't be running away from toyota motors on this one. from an impact japan has different problems. i would be more concerned if china was going at this with korea. exports to china from korea and taiwan are up for the first time in months. i'm pretty excited about this. where do you think china is really playing the worst game of chicken and do you think there could be regional spreading of this or is this just about elections? >> i think that the koreans are taking advantage of the current tensions between japan and china and trying to fill the gap.

we may see some minor adjustments in the minor term to the trade relationships that linger on this as they manage to build those additional relationships and be able to keep capitalizing on those. i think as we ged towards april of next year this may soften. we are seeing signs to ease for the chinese and for government and politicians to back down on the issues over the islands. >> in terms of the impact on japanese gdp are you forecasting a hit because that will impact the stock market and the bond market in japan and investors. >> i would say in this quarter there is going to be a hit. with the auto sales we have seen the auto sales drop anywhere between 30% and 50% in china. production and consumption of japanese autos is something like

16% of their production for the big japanese auto companies. a lot of what they are producing they are producing in china for sale into the chinese market. in some sense this will start to hurt the chinese because this will hurt chinese employment. >> the question is how will the dispute impact the u.s. auto makers? could this be an opportunity for the likes of general motors and ford. great to have you with us. >> thanks for having me. >> i know that jp morgan has put out a note saying auto exports will drop 70% between october and december. that's already on top of the september numbers which were as high as a drop of about 49% for toyota. is that surprising? if it is to that magnitude i would think there is an opportunity for the nonjapanese

foreign auto makers. >> it could be some in the near term. you have to remember there are over 100 auto makers in china. the one opportunity for a particular auto maker may not be great. the september numbers weren't that terrific across the board so japanese consumers might be deferring purchase. it could be short term impact but this doesn't seem like the same opportunity like last year with the japan tragedy where there was a six month period of pricing. >> so what is the chance that we have this back lash against u.s.? we saw this week there were some reports about perhaps some es espionage from china.

>> a lot of these vehicles are built for china. ford is building a lot of capacity in china. these are investments in the china economy not just manufacturing but also significant research and development. these are local products that contribute to the local economy that would be in the interest of the people to support. >> auto parts, delphi has been a fascinating story. the stock has done pretty well. they announced a large buy back. what do you think a deal at 31.5 into earnings? >> it is one of few auto stocks with a significant discount, shareholder friendly. numbers terrific since the ipo. we are above consensus. particularly amongst the higher

growth auto stocks. our topic is american axle. we are bullish on the pickup truck segment. you will hear a lot about the significant demand in u.s. for full size pickup trucks. delphi does not play into that. >> got to leave it there. thanks for your time. itay michaeli joining us on the fast line. 18% in gdp will be shaved off in the next year. >> these are very, very big numbers. this is the bus that nobody is seeing right now. just imagine if there is back lash against the u.s. ninety-thr now you can't meet the phone numbers. >> something came out about solar panels. we read about where htc and

highway were being attacked or targeted as being predatory in terms of u.s. security risks in this country. the u.s. china relationship is heating up. it is something i would be worried about. toyota's selloff i think is overdone. >> there is also the recall. >> also overdone. it is a window switch. >> reputational issue. >> that is not going to stop me from buying a toyota. it might have been a couple of years ago with the significant recall issue. market is pricing 30% of the total capacity right now. that is not sustainable. i think it is an opportunity even though there is no question that for japan this is a significant macroissue. >> what are you seeing in the auto makers. >> seeing call selling in ford. people think ford will be hurt a little bit. there is not going to be upside to ford. we saw big sellers in the march

11 calls. the buic name of gm is one of the most popular cars in china and you would think they would be vulnerable to back lash against american names but ford is what they are seeing. when it comes to buyer's versus renters who is on the right side of the buying right now? the battle for your online shopping dollars heating up. we are settling the score between two heavy hitters and that is next.

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everybody is wondering. >> grunting. >> it's the newest song. let's talk retailers. cost co and wal-mart hitting all-time highs. should you be buying. wal-mart positive sentiment out of the analyst meeting in arkansas. cost co better than expected earnings. this has a pretty high

valuation. >> 22.5ish forward earnings. traded 4.5 to 5 times normal volumes. it is a name that might be ready for a pause. i think it's a great story. i think the volume today tells you you might have to take volumes. >> 95 looks like the pullback. wal-mart i don't know if that one pulls back. >> really? >> people are so enamored with that name. >> we hit a record high. you are saying no pullback. >> there could be a slight pullback but not enough to get people really excited. we buy what is working right now. the market has been buying what is working and that probably continues. >> what hasn't been working is dollar stores. wal-mart has been eating their

lunch. one name i was short big lots i think it is time to start taking those shorts in and covering because it had been down so much and they are starting to come back. >> i want to get back to wal-mart. what are you seeing in terms of the activity on wal-mart. one analyst came out saying it looks like wal-mart is going for the higher end customers because they are getting higher end electronics goods which sell for higher than their traditional price point. >> it seems like they are trying to become amazon.com a little bit. it seems like that is the business they want to be in. you talk about valuations on wal-mart it is only about 60% of what it is for cost co. 16 for wal-mart, close to 26 or 27 for cost co. people like that valuation. they see it as a floor. they also don't think that the stock will sell off very much.

