drama at the close. the market ended down 21 points after spending much of the day today in unchartered record territory. nasdaq going up a quarter of a percent. the s&p was down about a quarter on the standard and poor's. that will do it. "fast money" begins right now. stay with cnbc. i'll see you tomorrow. >> live from the nasdaq market site in new york city's times square i'm melissa lee. our traders tonight, guy adami, tim seymour, brian kelly, karen finerman and mike khouw. let's get to the big story. hot stocks of july. some big names were a cut above the rest. we're breaking down the reasons for why it could continue for tesla, trip visor apple netflix as we enter the month of august.

guy adami. >> tesla, we said as long as it held the secondary the stock would be okay. i think the secondary was 92.5 93. it was okay. it bounced. a couple weeks ago i was convinced it reversed and was headed lower. i was 100 wrong. ten days later anthony deutsch comes out with their note and the stock is off to the races. at these current levels although i was wrong a couple weeks ago i still think you have to look to sell this thing ahead of earnings on the 7th. the last quarter was a blowout quarter. i'm hard pressed to believe they can do the same thing twice, especially given the stock that the stock is 40 $55$50 history. >> bmv revealed it's new car and to quote dr. j. it's a hot car. >> hot is relative to dr.'s

standards. >> would you be taking profits ahead of the 7th? >> i've been wrong on this name. i guess i would be taking profits a long time ago. to me this is a story where the valuation is difficult to justify. i was looking for momentum to come out of that stock. i was saying around $85 was the place you got to last liftsoff. it hasn't come near that. >> $160 is the price. they're saying they feel more comfortable with the 25% towards gross margins. >> this surprised everybody. i think you do take profits here. this thing has been a monster. that said you cannot try to short a name like this. it has so much momentum on the upside you get your face ripped off. take some profit do a stock replacement, that type of thing. >> karen? >> you know i wouldn't be in this name. i agree with brian, i wouldn't short it either. you don't have to play in every

name and i wouldn't touch it. >> a lot of analysts are talking about how they're going to scale the platform. it's where social meets the travel industry. you can get reviews, that type of thing. it's done much better than expedia. i still like this name but again, like i talked about doing a stock replacement. if you are up that much in this stock, not a bad idea where the volatility is on this to buy upside calls or do an upside call spread, something like that to capture that momentum or at least define the downside. >> i feel like you're dancing on mike khouw's territory. this is a strategy you can employ for any of these high fliers. >> i think that makes a lot of sense. in many cases, especially the stocks that have had violent moves, a couple of things start to happen.

one is that the options premiums elevate as people trying to play the volatility they're seeing in the underlying equity. that's one of the reasons why the spreads makes sense. you can sell well out of the money puts and use that to help finance purchases and call spreads. that way you have a cushion. i definitely think that makes a lot of sense in the names that have been mentioned and ones we are going to talk about. >> let's hit apple. it's up 11% gain for the month of july after it had been -- i don't want to say left for dead but left for dead. >> some of these a relief rally. it's sort of a decent sized bounce though. i think we also saw 30 million share buy back since the last quarter. so that is something significant. but right now i am long the stock but i feel like the name is in limbo until we have clarity on new products. >> they made it clear there's stuff coming in the fall. that was worthy of a short term

pop which i said wasn't getting through 445 so i was wrong. if you are waiting that long do you need to hold the stock now? >> i never feel like i'll be able to sell it and buy it back at exactly the right time so i do just wait. >> i thought we mentioned those double bottoms during that 388 level. pete has been saying it's a second half story and it literally started turning higher in the second half of this year so good job by pete. now i think the stock needs to close whatever that may high was. close above there, maybe that gets us the next leg up. we start to flounder though it's probably headed back down to the teens. >> e-trade financial, mike khouw, what are you seeing? >> that's one of these names that was so universally hated that any bit of good news would propel it higher. some brokages might benefit.

