>> all right. before we go, let's take a look at the day on wall street. it was a tough one. at the lows, the dow down 228 points. we ended down 139. the nasdaq gave up 36 points. the s&p 500 weaker by 20 tult all the averages came back from lows in the afternoon. that's it for "closing bell" tonight. ""fast money"" begins right now. ♪ [ music playing [ music playing ] i'm mellissa lee, your traders tonight, let's get straight to the big stories we are following for you tonight. manic monday, they stage a major comeback led by dividend payers, utilities and staples, the high yielding reads coming back t. question is, what does the reversal tell you about the markets?

we had a little give back in a couple minutes trade. >> they nailed the eem. i think that's what started this. i think then japan piled on. may 22nd, we talked about how important the data was reversed on an all time high s&p. last week, we said how the outside week technically wasn't good at all to answer your question, there is a good cannes we trade up to 1615, scene stwern when the. a 75 chance the high for 2013 is put in. maybe the first half of next year as well. >> there is a trading bounce here. it is painful. >> listen, we held where we needed to. pass resistance becomes support. it came in the form of july '07 high, march 2000 high. those tops we flagged last year. it bounced where it should have been, that last five-minute sell-off wasn't good at all. >> do you agree with that, pete? >> we have been talking about

this eem trade, may 24th is when we started seeing all this unusual activity. has included, including today. another 500,000 puts today. they continue to roll down. this is a great trade school idea when you see what they have been doing over the last month now. they have been buying puts, taking profits, rolling further to the downside, expecting more. today it was july 35 puts rolling down to the july 31 puts. when you look at the us steel, another name, the exact same trade going on, except out in october, they're rolling down. out of the 16s, taking profitles. so it tells me a lot about the materials right now. it tells me about the emerging marks. there is a huge negativity in the merging markets that started before this sell-off. it was a week before this sell-off. >> it takes two to make a market. >> to speak to that, you've had an enormous sell-off driven by flows. this is where i think emerging markets get back to the territory.

i actually think we have seen the peak of the liquidity crush and flow in markets forever. in other words, what we have seen with low growth and high liquidity and the five top central banks crushing the markets, ultimately, it stops working. at least if you look at the risk ae sets the commodities. there is no question the fed has been really troubled, very troubled in trying to tell the market what they're doing. i don't think they've done a very good job. i don't think they're leaving the burning building. i think we have to be careful to have panicked in the last couple days, cash, volatility and the dollar are things i would stay relatively long of in the 94 term. >> so have we seen the highs in the year, you think? >> in the s&p? >> in the s&p. >> i think in the next six months, towards the ends of the year, we break through. i think we are dead in the water until people have a better idea where the rates are going. with the 10-ier mochg up to 60 and moving higher, i don't think you jump if here. >> what do you say? >> it's scary, some of the

things, in terms of have we peaked for the year? i have no idea. i wouldn't give any credence to whatever my, not a market timer, but there are still things to boy. so that's what i look for. one thing, this liquidity, you guys hit on a macrosense, it's interesting to see the flow fund out of things like reed. i know the reeds, they bounced somewhat, even with the reversal that they've had, they're still not attractive enough to meet. >> i'm surprised we haven't seen the mlp etf sell-off. you know, i was thinking, wow, when the herd just turns and heads out of that intrum, i thought we would see a much bicker move than we did and i think that may be still to come. >> all right. tomorrow's session, what are we looking for? >> it should be better. we should get, be tag we held those 15, 16 levels or so we should bounce t. bounces will be violent. think you got to sell anything above 15, 16, we will sell. by some miracle, we get above 16

and a quarter and hold it. i don't think it will happen. >> the sell-off, we predicted it on air, in may, the senior responsible. she joins us on set. joan, it's always good to see you. >> thank you. >> what's your market call? people at home are wondering what the heck happened today? what is your market calm for the near term? >> so, just looking around the world, across our different asset classes and equity, i did think we would have a pullback, largely because we had seemingly unending up days. i think we had fewer down days this year than any year, you know, in decades. but this seems to be more of a correction than a protracted bear trend. it's always fun to know oung that lasts, but i think you will start to see some good values. the market's not that expensive when you look at it on a multiple basis. but i think there is a risk that we could have disappointing earnings. if we do, you will probably have