we see put selling at wal-mart even though options tend to be cheap. this is a tough way to make a buck. if you are willing to buy the name at a discount then selling puts is a great strategy. >> with rents rising sharply and mortgage rates dropping. let's bring in billy. >> good afternoon. >> is it as simple as seeing what rents are going for in the market and they are high and mortgage rates are low? >> at the end of the day all of the country's wealth was made through homeownership. now, of course, we have fallen as far as you can fall. it can't get cheaper because we are way below replacement costs. if i'm talking to a couple looking to move i say if you have 5% or 10% of the value of

the home you should buy. when it returns on the market you will see things shoot up. that will happen in two or three years. the interesting thing and most of our recent deals were condos that were busted that we took over, financed and converted top rentals. now we are under writing everything as both a rental and a condo or for sale. so to me if you're a consumer and you are thinking there's no right time but now is about as cheap as it is going to get. >> there was a lot of construction of rentals. since you have done that yourself, built for rentals, will there be conversions back to condos you think? >> i think a lot of the folks that we just financed to had condominium projects that we financed the conversion to rentals. i think in three years you will see those building owners convert them to condos. >> i think you probably also

maintain that you shouldn't be buying anywhere and there are markets that come back and probably in ten years you look back and markets will never come back. >> it is dicy. >> riding through the volatility this is the place people get scared because there could be a choppy run for housing prices. if you put down 10% and you are reappraised and you are under water -- >> market by market. i want to be investing 100 miles from right here because there is no more land. if you can find land and we are moving into some modest starter home for sale housing. would i be trying to reach today? no. would i be going out to middle of nowhere to buy? no. if you are buying a house because it is near where you work and you are going to stay there for a while there is nothing like homeownership to build wealth.

that is a fact. if you can't afford to put a down payment down rent but rent something cheap so you can build up the savings. too many young people go for their lungs and get no savings and they will never be able to buy anything. if you can get the deposit, interest rates are at all-time lows. and the housing market is going to come back and it is going to come back fast. one thing just look over the last three years. three years ago we were doing something 90% complete. that is all gone. and then last year we were doing stuff that was half built. that is all gone. so the market is moving the product through and if you notice now the foreclosures are way down because the easy short sales and foreclosures are all down. you are going to see trickles. >> within the 100 mile radius of the new york metropolitan area if you have the 10% to 20% down

payment how should we view the housing market because before it was viewed as a wealth creator. >> speculative market. >> should we view it in the same way this time around? >> just look at the median house price for the past ten years. we are down where it was in 2002. so that was a logical time, 2002. it was presubprime. >> should we believe it will go below? >> the good news about america and our banks they will flood the market with liquidity and things will go crazy again and you will go i'm not going to refinance this time and take everything out of my house and go on vacation. that is where everybody got in trouble. it wasn't that the house is not a wealth creator. >> hopefully we have learned and won't get into the trouble although you think prices will reach that. >> they have nowhere to go in my opinion but up from here.

coming up next we are digging deeper into oil's wild ride. get the way to play it. the trade of the day that is a prescription for profits. for many, nexium helps relieve heartburn symptoms caused by acid reflux disease. osteoporosis-related bone fractures and low magnesium levels have been seen with nexium. possible side effects include headache, diarrhea, and abdominal pain. other serious stomach conditions may still exist. talk to your doctor about nexium.

god looked and said i know you wasted that energy. we are going to give you one more shot. let's hope you get this one right. >> that was jamie dimon discussing his chat with god about energy policy at the council on foreign relations earlier today. it is the stalling oil rally that has been grabbing the attention of traders. what happened today? it looked like the test of the 50 day moving average. >> we will see this oil volatility persist. today we see turkey elevate. the tension we are talking about. i'm looking at iran. the israel prime minister, benjamin netanyahu is calling for an earlier election. i know your favorite segment is

pops and drops. we are seeing that today. we had a huge pop. right now oil coming down i think it is an opportunity to go long again. >> how high? how soon? >> i think a back in the next ten trading sessions up to 100. we should see that but it is all about the geopolitical tension. the bears have a lot of arrows right now. they have global forecast reductions. we are also seeing the spr on the way back. i think the bulls have the trump card in the geopolitical card. >> give him credit on that. >> packed with information. >> i was quivering when i heard. >> bears with the arrows. sticking with energy you did see activity in xle. >> that is right.

