finally tonight, my observation on fundamentals and if they will matter again. we had a fierce selloff at the end of the day today. only finished down 20 points, the dow in total plunged 56 points in the final 12 minutes of trading. we had been up 70 points at its best. lately, any sell offs are met with a buy on the dip mentality, thanks to the easy money policy. no matter, the dgp was out today and showed us once again that the u.s. economy is growing at an anemic pace. the economy is not doing all that well. sure, we've had spurts in housing and that sector has bottomed, which is good news. but we remain with the persistent unemployment situation and still a lot of trouble spots in the world, including europe. but don't take my word for it. let's look at a few charts that i like to use.

first, copper has had a severe fall. it is down 4% year to date. copper, of course, goes into everything from your mobile device to your home. it's an important indicator of what's to come for the economy. even worse is the dry shipping index. that measures glowing shipping. we've seen a recovery in the last month, but this index plummeted 56% in 2012. while we have a market that continues to flirt with all-time high highs, let's not forget that fundamentals still matter. the dysfunction in washington, the nearly $17 trillion debt, the potential of a surprise spike in interest rates at any time. and an economy by all measures shows an overall weak story. just a matter of when the facts will hit the stock market. want to be prepared. take a look at the day on wall street. we did see that reversal at the end of the day. the dow down 20 points. nasdaq down two and the s&p 500, flat on theati session, down on. see you tomorrow. stay with cnbc.

"fast money" begins right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. here's what "fast" is buyer beware. find out what red flag jp more gan's tom lee seeps right now. defensive blitz. just how much pain the sequester could cost defense stocks. and web wagers. who is best poised toic stroo it big when it comes to online gambling. the markets close in on fresh record highs. what was the top trade of the day today? dr. j? start with you. >> my top trade was the stickiness of the vix. it's made a big trip this week, so, i'm not saying, boy, it's just, you can't push it past 15 at all. it's made it from basically 1320, all the way up to 1920, back down to 14 and then it just wouldn't go any lower than ends up jumping on that rally for the

vix. and subsequent selloff for the s&p 500. i was doing these one by two spreads in there, mel, i was buying the selling the 18, that's what the street was doing. >> and beekers, of course, a nail-biter of a day. i don't know if you have had the popcorn out today. we were 50 points away from the dow's record high. >> i always have the popcorn out. you never know when you want to celebrate. >> why are you nodding? >> well, i mean, just look at the size of the guy. >> i love popcorn. >> popcorn's very light and fat free. >> fantastic for you. nonetheless. it was an awful close. the market looked fantastic, looked like we were going to head higher, get this new record and then last 15 minutes of the day was a terrible close. but i think that gives us an opportunity, so, for me, my top trade is the spider, the xle. if you look at what gasoline did today, it dropped, a nice reversal in a key technical area, a couple of refineries shutting down. april, we could see a supply constraint.

>> anthony, your top trade today? >> i like macy's. i want people to look at jcpenney and kohl's, both underperformed. macy's actually executing on its strategy. i think it's a cheap stock here and it's really good value by year-end. >> hi, mel. >> hey. still down there, huh? >> crazy. i can't go right. listen, blackstone, one of two things are going to happen. 9% dividend in blackstone. going to go down for one of two reasons. they're going to cut it or the stock is going to go higher. i think it's going to be the latter. talked about it for awhile. bx is my top trade. >> what do you make of this rally as we are approaching the record highs. is it a rally you can write home about? it's built on defensive stocks advancing. health care, staples hitting ne. but we don't have the participate of materials -- >> you did have trannies yesterday. trannies yesterday, when they exploded to the upside, partly with the trade that guy adami talked about, that ksu. beautiful trade.

