so, until next week, i want you to stay safe. bye-bye.

. we are live from the nasdaq market side. and mel liss' strait is here in time's square. this is what matters to traders now. bonds rallied. they have been the lowest yield since okay. they are close to a 10% direction. but the s&p, well, guess what, it's still near its record highs. so will it be the next to fall? let's find out. dana than, we are talking about how much we seen 30 pockets in the market really fly. the s&p is really -- >> it's potentially troubling. it's not right now. it seems the last 24 hours, traders were staring at the moving average in the s&p 500 and it just wouldn't break. what did it do late in the afternoon? it popped. so really on a week that didn't see a heck of a lot of movement.

we basically closed the week where we started it. yields got failed some to me, with the vehicles closeing where it did on the lows of the week. i think the move in bond yield, really, if you want to get a sense where risk is, it was there. the largest index options trade on the day happened right on the bell t. trader bought 15,000 o. vicks september 31 call spreads for 70 cents. between 2170 and 30. that's a possible trade on aspirations. that's one trader reaching out, saying risk is cheap. i don't know. >> the mark by the s&p is virtually unchanged. can you say, if it's unchanged over the last two months, isn't it as healthy as it was two months ago? it wasn't, we have a deteriorating stocks. it's this, the market deteriorates oundz under the cover of strength.

our blue chips are holling up. under the surface, we are losing ground and the russell depicts that. we are down almost 10%. >> that is a big problem ultimately for the overall mark. >> any nervousness on your part, mike? >> i think this yield issue on the fed rates is interesting. a lot of people said they think that is a flight to safety. that doesn't reflect that. neither does the vick. i think it's forecasting gdp growth slightly lower than inflation. i think people are overly complacentt to be honest with you. what that would suggest is we will continue to see quantitative easing which would support price itself. i think it's a ludicrous proposition. i also think being short any sort of market insurance, the levels we see in the vicks right now is similarly ludicrous. i can't fathom what everybody

would be thinking essentially on its highs. slower growth, slower eps groemt you ought to be thinking about portfolio here. >> if you take an extra day in vegas, you couldn't get back to the show, come on, doouch dude. this is one thing people tend to put off. i saw a stat today. i got a quote, a friend of pine, in the last 14 years since the year 2000, there have been 36 sell-offs in the russell 12,000. 35 times, 10%, 35 times the s&p large cap have followed. they have not followed this up type. so to me, you do not have this kneeled, this complacenttie he is speaking to. it's got to make you nervous here. >> this is one of those sixes where it's a combination of a

whole host of setups. technically, it ternly looks like the blue choip chips are poised to follow the concerns of the lesser-type of stocks. the fact that the ten-year treasury is here, it's ludicrous. there is nowhere to go, one of two things will happen, if you see some form of tapering, that will create another taper tantrum. that will bleed into equity price, surely. the other thing the housing park, the other thing we are trying to do this, hasn't been stellar. we will find more data in the weeks to come when we find out the pricing data in housing. i can't fathom why anybody would be further net long here. >> let's make some money hearing dan, what's your trail? >> we talk about applied vol till. >> that makes sense, it's a safety trade. look at that right there, it's at a two-year low. to me, there is two ways you can think about this.

next week, if we go up and try to make a few high in the s&p and we fail like we did earlier this week, this is when you jump all over this, i was pricing this up when the spy was 188. can you psy buy the june 177 put. people, that is down 2% over the federal government five weeks e weeks. that can be protection. it could be a directional bet. let me make one quick point everybody is in a hizzee yesterday with the markets. he says the ecb meeting the first week of june, we could see volatility to that. >> i absolutely would be looking to buy insurance in the s&p. it's a little when you are trying to trade interest rates, if you are finding longer data options will give you the possible. one nice thing about dan's trade

here this is important, fourth quarter, when the prices are low, you are getting a ton of gearingch essentially what that means is, it's like you are getting double the odds on a downside movement you otherwise would have in a higher volatility environment. it's hard for know see why people wouldn't be doing this. >> how about you, carter? >> part of what is holding up the s&p, of course, is it has a lot of bond proxys in it. you have big staple, utility, retails that don't exist in the russell. so as long as the rates are trey staying low, fooem people are fleeing to large cap givesive fames. that's a part of the members here. >> that's a really good point guidance, it was really the story of the week, wasn't it? the ferocious valley soaring bonds, that has given boost to a number of stocks as well. dom. >> all right, man fi, here's what we got. we are talking about those unyielding types, investors pauseing in that treasury. that set rates below 12.5%, down