a further downdraft. >> joan, what level does it cease being a correction and it starts being something more than that, the s&p outright levels? >> that's a great question. i'm not sure i can answer because i think some of it will be driven by flows. you know, you have had real risk off in credit markets. it doesn't feel like you've had that in equity markets yet. so looking at flows, we've had three record weeks of outflows in the high yield markets and funds and equities are still pretty neutral. so i don't know that i can really call a level. >> when you look at potential private equity deals to do, do you think of the financing markets as still opened to you, very opened? and that's in your model of easy money? >> financing markets are absolutely opened. for us, that's not great. because that means prices are high. so as it relates to public to private deals, the typical lbos, we've largely stayed away the beginning of the year. we focused much more on platform buildups, or industries where we

can consolidate. so today, you are looking at pricing that's a little more attractive and hopefully we can find more in the u.s., you know, thatten we have recently. >> so just to dovetail with that, what areas of the market are not expensive still? what areas do you see value in? >> we like real estate. it's driven by supply and demand than it is interest rates. with interest rates going up, you've had further correction. can you see it in the reet markets if you look at public markets. we haven't been building in the u.s.. >> is it single family homes, multi-family home, commercial? >> it's single family housing, commercial real estate, office, where you see occupancy continue to go up. but i wouldn't say we are buying a market. so housing prices have risen. we still think we're in a long housing recovery, but we're moving more from west coast towards east coast. some markets look expensive. >> this concerns me, when you see floodout of markets, we see the tendency towards the last

week the real estate markets, it's pensive demand vs. real growth. is there real growth? sure, there are pockets of that, when you look at the real estate markets, a lot of people think when you get it in a tizzy, ultimately i think you get to that place. isn't this setting people um up for more doom and gloom in a less liquid market? >> i don't think so. i think there is real demand. you have housing demand of 1.5 billion aer year. we're not building cloeg close to that yet. with real estate, you have a long lead time. you see housing starts, construction, and see a good window into supply t. supply is not hitting demand yet. >> joan, we will leave it there. thank you so much for coming by. we appreciate it. time now for pots and drops, a special all drops edition with the sell-off today. down 8%. >> i got fast forward on last week, rightly so. it's down another 8% today. i thought you could play the bounce last week.

i was wrong. what's amazing, these stocks specifically, we are getting to trade levels we saw in march, '09. i don't know it gets there. i was wrong, no touches. >> got a drop for aig down 3%. karen. >> besides being a financial down with all the financials, some concern about their iofc leesd finance business, that deal getting closed. it was not a good day for aig, which were long. >> wind resorts down 4%. >> it's been 12% over the last four days. you see a lot of this space, again, it was a crowded trade. these guys are not located there, they're located in the peninsula, they are doing relative data against these guys in the region. i think you stay away. >> a nominal balance sheet. pa ris sa miers is moving them towards the video area. they're doing a lot with content. i think for those reasons, i love this stock. i think it will pull back further. i think the market is break

down, no need to jump into yahoo yet. >> a pop goer for rusty the panda the bears aren't just out on wall street. they're also running wild in washington, d.c., apparently, rusty, a red panda who resides at the national zoo is reported missing today after a massive search which spread across the nation's capital the rare bear was found and returned safely. >> to the fox den. >> adams morgan or something. >> that's a fox. that's a fox. >> they're not fooling me. >> how do you know about adams buying that? a million eight, a million, al, great pizza spot. back me up then. >> let's get a check on one after hours today. navistar, the ceo is stepping down to transition outside the company. down now 2.5%. coming up next the markets taken to the wood shed with eem ending

down. how is he playing the sell-off and which names offer the best opportunity here? we'll tell you next. later, could the cyclical big bang play a worldth in in the rising rates? we're checking the charts a little later on. stay tuned. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it.

