we are still measuring success by what the fed does next. we'll keep watching. that does it for us tonight. the markets as you just saw, in rally mode today. we finished at the highs of the today, up 207 points. today, the second-best day of the year for the dow. have a fantastic weekend, everybody. see you on tuesday. that will do it for "the closing bell." 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. the trade earls tonight are tim seymour, steve grasso, dan nathan and guy adami. the ironclad rally, a goaldy locks jobs report. with economic data not so hot or cold, we ask, does the fed even matter anymore? guy? >> depends on which one you're talking about? yeah, i think our fed matters. i think what's going on in japan matters more than what's going on here. i don't think it has anything to

do with, talking about fed tape. i haven't mentioned that at all. i don't think that's the deal. i think the volatility in japan matters. i think the reversal yesterday was important. i thought we'd fade the early gains today, i was wrong. i still think people are going to try to short against that may 27th reversal, that's your term for us to get higher. >> of course the fed matters, though. i don't know why people -- wednesday, the sky was falling and suddenly today we get a benign number which -- the other thing that is ridiculous is people keep coming up with these numbers on how many job numbers over 200,000 numbers we need for the fed to get under play. the things are the currency markets. the moves we had in g-3 currency markets, to use a double negative, this was far from not a very important week. >> so it was an important week. >> it was an important week. >> all right. >> 3% moves in the yen. the yen reversal, very important. japan reversed last night. you buy japan here. the s&p never really broke that 50. fourth time it's tried --

>> nothing is going to kill this rally? >> yeah, something is going to kill it. >> eventually. >> he talked about -- >> is it going to be taper talk? >> let me tell you something -- >> we bounced off that. >> it's the talk that the u.s. is the safe haven trade, we have decoupled from emerging markets -- >> haven't we? >> well, we have, for now. >> it's the greatest -- >> when you look at shanghai and what they've done, hong kong's down 5%, the bovespa is a disaster. the only thing identify heard of ex-u.s. this week, pmi is europe was better than expected. >> what is your point? >> my point is, we saw it in april, we saw commodity, you know, volatility, we've seen emerging market volatility, bond volati volatility here at home. it will come home to roost here. it just has to happen. >> the problem, though, with all of this is that the market needs to define risk. to guy's point, we need to break above 1687 to the upside or break down below 1580 to the down side or else this is all the same thing.

>> we have the bank of japan next week, kur rhoda's got to do something. they need to push the yen higher, weaker against the dollar. >> the u.s. could look like the best house in a pretty lousy neighborhood. >> well, dan is concerned about the lack of growth and emerging market currencies are telling you something. when the dollar prumented this week, it should have been emerging market currencies rally, they went weaker. i hear what he's seeing. but ultimately, where is the panic that you need for this? and i don't see it and i think the u.s. is going higher here and i think ultimately the housing market is better. today's job number, by the way, wasn't bombastic, but it was something that givens people more reason to feel like -- >> number below 50 -- >> terrible. >> but we rallied back from all of that. the biggest thing is still ben bernanke. once he tapers, this market is going to sell off. >> once a taper becomes more clear in terms of when it's going to happen, that's when we see the selloff? >> only 10% of hedge funds out

there were actually beating the benchmark. they try to load up this week. guys got aggressive on the sell side. that clear defined sell side, that short interest is going to increase once that tapering becomes eviden s evident. >> we have a great sharlt on the spx. it's bounced off. you can take it off the bank. there will come a time when that trade is not going to work. i think we're going to see -- >> why has it worked? it worked only because ben bernanke is still backstopping, do you agree? >> yes, i do. >> it's not as if a lot didn't happen. >> japan was way ahead -- >> guy, what do you think? >> japan -- >> i think the volatility in the asian markets is going to come home to roost at a certain point in our market. may 22nd reversal will hold up until it doesn't. i happen to think that was the day the market reversed. these rallies in the middle of the, this downtrend that we've

seen are violent and painful. but i think until that 1687 is violated, i think as painful as it, is you have to sell this thing. >> key question tonight is, when is the fed going to start to taper? let's bring in a man who might now, otherwise known as the fed whisp whisperer. john -- >> melissa, on that fed whisperer thing -- i think reporter is a better word. >> all right, reporter, fed whisperer. >> just trying to talk to these guys -- >> how about the mole? >> hey, hey, let's let john -- okay, john, you say likely to ease up on bond buying, qe, this year. what's the time frame here? >> well, i mean, i think the fed chairman said it a couple weeks ago in his testimony to the joint economic committee. in the next few meetings. it's very unlikely to be at their june meeting in a couple of weeks, so, you know, then you've got one in late july, you've got one in september. they're going to see how the economic data plays out.

