things. now, you stay safe. bye-bye. we got the answer. is fancy losing favor?

>> it's a ball. >> richer getting richer, high end supermarkets are getting full. we are tell you it's about to get worse. the action starts now. i'm at new york city's time's square. i'm melissa lee. was it all a dream despite tensions with russia. meantime, russia and germany and other markets are lower on the week. so is the u.s. the next safety trade or are investors making a mistake? dan, has anything changed over your view in the past week? >> nothing has changed. think of the u.s. investors are willing to discount weathers. >> that will affect q1 in april. we had a jobs number better than expected. we revised some of the prior months up again. so in general, it feels like the recovery in the u.s. is intact. i think that's why global

investors think safe of investing in the all high. >> would you say it is the safety trade? >> i wouldn't say it's the safety trade. >> a safer trade? >> perhaps. why don't we look at the risk factors? if you take a look at the value of all stocks relative to gdp, right now, this is a metric warren buffet looks at a lot. probably around 120%. another metric, the long-term average is closer to 16. it's obviously a little premium there. in a yield environment that, could make sense. remember, we are looking at the risk versus the reward. the higher these multiples get the more risk, the less reward. there is almost no time buying the s&p was a bad mistake. you could buy it badly and make a lot of money t. s&p is saying one thing. if you look at bond and gold, they are saying something different. the market is not a democracy.

i am shocked and i mean truly shocked, not in a claude raines sort of way i think it tells you people don't want to have a lot of risk over the weekend, even though the s&p may be a safer trade. they are buying the s&p only if they could have some protection. >> could it be the worse the tensions get, the better the u.s. looks. few look at germany, it was down 3.percent on the week. it will get here, u.s. valuations are almost the same. >> the notion that the u.s. would couple from a geopolitical event. history doesn't prove that to be the case. ultimately, we could hang out a bit. scott makes a point about the gold actually hung in there this week, too. i would say rates going up here, you know, people feel pretty good about things. we have a fed meeting coming up.

they are likely to taper 10 billion again. the deeper we get into the taper, at some point, something could give. >> i think if we move to more of a risk off environment, that will be bad for equities everywhere, not as bad as for other places. don't think that equities are a safe haven if we start to see a risk off type of a separation. >> financials did as well as today. >> there you go, bonds got up, rates are up, people are focused on that. let's talk about jp morning. this company had their annual inventory last week. it caught my attention today, it banged up against that previous high, within penny, 5980. when you look at that chart, it pulled back in. the stock had a monster week, 60% off the lows of monday. so here you are, you have this thing. i actually think if you think about how the european banks

traded. they closed at 2% on the low of the day. listen, j.p. morgan does not have a lot of exposure over eastern europe and russia. it's more about the broader contacts, volatility is not pricing anything here in the u.s. stocks. i want to look at stress tests in the next two weeks and j.p. morgue isn't going to look at their q 1 qui we know is going to look bad. if the outpushing is murky, i think you have an opportunity to make bearish bets. >> so are you a bears. what is yours? >> this is a term, it's a rocky term. i think of a poor technical setup and cheap options. i look at the april 11th weekly puts. that's the morning that they report their earnings. you could buy the april 11th weekly put for the 59 put for $1.45, about 2.25% for the stock price. you break even t. downside, what

i would do right here if you get one big move like we had past monday you will have a cheaper spread put on. have you the potential for geopolitical risk. >> why do you think the c-car or stress test will be a bad event for j.p. morgan? do you think that's true? that's what dan thinks. >> i think it's the potential to add volatility to this space. >> what is the best possible outcome. that's the flipside. a lot of these names have had a very good run. so you have to figure, even if it's a coin toss, which way that goes, that there is some risk to the downside, i think he pointed out earnings, i don't know it will be a surprise they will not be that terrific. because we already know all of the fines they have to pay. there is a lot of things hit these numbers that are baked into the cake. i'm just taking a look at equity more generally. >> understand option trade. you will not have a lot of time to spread it around.