last week they had earnings better than expected and they announced they were going to sell their market making unit. this is a company that has headwinds. it's been facing declining revenues they have had several ceos over the course of the last couple of years. i think the company has problems and i would not be looking to purchase it here. bk was talking about replacement strategies. if you are in this stock you should definitely peel out of this. >> i'm with mike on this. at least take your profits on it. i think there are a lot of headwinds for this name. if you look at what propelled a lot of these names it's the baby boomers. as they start to retire there's going to be less dollars in those accounts. e-trade and much of the asset management business is going to have a tough time. >> netflix? >> what is happening? these guys -- we've talked about disrupters on the network. they're the ultimate disrupter.

it's a great value for investors, especially a younger demographic which is using the internet for how they're getting their tv. subs are growing, they are growing internationals. the original content that these guys have spent a lot of money on and ultimately is delivering. if you follow through on their unique content it leads to margin expansion as the subscriber base gross. that's what the numbers show. hulu amazon that's a lot of competition. these guys have a long way to go to prove that they have carved out this unique model with guys i think are bigger and badder and may win at 55 times currents and 33 times next year at 2014 and 15 respectively i hold this stock. i don't short it. i think we now need to see subscriber growth catch up with the expectations that it will. >> i think you will see that. the higher the stock gets the more difficult it is to own. you saw that in the last

earnings period when the stock went from 270 to current levels. ten percent moves are not uncommon a name. if you can stomach them though i think we're at a level where we can make that next leg higher. i've liked the name for a long time. clearly i should have pulled the rip cord last quarter. >> let's move to the fed decision and how it could influence the bull market rally. joining us education yar denny who runs yar denny research. . you're a believer in the bull market but you think that we're bound at this point to hit sort of a stall, correct? >> i think so we've got some issues coming up here in the fall. september 18th is when the fomc will discuss possibly a tapering qe. it wasn't obvious that that's what is going to happen with with this latest statement, but that will certainly be a date to be reckoned with. then october 1st. we'll get another sequester and we forget they're going to

happen every year nor a ten-year period. they add up. there will also be a debt limit fruk kus down in washington i'm sure and obama care hits us in october. i think all these things may give the markets some pause. the reason the impact has do you know so well is because the fed said they're going to keep interest rates towards zero for a long time. >> in terms of what this stall will look like, can you characterize it? are we going to see a market pull back and if so what do you do out there? when you are a viewer at home and listen to this you think maybe i should get out at this point? >> the problem with getting out in this bull market is you also have to figure out when to get back in. you have to time it just right. we have had three major corrections in this bull market and to go away in may and come back in october just didn't really work out. sometimes you have to know to

come back in july or go away in april. i think this bull market is going to carry us for a couple more years quite honestly. this is a case of you stay with it and i think some consolidation would be overdue and welcome quite honestly. >> ed, brian kelly. i'm curious, if you are thinking that the taper is going to be a problem, about 60% of the earnings growth according to jpmorgan has been driven by buy backs since 2011. if the taper comes in and we get a little bit back up in rates, how does that impact your long term bull market deal? >> that's a very good point. i have had the same view. when you add up the amount of cash that s&p 500 companies have plowed back into the market through dividends and buy backs, it adds up to a stragerring $2 trillion or more than that now. that's really what's driving this bull market. i think we are going to see some buying by individual investors and foreign investors but it's

the cash flow that's driving the markets. i think it continues. >> it's tim, ed. one of the things that we've noted that you are more constructive on europe, maybe at least some recovery on the industrial side. i stay short european banks. i think i'm going to continue to trade actively but lean on. on the industrial side where do you see this going in. >> germany seems to have more domestic demand than one would have expected so that's offsetting some of the weakness in their exports. when you look at the latest data on manufacturing and this organization called markit does preliminary manufacturing pmis and they look like they're turning back up closer to 50. there is also production measures in there that are turning around. to tell you the truth, i'm surprised by it as much as anybody else but i'm very data driven like the fed. europe actually looks like it's

recovering. >> ed pleasure speaking with you as always. >> thank you. >> let's first trade this a little bit. a lot has come out with the fed statement. there are a couple of changes worth noting. first of all the note that mortgage rates have risen somewhat and the modest economic growth. >> you saw that in the bond market today. right after the adp report we were off. i actually sold bonds right after that report looktd like a hero went to a zero by 2:00 in the afternoon when the fed came out and said that. you're looking at them trying to keep these rates lower for a longer period of time. >> inflation was another thing that was different. june and july if you compare the fed statements they were exactly the same other than the fact that they said sub two% inflation is what they're watching and could be imposing economic risk. that's where you got a more

