it was a reaction to some of the landscape out there in terms of the economics story. the dow down 106 points, although well off the lows of the day, which were almost 23-200 points on the down side. 15,302 last trade on the dow. nasdaq finishes down 21. and the s&p 500 gave up about 12. that'll do it for "closing bell." thanks so much for being with me. i'll see you tomorrow. stay with cnbc. "fast money" begins right now. welcome to the nasdaq marketsite in new york city's times square. i'm melissa lee. our traders for tonight are tim seymour, steven p. grasso, dan nathan, brian kelly, and mike kuo. let's get straight to the big story "fast" is following for you tonight. bubble watch as markets come off record closing highs. are we looking at a looming breakdown in the areas that were considered safe but possibly bubblicious? take popular dividend plays like utilities now in correction territory officially today. real estate investment trusts, or reits under pressure over the past couple trading sessions. you can see there the iyr, the

etf that tracks reits down by 2% today as well as high-quleelding telecom stocks like verizon, sprint, at&t, and then take a look at this. we got this today. "usa today." >> oh, no. >> bull run gets solid footing. are these former market leaders bublsz in the popping? yes or no? brian kelly, what do you say? >> you know, bubble is probably a little too extreme here. but certainly being a bear i think we're at probably the highs most likely for the year. i'm not quite willing to go that far. but what that cover on the "usa" does remind me of, in aufg what was it, 1979 -- >> you weren't even born. >> august of 1979. i was just a wee little lad. >> impossible. >> and "business" magazine -- exactly. "business week" magazine wrote "the death of equities." and the dow was at 833. went on the biggest run that it's had in our lifetime.

so it concerns me when i see the "usa today" declaring that the bull run has legs. i being short would continue to short this market. >> what do you say, dan? >> well, listen, the market has last momentum. so in the last week we had that gap up, that day after the fed. there was a lost fedspeak last week, i think it was the 22nd. the gap up, the reversal. and now it's kind of finding its way here and looks to me like it's lost momentum. we've seen the moves you that mentioned today are kind of eye-popping here in the u.s. tim flagged a lot of this. the mother's index in japan. it start over there. it's worked over here. we're seeing volatility in bonds and equities and currencies and commodities. so to me i think as b.k. just said we might have put a near-term top in. >> but just as euphoric as all that can be, you get a couple down days and everybody starts to lose their mind. i agree. today was important to me because teactually we started t see a crack in the high yield. we started to see fixed income credit blow out. periphery in europe, which is more concerning to me. we stopped talking about europe for a month and a half and in fact italy's gone from 3.80 to

4.20 on the ten-year. but the bubble was on the way up. clearly. it's not necessarily that there's a bubble to be popped today and tomorrow. it's ultimately what's going on with asset flows. where did the treasuries settle in? the bond market's all over the map. and i would say you ultimately could have just as scary of a pullback in yields, i.e. a rally in bonds, right here as you did in terms of the blowout -- >> let's dig deeper in this notion of the bubble. we're not necessarily asking a bubble overall for stock -- >> it's a scary word. it's a big word. >> take a look at utilities, for instance. xlu, it's trading at a forward p/e of 19 1/2. if you take a look at a telecom stock like an at&t which has been a favorite among yield-seeking investors that is trading at a current p/e of 28. these are historically high valuations compared to themselves. >> that's the problem is people are basing that bubble on valuations, not on the rotation. even though we've seen a pretty good trooigs. but how can you say that the yields are going up elsewhere

and it's unattractive for a 4 1/2% yield on sl? i own it. i still own it. but when does that reverse again? how on earth does that -- so treasuries move now. i do get that there's an algo out there that starlts to dump the utility space -- >> you're going to wait for that algo to kick in and be the last one out of this trade -- >> algos kick in -- i've definitely held this a little longer than i wish i had but i'm still long southern because i think it has to revert backwards now. i don't know how long that trade goes up. but you can't tell me a retiree that was looking to collect the income from yielding space in the utility space is going to -- >> but are retirees worried about volatility? they're worried about their nest egg. they don't have five or ten years here to worry about getting it back like you do. >> so you're right. they're going to get into treasuries because there's no volatility there. >> they can go to cash. it's not an either or -- >> we're not even seeing it yet. we're 2% off the all-time highs and the vix is at 14 and doesn't even move. and we're seeing really, really