my question, why not sell a call for it. they are cheapish. >> we have implied volatility. they are multiple points below where it gets to before events. if you get any sort of volatility, geopolitical, like i said, or something comes out of these stress tests, you will get opportunity. >> let's have stocks vs. options. j.p. morgan could be doing a bank job. a big bet to the downside to define his risk. he has $145. let's turn to the big report. auto jobs is good for auto makers. let's call the charts, chart master, find out why. carter baxter moore, hey, carter. >> let's have a look. something not quite right. tesla notwithstanding the major auto manufacturers are not acting right. we have charts here. i will draw where the year

started. toyota is down the stockmarket, itself, is up. do it again with honda, yours started here. honda is down. stockmarket is up. do it again volkswagon, here's the beginning of the year. down, stockmarket is up. try a little with hyundai, yours starts here. auto manufacturers down. here's general motors. it's a big one. again, stockmarket up. stock is down. here is the entire shooting massachusettes. this is hyundai, nissan. this is the entire auto index. what i see is a well defined trend, what you see over and over and over. finally, we have broken trend, now we have thrown back to the under belly of the line. that's a very difficult spot to be in. now, two more things, this is that same chart of all global auto manufacturers relative to another very important index, which is u.s. home builders. and notice the lag between how cars are performing and houses

are performing. it gets the employer, it gets the consumer. so there's trade, let's look at ford, a well defined trim line. it's clearly a break in trend. if you want to talk about a topping formation, head and shoulders. what have you. this is a heck of a neck line. the presumption is this is not good for ford, not good for the group. it can't all be tes las is winning they're all losing. something is wrong. >> thanks to that, carter. mike, do you agree when it comes to the fundamental also? are they bearish? >> this is an interesting thing. i think a lot of people like to look at multiples, they are trading less, that sounds pretty good. they look at enterprise ebitas. you continue look at sick lick also like kimberly-clark or proctor & gamble. actually when you look at the

broader look and spread it out more, one thing we see is it's trading above the historical, past two and five years. this company lost $3.30 a share. in the downturn, if you add it all up. the ten year cyclical earnings is trading 30 times that number. if you see a rising rate environment, that doesn't really see from my perspective a lot of consumers buying cars. they are taking advantage of cheap financing. you take a cursory look, looks good, a deeper look, not so good. >> so you are bearish. >> i am looking at the june puts they cost 50 cents and j.p. morgan is not that high here. i'm giving myself time for a bearish bet to play out. i can always look to spread it. this is one of those sixes where also just the price action is not looking that good. if the broad market is turning, it will not catch. >> i like this trade, i am bullish on gm. i like the idea of pairs, between ford looking out four

months here and a bearish bet. i think stocks can be coupled. when you look at the valuation, gm is set up better. i don't think you can argue with buying very near the money put, looking out four months on a name like ford. >> i think that's the same laundry day. it makes sense, water dated options are rode less each day until you get clear e closer to expiration. the fact that all these legacy auto makers, the unionized auto make verse a tough time, given the fact that vw will come in and build a plant in chattanooga. all these guys are in trouble. >> send us a tweet at cnbc options. tonight scott has a great way to make a bearish bet on treasury. check it out. here's what's coming up next. one stock is up 50% this

year. no, it isn't, it was all in the charts. we will tell you where it is going next. you may want to think twice about that. that's high end grocer sees low end returns. it could get a lot worse. find out why when options action returns. ♪ .

>> welcome back. it is time when we look back ought our winners, zinc gga. here's how they made money. on options action, it's the only thing we play, risk less so we can make more. that's what they did with their bullish bet on zinga, carter said it was time to get in the game. buying the shares can mean serious losses. so to avoid buying the farm bill, mike said buy call for 42 cents, now to make money, they need zynga shares to rise above the pra trade or $4.92, or paying 42 cents to get in on zynga -- >> is this game?

>> no, it ain't. so to spend less, mike sold not one but two equal 550 strength calls for a total of 24 cents. between the call and the 24 cents he checked on those two higher strength calls, mike reduced his calls down to 18 cents. now to make money, mike only needs to see the shares rise above that lower strike price by more than the cost of the trade or above $4.68 on april expiration. >> i created the perfect system. >> well, not kwiechlt you see, because mike sold more calls than he bomb. if zynga shares rise above day 42, mike could be on the hook for infinite losses, so to protect himself against that, mike went ahead and bought the april 6g9 call for kre7b9s. now between the 42 cents for the lower strike calm the 24 cents he's collecting by selling the two middle strike calls and the

kre7b9s cents he is paying, he is shelling out 25 cents, the most he can lose, in order to make money, he needs zynga to ride by april expiration. since the time of the trade, synga shares are a winner. leaving one more question, what will those two gamers do now? before we get to that, let's see how much money was made. had you bought zynga at the time of the trade, you would have made about 25%. that's pretty nice. mike's trade costs 25 cents and can be sold double that for a return of 100%. wow, mike, are you sticking with this? >> it's interesting. one of the things we are looking for is the stock to go right to that sweet spot t. strikes we are short. we would really like that to happen on expiration. this situation has happened a little sooner than i would have liked. but i think this is an opportunity for us to take

profits on this one, even though unlike most flies, if the stock were to rally, we wouldn't lose money, this is about as good as it will get. >> let's see what the other half of the dynamic duo has to say? >> the pattern is played out. we would say, take the money and go. >> dan, is that what you would do? >> disaster. an amazing directional call these guys made, yes, they made 100%. yes, it was a lot of work to do that. they have taken the premium. >> you put 100% on one trade? >> you see what happens, you have as to hit the mouse button three times in a row to double your money. >> laborious. >> my finger is tired. >> i will never do that again. >> you have to take it off rather than cross your fingers and hope to get to april at this price. >> coming up next, supermarket stocks are booming. why president foods falling short? the answer might surprise you.