guy's been on it for awhile. you look at cp, canadian pacific. both rails doing phenomenally. and the fact that the trannies are more or less giving you an endorsement of that higher high that weevil been p that we've been putting in. i think we get a little bit of a pull-back, but i'm not looking at a major one. >> one of the most bullish men on the street is sounding the alarm. let's welcome tom lee from jpmorgan. >> hey, melissa. >> why now? >> i think it's really been a constellation of factors that are getting us nervous. you discussed this. the cyclicals have been underperforming since january. and we think you're going to be facing headwinds in the next couple of weeks from higher gasoline, just the underknown effects of the payroll tax. and there could be some fear mongering related to sequestration. and the last thing i point out, credit which has been such a big part of our bull call has been acting in a mixed fashion the last couple of weeks. we are starting to feel that

equities are the loan man standing. >> would you stand behind this rally, say, get in on every single pull-back if we did have the participation of technology stocks and some of the growth areas of the economy? >> that's exactly right. i think in a way, you know, the big picture for us is, we're bullish. we think we're in a secular bull market. but we want to defer purchases until the index levels come in or the market starts to act broader. >> okay. let's look at this chart here. you brought this along. what do you see here? >> we like to look at this chart. this is hedge fund beta. it's measuring the tracking area of a group of hedge funds against the s&p. and the reason we like to look at it is, we think hedge funds are the increment alibier for the market. and as you can see, when you get to near this dashed green line, it occurs around market peaks. and so what we've been watching is this recent thing has spiked, yeah, and we're getting nervous. we would sell in front of that peak. >> okay, so, you see up here, we are heading towards that green line, you want to sell there. anthony, want to bring you in.

>> he doesn't look like gary kaminski to me, i have to ask a few questions. if -- how long have you been tracking that as an indicator. is that a one-year track, five-year track? >> well, this time series actually is five years. we've been using this among seven eindicators as a constellation, when we get a cluster of these signals is when we get cautious or sideline on the market and actually we got that level last week. >> so, when the hedge funds are going into the market, you want to be out? but you're very bullish and you've been very right and so the question is, with the market still trading at a reasonable valuation, why be a timer here and get potentially caught wrong on a liquidity push-up? >> long-term, you are bullish. >> that's right. this is a tactical short-term call. >> okay. >> in other words, a couple things. you know, one, we think hedge funds are very predictive. so, when it's at the low, when that beta is low, markets

actually rise. the problem is, when it rises to the dash line, it means hedge funds are basically all in. and, yes, we want to be dip buyers. i think you still want to be overweight equities all year. buy the cyclicals on dips. but if you have fresh dollars to put to work and put them at 1550, i would rather wait. >> these are your sector picks? >> yes. >> and you buy on pull-backs. >> the one group that's really lagged has been basic materials. actually historically, a great fifth-year sector to own. but the global data has been kind of mixed and china's been weak and, you know, hasn't been great. >> you can't be market timers, so, on any pull-backs, you should buy, even though short-term, tactically, you want to see people not put fresh money to work. >> that's right. we just -- you know what, if you're a dip buyer, you want to be buying individual stock dips. i think one of the great themes this year has been mna. i was just at our high yield conference this week and one of

the interesting stories is, issuers feel comfortable with the debt market. they are doing more things for equity holders right now. >> tom lee, thank you for coming by. dr. j, what do you make of tom's sector picks? >> i don't dislike them at all. and i respect the heck out of you, tom, so, i like your work. i have not heard that particular, just as anthony hadn't, view of the hedge funds before, being that buyer of last resort, if you will. but -- and whether or not they are cutting back to that. but i do think his levels, melissa, those are interesting to me, because i do think there's a high likelihood that we do see a bit of a pull-back, into this, the first few trading days of march. i wouldn't be surprised to see that. and could carry us down 20 s&p handles. >> there is another catalyst out there, the retail investor. >> is that a catalyst? >> i think it is. >> come on, really? why? >> well, one, the so-called great rotation. i mean, i'm more in the guy camp, one last leg up here, so, and then, things start to look ugly. but we saw today, the aaii

bullish/bearish numbers. 28% bullish, lowest level since july. we saw what happened then. we talked about this great rotation, how the money goes into mutual funds. if that starts to rotate, you may not need the hedge funds to make this leg up. >> guy, what do you make of the sector picks and do you go with what is working? those sectors that tom singled out, they are not necessarily working right now. >> that's where we're different. if sectors haven't worked up until now, why should they work? i'm not a big believer -- people say the stocks that underperform in a sector, go and chase those, but that typically doesn't work. they are underperforming for a reason. and the other thing i would disagree with, i think the market is headed to 1550, but the selloff could precipitous. i happen to think that the high we see in the next couple of weeks, 1550 may be the high for the next year. we'll see. >> let's take a break here. and let's take a quick look at other names moving in the

afterhours session. groupon shares up sharply on word that andrew mason is out at ceo. oo salesforce.com, another one we are watching. a beat on the top and bottom lines. and look at deckers. the company posted earnings that beat expectations. ahead on "fast money," bullet proof defense stocks. and the special media giant that is rising above the street. get in while the going is going. and later on, stock and awe. the possible driver for the next leg of this rally. back right after this. how do traders using technical analysis streamlineir p at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis

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gap out with better than expected earnings. courtney reagan is monitoring the conference call and has the latest. >> that's right. the conference call still under way but did get a couple of minutes to a late start. we haven't heard a whole lot yet from glen murphy. the real interesting stuff comes out when the analyst start to ask the questions. he made an interesting comment about the holiday sales period. many of these retailers reported strong sales around black friday and then that three-week lull until couple dales before christmas when really everyone was running out of time.

and ceo glen murphy saying that they have to find a way to unlock the value in those three weeks. they have to do a better job going forward. but bottom line and top line did beat wall street estimates. their guidance back kepts the estimate right now for the full year at 259. also increasing the dividend, another retailer increasing the dividend. remember, gap is an international play. one of the american retailers that does have a fairly significant presence overseas. so, that's a different way to trade it if you are thinking about it from that viewpoint. melissa? >> courtney, thank you. guy, this has been a turnaround in the making that you have flagged, a long time ago. >> stock's done well. obviously recently it sold off from the high 30s down to here in the low 30s. but two things i take away. operating margins, better. which is obviously a good sign. the other side of that coin, inventories up 9% year over year. you have to marry those two and figure where it's headed. fine quarter. guidance was marginal but

probably a sandbag because retailers can do that now. if you want to be in retail, gap is not a bad place to be. >> you said you like macy's before. do you like the gap? >> i think it's a classic story, like macy's, still a good brand. renewing the branding into fashion and they're executing. so, those retail stocks in this environment are going to work. >> all right, let's move on. herbalife shares jumping 7% today. the company reaching agreement with carl icahn to expand the size of its board by adding two of his representatives. herbalife allowing him to increase his stake in the company to up to 25% of outstanding shares. this means more pain for icahn's foil bill ackman. he has a sizable short trade in her ba line. is ackman's pain the herbalife investor's gain? and, of course, you know, if you are a fan of carl icahn, the poetry in this, it happens on a day when jcpenney's shares tanked. >> i'm sure carl's thrilled right now. get him on the blower, frankly. but i think today, herbalife's move, you mentioned -- i think

it was as simple as the loss in jcpenney, the move down in jc penney was offset here. you smell blood in the water, as carl probably does now and other folks do, as well, you see jcpenney go down, you have to believe at some point you're going to squeeze people out of their short in herbalife. you get ahead of this. you might not say that's nice, but that's trading. and trading is predatory at times. >> you take a look at that chart, with herbalife shares and jcpenney. you look at the diver jens of the stock and you think of sugar plum fairies, as in, "the nutcracker." >> oh! i like that. >> i'm so happy i'm sitting in this seat, guy. >> my god. >> keep going, melissa. go ahead. >> i mean, you thought that, too, dr. j. come on. >> i did. right yesterday when the numbers came out from jcpenney, we talked about it here on the desk. and this is something that's going to put carl's, you know

whats in a vice, folks. not carl's, i'm sorry, mr. ackman's in a vice. and carl is going to twist that vice. because obviously people on the other side of ackman and herbalife know that he's going to have a harder time staying short that stock because of the losses he's incurring over at jcpenney. if he does get redemption, it's going to hurt both positions. forced liquidations in jcpenney could take that thing down to a hat size. less than double digits, in my opinion. and the fact that he's caught in here and is notably the biggest short in herbalife, is just a horrible position for him and his shareholders. >> now that we've done the ackman pile on, let me defend him for a second. >> sure. >> he's got very, very tight lp standards. going to be very hard to redeem on him. he's a long-term locked up sort of a guy. i do think he's going to come down to whether herbalife is an avon, tupperware or amway or a fraud like bill is suggesting? now, the reason i think it eelgs