orderly action here. so to me going back to some of the price action we've seen in other asset classes, this thing's coming undone, people. you've been flagging the iyr down 2%. that looked horrible today. the xlu, just put up that chart, looks horrible here. it's not going to just concentrate in those little areas. >> i kind of want to say, you know, structurally i think we're in a decent place but i think we're in very overbought conditions. i also want to point out that the utilities index was off 5% even before we started worrying about this thing blowing up on us. it was all 5% because people are rotating into higher growth stocks, not because they're scared about yields going up and exchanging their div stocks for treasuries. that's not what this is -- >> so where were the overbought stocks? are they the hyg which you flagged earlier? is it the telecoms? is it utilities? at what point do you say these are the areas that are a little bubblicious here and there could be a rotation town a higher growth area? >> i think when you get into the multinationals that have had global growth, that have also had exposure to real domestic growth here, and i'm talking about mostly in the food and in

the retail sector, i know mike kuo's going to talk a little later in the show about some of these. i think he's dead on. but ultimately when you have -- how about coca-cola? how about heinz before that takeout? how about people look at the heinz takeout saik saying people pay unbelievable multiples for -- >> bleach and spices. >> and i know the range things trade in. i'm an emerging markets guy. i know there's a consumer out there. i know heinz has done as good as job as anyone selling ketchup around the world, but guess, what there's a limit to what you pay for these things. >> heinz 57. >> i'm more of a catsup fan. >> catsup and ketchup are very different, by the way. >> they are? >> yeah, they are. let's move to our trade here. is the market of housing showing cracks at this point? diana olick is on the case. >> rising mortgage rates and rising home prices are never a good mix, but are they a lethal brew for housing or are they an incentive to buy? let's foote all in perspective. the rate on the 30-year fixed is up from the r0rd low 3.47% we

saw last december but we're still below 4%, which is historically very low. that said, every one percentage point increase in rates, say, from 3 1/2% to 4 1/2%, reduces the average home buyer's maximum purchase price by a little over 10%. that's from dan green of waterstone mortgage. now, a lot of this is of course emotional. that's what i'm hearing from lenders and realtors alike. craig stremt of apex home loan in maryland says "it's amazing to see the frenzied pickup in home buying as renters get nervous that both rates and home prices will rise quickly." dan green out in cincinnati says his refi clients, especially fha borrowers, are being hit the hardest. and realtor david fog in burbank says rising rates are clearly slowing the market and pricing. now, rising rates have hit refinances hard, down to their lowest level since december. and while many borrowers have already refied, as more people gain equity in their homes due to rising prices they're finally qualifying to refi. but now they've missed the boat

on the lowest rates, melissa. >> diana, isn't this a reason for them to jump in ultimately? >> people off on the sidelines. >> exactly. because as you said, this is such an many oceanal trade. i had a dinner last night with one of the top brokers at edelman who tells me he's as much psychiatrist right now as he is actually broker. in other words, talking people, getting them in the mood is a lot of what this is. i think if people are scared they're going to miss -- even at 2.10 on the ten-year, this is much cheaper than we even were a year ago. >> right. it's an emotional trade. you're going to see it short term. you're going to he soo a couple people who say rates are going to get really high, i'd better jump in right now. but most people i talk to say rates are going to stabilize around this point, higher than what they were but still at historically low rates and we are not, not in aing boom right now. we are in a house recovery. yes, prooss are up 10% from a year ago but we have to remember they're still down 30% from where they were during the peak of the housing boom. they don't need to get so afraid

suddenly it's this huge bubble that's going to burst again. weern back where we were. >> housing not in a bubble. housing stocks? >> quote me on it. >> and how about housing stocks? >> housing stocks different story. you can make that argument. because when we look at the stocks of the home builders over the last two years they started to run up even before we were in a solid recovery, even before home prices had hit bottom. you're seeing the builder stocks very expensive right now. what you're not seeing is housing starts rising as quickly as those stocks are. much of those starts are in multifamily. the home builders are still -- they're recovering. they're doing better. they're getting better orders. but they're still well below the historical norms and well below where they need to be given the complete lack of supply we have out there. you have the realtors out there beg the builders to get more homes on the market more quickly. interesting. some of the builders are admitting they're actually slowing production in order to gain pricing power. so you know, let's keep it all in perspective. >> got it, diana. thanks a lot for that. diana olick joining us from d.c. housing market not in a bubble.