doveish commentary than people expected. the dollar is going higher. they're coming out of the market, we know this. >> let's connect the dots here. if we think the fed is more doveish and perhaps tapering may be pushing out to october and facing the squesequester ed said and that is a concern. >> you know it's not the bus you see coming. it's the one you don't expect. that's what's going to wind up happening. i talked about this last night. the fact that the s&p remains around these levels, i'm hard pressed to believe that this is in fact the top. the market doesn't allow you this long to buy a bottom or sell in this case sell a top which is why i do believe we probably have another 25 30 handles. >> still ahead we've seen shares of time warner. could the major media names have more room to run and at what point are they no longer a power

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>> market flash. check in with job lipton at headquarters. >> we are watching cbs here reports and beats on the bottom and top advertising revenue. up five percent. from content licensing and distribution up 22%, revenue from affiliate and subscription fees up 18%. chief executive les moonves saying the results represented the best quarterly profits. >> let's get more on red hot stocks and bring in portfolio manager at gam co. cbs is one of your holdings. did you like this? >> it was a terrific quarter. strong advertising. they monetized television

content, bought back $300 million worth of stock and going to convert the billboard business in a reit ipo it. >> i think the struggle people have with a lot of stocks is they have had monster runs hitting at least 52-week highs across the board here. you're a value investor. at what point do you say these no longer represent quote unquote value stocks. >> we're long term investors. we have very little turn over. cbs had a brush with death. they've done a great job transforming the business but it is 7 -- 60% advertising. >> to mel's point, comcast, the parent -- we have to say that. that stock moved four or five percent today on a pretty extreme of a move. when you see things like that

you say regardless of what we think about the space it might be time to pair down understanding these are long term. sometimes the market tells you it might be time to sort of make a move. >> listen we still like the cable business as well which is a subscription revenue business. broad band is going to be here to stay. there's a lot of room to grow grow business services. comcast was dramatically undervalued three years ago, it's made up a lot of that ground and is still are relatively cheap here. >> let me ask you about portfolio management. when something gets to fair value or when it's no longer a value, do you -- at what point due sell it and then do you have to deploy the money right away into something else. >> no. we can sit on cash. we'll trim as the margin and safety in individual stock narrows. >> you mentioned the trend for advertising, you think it's near

peeking. at what point and which stocks will feel the biggest hits. >> the global advertising market $100 billion in television and social media. clearly those are taking most of the growth in advertising. print actually more than television. cbs obviously is advertising exposed as are the broadcasters. >> you mentioned social media so we have to talk about facebook for a minute. it finally hit its ipo price today. is that the number one beneficiary you think from the loss from the traditional places that would get that dollar? >> that and google which represents the most search. >> do you consider them media stocks? >> sure. they compete with the traditional companies. they're in a different zip code in terms of valuation that we look at although google got interesting for a while.

>> how about m and sa. you have had a a lot of rumblings. >> there is a kol days bid. time warner reports tomorrow. the big question is are they going to be a consolidator or get consolidated? at some point two big cable operators in the u.s. consolidation should benefit everybody. >> just the bottom line in terms of top holdings comcast, cbs, time warner. there's no need to pear even though they're reaching highs. >> i can tell you to look north which is roger communications. i think that is an attractive stock. i can tell you to go back to old media, which is different than

old news corps, basically the "wall street journal" for free. >> chris thanks for coming by. let's hit the top trades that kept our stomach's and specifically bill ackman's stomach churning today. jcpenney slotting ten percent after the new york post reported that cit is cutting some product shipments. when there is a sniff of credit problems that's huge. >> this is a problem. >> short the bonds. >> here's the thing about -- i'm actually surprised. i have not been a huge fan of jcpenney and this was ackman's after lunch problem as opposed to his earlier problems. given the size of the offering which they have recently done i think it was a little surprising to see this news if in fact it is true that's a problem. that is really a problem when your financing dries up. >> i would imagine they're trying to get their orders in place for back to school.