you know, i think that what you saw today with the unemployment report was a number that's kind of in line with what they are expecting to see. good growth, payroll growth but not great. but actually holding up in the face of fiscal headwinds. so, you know, i think things are proceeding on track and nothing changes from what the fed chairman said a couple of weeks ago, you know, for everyone to digest. >> john, do you think the volatility in the japanese market, specifically the currency and the bond markets, scares our federal reserve in any way? do they feel like maybe they can't control things over there and some how it's going to come home to roost here in the u.s.? >> i think they've got to be looking at what's going on in japan and saying, well, things are actually pretty orderly in the u.s. there's all this worry about when they are going to start pulling back. we've been palmi ingbeen talkin several weeks now and the markets have been pretty orderly. i think they would take some

comfort that what's happening in japan isn't playing out globally. >> so, john, when you said that nothing has really changed from what the fed telegraphed a couple weeks before, does that mean that you think it was already in the cards, this prediction that the fed would likely taper qe by the end of this year, because it does seem that economists on wall street, if you read all the notes that came out today, i mean, you could throw a dart at the wall in terms of their forecasts, as to when this taper is going to start. >> well, there's a couple of points of view here that i think are really important and help us to put the finger on the dilemma for the fed, right? so, the fed is expecting the economy to grow up -- to pick up in the second half of the week. right now, there's a lot of head winds to growth, because of this fiscal restraint. but they see an underlying economy, a private sector that is pretty strong and they think is going to take hold by tend of the year and put them in a position to pull back. if you read analyst reports, like the reports coming out from bank of america or goldman

sachs, they're expecting slower growth. they think that once again, the fed is being too on mystic about the economic outlook. and that the fed is going to have to cut it own growth forecast and take all these plans that they've been telegraphing off the table. that's possible, but i think if that happens, the first thing they're going to have to do is revise down their growth forecast. that's the next big issue. are their forecasts going to hold up? some people think they are being too optimistic. >> we heard that greenspan thinks they should just go to zero. obviously, he's at the other end of the spectrum. what do you think of that view? >> they did that with qe-1 and qe-2. what they're worried about is, they did that and the economy slowed down again and they had to restart the whole thing. so, i think the strategy that they laid out is, what they're effectively saying is that

they're uncertain. they don't know if this thing, if the economy is going to hold up. they don't want to face the embarrassment they faced a couple more times now of stopping something and having to restart it. so, they are keeping their options open. >> john, real quick. i know you are pressed on time. behind you, is that a present from that woman in scarsdale, that plant? look over your right shoulder. >> you know what, i can't tell you. >> is that real? >> is it real? >> i'm going to have to pull some of the books off the shelf and see what they're all about. >> just don't smoke it. >> john, thank you. >> okay, all right. thanks, everyone. >> reporter from "the wall street journal." known in some circumstance. s as the fed whisper per. >> got that one in. >> people listen very closely. let's move on here, hit pops and drops. got a pop here for micron tech. tim? >> regis is probably listening to this.

>> i hope so. >> big week, a note saying that memory supply is getting tight. you saw a pop for them, nice week. >> big pop for soda stream. guy? >> we talked about this. $100 price target. later in the week, you had the pepsi rumor. we talk about this stock having legs. it don't think you can chase it here. gets below $70, you buy it again. >> tesla, grasso. >> short interest way too large, still to get in front of this. it can come in. it's got trading range of 85 to 110. so, basically be careful. i would not short it. >> and long haired freaky people should not apply. >> right on. >> drop here for ebay, down 5% this week. dan? >> this one is a little puzzling here. first time since january 2012. i got to tell you, i think there must be some sort of whispers throughout about apple and wwdc coming out with some sort of payment sort of system here, because i do not get the weakness in ebay this week. >> and a very special pop for

our executive producer john malloy. >> there he is. >> who is celebrating a birthday today. >> love when he does that. >> very happy birthday, john. >> can you roller skate? you are so good at that. oh! >> love the suit. nice stretch. coming up next, we're going to be talking apple. once america's most beloved stock is now down 17% this year, but will the developer's conference give shares momentum? we'll give you the trade. and later on, blackberry unvaming its new q-10 phone in the u.s. this week. will it cause more harm than good? the question sparking a street fight you will not want to miss. much more "fast" coming up next. we went out and asked people a simple question:

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apple expected to unveil its i radio streaming service at monday's developer's conference. julia boorstin now with what we can expect. zblchl that's right. apple has inked a deal with sony music. now it has all three major music labels on board and will develop i radio on monday. it will roll out this fall, be free and ad-supported with personalized play list similar to pan door ya's service but control over what songs you hear like spotify's on-demand service. i radio will look to have listeners buy music from itunes. pandora's user numbers, which it revealed today, in may, pandora's active listeners grew 33% from a year ago to 71 million, as listener hours grew 22% to 1.3 5 billion hours.

pandora's stock has suffered in the past, but today, the stock moved higher, as it is the internet radio leader. now, the big questions now are, how much i radio will eat into pandora's market share and how apple will grow its ad business to support its free radio service. now, ads have not been apple's strong suit. melissa? >> thank you, julia. wwdc happens on monday, not too much expected. largely a soft ware conference. this could move the needle for some like a pandora, perhaps, tim. >> for apple, on software, the ios 7 is what people expect them to deliver and may be a driver for the stock. if you are looking at the i-streaming, the i-wallet, these are not things that are going to move the needle. if you look at what happened to samsung last night, this whole sector is under pressure right now. big downgrade on samsung, which i think is the leader of the pack. they're slowing demand here for the high end phones. >> google had a conference a couple of weeks ago and the stock popped 30 bucks off it.

there are things -- though everyone thinks -- >> good-byele is in a very different place. >> yeah, but -- >> don't you think? >> i think they are both in the same spot. apple, all that negativity is out of the name already. everybody knows what to expect. >> it's not just off of a almost fresh record. >> it's funny. expectations aren't high running into the conference, but there's been so many people who have been calling a bottom in this stock. expectations are hikind of high. i actually think investors are going to be disappointed. if they only talk about ios 7 -- >> that's all they got. that's it. big surprise would be the wallet. >> the outlier in today's tape was qualcomm, down. at one point, almost down 2% today and that stock has not performed now for a few weeks. i think you can sort of trade qualcomm for the long side against $61.50. people are tried to use this as a proxy short for apple. >> all right, let's talk

blackberry. shares of the blackberry maker have rallied 16% this year. can the momentum continue? we have a good old fashioned street fight. guy is the bull, grasso is the bear. 90 seconds to make both cases. guy? >> their ecosystem is not getting the respect itdy ser de. blackberry's got about 120,000 apps to their system. people will say, they don't have the good ones, but 120,000 is actually a decent number. that, improving gross margins. you go back to the last quarter, their gross margins were 40%. the street was looking for 30%. that's actually a pretty good sign for them. so, i think all the talk about them sort of receiving the downstream, losing the margin war is probably overrated at this point. and i think it's an underapproaeciated property pla. the stock has meandered around these levels. when dan and i debated, it was probably trading right where it is now. i think there's some mojo to this stock. >> i think you have to believe

the turnaround story to make it an effective case. high short interest stocks i usually stay away from. but the short interest has actually grown in this name. you see netflix or tesla, the short interest decreases. people don't believe the story. if you chart it, april 2011, from the time corporations said that employees can pick whatever device they wanted to use, the stock lost 90% of its value. when people have a choice, they go elsewhere. >> i have a question for you both. short interest and high short interest, doesn't that play more into guy's case? >> not when it's increasing on every pop. and that's the difference between tesla and netflix, that every time the stock rallies, the short interest decreases. with blackberry, it's actually been increasing. >> right. and you get one decent data point and you see what happens on high short interest. >> sounds like you guys agree. >> well -- >> no, no. here's the problem. every time it's popped, it's