house stocks may be so. yes, you say. >> definitely. look at the action you've seen in the last month in toll brothers, d.r. horton. but we've talked about this. the better way to play that -- >> you said that three months ago. you would have said that five months ago. >> toll brothers is in the same spot that it is today. >> but you buy these things -- i've been buying stocks on momentum. i've been consistent on that. when they run out of momentum and you see these charts, they clearly have. >> let's hit our top three trades of the day. some of the most notable moves of the session. first off michael kors, an earnings beat on both the top and bottom lines giving a pop to this stock. grasso, what do you say on kors? >> 65 is really great resistance in this name. so i won be a buyer here. we have to look at this in the spectrum of april 22nd, from that point the stock is up 23%. i think you have to let it breathe, wait for a close above 65, wait for about two or three consecutive closes above there before you buy the name. >> next up a roller coaster ride for fannie mae today after our

own david faber reported that bruce berkowitz's fair home has taken half a billion-dollar stake in fannie and freddie preferred shares. that had the common stock moving. mike kuo, what do you say on this one? >> yeah, i think people should really be very cautious here. what's going on on in the preferreds, obviously the common is the subordinate to the preferreds, doesn't necessarily mean they're going to be endielted to any of the profits which really are going to the u.s. treasury who's the beneficial owner of this name. remember this thing has an enormous multitrillion-dollar balance sheet. so even as volatile as this has been on a valuation basis that's still relatively small. this is not a way to invest in the housing recovery at all. it's a political trade and i would avoid it. >> and last up here, smithfield foods surging on word that the company has agreed to be sold to a chinese meat processing company. for nearly $5 billion to our meat space trading expert. b.k., what do you say here? >> we're talking heinz, we're talking meat space. >> dream come true. >> time for a barbecue. the only problem with, this i mean, obviously it's not a problem if you're a smithfield's holder today. but look to the other names, tyson foods, what happened today. it's going to be hard to

extrapolate this to the rest of the meat space primarily because you're talking about a lot of regulatory problems, you're talking about the potential chinese company buying a u.s. company, and tyson foods really reversed today. popped up in the morning, reversed. i would be cautious. >> you think this deal does not go through, then? >> i think it's going to be a little more difficult than the market is suggesting. >> i think it would be laughable if it didn't go through. and i think the u.s. government has to accept the fact that we want to open borders, we want open trade. is pork suddenly -- >> in any way is it oil? is it rare earth? is it -- >> okay. but i mean, are you telling me that this is something -- >> we have no more hogs? >> this is -- >> when you get politics involved in these type of things, all i'm saying is strange things can happen. >> good points all around. still to come here we stay on bubble watch. it's not your dentist or cabtwi facebook. we see if social media's showing too much euphoria. widows and orphans. but in the last week they've

already wiped out their dividend payouts for the year. and a bubble in company headquarters? it is true. and it could be a sign that the stock has topped. that's more "fast," straight ahead. ood idea. and work day and night until they end up in a place that no one ever dreamed of. because they know that things can always be better. well, us, too. introducing the redesigned 44-mile-per-gallon-highway civic hybrid. the best civic hybrid yet. made possible by honda. could lose tens of thousands of dollars on their 401(k) to hidden fees. thankfully e-trade has low cost investments and no hidden fees. but, you know, if you're still bent on blowing this fat stack of cash, there's a couple of ways you could do it. ♪ ♪

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welcome back to "fast money." i'm seema modi. mid-american energy holdings a subsidiary of warren buffett's berkshire hathaway. they've agreed to buy outstanding shares of nv energy. a 20% premium to wednesday's closing price. nv energy is nevada's biggest electric utility provider -- providing power to about 2.4 million customers in the state. plus millions of tourists that head to nevada for that famous las vegas strip. you can see shares of nv energy higher after hours. back to you, melissa. >> seema mody. we are continuing our bubble watch. consumer staples have declined more than 1% since our mike kuo raised the red flag on the sector just last week. take a listen. >> this group is trading at a good multiple over what the market is trading at and i think that's probably going to revert. i don't think the overall market is expensive but i think the staples are.

i think this might be a good time to start rotating out of them. >> so is this so-called safe sector in its first bubble ever? we were talking about paying out for spice makers, for bleach makers, for detergent makers. that's what we're talking about here. >> the clorox. mccormick is obviously the spice makers. they just acquired a chinese spice maker obviously. color sox a commodity. they make bleach, branded bleach, but it's still a commodity. kimberly clark, procter & gamble which dan had highlighted many weekends ago got hit right after earnings but kimberly clark had not. college gat palmolive had not. these things are still immensely expensive relative to the market, relative to their historical valuations. there's not a who'll lot more upside one could potentially see. if rates go up these things get hit. if the market goes down they get hit. i don't understand why anyone would look to buy them here. >> i mean, 22 times forward for mccormick. you may like cinnamon and herbs de provence but is there growth in those areas?