♪ after all, what's the point of talking if you don't have something important to say? ♪

it's time for our top three trades for today. first up, a number of health care names making their new 52-week highs, well point, a few of those names, karen. >> i actually did not know why they were up. i was hoeng the last time there was insider trading front running news. i didn't see anything. of all these guys, the exchanges are getting slower to start than we thought. next up, the emerging market's blood bath, eem stocks fall. they enter bear market territory. where are the values here? >> i got a tough guy sitting next to me. i think they're way oversold, on a percentage of aum, one of the trading call we make is a look at loss of calls. on the equity side, not on the

debt side, on the equity side, you seen a major sell-off. the level on the eem is very good support. the eem to me is not buying the emerging markets. indonesia, look at parts of brazil. look at ambev, you still see growth, volumes growing. this is a place you stay in the medium term. >> i feel it's a street fight brewing. >> back itself up. >> you only have 45 seconds, dude. >> all i can say is in the actual emerging markets, when you look at that eem, the trade, this has broken. it broke that 39 level. now it's towards this 36.5 level. it got down to 36. it bounced today. i am telling you right now the way they're attacking this thing. another 570 puts in there today. that's telling me a lot of the perceptions. >> he could be right in indonesia and eem trade.

>> the low, don't touch me. it's something that we have to respect. it has bounced off of. i can talk to you any time i watch. >> i'm watching you. >> we should just move on, trust me. >> finally, a big announcement from microsoft, sending both stocks higher. we will have the latest in san jose, hey, john. >> we knew this was going to be a big partnership between microsoft and oracle. it's maybe a bit deeper and immediate than a lot of people expected, basically to run oracle software and microsoft's cloud. in theory, this should act sell rate microsoft's cloud and virtualization businesses, customers have a now easier path to the cloud. oracle will fully support its software, including java and microsoft platforms and let people move their licenses over. for oracle, it should keep people spending less on database, testing other option, like microsoft secretary general

server as they move to the cloud. it makes it a bit easier to sell it to cloud customers. oracle has a similar arrangement with amazon. this helps. it's hard to say how this plays out. it certainly seems to strengthen microsoft's position as a cloud provider and call into question where oracle fits in. i suspect it will make the high performance argument. but we'll see. guys, back to you. >> thank you so much, karp, you actually bought oracle, why? >> if the valuation are attractive. it didn't go down anymore. dep flagged it the other day as, you know, maybe there is a nice bounce to be had here. and i sort of agree. i know it's a tough tape. i loo ec the name. >> look at the trading volume, a street fight. trading volume on friday traded about seven times normal volume. we said it traded 29.5, which was a november, 2012 low. doc was here as well.

rick rewards sets up as well. >> pete the real standout was microsoft, which managed to buck the trend and lift the dow higher. >> well, certainly, yes. >> i couldn't hear in my ear. the microsoft trade, i absolutely look at this, when you talk about cloud plays. i think there are certain areas, microsoft one of them, they have made great strides, ibm, emc, guys with great exposure and continue to build upon it. i think i'm one of those folks who think microsoft is going towards 40 in the not too distant futures. >> we will kind of go off the charts. jeff, always good to see you. first of all, let's start off with the ten year. obviously, all eyes are on the ten year, with the yield curve, we saw the biggest move in ten years. >> unbelievable. i think it's important to the keep it in perspective and context. here's a term going back to

1986. when i got into the business, it's still intact and actually comes into play all the way to 4%. so we have a long way to go before we break that secular downtrend. if you take that most recent decline, you are talking about getting up to 2.95% before you break that more cyclical downtrend. so i think getting through 250, it puts that 3% in play. i think we're going to have to struggle to get there. i think we are close to some type of temporary low inbound prices high end yields, correct. >> to use it as an important level to break in order to see that 2.93. >> short-term daily reversal today. hopefully, that's a part of the trade here. >> first of all, i have been wrong. i didn't see the last 20, 25 basis points come to the upside. i thought people would pile pack into treasuries, which i still don't think would happen. but it feels broken. tlt closed on the grown today.