>> that stuff is going into the storage right now. they have been drawing down i would imagine using cash. also going into the hot season that's a big use of cash. this isn't welcome news at all. there seems to be fear out there when you look at the stock, if this is the case it should be getting hit. >> herbal life famously shorted by ackman who says he hasn't covered a single share. cnbc learning george sore oh,s has gone long. one of top three holdings. >> the quarter yesterday was excellent quarter. we had herb talk about it a little bit. you saw the follow through on the stock. i thought there was a good chance that that was a ka pit lags day today but this stock was headed higher before the

sorrows news today. i still sort of side in terms of the -- listen i have no axe in this clearly. there is a good chance that ackman winds up being correct. >> that could very well be the case. >> he's going to wind up being wrong in terms of the stock. i don't know how much longer he has left in this thing or how much longer this thing has to move on the upside but this is not a name for the -- the people playing the home game should not be playing in this. >> one stock actually helping ackman today air products up today. last week on "fast money" mike khouw highlighted some unusual optioned in this name. listen. >> this is not a name where you usually see options activity but today we saw significantly more than that. it traded 20,000 contracts overall. for the most part i think options traders decided that a

low risk way was to buy some calls and that's what they were doing. >> mike khouw, what are you seeing now? >> it's interesting, now we know why maybe. there was a lot of volume in the stock, a lot of volume in the options. then of course the company put the shareholder rights program in place i think on the back of all of that activity. the implied volatility the price of the options has come in significantly now that the news is out that basically the big fund that ackman was putting together was targeting apd. i have a hard time though understanding exactly what the valuation case is here. the only thing i can think is maybe he thinks he's going to impose changes that will get their multiples in line with a company like prax air. this isn't a name i would have chased going into this and i probably wouldn't now either. >> karen has been looking at the filing here and you've got a fine print for us. >> the 13d has a lot of information if you know where to look.

i like to look at item number four which is why is he doing this? basically he has left himself open for a lot of -- he could buy, sell do a lot of things. one of which would be to nominate -- this is a delaware company. so he could nominate. he has not talked about any communication with the company which i believe the company later said they had not been in touch with him. this wasn't the most aggressive 13d i've seen or from him either. i, like mike khouw, kind of scratching my head a $2.2 billion bet for maybe it's more than fine tuning he must think so because to go in and out you have friction trying to trade that much. i was sort of surprised that this was the name. i kind have don't get it ally. >> instead of having a nonstaggered board where the slate can be replaced a staggered board is one or two

directors coming up so his impact on that board will be less. >> right. he has a big stake. >> still ahead of shares of facebook opening above the ipo price this morning though finishing the day under 38 bucks. why does our traders say the next test comes in the earnings release? we have a good old fashioned street fight. plus a big time currency later lays out his trade heading into september's meeting.

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>> i still prefer google right here with facebook up 20%. >> i still prefer google as well. >> i'm going to have to go with google. >> just my book, long google, not facebook. >> snapshot i'd say google but all five of us can't. i'll say facebook just to say it. >> that's a conviction call. >> our traders prefer google over facebook but with shares of facebook crossing above the ipo today can the upward momentum continue. time for a street fight. tim you're the bull. kick it off. >> the job of arguing for a bull run on a stock that's up 40% in ten days is difficult except the validation and the come back for beakers wasn't there also for the google or facebook choice. >> at that time i would have said google. at this time i think guy wins on this. >> really? he changed your mind. >> this is a trading call. i'm with him on that. tim did a great analysis. >> that's why the stock has made the come back it's making. >> analysis is the master of observation. trading at master of behavior. >> there is no reason to jump into the stock tomorrow but at 38 bucks are you telling me the stock is not offering growth

superior to the other players. >> all right, all right. i need another buzzer! when am i going to get a whistle here. thank you. we want to know who you thought won. tweet us at cnbc "fast money" using hashtag bull for tim or hashtag bear for guy. we'll have the results at the end of the show. coming up when will the fed start to taper and who is likely to replace ben bernanke next year, all things fed straight ahead. plus the biggest movers and shakers in today's trade. stick around, back in two. ... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." ♪ "first day of my life" by bright eyes ♪