>> johnson & johnson is another name i've been on and i've been losing money on the way up and i finally have this thing here now. this is a mid-single digit grower that was trading at high teens multiple because of that 3% -- >> this is all about multiple expansion. it's not about anything that has changed. nothing has changed. it's all multiple expansion. if you're going it sell high yield this is the sector you're going to sell. >> procter & gamble popped on the -- >> and then unpopped. >> tells you one that it wasn't that simple. and two, procter's still at 18 1/2 times earnings. i think they're a better play here than unilever to take care of that e.m. consumer, et cetera. but i think you have to look at valuations, people. an expensive stock is ultimately a good barometer. if you're buying a great company like procter & gamble 14 times, who cares what the market's doing? it's not. it's 18 1/2. >> next trade, it is the most horrible part of the market, the gold miners sinking about 40% so far this year alone. frank holmes is ceo and cio of u.s. global investors and he believes sometimes you need to go where there's the most pain

to get the biggest gain. frank, you're experiencing a lot of pain right now. your fund is also experiencing a lot of pain right now. so what do you see here that others aren't? >> well, i think that you take a look at gold stocks on a mathematical basis. what they call the death cross. when the 50-day goes below the 200 day. we like to go back the past ten years for gold stocks it's happened ten times. on average it takes about 90 days before you get a turn. and they fall 16%. this has even been more severe and has fallen with what we like to say stukt statistically two standard deviations. the odds favor based on historical data for the past ten years that we're close to a bottom. then we like to look at the seasonal pattern to gold with you, a very defined 35-year seasonal pattern. and the bottom for gold is between may and july. and sometimes it's in may. sometimes it's in july or june. and we're coming to this period where we're due for a big rally for the seasonal demand that takes place out of asia. >> hey, frank. brian kelly.

so at the top of the show i kind of poked fun at the "usa today" for saying -- talking about the bull run continuing. now we've got something below me right now that says this is the horrible part of the market. tell me something i can say at the cocktail party this weekend to say gold miners are a buy here, not the standard deviation. there's got to be some catalyst out there that i can just impress my friends with. >> you can impress your friends with the yield. i mean, you've got a dividend yield that's higher than a ten-year government note. >> that's not saying much. >> it's higher than inflationary rates. >> tied to the price of gold, correct? >> but you have it extremely oversold. when it's down this percentage change, never before that we've had such a decline where you get dividend yields. all the gold mining companies have been increasing their dividends and they're cutting back on any further produce. so you're going to see supplies start to shrink over the next three years of gold mitting the market. i also think it's important to recognize the big crash in gold,

the etfs unwound but consumers around the world bought it. you went from financial gold to strong hands gold. >> frank, ultimately, though, what are these guys doing to free cash flow? because what we're really seeing and what a lot of these gold miners are trading like thar really going to go bankrupt is they're not in a position of free cash flow that in fact if you price gold at 1,300 bucks an ounce, ultimately a lot of these projects are worthless and they need capex in order to save the balance sheet. >> they may not be able to access the credit markets because they're facing possible downgrades as the price of gold goes lower. >> i think you're going to see a lot of -- we're seeing some companies cutting back on their capex and i think that will continue. i think there's also a discipline that's taking place. buying back their stock and increasing their dividend because they have so much free cash flow. we like stocks like that. franco nevada pays out a monthly dividend. it has 60% gross operating margins. i think that's another great company. and rangold has lots of profit

margins and is very disciplined. i don't think they'll go into any project unless they get a 20% return on their capital. some of these other gold mining companies like beaumont and barrick, terrible. newmont, terrible use of capital for the past ten years. >> frank, going to leave it there. thanks for your time. good luck. frank holmes. >> the point he made about capex actually could be the catalyst for these stocks. >> there's a lot of flexibility. >> eph in the ability to pull back on supply. >> plus miners, though, krout perform on the way down. when gold's moving down the miners outperform them to the down side. but when if you think gold has bottom bottom the miners outperform on the way up. i'd rather be a buyer of the miners than -- >> i think barrick bottomed. >> you just said it was terrible. >> i see 2 1/2 billion dollars of cash on the balance sheet, a lot of flexibility, 4% div yield. this is where i would take his argument. they're not all going out of business. the junior gold miners stay away from them. >> you side with tom holmes or tim seymour on barrick?

>> oh, i'm going to go more with tim seymour on this. >> because i'm in the studio with you? >> well, if you just look at gdx, right? as the proxy for it. it's actually been holding up pretty well here. and when you have the sentiment so horrible, so bad in any sector, any little spark with k. really get a good lift here. so i'm with grasso and i'm with tim seymour. >> let's stick with some of these miners here, not gold but other miners. bhp billiton struggling so far this year, down more than 15%. this as the company halts plans to expand their coal mining division. will shares continue to tum snbl mike, what was the options action on that? >> we saw a lot of the august 50 put trades. those are out of the money. trading about 30 cents as kind of a cheap pet. but i message it was a put purchase for someone who might be concerned declines in the shares might actually be prolonged throughout the summer. >> all right. let's hit pops and drops now. the big movers of the session you might have missed. drop for clifz natural down 5%.