i think you got to let this wash out a couple more points to jeff's points. >> a lot of people say speaking of the financials, what do you see for the s&p financials? >> generally, that is the case. if you go through and look at our rankings, where we have the strength, in our modem itself, dischretienary scores well. look, the trends in financials are still strong, very, very important. all the uptrends in financials, you have the highest pentage of utility and reads, the highest oversold names in financials. the other thing i would add today, 55% of the s&p 500 made a 20-day low. we look at that 50% threshold as a capitulant environment. here you see the average, still some room to come down. we are getting close. >> pete, you have been in the financials trade, it's still not convincing to you at this point? >> no, it's not. i have been back in the

financials since back in november. we have seen the activity telling us they were going to go higher. they did. as soon as we hit the end of may, it was like a switch was turned off. we've watched this slow pullback. so i'm just curious, at what point do you think they were at a full breakdown? is it the 100 day, the 200-day, is there a point where you would be less bullish? >> time is part of it as well. would be a big part of it. look, we still had breakouts. even friday, we had three breakouts in financials. schwab looks good to me. some of the asset managers look good. some of the regional banks look good. financials have held up. that's important. if they break down on a relative basis, then we have a problem we tracked the region also, they were doing well. karen, where are you finding value at this point? >> i find banc of america, j.p. morningen and city, i think i still like them. i understand, though, this rate move is a little bit of a head

wind that bank of america will face in terms of, they all will face in terms of refinancing slowing down. i'm still bullish on the housing recovery. so i'm sticking with them. >> jeff, thanks for sticking with us. crude oil seemed to go against the stronger dollar and finish below $95 per barrel. dennis is putting on right now top money traders say right after the break. later on, as we sit halfway through through the calendar year, one tech name that spoke gains of more than 64% since the start of the year. we will hear from street analysts later on. stick around. [ male announcer ] with wells fargo advisors envision planning process,

it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. where you stand, turn to us. with centurylink visionary cloud a brinfrastructure, and custom communications solutions, your business is more reliable, secure, and agile. vo: i've always thought the best part about this country is that we get to create our future. you get to take ownership of the choices you make. the person you become. i've been around long enough to recognize the people who are out there owning it.

the ones getting involved and staying engaged. they're not sitting by as their life unfolds. and they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?" i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives.

vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection and because usaa's commitment to serve military members, veterans, and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve.

. >> the chinese markets are playing heavy in the u.s. let's see how they are shaping up at this hour. >> reporter: mellissa, i would say there is more selling on the cards today, look what happened yesterday the api, the asia pacific index had a fresh 9.5 year low. now the fed is talking about pulling back. we are seeing capital outflows from this region and the marks over here are repricing rick as well. china was a big casualty as you pointed out t. shanghai composite was down by 5.3% yesterday at the settlement. is the biggest one-day loss in almost four years t. banks were hit very hard in china. what's going on here is by a jenning, the central government is trying to get ahead of the

curve, is trying to address the risks in the shattered banking sector. has caused stress in the interbank market. this is very much fine tuning in terms of economic management. this is a work in progress. this is going to be a factor. it will contribute to volatility and outside moves in the china market and by implication the region as a whole. in my book, look for more selling today. >> thank you. speaking of china, we are seeing the metals in the meltdown lows on peers the fed will pull back its monetary easing out of china. so let's go to the commodity king, himself, dennis, great to see you. >> always good to see you. >> copper, inventories are now at 10-year highs. plus, freeport mine will come

back in a mts of days or weeks. what's your outlook here? >> you can't find yourself being too terribly bullish of any ought metals at this point. copper clearly has fundamentals facing it. without the fed, you got problems. you took copper down the morning, however, to what i used to call the obscene number. you took it down to below 3 cents, $3 per pound. you might. you might be making a low here. but i would not press that issue. gold, on the other hand, i think is nowhere near making a low. i think gold wants to go demonstrably lower, still. it needs, as i always said, gold needs fuel. it needs a lot of fuel, more mule, monetary aggressiveness to push it up. and it doesn't have that as far as the ecb or the fed is concerned. it only has one friend in the bank of japan and if you are going to be long of gold the only way is to be long in yen terms. but anybody who holds gold in dollar terms finds himself in a very uncomfortable position.