down 1.9% today. if you look at the chart it is convincing rejecting the 77 level from mid september. somebody thinks that will continue so they bought puts. they paid up for these. they didn't try to get in the middle. that means their break even is 68.80 which is an important level because we spent so much before that level. somebody bought points. >> we did see a pullback on that chevron warning. >> we have seen energy space under perform here in specific names. shopping lists, marathon. bhi, your services and your enp play. those are names that guys are waiting for on the next dip. >> how about this dip? >> i would not buy oil here. i would probably be looking to

short it tomorrow. the fundamentals for oil are very bearish. there is plenty of supply. jamie dimon talked about shale oil. we have supply above five year average highs. if you notice today when the syrian and turkish tensions came oil went down. to me it looks like it is something that tim mentioned a while back that looks like saudi arabia and u.s. are trying to keep the supply of oil out there. >> smoke them out. >> time for pops and drops and movers you might have missed. drop for alcoa down 4%. >> she smoked it today. it is moving down 1%. people making a big deal out of this are overreacting. there was no reason to expect much more. this took a lot of other names with it. >> pop for edwards life sciences up 3%. >> it was a drop yesterday. i think it was a drop that was unjustified to the extent of a

huge volume day yesterday. there was a revenue miss but not enough to justify the kind of stock price we saw on the down side. pop today and i think it pops tomorrow. >> drop for monster beverage. >> it was a neutral today. this is a volatile stock. i would stay away from this. >> a drop. >> tesoro beaten on the back of chevron. in california the ag is being urged to block one of their takeouts or another refinery by bp. i think it is a little bit political at this point. >> pop for true religion up 22%. >> the two most beautiful worlds, strategic alternatives. they are reviewing them. this might include a sale. citi group said they see a range of $32 to $35 a share.

>> we have a pop for hobbit currency. hobbit currency new zealand is banking on publicity to celebrate the release of the first movie in the hobbit trilogy. the government is issuing legal tender hobbit currency and the value of the coins is no fantasy. some are worth more than 3,000 u.s. dollars a piece. >> was that e.t.? >> preposterous. >> fantastic. >> that's unbelievable. >> those books and the harry potter. >> they are all the same. >> and then harry dent. >> harry potter. >> it is uncanny. >> it is hair. >> outstanding. coming up next new york known for sites, skyline. there is something new brewing.

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it is healthy week at nbc universal. we are looking out for your personal and financial well being. hospital stocks will be in focus tomorrow. another strong showing for the republicans may be seen as a risk that president obama's health care overhaul could be repealed. let's talk hospital stocks specifically because can you invest in them without looking at the political landscape?

>> i think you can trade them. it has been an interesting trade. tenant health care i think kicks in tomorrow being the 11th. it is a stock that has had a little mojo and i think that will continue. they laid out a four point plan. i think it is working. i think it will continue to work for the near future. if you want a stock that has bait i think tenet health care. >> i usually agree with guy and i hate disaiagreeing. i am long etna. i would rather be long aetna. i think the hospitals are overworked. >> healthy week coverage continues. check it out. silicon valley better watch its back. there is a new kid on the startup block. and it is luring tech entrepreneurs. >> new york may be known as a

financial capital of the world but is it close to being the startup capital, too? 127 new startups have set up shock in the last 12 months. newcomer the founder of personal finance site the decision was obvious. >> the media and finance capital of the world. it made a lot of sense for us to be here plus most of the smart talent we wanted was right here. >> did you feel like you were in any disadvantage by being here? >> in my opinion we are equally. we are right on what is silicon square. >> it is not just small startups calling new york home. etsy began as a website for people looking to buy and sell home made crafts.

it has raised over $91 million in private equity funding. >> we are one of the first tech companies to build in new york that grew up in new york. other companies have come here and built cultures that are extensions of other offices. for us it is a place we have been able to succeed. >> companies here say the if you can make it here you can make it anywhere mentality is a big driver of their growth. just ask style caster founder. >> i think there is something special about new york city. i think that i have this theory that all american cities have their own m.o. i think people go to l.a. to be famous and boston to be smart and i think people go to new york to win. coming up next a trade of the day that you could call a miracle drug. keep it there because we are going to lift that curtain and reveal what it is in mere minutes.

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it is time for the moment you have been waiting for, our trade of the day. so mr. guy, go ahead. >> there is nothing generric

about "fast money." we are innovators here. if you are looking for a stock that is a segue. they raise the curtain. the symbol is wpi. in the generric world this is best in breed. it has been on a fantastic run. people will knock these guys on valuation but that has been a knock for a while. wpi although you were basically trading around the 52 week high it is a stock you can own. if you want exposure this gets you done. >> no dividend. you want to be in the space with no dividend.

>> talk about a nice run. wpi had a monster run. >> it is all what you are accustomed to. >> i'm just asking. why can't you have everything. >> that is a stock move. >> coming up next hour on mad money healthy week continues. jim talks with the founderer. plus visa made it to the hot list. he has two more plays he expects to continue to climb until year's end. how did i get here? dumb luck? or good decisions? ones i've made.

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final trade time. >> disappointing forecast caterpillar stay short. >> oversold because of a competitor. nbt. >> wpi. >> marathon mpc. >> you want to protect your portfolitr