>> in the iron ore space and coal space. iron ore's about 30% off the highs. it's broken tlou the 50 moving day. i own cliffs. i'd feel very comfortable owning cliffs until about 17.50 then i'd pull the rip cord. >> weyerhaeuser. 4%. >> that's not so bad. when you look at lumber, which is down 35% year to date from the highs to the lows, i would expect weyerhaeuser probably to go even a little bit lower. so i'd be short weyerhaeuser. >> drop for colgate palmolive down 3%. >> this is a continuation of the proxy trade. crowded trade. people are coming out of it here. expensive name. slow grower here. to me i don't think these things are done going down yet. i don't think you want to be early in trying to pick a bottom. >> drop for chico's down 7%. steven grasso. >> the stock actually acted a little worse than it should have. i still wouldn't be a buyer here, though. just playing both sides of the fence. and that's getting painful right now. so q1 is -- >> straddling is usually not comfortable. >> the spring line.

>> i'd stay away. i'd stay away from the spring line as well. >> pop here for stewart's enterprises. up 33%. mike kuo. >> service corp. international agreed to buy them at an enterprise value of about 1.4 billion. you know, this is interesting of course because we look at names like the staples. this is an industry, the funeral service industry that probably would continue to grow along with population growth and i think that services is actually still a buy. it was only up less than a buck actually. >> and a pop here for free falling. it's one thing to climb mt. everest and another to jump off its peak. a russian daredevil smashed the record for high yeest base jump ever. 4 1/2 miles off sea level. the leap of faith took about two years of planning and lasted all of one minute. >> and a big shot of vodka. >> coming up next on "fast money," wells fargo higher in this hornl tape of housing cracking. why is the biggest mortgage underwriter higher today?

bull tim tries to circle the wagons and no holds barred debate with b.k. social media telling us the stock bubble is already here. we read between your tweets. more "fast" straight up. >> "fast money" means trading. everybody's got to bring their best information each and every night. the entire trading day is the preparation for the show that night. >> it's idea generation. it's all about giving you a framework for how to look at the market. as the world has changed, our show has evolved. i am guy adami. i am "fast money." >> i am pete najarian. i am "fast money." [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ]

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as the rest of housing stocks back today, wells fargo was on the move higher. how can this be when the bank is the biggest mortgage originator? it's a fierce debate unfolding on the street today and on the desk tonight. tim is the bull, b.k. is the bear. total of 90 seconds to make both cases. tito, kick it off. >> stock price hasn't been rising on fantastic origination

volumes. if you look at last quarter's volumes the origination volumes were down. last quarter also the net interest margin, the nims, which a lot of people are look at and this is ultimately one of the reasons how you are gauging a bank, you're also gauging their return on equity. the nims actually shrunk last quarter because we were in a compressed yield environment. taking a lot of deposits. ultimately wells fargo is in a place where this is weighing on the balance sheet. when the ten-year is at 160. if we're talking about a world where rates are backing up this is about for profitability. this is actually good for nims. o'this to me is a guy who's -- >> filibuster. >> great valuation. 13 times ultimately is not bad but the return on equity beats the rest of the sector. ten times earnings is probably 20% cheap to the other core. this is not a stock that's laying all of its eggs -- >> all right. listen. enough with the subterfuge and chicanery. they have 28% of the mortgage market. refis used to be 75% of the mortgage applications. that's now down to 70%. the last three months mortgage

applications have been -- last three weeks mortgage applications have been declining. and the refi index is absolutely plummeting. that's their core business here. if you're selling ketchup and nobody has hot dogs anymore, it doesn't matter -- >> but that's the core business, why has the stock been rallying? >> the stock's been rallying because the yield curve got a little bit steeper. >> and that's what it's going to do. it's going to get steeper. >> you talked at the top of the show how you could have a big rip in bonds here and yields go back down. that's going to -- >> nims going higher. cost of equity going lower. ultimately this is very positive for these guys. >> the bottom line here is whether or not you believe that higher net interest margins are going to offset the decline in their core business, which is mortgage originations. where do you stand, grasso? >> obviously, the chart speaks for itself. so i was -- i felt like b.k. was going to make the more compelling story but i feel like tim's family is in the studio so, i think i have to agree with him. but also the chart speaks for itself.