. >> i want you to go back to that point you made about copper. you said it might be at a low. what would you need to convention you need to step in and buy? >> you need to see crude oil higher, which it did. you into ed to see the stockmarket hold and move higher, which it did. it tried this afternoon, it gave up the ghost in the last half hour. i want to be bullish on the stockmarket for the first time in months and months. you need to strt to see the term structure of copper turnbullishly. you'd have to see the front month futures gaining on the back months and they're not doing that at this point. but i would never. i don't think here having gone under $3, i don't think i'd want to press the short side in copper. i'll press the short side in gold. i will not do it in copper. >> dennis, i'm pressing the short side on the dollar and the short side in australia, in general. what do you think about the call here? hopefully, this is a aaa rated country. a lot of people are hiding out.

yet, if you look at what's going on, this is a place that has a long way to go. it is going back to a buck, in my view. >> i bought the the other side of the trade on, i did it today, to be honest. you had an outside reversal day. i'd pay attention. you made a new low for this recent move. you closed demonstrably higher. i'm buying the aussie dollar and selling yen against it. the first time i've done it in a while. >> now, it's interesting. where would you stock yourself out of that? >> today's lows? absolutely, today's lows. we should not make new low in the aussie. today's lows that were made in the midst of panic last night should hold and if that's, i think it's one of the clearest trades you will see. you know exactly where you are wrong. >> den fis, grit to see you, thanks for your time. >> great, always good to be on. thanks. still to come, a look at the biggest stories in tomorrow's trade. later on, we're kick off our

2013 segment on an old tech name that has booked huge gains since the start of the year. find out why the top analysts on the streets say the games we have seen thus far are just the very beginning. stick around. tter opportunity for your business, a better legacy to leave the world. we have always believed in this pursuit, striving to bring insight to every investment, and integrity to every plan. we are morgan stanley. and we're ready to work for you.

how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

. >> welcome back to "fast money." we are live in time's squarement time to fast forward our top three trades for tomorrow. first up smith and wesson after the bell of stock is up 14% since the start of 2013. the current valuations still look cheap, pete? >> i will say yes. i think the sales will be off the charts. when you talk about a shareholder friendly company, i think the stock does go higher in the short term. if you are looking towards the end of 2013, though, this is a stock that will finally reach its valuations and pull back. >> from the old holster to your local pharmacy, walgreens out before the bell shares up 30% sense the start of the year, cantor downgrading to a hold, citing valuation. karen. >> that's what i come to, valuation. not terrible. i think if you want to be in that space and you want the premier name of the business, the best management team in the business, go with cvs. lastly, barnes and noble the

last part of the company's nook digital business failed to wow the street. guy. >> apparently, microsoft, that's been the word that they might be interested in acquiring their nook business for something like a billion dollars, which in terms of barnes and noble is a tremendous number. you obviously can't do anything now. you hope the disaster quarter trades down to 18 and holds like it did in early may and bounced. i was there the other day. they proudly displayed. i sent her a text. >> you did. you sent me a little picture. it was nice. >> the whole team 5 shortage should play for a trade. >> any options? >> no. i've not seen that recently. that's up with of those names where the stock is almost like an option, so, no, not seeing that. >> home builders, down nearly 5% after falling 13% last week. this is goldman sachs slapped with celebrating. is it time or more pane ahead? pete carries the banner for the bulls, tim is fighting for the

bears. 90 seconds total to make the case, pete, go ahead. >> when you look at the rates, that's within a problem. suddenly, you see the housing stocks get beat up. i actually think we see stability, the mortgage rates out there. when you look at these housings right now, you talk about their input costs seem to be at a nice level. i think they can make a lot of money, forward earnings, you are talking 11 pe. it was 17.5 two months ago. now pulling back. it's almost right back where it started on april 18th. i think because of that, the builder's index out there very strong. i think this company is cheap. i think it's a great opportunity. >> i take the same points. i see a glass afl empty. this is a stock broken technic amy, basically below $19. it hasn't been to the 200. this is a stock that on valuation 23 times in a market where i don't think i see the growth. not in the areas that are growing. so on the east coast, a big

market. not happening in d.c. goldman says more importantly people are giving pulte credit for the gross par jins. that's great. these are ultimate guys not growing. their land banks not growing. they are not keeping up with their peers. i will not say it's going to heck in a hand basket. >> i don't agree. you said 23, you look forward, it's 11. they have land acquisition on their books as well. i think this company has that big run. now is the time to get in. >> that chart right there in this month tells me this stock is going lower. >> when you hear the buzz --. >> oh, the pot calling the kettle black. >> that's the pot on the end. >> what say you, mr. kettle? >> i tell you what, i thought they both made fantastic arguments. pete in terms of the stock pulling back. tim my in terms of great arguments. >> not everybody gets a metal, though. >> we don't know how the trophies go.