not a fraud is, number one, i have a very close personal relationship with dan loeb who doesn't believe this is a fraud. number two, the company has made it for 30 years. now, you can say, okay, bernie madoff made it for 40, but it's a totally different type of company. and i think bill is going to be wrong on this. but i think he's a super smart guy and will start to fade this position if he's wrong. >> mike khouw, want to get you in here in terms of the options traders. are they siding with this bill ackman pain trade, in other words, siding with carl icahn? >> well, the top ten most active options in herbalife today were all calls, so, i think they're sort of going with the possibility that he's going to get squeezed a little bit here and there's room to the upside. basically, everything 37 to the 40 calls, all these things were trading quite actively. so, i think that obviously they're looking at it. there's no much risk of a down side shock, but there is some possibility the stock could move to the upside if carl gets some action. time is still ticking down until the sequester. congress voting today on dueling

proposal that would present domestic spending cuts before the deadline tomorrow. if no deal is reached, the department of defense will cut its budget by 8%. so, why don't investors seem to care? let's bring in brian rutton. and brian, specifically, you take a look at the philadelphia defense index and it seems like every day, it is a march to new all-time highs. so, what gives? >> good question. i can't figure that out. because you're going to see the defense primes get cut in terms of their earnings back to 2005, 2006 levels in terms of earnings. even keeping their current multiples, that would be 15%, 20% downside for their defense primes. now, the smaller guys are going to get hid really bad. like the services guys, in the department of defense, they're not going to cut the d.o.d. active duty personnel. not going to cut the government services personnel. they're going to cut the procurement guys, the outsource

guys, the services guys. that's what can be cut. that's what will be cut immediately. >> so, let's break this down in terms of numbers and what you mean by being hit. in terms of the big defense companies, how much could these stocks be hit in terms of the smaller defense companies, how much could these stocks be hit? >> for the large caps, lockheed martin, gd, l-3, i estimate that with sequestration in 2014, because we don't know the timing in '13, that we're going to see around 15% or so on average, hit to earnings. okay? the small cap guys, depends. like the services guys could get hit 70%. >> 70%? >> 7-0 -- >> to earnings. >> 30%, 40% top line, 70% bottom line. could get really ugly. the big guys are probably going to be okay, but there needs to be a re-valuation. >> there's been a trade in rockwell collins in that, they're saying, okay, you can't buy something, you have to fix

it. they are a bit more levered to that area. where do you come down on that? >> the navy, the army, the air force, they're all pushing off maintenance. so, the good logic out there, six months ago, was, maintenance is going to be fine. you're going to put off the f-35, you're going to put off buying all the new pretty toys and you're going to maintain what you have. that's not the case. the navy is putting off resupplying ships, deploying new aircraft carriers, existing aircraft carriers, refueling them. all that maintenance is getting pushed off. >> you had shocking numbers in terms of hits to earning, but it's how long the sequestration lasts. a lot of people think it's going to hit but only last for a matter of weeks what is the magic number? at which point do you think these stocks need to be re-rated in terms of expectations? how long does that sequester have to last? >> i think it has to last more than four or five months. i think that what we're going to end up having is a continuing

resolution throughout this fiscal year. and that's going to take some of the punch out of the sequester cuts. so, it's $55 billion that's supposed to get cut out of defense under the sequester. i think the cr gets pushed throughout this year and only have half the impact this fiscal year. that's through september. the rest of the impact is next fiscal year. >> brian, thank you. brian ruttenbur of crt. time now for pops and drops. a drop for iron mourn tntain. guy? >> i thought you'd be long in this, i thought it was going to break out. it was wrong. i've been wrong before, but it wasn't as disastrous as it could have been on the down side. i still want to stay with this trade. i think it has a shot. >> pop for dean foods, up 3%. beekers? >> this has been a real choppy trade. you can see by the chart. they are going to sell off a portion of their company. it's right around the 200-day moving average. you can take a flier, but b.k. doesn't like flyers, so, stick

away. >> big drop for intuitive surgical. 11%. doc? >> regulators are probing this one. there have been questions about intuitive surgical, it is tron and others have raised these questions. the stock dropped $70 in those final six minutes of trade. it's had a slight rebound in the afterhours, but it's still down $50 from the highs of the day. >> here's the other side of the ackman pain trade, jcpenney down 17%. >> these stories typically take 36 months, a lot of hype going into this thing. a lot of pain when it's not working as quickly as people want. the downgrade to ccc plus is terrible for the company short-term but there will be a time to buy this. just not right now. >> got a pop here for blackberry, up 1%. mike khouw? >> actually, up a lot more in the middle of the day. david smith was talking about the company possibly releasing a new tablet computer. of course, when people startdy gusting that, they're going to