given it right back. it's not as if it holds those pops. with those pomes, it there's a whole layer of people that want to reshort the name. >> all right, the buzzer rang. >> the may quarter looks like it is coming in better than the street expected. blackberry 10 selling ahead of expectations. i go with guy. >> i go with guy, too. >> oh! >> i think the products stink, but i don't think it's a product story. they have a third of the market cap in cash. 38% short interest. i think on the next pull-back, back to 12, this thing on a sum of the parts basis looks very interesting. >> you were just negative on it two weeks ago. >> all right -- all right. >> get the baby. >> i hear the baby. tell us who you thought the street fight. you don't have a lot of time, only ten minutes left in the show. results in ten minutes time. coming up next on "fast," we have all the big movers covered. plus, lululemon set to report

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same store sales for may, above analyst predictions. guy? >> yeah, yes, almost double what the street was expecking. these games are doing something right. i can't tell you what it is, tim might know, because he's a big old navy fan. where is it, 42 and change? i think gap goes higher. >> gap is going higher. all right shares of tivo mrulting after it announced a settlement for less than expected. dan? >> be careful what you wish for here. this has been the story to own tivo forever. that they had some serious patent claims to some of the biggest cable providers here. so, this thing got drilled. less than expected. at some point, this thing is going to be trading at cash and probably gets acquired, i don't know. >> finally, yum brands gets a boost. upgraded the restaurant operator trades to a buy. ubs believes the profitability

will improve. tim? >> they are saying it's an inflection point and they better get back to high teen margins on yum. i think they will. i think yum is doing the execution. yum and domino's, you know, dpz is another one to look like. they are actually beating it internationally. yum to me technically has a ton of resistance and i think you have to be careful for a stock that the street is calling for it to trade at a premium valuation for it to get to their conviction level. 80 bucks a share, 20 1/2 times, which is expected -- >> half hour show. be careful. >> good content. people wait for that. >> lululemon, the stock up 30% since april 1st. so, is lulu stretched -- >> oh, come on. >> or is it -- >> you can see right through this one, though. >> seriously? >> nice, steve. >> seriously. >> dan. >> it has shook off all of that negativity. this was expected in the price move. i would be a buyer. >> question is, dan, in your

spinning class, what are you wearing? >> sorry. >> listen, the dudes are starting to wear lulu. >> meaning you? >> on a purely technical setup, this thing, after having a rough go after high profile earnings misses this year, it is trading back at all-time highs here. if they start getting things right, i think you see a breakout here. >> the estimates have come down by a third because of the transparency issue that they had. >> nice way to say it. >> 32 times earnings. shorts have been piling into this thing. i think it's 23% short interest now, whatever -- i mean, it's tough to play these names to the short side. you have to way for the blowoff tops where there's huge volume. then maybe you can get in. otherwise, stay away. >> all right. it's time to find out who won the street fight. >> i did. >> no, grasso did. sorry, buddy. >> thanks. >> time now for the final trade. go around the horn. guy? >> the defense stocks, something's working. lockheed martin. >> tim? >> we have a lot of setting up

in brazil. take your spots here. >> dan? >> yeah, i think investors are going to come back to u.s. domestic. long slu. >> grasso? >> i went to 60% cash before we had the selloff it was lucky, more luck than skill. but i did miss this 40 handle rub from 1600. i'm not ready to get long. i think we're going to fade again. >> all right, thank you so much for watching. see you back here monday at 5:00 for more "fast money." meantime, don't go anywhere. "options action" starts right after this quick break. stay tuned. only part of the . before reminding ourselves that some bonds are more valuable than others... and before weighing the ups and downs in your life over the ups and downs in the market... we changed the way we help you live in retirement by changing the way we work with you to and through retirement. connecting your wealth with your health and your life. that's the power of a merrill lynch advisor.

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this is "options action." tonight, apple's big moment. will wwdc finally give the stock its mojo back? dan nathan's revealing what's really at stake in giving you a winning trade that makes you money for free. and cracked foundation. may be jitters in the housing market, but khouw and carter is teaming up for a rock stoll lid trade. plus, rev your engines. has general motors come too far too fast? our traders have answers to put you one step ahead of the stock's next move. the action begins right now.