>> hashtag. i'm not in this housing thing, i'm not a believer. >> a hashtag bear for tim. >> karen. >> this was one of the closest street fights we've ever had. >> wow! oh! >> you and me, smooth. we got a little something going on. we are going at each other many times. >> there you go. >> now it's tied. >> hey, you want to break it? >> break what? >> no, not i. the viewer at home. yes. wheat us as cnbc. we'll have the results at the end of the show. coming up next, after the break, a top analyst gives you his playbook on an old tech dog trying new tricks. stay tuned. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ]

♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. [ engine revs ] ♪ [ male announcer ] just when you thought you had experienced performance, a new ride comes along and changes everything. ♪

the 2013 lexus gs, with a dynamically tuned suspension and adjustable drive modes. because the ultimate expression of power is control. this is the pursuit of perfection. a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪

. >> all right. we're nearly halfway through the calendar year. where has time gone? all right. all week on "fast money," we're profiling the hottest stops in 2013 with analysts at the top of their games. our winner is hewlett packer. an old tech name the stocks soared more than 64% this year alone. they call for hp to double in

2013. tony, great call it looks like so far at least. >> so far so good, thank you. >> and for hp, you see sort of a win-win situation. whitman performs or something will happen to the company to make it do even better? >> yes, it's ultimately been and continues to be our investment thesis, which is, this is still a collection of very attractive businesses with a great legacy and the businesses have been underperforming and marks are challenged, but they've largely been losing share. so meg whitman is doing a good job so far. performance has improved. they still have a long ways to go. my belief is that either meg and her team fix this business or ultimately, there will be pressure from outsiders, shareholders or perhaps the board, itself, to make more radical change if hp isn't able to continue its improvement. >> karen, let me ask you, what might those changes be? at one point, they had talked

about other techers spinning off the pc business. then they sort of did a 180 on. that what could those changes be? >> i think, ultimately, karen, if hp was viewed as too big to manage, it's, you know, 100-plus billion floor revenue conglomerate. if it wasn't getting the focus on its businesses, i think what would be most likely would be for the company to spin out its pc and printing businesses which are together managed jointly today and increasingly integrated. so one could spin out that business and say, this is sort of the legacy low to no growth, declining growth business, manage it for cash, then retain the computing business and the services business and have that be the core hp. i think potentially there might be some possibility to sell the pc business in and of itself to either private equity or perhaps to a nation-based pc oem and

then spin out the printing business and retain the remainder of hp. that's what i could see happening. but again, we're 12-plus months away from that. >> tony, assuming they stay the course. what is their growth business at this point? >> i think realistically, hp still needs to prove to investors that this is truly an investment. i think right now, it's a trading stock and i still believe that the rent on this stock is too low. it's the second least expensive stock in the entire s&p 500. it trades less than seven times earnings. i think ultimately, you know, fear value is somewhere in the 30 to $35 range and then i think investors have a significant decision, which is, do you believe this company is investable and can grow? right now, i'm unconvinced they k. i still think the ren is the too low. i'm unconvinced that they can. now, i think the most optimistic case would be that hp is a bit like ibm, which has only had 2%

revenue growth per year over the last 15 years. maybe hp is minus two. if they return a lot of cash to shareholders and they can keep their costs inline, maybe earnings can grow 4 or 5%. maybe you get an 8 multiple on that stock. >> tim, would you buy hp here? >> tone's points are great. i look at a different metric. this is a company that's revalued a lot. it is giving something back. it's trading at eight times next year precash flow ed. i think ultimately, that's a place where they are right in line with their peers. >> is that a good metric to look at, tony? >> i do. the trailing free cash flow is a little heighth higher than that, so the trailing free cash flow is more like 20. on a go forward basis, have you an enterprise value under $50 billion and you know cash flow this year is $7.5 billion. we think it might be the next next year. you are looking at a 15% free

cash flow yield, which we think is pretty attractive. we think on a go forward basis that hp's balance sheet is restored, shareholders will get their hands on much of that cash. >> you like hp? >> i do. i like at this time same way i like blackberry. i don't think i want to own either of these two stocks, but i love having option positions on these because of the fact i mean they laid out to us long ago exactly what the game plan was. she gave us a time plan. she hit those numbers. i still think this is a stock that could fall down because of the reasons he points out. they might fall apart and accident great from the aspect of can they continue the growth? if that's the case, i'd rather be in the options of less exposure. >> tony, before you go, we want to ask you about apple and whether or not your outlook has changed given the movement that we've seen now, which is to go below $400 a share, test that, i mean, it did close higher than. that still the trading action was terrible lately. >> it has.