i haven't seen any reduction in momentum just yet. >> i don't think sky's going to beat you up on this. >> my 4-year-old's tough. >> i actually think mr. tito over there made a better argument here. but i'm going to agree with grasso. i think you want to buy this thing back at that breakout level, that multiyear breakout level at 37 1/2. it just rallied 10% in the last here. >> can i clarify? i am tito. but wasn't grasso saying he agreed with me? >> yeah. >> but you're agreeing with grasso who agreed with me. >> and he said you first. he agreed with you and me. >> right. >> i've got two people on my team. >> is this show two hours tonight? >> i want to know who you thought out there won the street fight. so tweet us @cnbcfastmoney using hashtag bull for tim, #bear for beakers p got the results at the end of the show. >> vote early and often. >> for those that need it, beaks. >> is social media signaling a bubble? a recent study of 40 billion tweets found that the word "bubble" is being used at an

astonishing rate. paul haughton is the founder and ceo of cayman atlantic, an investment management firm that uses social media to conduct trading opportunities. paul conducted the twitter study and joins us on the "fast" line from spain. paul, thanks so much for phoning in. >> hi, melissa. >> why did you track the word "bubble" and do you think this has any significance to the markets? >> it's a good question. i basically wanted to look over the last six months and see if it was a general upward trend in the mentions of bubble, financial-related bubble talks or tweets on the network. i looked at about 40 billion tweets over the last six months and compared each month, month by month to see if there was a growth curve, and it looks like the last two months there's been a massive spike. i mean, we're going from like a couple of hundred tweets a month to about 29,000 in may. >> so do you take this as a contrarian indicator if people are talking about bubbles and it's not a bubble? >> well, that's a good thing. it's now up to how people can interpret that data. but you know, it could be one of

two things. it could be simply people just retweeting news or talking about comments they hear on the news about a bubble or it could actually be a general build-up of concern in the market, people saying the equity market's getting overheated and we could be in for a reasonably sized correction soon. >> well, you use social media, paul, in how you trade. so how would you use this piece of information? you built this algorithm presumably for a reason. >> well, yeah. what we do here is we actually look at more specific equity-related news to specific companies. but this is really just an interesting study that i did. because it's quite topical at the moment as well. people are talking about this bubble, are the markets overheated. so it was really just a bit of research. i mean, i won't specifically trade on in, but i will bear it in mind in the next couple of months. >> paul hawton, joining us from spain. i just tweeted "bubble" 20 times in one tweet. i don't know if that will skew

the results at all. but what do you do with this information? >> people say when mila kunis was talking about the s&p it was time to sell. she's 8% in the money from that statement. how do you read what twitter in terms of momentum is actually saying? there are people trading it all day long. most of these people that are tweeting are also not trading this market. so i don't know if you can look at it in the same way you can look at rsis and essentially exhaustion indicators that a lot of technical guys look at. i would say i don't listen -- >> so you think it's cockamamie? >> yes. thank you. thank you for boiling it down for mep. >> i'm still amaze the guy did it all by hand. 40 billion tweets. >> talented. one, two, three -- all right. still to come on "fast," energy independence. it is possible for north america. but what's the holdup here? the company behind the keystone pipeline tells us why congress is clogging the process. plus we stay on bubble watch. this time fancy buildings. the new apple headquarters looks amazing, but are they a sign the best days for the stock are over? history shows there is a correlation that you might want to know about. be right back. ♪ make me feel fine

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welcome back to "fast money." we are live at the nasdaq marketsite in new york city's times square. trouble in japan has been foreshadowing trouble in our own markets lately. and today's session could mean

more of the same tomorrow. let's get an early read on the session with cnbc's adam bakhtiar. adam. >> thanks very much, melissa. that's right. we're looking at probably another volatile trading session in japan when the markets open for business in about a couple of hours' time from now. you can see the osaka futures trading with an implied triple-digit decline across the nikkei 225, which is a very tech-heavy market across the board. the market of course has been characterized by huge volatile swings on an intraday basis. and yesterday we finished with the cash market closing at about 14,300. in terms of today's moves, the osaka futures is probably telling us that once again the correlations between the movements in the equity markets are going to be directly correlated to the movements in the foreign exchange. at this juncture the dollar-yen is looking a little softer in the u.s. trading session that's just ending on your size. dollar/yen yesterday just to put it into context rose as high, about 102.40 and that helps to

support equities in general. but given the fact that trade is currently being unwound with more than 100 basis points and also euro-yen which was trading as high as 131.60 at the high of yesterday's trading session, it's going to mean there's going to be some selling in the cash market across the board. of course futures markets tend to dictate the movement in cash markets. a lot of the times the intraday hedge funds, what they do is they sell in the futures market and then they start selling the equities in the cash market. the other factor that could be influencing the market moves is of course where jgb yields have been heading. now, they tend to always -- a lot of the times follow the movements in ten-year u.s. treasuries. and we did see some money come back into your fixed income mark, which helped to stabilize the rise in the yields we saw two days ago. as a result of that we haven't seen a sharp rise in the ten-year jgb yield as of the overnight session. we need to watch this one very, very closely. during the japanese trading session. because we have seen huge, huge volatility in the fixed income