to the lowest levels if okay. that's far cry from the 3% where the ten-year started this week and the action definitely impacted some of the stockmarket. this week's best performing sector was telecom, which happens to have a 5% dividend yield on average. that's the highest of any s&p sector out there. thanks to real estate investment umt trusts outperform this woke as well as did mlps, those are the master limited partnerships that do oil and gas pipe lines and that type of thing. curiously, home builders, which should benefit from lower rates. they were actually down on the week. again, some of the interest rate trades are there, but it doesn't apply a across the board. >> that's quite a good point topping vrp much for that. home builders aren't feeling a lot of trough, could there be trouble on the homefront and one last retailer as well. let's check in with the chart

master. what have you found there, carter? . >> we will focus on home depot. it's conceptual in that these stocks are sensitive in the cost of.the conversation of money has collapsed yet they have not come to life. so just quickly, we know the s&p, of course, basically unchanged on the year. let me switch to red. have you that versus the home builder etf, masco, fortune brands, beacon, la-z-boy. etan allen. this is getting rates continue go lower. let's talk about home depot. this is a big asset. the second biggest retailer in the urine, it's an intersection of a lot of different things. it speaks to employment. it speaks to housing. it speaks to moment improvement. they have dark trend lines. you can't draw a more precise trend line than that. you can't call it other than a

break in trend. this has been responding over the better part of three years. over the last six, seven months, we have left the direction we have been in. you can draw it this way. you can draw hit the way. i would call eight well defined bullish to bearish reversal. the implications are, of course, is that you have great risk of braking here from these lows and, frankly, collapsing. so here's how you could draw it if you wanted to say, maybe it's not going to clash, carter, maybe it's the range. and this is the setup for the breakout. a lot of people i know are quite bullish on this stock. they might be right. there's the thing. is this pause that refreshs that a good thing or is it something else? here's why i would interpret it as a bullish to bearish rehearsal. not a breakout. i would interpret it's not a set judgment here's the same cart. here's the same consolidation. this is what's important. relative strength. this stock since basically may a

year ago has been under performing the s&p. so optically while it's sideways, its relative performance is nothing short of a disaster. this is not good. we think it comes out to the downside. we would sell home depot. >> i would add to the disasters. when you talk rates, dom said rates coming back down, that would be good for home builders and related stocks. i see it as very bearish. the fact is investors are seeking bonds out because they see risk to growth right here. so to me, i don't think you have a whole heck of a lot of people running out to buy new homes. there was decent data today. to me, i think it's very troubling. i would stay away. >> would you as well, mike, stay away? >> no, this is real interesting. what dan was highlighting there, is the fact that if you see these falling rates, there is actually proof in the home builders because what we saw the last time that rates started to spike water that there was a

rush to buy homes. i think we pretty much exhausted whatever demand there was at that time. here we have rates much lower. specifically, we are not seeing people like first time home buyers, for example, kind of a jobless recovery some the am the affordability is, you know, about average at this point. if rates rise, it's going to get much worse. if anybody could be buying. this is the time we would be seeing it. we're not. this is one of these sixes, where, you see 20% etf growth five years, 5% ref few growth. i'm with carter on the one. >> thanks very much, guys. we will get back to you in a second. if you are a viewer, if you have us a question. send it to us at tweet us@cnbcoptions. you will find blocks information material. do check it out. in the meantime, this is what is coming up next.

. due to events such as these will affect you in the future. >> one of those events could be an oil spike. why that could be good news for one of america's biggest companies. plus. >> who changed that? >> plus, what investors have done to netflix own shares him we'll tell you why when "options action" continues. ♪ ♪ ♪ ♪ [ 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.

♪ [ 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.

to a number of big investors making fuse this week with their filings him one of those investments carl icahn had a clunk in the first quarter. by now, has he got enough entirely? dan, what kind of movement are you seeing? >> here's the thing with these 13 fs, in q-1 he sold 15% of his position. that was a position he owned 100% of more last fall. one of the things that was interesting, mr. icahn was the largest shareholder. he got into netflix two years ago when it was below $100. why do we are focus on the stocks so much especially in this high valuation sell-off we have been in. it's kind of like the poster chald child for it. look at october of 2013, this was one day after they reported their q3 rules back in okay. what happened? right here, mr. icahn tweeted