the tape has been very weak. apple clearly one of the big growth engines is china. there is some questions with samsung's high end product perhaps not fulfilling expectations of the high end of the market. collectively, those factors have been pressuring the stock. my belief is you have relatively inexpensive option value in the company right now. so the stock's about $400, you know, it's trading at about seven times its cash flow 6.5 times its cash flow if you give them credit. it's a very, very inexpensive level. and i think the option value is, i don't think estimates are likely to go down over the next three or four months. yet, at the same time, there's potentially forthcoming product. there could be advise either in terms of those products coming earlier, being more impactful than people think or products that people aren't anticipating. so i think at this valuation level, yeah, i'd probably have downside to maybe 360.

but i think you have real option value if ultimately we're not going to have a big downward revision and we are in the window of southern new products. >> tony, thank you for joining us. appreciate it. buy or sell apple. 360 would be a new 52-week low if we were to see those levels. >> buy or sell price here. >> i think there is a chance of trades in the 80s. i guess with that give you got to sell it. i think it's mindless to do it at this point. we have been saying for a while, it's a stock that's underperformed since september until up to recently has been a great tape. now at 400, yeah, i think it can trade at 380. >> apple, i tell you, 360 is the level to buy. i bought back at a trade back at 505. i came in, got out, took some pain. i don't buy it here. >> what do the options see in terms of that 360 level? >> well, they have certainly turned more bearish. normally, very little on the put

side. shifted. it's much more even. it's a lot more like the financial's trades, if you look at the composites in there, the calls and puts are almost identical each and every day. is it time to buy it? probably not. i think it's a sec half story. i think we are getting to the second half. i think it will be a fall story instead of summer. >> scott nation's has the options action for us. scott. >> i think that we are having a problem with his mic. i wonder, pete, if you see options in hewlett packard. >> there are a lot of positions. when you see put activity, you'd say that's bearish. i think when you see this put activity, it's folks trying to proek their positions. so we are seeing more puts trade in hewlett packard than you normally wouchld i think a lot is putting if protection along

the way. >> options action every friday 5:30 here on cnbc. still ahead, our viewers on everything from the refiners. you tweeted it. we are trading it later on. stay tuned dave's always wantedo when he retires -- keep working, but for himself. so as his financial advisor, i took a look at everything he has. the 401(k). insurance policies. even money he's invested elsewhere. we're building a retirement plan to help him launch a second career. dave's flight school. go dave. when people talk, great things can happen. so start a conversation with an advisor who's fully invested in you. wells fargo advisors. together we'll go far. it's monday, a brand new start. with centurylink visionary cloud infrastructure,

and custom communications solutions, your business is more reliable, secure, and agile. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.

. >> our traders are quick, they're not always right. here what she said. >> in the travel space, i like hertz best of all. i like that $1.50 acquisition for them. >> hertz is down 12% and myriad dropped as well. karen, do you still like these names? >> i do like hertz, but, clearly, that was premature. i think the fundamental reason to own hertz with the $1.50 acquisition was a good one for them. it will give them synergies, cost cuts, revenue synergies. i think that's still intact. it probably got a little too much ahead of itself and then the hertz equipment business, that probably is giving some, causing some of the pain as well. i still like the name, if you believe in the travel story, which i do. >> okay. >> you tweeted. we traded. let's get some of your tweets to

our crew today. this one is for tim from the u.k. greetings fwra the u.k., trading pot ash between 33 and $53 bucks. would you get in now or is this now off the table? >> hey, i sold last week. i think, no worries. i think pot ash, it's all about the chinese negotiations for the next contract on pricing. this is something where i think it will be delayed. i think the market remains somewhat soft. brazil, demand not so good. china, inventories are somewhat loose. i think i would stay out of this trade. i think in the third quarter late you buy it. >> i think may is more australian. >> i could have bought actually australia. >> karen, this is for you. thanks for recommending wet seal. are you still bullish? >> no. the stock's done well. clinton group did a gooth good job of being activist here.