realizing there's a lot of new players in the tablet space and not as much money being made there. i don't think it's a come peopling reason to jump in. >> and we have a pop for telepathic rats. >> what? >> scientists in north carolina and brazil definitely have rats on the brain. a recent study involving pairs of rodents on different continents found that the furry free sures were able to communicate with each other over the internet, using only their minds. >> get out of here. >> able to do that? >> a so-called brain net, which scientists could help link minds across the globe. >> what is that thing? is that a mouse or a rat? >> that's a rat. >> how do you communicate on the internet? >> why are you asking me? i still pick up the phone. >> you are a rare breed. >> guy phone. >> thank you. still to m co, the leading factor which could push the stock market rally even higher. but first, is the social media giant on the verge of getting

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news of andrew mayson's ouster of groupon comes one day after they reported another dismal quarter. let's go to julia for the latest on this seemingly abrupt departure. if anyone was listening to that conference call, you would have thought that maybe a pink slip would be on his desk soon. >> yeah, he seemed awfully confident in that conference call, considering the numbers. and here he is today, he was handed a pink slip. with groupon shares down about 75% since its november 2011 ipo, the only real suf prize is the fact that mason wasn't fired earlier. today, groupon's stock plummeted nearly 25% on worse than expected earnings. and mason famously turned down google's $6 billion buyout offer back in 2010. now, the farewell e-mail mason sent employees today took the same comic approach that defined his tenure as ceo and made wall street nervous. he wrote "after four and a half intense and wonderful years as

ceo of groupon, i've decided i'd like to spend more time with my family. just kidding. i was fired today. if you are wondering why, you haven't been paying attention. from controversial metrics in our s-1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one-quarter of our listing price, the events of the last year and a half speak for themselves. as ceo i am accountable." goes on for a couple of photographs and he signs off, "it will miss you terribly, love andrew." now, groupon has not yet announced a replacement. the executive chairman and vice chairman will serve as co-ceos until a replacement is found. but melissa, one of the funniest farewell letters a ceo has ever written, i think. >> he has a sense of humor, at least. julia, thank you for that. dr. j, the jach hours market action in groupon says it all. the stock is up 4% on the news that mason is out. >> yeah. and i don't think it gets back above 5 in a big hurry. i think there are sings they've

turned around at the company as far as being able to search for deems instead of them just popping up and infull traiting your e-mail and basically ticking you off, if you weren't particularly looking for that spa treatment. but i think the real issue that he was fired, julia nailed it, is that, and he did in his own letter, he missed estimates. and he must have told the board, look, i garn tee you we're going to come in with this and that was the last straw. when they missed this one more time, that was the last chance he had. >> yeah, it's not just -- i mean, missing estimates is one thing, but putting the economy on a strategy where you are putting yourself in the sites of an amazon and ebay, i mean, he launched a strategy where they would sell goods. how is groupon going to compete against amazon and ebay in selling goods? >> and that's -- this has been the problem with his tenure anyway, is that there is no entrillion for any of this. we saw it with what google did with them. many competitors came into the marketplace. then you go after massive co

competit competitors, it's just not going to work. clearly good for the company. we have to see who the new ceo is going to be. >> the only thing he left out of the letter, that he had a chance to sell this thing to google for over a billion dollars. and he should have wrote that in the letter, as well. >> self-flaj wags? >> i appreciate the guy's honesty and sense of humor. no one would do that in politics of business. but a guy coming out of the technology trade like that. thumbs up for that. you just have to accept it. >> trader guy adami making the right call on a special media giant that has been firmly in rally mode. >> this was a good quarter. solid quarter. to me, still the best social media company out there. and valuation in the stock is still relatively fair. so, yeah, we'll say again, lnkd is okay here. >> linkedin shares soaring since its ipo in may 2011.