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>> welcome back to "fast." we are live at the nasdaq market site. let's go to josh lipton. >> we are watching whole foods, reports and dis appointments it beats by a penny but revenue clocks in light here. same store sales up 7.5% slower than the last quarter report. so far in the fiscal fourth quarter up. looking ahead, consensus was at 145. gave 2014 guidance 169 to 172.

the street expected 172. back to you. >> thank you, josh. guy, a case of not firing on every metric that the streets wants. >> you won't remember this but -- >> why won't i remember it? >> they missed. stock traded down 8 bucks. we talked about it. we said a couple months from now the stocks will be back. post split the same thing happens. given a valuation you would swear that the short interest would be in the high teens, low 20s. it's not. people are terrified to short this stock for good reason. you might have a couple days to selloff. >> the fomc announcement part of a slew of indicators this week. how does the impact the u.s. dollar. let's bring in jens nordvig. always good to see you. dollar is always a good trade.

do you hold on until the fall when we're not sure when the tapering is going to start? >> i think we're going to see tapering in september unless the date goes off track. i think that could be a catalyst but i think the data is key now. we could see today adp not particularly important better than expected. we'll see more in the next couple of weeks. >> one of the things that worries me is the dollar is the most consensus trade out there, big the dollar. i'm there, with you. but ultimately the dixie's performance has been disappointing in the last six months. in japan europe recovering slowly they should not be running 133 on dollar euro here. what is going on? if all of these people are leaning this way and it's not moving, shouldn't we be scared? >> i speak to a lot of investors

that share your frustration. we have had two big dollar drawdowns. we've seen the back up in bond yields. that should pull money back into the u.s. but people are scared of a further back up in yields. in the flow data, people are not big the bond. the key for the dollar to really move is the short end of the bond market start to go higher. that's going to drive the dollar in my view. >> tomorrow we have had ecb. we just talked about the euro. everybody wants to be short the euro. it's part of the long europe stocks, short euro trade. to me it seems like the ecb has done everything to talk rates lower but they haven't expanded the balance sheet or do you know anything except talk. do you think the euro itself is a threat to the euro recovery? >> it's grinding higher almost

since february now. this is a problem. over time that's going to be a dent into growth and it's going to put the eurozone further into the deflash naer territory. there is a problem. are they going to do something about it tomorrow? that's a little too early. they need more time to convince the whole council to do something more aggressive. >> thank you for coming by. the debate about who will replace bernanke continues to heat up. david rosen berg out with a growing endorsement of janet yellen and karen finerman out with what she thinks it should be. that would be? >> larry summers. i think it would be a better choice. full disclosure. i know larry. he's a friend of ours. personally i like him but that's not the issue. i think he's had more real world

experience around the world, not just in the u.s. in 1994 we had the mexican peso crises. he was right there for that, undersecretary at the time. he was there in 2008 was a central -- >> i share your positive views on him but is he appointable? here's a guy that was around for the fall of -- a lot of people who make this appointment that would say ultimately this is a guy that led deregulation and knees now running for a position or should be appointed to a position which is all about regulation. >> i think yellen is easier but i think summers is absolutely appointable. if obama wants him, that's who they're going to get. if you think about it you think, well maybe the republicans wouldn't like him, i think relative to yellen he would be more attractive. so i think, yes, he is

absolutely, absolutely can be. >> in terms of summer' global experience -- >> it's a global world now. >> rosen berg was highlighting yellen's experience. for instance she was adamant about pointing out the potential housing bubble in 2007. so that was one aspect. she also he says nailed the call for a recession when nobody was talking recession, everybody was talking about soft landing back in 2007 as well. so when it comes to the u.s. economy specifically his point was that she was actually the one person who actually saw these things coming when nobody else did. >> look i think for me larry has been in there when these crises happen. she, i believe, is more of an academic and a very, very impressive one at that absolutely. obviously was there for critical policy making as well but i think he is just a better more

battle tested candidate. >> let's get a trade out of this which is bizarre but obviously the markets are expecting yellen to some degree. >> they are. so if it's summers the way it's being framed and the way people are expecting is that if it's yellen you get more aggressive qe. if it's summers you get a quicker pull back in qe. you probably go to tlt. that's where you're going to find the battle ground. if it's yellen you buy. if it's summers you sell. it's broad but that's how you play the game. >> pops and drops. pop for semantics. >> we discussed the fact that maybe it had something to do with the mack acquisition paying dividends. finally it seems to be getting its mojo back. this is one you might want to think about tomorrow. >> barman a pop today, the move 7%. beaker?