markets in japan. this tends to influence of course a lot of the sectors like the real estate plays, the companies, the reits, and any company that relies on cheaper interest rates are vulnerable to those high rates. it dictates the moves in the equity markets. we're keeping a very close eye of course on the two major factors, dollar-yen and the ten-year yield to see exactly where equities will be heading in japan. given our futures number, it's going to be a down day today following the declines that you guys had on wall street. back to you, melissa. >> got, it adam. thanks so much. adam bakhtiar joining us from singapore. b.k.-w this information how do you position for tomorrow? >> well, i think if you can trade forex you probably want to be long yen tonight. that's the way i'm going to be playing it later on. and going into tomorrow you've got to be a little concerned about what's going to happen here. to get all george soros on you, you can get a reflexive moment going on where this whole process starts to get that downward spiral going. >> you're into the very big words tonight. >> yeah. i used a dictionary -- is it a dictionary or is it a thesaurus? >> thesaurus. >> 165 dollar-yen is a key level you'd watch. if you break through there i

think you're getting that reflexive moment. also watch the aussie dollar which continues to crater. >> blackrock ceo larry fink making headlines today. in an interview on "squawk box" take a listen to what he he had to say about the short-term mentality of investors and specifically options traders. >> most players in the markets make money on the velocity of money. and so they're trying to talk about quick trades sxopand opti trading and all these other things, which studies show it has negative outcomes for most people and yet we perpetuate things like that. >> let's get a reaction from our very own options trader, jon najarian. i did put a request in to blackrock to get some more information on what exactly larry meant by all of these studies, what studies he specifically was mentioning, and i didn't get a response. >> no. and i couldn't find one either, melissa. i'm not surprised and i'm sure dan wasn't that people continue to demonize the product. however, the product, options, that is, grow at about 16% a

year. if people were just losing, if all these studies proved people couldn't make money in options, you wouldn't see the volume of trade. you'd see a one-time spike in options trading and then it would go away. that's not what's happening. we're breaking records every day. >> so some people listening out there say you're the co-founder of options monster obviously you're going to come on and say lots of people make money trading options. but you actually took a look at 12 studies. >> studies from duke university, from the university of massachusetts, from harvard, from very recognized experts like ibtsen and so forth and they found over a 20-year period you've steel got four full percentage points lower in volatility. so 11% versus 15% over a 20-year period comparing just a buy and hold index, the s&p 500 or the russell versus a covered writing program. >> and i don't think what he was saying is too fair, too, especially not quoting the sources. when we spend a lot of time talking about options on this program or "options action" we're talking about uses of options for risk management.

this is something that's really aiding a lot of portfolio management, whether you're a professional or an individual. i think what mr. fink is talking about is the gameification of the stock market using options for leverage rather than going to a casino, and i think we can all agree that that's probably not a great use of them. >> and i think he's talking about people who are buying options outright and effectively buying premium and doing nothing else. and that's very i think low on the spectrum of how people are using options. we use options all day long. we do have an expected options drag on our book. we use a put book, and effectively we're always buying volatility. i will never sell volatility because i always refer to this as picking up nickels in front of a steamroller. i don't think that's a smart idea. i like to own volatility. and two or three months out of the year it pays off handsomely. i am more than happy to trade that, by the way, in the long run. so i usually have 30 or 40 bips of premium on my book at all times and that makes me sleep well at night. >> i bet his portfolio managers, tim, do much of the same. some of the smartest investors in the world, warren buffett, mr. soros, of course carl icahn,

use options almost exclusively to express a view that they've got when they want to make that bet. i think he's probably just demonizing more high frequency trading than he was option trading. >> jon, always good to see you. jon najarian of options monster. by the way, larry, if you're watching, feel free to come on and defend that statement. coming up next, we gave you the top trades for today. we give you the top trades for tomorrow coming up next. don't get flat foolted at the open. transcanada's ceo gives us an update on the pipeline and what it will take to get the green light from congress. more "fast" straight ahead. ♪

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the keystone xl pipeline has been under review for 4 1/2 years, one of the longest ever for a cross-border pipeline. these delays could end up costing transcanada the builder of the keystone xl pipeline more than $5 billion to construct. but how long can transcanada wait? let's welcome russell gurlg gurling, the ceo of transcanada. >> thank you. >> it's passed the house and is now up in the senate. so what's your time frame?