to our street fight on linkedin, guy is the bull. jon is our bear. total of 90 seconds to make the case. >> doc and i are going to shake hands. that's what we do. listen, i understand valuation at this point is probably stretched. but there was a journal article yesterday, the pepsi guy that's in charge of recruiting, guess what? they are using linkedin and so are other companies out there. it's become the medium of choice for these folks. valuation stretched here, but these guys smoke earnings every quarter. just go back a couple of weeks and you'll see it. every two seconds, somebody new signs up. i can't do that math, but that's a lot of people. the momentum is still behind this stock. it works until it doesn't. i think it's going to work if awhile longer. >> guy has been dead-on on this stock, so kudos for him. where they're going to run into trouble, mel, is the fact that they've got 200 million use earls, allegedly, people that have signed up. i don't know how many accounts are dormant. only about 43 million of those

accounts actually have been used from august through now. so, that has me a little worried. cap ex, they're going to have to spend a lot of money. guy talked about the extension to the upside on the valuation. valuation versus their peers is very high. and then you've got facebook, which they have to find ways to make money. this is one of the places where they could compete with linkedin, so, i say, north of 160, i think it might be time to lighten up. >> doc makes great points. all fair ones. the same arguments you could have made $60 ago in the stock. is the move over or is the move in the fourth or fifth inning? i think it's in the fourth or fifth inning. >> 15 seconds on the clock. i mean -- >> what do you mean? ask b.k. what he thinks. >> bring in k.b.k. they are able to upsell the active accounts they do have. people are paying for premium services. >> this is a social media company that actually gets it. you have to allow your users to be able to monetize their experience. and that's what linkedin can do.

i'm going to stick with guy -- >> right on, beekers. you're the man. >> i hate to buy stocks up at 52-week hikes that are straight up. but this is a company that gets it and people continue to use it and they can upsell. >> anthony? >> does that mean guy won or i can rebut that? >> say something! >> weigh in. >> listen, i've gotten myself in trouble by buying high flyers and buying into the momentum and the hype. this is the netflix of 2013 and i think my buddy the doc is going to be right on this, as much as i like guy and that purple shirt. >> let mike khouw break the tie. >> mike khouw, bring you in here. you did notice pretty heavy options activity in linkedin. >> yeah, sure. 20 times revenue, 70 times earnings, 120 times free cash flow. is sure, it grow 100% over the last three years, but those are nose bleed valuations i can't touch. and the options market way to play that, they were buying the weekly 170 calls, paying $1.15. and i think that's a way to put premium to work if you are

basically trying to ride the momentum trade here. but there's just no way to buy this stock on valuation. >> so, this is your koushsly optimistic. yeah, nose bleed valuations, but if you want to do this, you buy calls to limit your losses. >> yeah, i mean, you are risking less than 1% to make that play. but you don't buy this stock at this level. >> michael -- >> that's how you play it. you don't buy the stock here. you buy those options because you have a lot less risk. youfl defined your risk with that and if guy's right, which he has been dead-on, then you profit from that outlook. >> michael, i like the camera angle. very papal and judgmental. >> looking down upon us. all right, tell us who you thought won our street fight. tweet us @cnbcfastmoney. share the results at the end of the show. coming up next, we single out what could keep the stock market's winning streak going. plus, the latest read on the fear gauge. and cnbc's jane wells tackles dog breath on the west coast. jane? >> ah, we're going to talk about

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the s&p and the dow continuing their march toward record highs. could the key to the next leg of the rally lie with the retail investor? so, j.j., the question is, is the retail investor back? i sort of had it with b.k., because he said the next leg higher could be the retail investor getting back in. >> you know what?

it's interesting to me when people say the retail investor back. the retail investor is back, but they're different than they were before. and what i mean by that is, they used to be all-in or all-out. jon, his company, and td ameritrade, we spend a lot of time on education. and i think the retail trader is a much smarter trader than they used to be. i would say on some levels, they are almost what the professional trader was 20 years ago. they've realized, when up get in, you get in in portions. >> scale in. >> scale in, scale out. and something the retail trader never did before. if i was to, you know, put an analogy to it, i would say if the retailer was in up to their ankle two years ago, they are mid-thigh. that's a smarter way, what these guys do every day. that's how they get in and out. >> will we ever get to the days where you look at margin accounts and were people buying on margin. are those days over? >> no, i don't think so. we released imx, i know next tuesday we'll have on "halftime" show and one of the things we're