we will have that story coming up. we'll be right back. [ indistinct shouting ] ♪ [ 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. ♪

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12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. . >> i got a question for you out there. is the organic arugula guilty?

even if safeway gets bought out, whole foods suffer. is it time to get out of the fancy today stocks? carter, what do you see? >> time to get out for sure, let's take a look. i will not draw on the first two, safeway, kroger, let's go back. it's the same pattern, they are basically going up, working well. take a look at this. the fresh market, whole foods, down. fresh market down. notice the problem here. a gap, a gap, a gap. stocks gap down when they say bad things. these are earnings misses. guess what's happening in whole foods, same thing. you got a recent quarterly miss. you got a second quarterly miss. and that's a bad problem. then there is the pattern, itself. if this is not a head and shoulders top, i don't know what one looks like. it's well form. you have a perfect neckline here. the presumption is, again, this drop in gap.

this drop in gap and the next one we think is imminent. it looks to us as we go down to 45. again, keep in mind, basic sumplts are doing very well, kroger, safeway getting bought out. >> that is not case with the whole foods and fresh market. >> can i take a shot at that? i think we have a chart of mine. >> we are dualing charts, my favorite. >> i think i labelled it the triangle of death in whole foods. remember that? >>. >> yes can we bring that up? this thing is a head and shoulders top, look at that thing, that whole triangle is above that gap from the all time highs back in 2012. it may be light out for this one. it may not be the 10% gap we seen on the way down. >> here's what i don't get. we have high end people, coors are doing well.

>> a lot of the retail names have not been priced that expensively because people kept waiting for shoes to drop. these stocks by contrast actually were not that cheap. whom foods was trading at a good premium. it was trading like a growth stock. you don't see growth and something priced for it. this is what happened. >> i think people loved starbucks. they fell out of love with starbucks. it bounced back. i think the same is true with whole foods. people loved it. they lined up their bmws or expensive audi. they fell out of love with it. why? it's expensive, it's crazy, if they can fall back in love with it, they will do well. >> trader joe's is expanding. >> wal-mart. >> not only that, when you see the console day, you showed us the safeway. they are going after the market share. they know there is this appetite for it for gluten-free, whatever else they sell. i think it's competition.

>> you know what they sell. actually, you don't buy anything. all right. so let's get to your trade. >> i want to look out, actually. i agree with carter wholeheartedly. i want to look out in the first week of may, they're likely to report their fiscal two-two. today when the stock was 5370, i bought the april may. i sold one of the april 50 puts at 50 cents. abbott a may 50 puts at $130i7b 80. >> that cost me. i want it to go to the 50. that is the head and shoulders, the breakdown level. if you get there and you can finance the purchase of these puts, you will have a good set up. >> i love commercial trades the only change i would consider is i might push those may options up further. >> why? >> one of the things we noticed lately, scott highlighted this,

at the beginning of the show, he said notice the fixed didn't change much. what you can do is use those proceeds to finance something even longer out. those decay more slowly than those mays. i think that would be the way i would prefer to play it. >> i think mike is right and i am right. >> coming up next the final call from the options pit. ♪ . ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

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[ 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. ♪ i think that would be the way >> time now for the final call. the last word from the options pit, scott. >> it's expensive this week, extras is how to buy a put in tlt. >> carter. >> we have ford or whole foods, be careful. we think there is downside risk. it's not nice. >> dan. >> the food's triangle of death. i love the quick calendar. >> i would love to make that calendar spread a little broader, longer dated option there. the other thing is on cyclical

stocks, you have as to look more than the next 12 months in your value. >> a two-fer there. our time is expired. i'm melissa lee. for more options action check out the website also watch our daily segment "pence "fast money"" every day. we will see you here next time. have a great weekend. paid presentation for derm exclusive instant anti-aging, brought to you by beachbody. [ cheers and applause ] >> wow. hi, everybody, and welcome. i'm deborah norville -- journalist, author, wife, and mom -- and today i am joined by grammy-winning music superstar chilli of tlc. woo-hoo! [ cheers and applause ] and television phenomenon turned entertainment reporter mindy burbano stearns. [ cheers and applause ] now, wdo