>> i think the protest that we're still working toward is the decht state process. and our understanding of that is the comment period is closed on the final environment impact statement. we'd expect a final issuance of that report hopefully in the coming weeks, maybe another month or two. and then after that there's a national interest determination period which we believe should take somewhere around 90 days or so. that's the time frame that we're working with. and i think we've answered every possible question that anybody could think of with respect to the pipeline over the last 4 1/2 years. i'm still thinking that's going to be positive outcome. >> all right. so you have said before that it will be in service, the pipeline, in late 2014 or early 2015. does that fit with the pipeline you're laying out here in terms of the various approvals you need from congress and the government? >> i don't think under the current scenario anytime in 2014 is -- >> that's off the table? 2014's off the table?

>> i believe that completing this pipeline is probably more likely mid to end 2015 at the current time. >> mid to end of 2015. and at this point the estimates are $5.3 billion and it's rising with every additional day. now that you've pushed out the in-service time frame to mid to late 2015, how much is that in cost and how much will that impact your bottom line? >> the costs are rising. these delays aren't inexpensive. it's very costly to maintain all of the facilities and pipe we've got in place out in the field, maintain our construction workforce. don't know the exact magnitude of those numbers yet because we don't know what the date of approval's going to be and how long it's going to take us to put the pipe in the ground. but it's not insignificant, i guess i would put it that way. >> not insignificant, the additional costs due to the delays. is that correct? >> correct. and we need to work through that

with our shippers. some of that will impact transcanada and some of that will impact our shipping tools. >> russ, we're going to leave it there. always a pleasure to speak with you. >> thank you very much. >> russ girling, cref transcanada. tachlt rp. there are a lot of stories now that in the meantime with all these delays they're looking at other ways to get the oil from sands and that includes truck and rail, which is more dangerous, but that could be a boon for the truckers and -- >> it has already. canadian pacific has ripped that type of thing. when you look at russ's stock here, it's been on a tear since 2009, really. but the problem you have is those costs going up that you just got out of him, melissa and it's at the 200-day moving average. if i was in this one and i had some profits i'd be getting out here. >> costs were not insignificant. not insignificant. >> yeah. to me i think people are really focused on the wrong things here. this is clearly a political football that's being juggled around. this is 830,000 barrels. this is a major boon for the united states consumer and obviously very good for canada. and to me with something that

actually has bipartisan support there's really no excuse. these guys have gotten around the environmental issue with the nebraska ak wifr. pass this. >> keystone cops literally. literally. >> it's ridiculous. >> three big reports out tomorrow but we give you the trades today ahead of the game. plus we answer your tweets. more "fast" straight ahead. at honda, we know some people are never satisfied with a good idea. and work day and night until they end up in a place that no one ever dreamed of. because they know that things can always be better. well, us, too. introducing the redesigned 44-mile-per-gallon-highway civic hybrid. the best civic hybrid yet. made possible by honda. some brokerage firms are. but way too many aren't. why? because selling their funds makes them more money. which makes you wonder -- isn't that a conflict? search "proprietary mutual funds."

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what i would do is if it drops you wait 15, 20 minutes in the morning. any muhlbach you sell it and get out. >> lionsgate set to report tomorrow after the close. grasso, just yesterday new high. >> this is all about content providers. it's been on fire. there's no sign of this stock running out of momentum. more smartphones, more tablets, more tvs. you want to be a buyer of content. >> and last up, joy global posting second quarter earnings before the open. dan? >> yeah, this is one that all you e.m. people who are looking to get a barometer of global

growth, 50% of their sales come from overseas. the stock is really stuck in the mud here. it's down 13 oers on the year. real underperformer. you want to see what demand looks like around the world. you want to see what the strong dollar is doing to it. >> e.m. people. >> i'm an e.m. person. inventories in china have not gotten any better. the farm equipment is doing a little better. mining equipment is dead in the water. i wouldn't be running in there. >> all right. coming up next, we've tallied the twitter votes. so who won the street fight? is it timbo or is it beaker? and we've got your first trade tomorrow. stay tuned. >> crazy day in the market, but investing doesn't have to be a white knuckle ride. grab a ticket for tonight's show. i'm looking at a stock that can provide you with a smooth ride and steady returns. so keep your hands and feet inside the vehicle. "mad money's" coming up next. it. see, i knew testosterone could affect sex drive, but not energy or even my mood. that's when i talked with my doctor. he gave me some blood tests... showed it was low t. that's it. it was a number. [ male announcer ] today, men with low t have androgel 1.62% testosterone gel.

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