seeing there, the trend has been bullish over the last six months in terms how people are putting their money to work. now, you have the retail trader with the ability to use portfolio margin, which they didn't do before. so, we're comparing old line statistics to new line statistics and that afternoon doesn't work. and our assessment, the retail trader, is back in a smarter way than they ever were before. >> and they are increasing their use of derivatives, which helps this whole notion of sort of getting in in a smart way and in a more limited way. what are the retail investors buying, though, these days? >> if you look over the last few weeks, the professional's gone crazy. the vix at a 35% move in one day. the s&p really hasn't moved that much, in two weeks, it was 1487 to 1531. the retail investor has been selling things that have outperformed. goldman sachs, coca-cola. they've bought alcoa, bank america, stocks that got beaten up a little bit and now look like they are setting lows and

things like that. >> guy -- >> hello. >> would you buy bank of america right here? >> no, i'm not a big believer -- the only banks i like, u.s. bank corp and blackstone. and alcoa has been grim death for five years. and it's probably grim death for the next two, three years. so, i see no reason to own either. >> j.j., thank you for stopping by. >> pleasure. >> j.j., thank you. we've got you covered in the west coast wrap. jane wells joins us from the best coast. jane? >> melissa. apple shareholders may have said no to a proposal forcing executives to own stock until retirement, but the board is quietly instituted a new rule, saying executives do have to hold shares worth three-times their base salary. is that a lot in no. jon fortt items me the base salary averaging 800 grand and $2.4 million in shares is a pittance. it's coffee money. but this rotten news for apple says it's only selling half as many iphone 5s as expected. at the current sales pace, leap

could be stuck with $450 million in unsold iphones by mid-2015. $100 million worth threw june of this year. >> this seems to say more about leap, maybe, than apple. >> and i think it says a lot about what we talked about last night, jane, and mel, as far as those fablets. the larger phone tablet merger, the galaxy 2 or 8 that's coming on sale. that seems to be what people want more. because they're doing so much on that phone that they don't want the smaller screen size, they want that larger screen size. >> all right. espn usually mops the floor with cable operators, but not today. dish won a federal court case alleging espn gave other cable operators better terms. dish wanted $150 million, but melissa, the jury only said it needed about $5 million to be made whole. >> ah. dish and espn, of course, a property of disney which has been on a tear. beekers? >> it has been. and, it's all the content

producers. we talk about all the different ways to get this content. the fablets that doc j was talking about. but they are holding all the cards in this case. we've seen it with netflix. i still like disney. >> jane, to the dogs now. >> all right, finally. + not mine. a utah companied ora-brush has discovered there's more money in selling to dogs. the paste that goes on the brush takes like beef and bacon and kills bacteria. they raised money through crowd funding, shipping 40,000 pre-ordered kits. dogs have breath that no longer make me retch. cnbc.com, more on the docks and hear from the ceo. >> is it the same product for humans flavored like beef and bacon? >> no. >> i would -- >> you just have to work on filing their nails now. that's it. >> oh, they're so -- >> eeyore and princess -- are those janes doings? >> the best.

oh. >> that looks nasty, jane. all right, jane, thank you. coming up next on "fast," which gaming stocks could hit the jackpot as online gambling becomes legal in more states. back right after this.

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topping the tape today, monster. the beverage company missing on earnings but reporting a 16% increase in sales, gross sales s excuse me, year on year. the stock could hit 90 bucks in two years. so, standing by is buy rating -- did you just down that? >> i drink it every day on the set. monster, in case you guys are looking for somebody to -- anyway. the stock last night, missed top and bottom line and traded down about 7% during our show last night. got down to beneath 46. today, it gets to almost 54 on that goldman upgrade, taking them to the buy, so forth. big turnover in shares. classic guy adami washout there -- >> so, you like it? >> i like it. >> soon, you may not have to go to vegas or atlantic city to be a high roller. no games yet available to play