the stock i think has actually outperformed the underlying business. their komps weren't so bad, which was good enough to get the stock going. at this valuation, i wouldn't continue, though. >> gee, what gives with the refiners? >> a woman, an analyst a while back said they would double. remember that? they have been grim ever since. they remain in a grim up-channel. i think you trade bolera and tesaro and i think the take should behave itself over the next couple days. >> pete, has johnson & johnson peaked or does it have juice to go higher? >> i think there is juice left. i love the diversity, you got the consumer, the pharmaceutical the device division as well. there is a lot of reasons to like it t. 3% yield, i tend to lean much more towards direct pharmaceutical companies, but, if you want to be in this particular name, i do think there is upside. . >> here's just one for the entire desk.

>> what do you got? >> if the downey teamed with seymour in a no holes bar against najarian, who would win? >> that's like hulk hogan takes on a pair. we could do it. >> what does that mean? >> he just sold you down the river, brother. >> i might be one of those partners that turns. >> whatever that means. >> wow, just saying. >> what are you going to do? >> i'd totally go with you, pete. >> she's right. >> are you a little late. >> it's fast. >> we'll tell you more about tomorrow when we come right back. stay tuned. tdd# 1-800-345-2550 [ trader ] when i'm trading, i'm so into it, tdd# 1-800-345-2550 hours can go by before i realize

tdd# 1-800-345-2550 that i haven't even looked away from my screen. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 that kind of focus... tdd# 1-800-345-2550 that's what i have when i trade. tdd# 1-800-345-2550 ♪ tdd# 1-800-345-2550 and the streetsmart edge trading platform tdd# 1-800-345-2550 from charles schwab helps me keep an eye tdd# 1-800-345-2550 on what's really important to me. tdd# 1-800-345-2550 it's packed with tools that help me work my strategies, tdd# 1-800-345-2550 spot patterns and find opportunities more easily. tdd# 1-800-345-2550 then, when i'm ready... act decisively. tdd# 1-800-345-2550 i can even access it from the cloud tdd# 1-800-345-2550 and trade on any computer. tdd# 1-800-345-2550 with the exact same tools, the exact same way. tdd# 1-800-345-2550 and the reality is, with schwab mobile, tdd# 1-800-345-2550 i can focus on trading anyplace, anytime... tdd# 1-800-345-2550 until i choose to focus on something else. tdd# 1-800-345-2550 [ male announcer ] all this with no trade minimums. tdd# 1-800-345-2550 and only $8.95 a trade. tdd# 1-800-345-2550 open an account with a $50,000 deposit tdd# 1-800-345-2550 and get 6 months commission-free trades. tdd# 1-800-345-2550 call 1-800-578-4439 tdd# 1-800-345-2550 and a trading specialist will tdd# 1-800-345-2550 help you get started today. we're headed the same way, right? yeah. ♪

[ panting ] uh... after you. ♪ [ sighs ] [ male announcer ] it's all in how you get there. the srx, from cadillac. awarded best interior design of any luxury brand. lease this 2013 cadillac srx for around $399 per month, with premium care maintenance included. [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪ can help you do what you do... even better. in a we believe outshining the competition tomorrow

requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. from this is a rare occurrence here on "fast money". >> i told you it's a tie. >> it's a tie. >> that's a good argument, my friend. see. >> it's a tie. >> normally it's like kissing your sister. in this case, it's like kissing pete. >> it's not such a bad thing. >> final trade time, tim. >> apv. the best company in the world. it's cheap relative to itself get abv. >> xlb, a lot of foot buying

last week. 150,000 in july. i think it's going lower. >> oracle, we talked about it earlier. i think it has stopped going down. >> i'm with fennerman. >> i'm at 5:00. mad money starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a working summer and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to mad money. i'm just trying to save you a little money. my job is so educate you and teach you. so call me. your biggest enemy in this market is an unseen enemy.