>> huge move on earnings here. everybody has a gps on their phone but they blew away earnings. 38 to 40 today. generally speaking i wait two or three ranges. >> drop for mosaic down. tim? >> day two of the potash fallout. you have to look to see -- 70% of their sales is fos fates. to say they're doing to be shaken out to the wood shed is wrong. i'm staying why it. >> drop for dell mike khouw? >> the word was the board wasn't going to go along with the merger. this is good news as far as icahn is concerned. that's the reason the stock got hit. if you are trying to pay for

that buyout we're only playing with a few cents. >> buffalo wild wings. >> they came out with earnings last night. good growth. i think the valuation here not surprisingly is rich. >> from chicken to flamingos, when it comes to dancing one bird really knows how to wing it for the camera. check out this bird ruffling her feathers. the 15-year-old foul is at an amusement park. her music video has already more than 100,000 views on youtube. >> i hope it has its eyes closed or it will get dizzy and all over the stage. >> maybe it's spotting like a

ballerina. >> what? >> very important ball lay, third position, the whole rig i know it. >> u.s. rejecting the fed's cap. why are the options market betting on more upside in the names. in we'll tell you what to expect ahead of tomorrow right after this break. [ male announcer ] it's time. time to have new experiences with a familiar keyboard. to update our

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>> welcome back to "fast money." i'm josh lipton. we are watching yelp here in the after hours. reports and pleases, a loss of 1 cent but that was better than a loss of 4 cents. we expected revenue clocks in at $55 million. also better than expected. average monthly unique visitors grew 38% to 108 million. active local business accounts grew 62% to 51,400. company expects third quarter revenue above estimates. >> 15% of shares outstanding short. >> there you go. look at you putting your trader

cap on. you don't have to come to me. you could have answered the question yourself. that's why the stock is up. it's up 7, 8% now. tomorrow is not the day to chase. if you are fortunate enough to be long you take profits and go and have a cocktail avian with your buddies. tomorrow is not the day to initiate a long position in yelp. >> heavy options activity in shares of master card. mike khouw, what did you see? >> right after we saw that court ruling which looked favorable for merchants and bad for visa both sold sharply. their numbers were pretty good. part of that ruling was that the existing rules are going to stay in place. a lot of options traders stepped in start buying short dated calls even up to the 630 strike. it's a cheap way for these guys to make a quick bet that the stock could recover. it did but not that much.

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>> not so fast brian kelly. our traders are quick but not always right. listen. >> the big picture is china is slowing. the head of the people's bank of china today she had they had to make short term sacrifices for long term stain ability. people are looking past the margins that are going to come. you have a huge potential for a disappointment here in the very short term. in short term i mean three months. >> that is the first and the last time we had a call in for a bull/bear. since the call the stock is up 27%. >> yeah, you know wrong. just flat out wrong. i don't know what else to say on that.

i'm not going to ladle anymore insulths on myself here. get out of this name if you are short on my call and move onto something else. >> you tweet it we trade it. let's get to your tweets to our crew today. guy, you like sandisk at these levels. >> that's a question for me? >> yes. >> sandisk had a nice run but after the quarter you had three downgrades. the short answer is no. i think it can probably trade lower than here and then maybe take another look. all these storage names, once they get kmod tiesed they get scary. >> here's a question for everyone. >> whoa whoa. >> when does mike break out the sweater vest again? >> after labor day. >> so during the summer it's like white. you can't wear it during the summer. >> when was mike last sweater investing? >> a month ago. >> never wear a sweater vest

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tim? >> mosaic yesterday. stay in that trade. >> brian kelly? >> sell vgk, sell europe. >> karen? >> foot locker. >> guy? >> see you tomorrow 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 bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." i just want to try to make us some money, although i happen to have a few friends with me in the studio tonight. not just to entertain you, but to educate you