in the u.s., three states have already legalized online gambling. zynga is up more than 43% this year as it is expected to be a main player in internet gaming. so, should you roll the dice, ha-ha. let's take a deeper dive with doug kreutz, the senior research analyst at cowan and company. great to speak with you. >> thank you. >> in terms of zynga specifically, you look at when governor christie signed the bill into law and zynga shares have absolutely been popping. you take a look at what the law legalizes and it's not clear that zynga is going to directly benefit as soon as its is available in new jersey. only gamblers physically located in new jersey can do online gaming and they can only be services of atlantic city casinos. zynga has to tie up with somebody, correct? >> i think that's a likely outcome. it is also legal in nevada, which has a little bit more expabsive definition of what's going to be legal, and delaware. obviously, as you mentioned, one of issues is, there are 50 states in the u.s. and a lot of people are located in states

that have not legalized online gambling. not clear how you are going to monitor that. so, there's a lot of issues that have to be resolved before this actually becomes a market that zynga and others can address. >> is this an vestable thesis, zynga can offer online poker and other gambling and they will benefit? >> well, we're kind of in this peer yos right now where there's a lot of hype and there's a lot of news flow, a lot of excitement about this potential new market and nobody has to deliver any results until next year at the earliest. so, you know, is this probably going to be a tail wind for zynga shares for the time being? i think it probably is. whether there's an actual business there for zynga in a year or two years is entirely another question. this is going to be a very competitive market. the incumbent casinos are going to compete aggressively to get it. it is going to be a commodity-based market. not a lot of differentiation between the online gambling activities that are going to be

offered. that doesn't necessarily bespeak of a business that's going to have wonderful margins. >> so, here's the bottom line question. could zynga be a takeout candidate now that it is in place to offer online gaming and more and more people want to get in and get themselves ready for increased legalization? >> normally i would say yes. there have been other social gaming companies which have been taken out by traditional gambling concerns, for exactly that reason. the issue is that the ceo and founder owns more than 50% of the voting rights, so, for them to get taken out, he would have to agree to it and i don't suspect that he's interested in selling the company right now. >> doug, thank you for your time. appreciate it. investable in terms of zynga. do you invest in zynga thinking it's going to benefit in online gambling? >> i think it will benefit, but the biggest risk is the commodities and the question i was going to ask him, would you go long this and short the casinos, and i think in intuitively, the answer is no, because the casinos are coming

into the space. the stock's had a huge run. i'd be cautious. all right, coming up, your tweets traded live. if you have a question, tweet us. back right after this. hello! how sharp is your business security? can it help protect your people and property, while keeping out threats to your operations? it's not working! yes it is. welcome to tyco integrated security. with world-class monitoring centers and thousands of qualified technicians. we've got a personal passion to help your business run safer, smarter, and sharper. we are tyco integrated security. and we are sharper. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points.

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you tweet it, we trade it. let's get some of our tweets. guy -- >> hi there, mel. >> huge fan of the show. i want guy to explain why specifically he is a long-term bear. i watch every night. keep up the good work. >> right on. >> specifically. >> i'm going to answer specifically. don't play with me. >> do it. >> i'm a long-term bear, why? the pillars of the market should be earnings, earnings growth, revenue and revenue growth, they're not. the pillars are an overly accommodating federal reserve. no exit plan. at some point, it all comes to an end. that's why. >> pretty good specifics. good job by you. beekers, alex asks, what do you think of csx? take profits or hold? >> in the short-term, i would take profits on this, primarily technically. it's bounced against 23, 24 for almost a year and a half now. so, it looks like it's going to

take another catalyst to get us higher. we might only have one more leg up in the market. it's going to be hard to get csx above 24, i think. >> this is for the doc. what's your view on apple? seems to be in a tight range after the shareholder meeting. >> very smumuch so. and since nothing was addressed about the hoard of cash they have, other than the board is thinking about it, again, maybe those -- those rats with the -- >> tell pattic rats. >> yeah. >> maybe that's what we need to hook up to the board at apple so they can understand why people are nervous about that big hoard of cash not being put to work. i think it's bullish that the stock has not really violated these february lows and so forth, so, i would own it and do own it at the 450 strike, next week and i'm short the 460s this week. >> moochers, is ford on the rebound or is this a head fake? >> i think it is on the rebound. the only thing i don't like about the stock, very high beta. if you do a regression analysis,

it's over two on the beta side. but it is yielding 3%. the cars have gotten better. it's a good execution story. and if you're willing to be patient here, i think you'll make money. >> all right, got your first move tomorrow when we come right back. stay tuned. i have low testosterone. there, i said it.

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