out he had sold half of his position. now, he had a fabulous gain in that. look at that. >> that stock went down. it had a 20% reversal peak-to-trough here because he was getting out. a lot of people were riding his coat tails. let's move forward. last month the company reported a better than expected q1. the stock sold off again, almost 20% after that official earnings gap. now, again, you sold down a portion of positions, supposedly, he still owns 12.12 million shares. remember, people, this data is 45 days old. okay. so let's look at the cart right here. this is a company that actually, they're doing a lot of good things. they have tons of competition. they have regulatory issues. to me, it's a high regulatory fame. when the stock was 3.38 a while ago, i actually bought june 325

put to offset some of the decay here t. stock is at a crucial level here, if you look at this, it has to break right here. at the end of the day, it had a big pop. i think a lot of people were digesting the fact that mr. icahn might sell. i'm on the 325 putz to june. >> mike. >> this is a situation where it's a gait company, kevin spacey was speaking at the conference here in lug this week. when he was talking ab it about it. it gives consumers what they want. it does not give investor what is they want. this thing is trading at 125 times earning. you'd be foolish to think about getting long here. >> just as dan has laid out in terms of the pattern itself, the word dreadful comes to mind. >> dreadful. >> this is a bullish to bearish. we closed at 349, this looks like it's slowing to 250. >> as a trader with short position here, i have time

working against me, i'm actually factually nervous about the break. >> there is a critical level. ultimately, it should give way. >> mike. >> this is where you want to put put spreads on, sedan doing that os smp tensably. we will tell you how to cash in on that when options action returns. [ 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.

[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 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.

so is up with of this year's greatest phrase cooling off, energy stocks have suddenly turned sluggish and that has left mike and carter in a jeopardy. let's take a look. >> on "options action," sometimes risking more isn't quite enough. sometimes you want more cash. that's the case with carters exxon trade. shares are looking good.

>> wefully the ton is the to play exxon for some catch-up. >> all right, mike said let's do this. just buying the stock 100 shares yields $10,000. so to make a bullish bet. they bought the october 140u678 call for $3.50. that is the most he can lose. in order to make money, mike needs exxon shares to rise above the strike of that call by more than the cost of the trade or in this case above $103.50 by october expiration date. here's what makes it even better, even if some shares do rise, then that core will gain value faster than the stock, meaning more money in mike's pocket. >> do you get the picture? >> and exxon shares are up just fractionally, making this trade neither a winner nor a loser. >> i sympathize with you. >> reporter: with a ton of time left until expiration, "options

action" finds from dallas to damascus are asking the same question, how can cohen carter make even more cash? dallas to da pass cuss, if only i wish it were so. let's get that answer in just a second. but before all of that, carter, i got a question for you, do you still like exxon? >> you know, i do. here's the interesting, if june of 2008 this stock is where it was. we have but gotten above that high of seven years ago. it has characteristics not only absolute, but if asked, there is a real draw down in the general market. exxon, we will hold on well. it's a low beta stock. it's defensive by nature. we would stay in this trade. >> what about the move, is there a way to get cash on the trade? >> this was a stock that actually rallied, you could have taken main i money off the table by rolling it into a spread or

up and out, taking some of those profits. if the stock rallies i will stay in this trade, that's probably what you should look to do. >> i don't like a trade. i will give it to you as a freebie here. >> i think it's up because buffet got in in february. i would look for back to 95. to me, 95 would be a great level to press this thing back. the 195.90 july put-wise is probably 85 cents. that's a great risk reward. if are you of my mindset you think the market can pull back a bit over the next couple months. >> brent is 10126789 commodity acts well. >> final word to you mike. >> market neutrality doesn't mean you sell absolutely everything. there's got to be some place you are long. i think this is of all of them probably the best way to do it. >> a quick programing note as well, next up on ""mad money,""

it is raining on the east coast. plus, kramer might have an interview that can cinch that surge. find out about that after after this vol estimate. up next, the final "options action." don't go away. . ♪ ♪ ♪ [ 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.

♪ [ 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 friday afternoon, the traders want to go home. let's get to the last call. mike, you take it away first. >> sure, when you get concerned about the market, you can use options, we will explain on the 101 express bearish views. >> great plug. carter, what about ubt? >> home depot, i love seventh. are you talking five-fold increase off the lows of 2009. almost double the pace the market. take profits as you got those gains. rely on exxon as a safety trade. >> dan, lucky last. >> yeah.

s&p 500. we get a failed test, i think five putz are very, very cheap. can you use them for direction. >> thank you very much. it looks like our time is expired. check out mike's trade on home depot. go to the website. have a great weekend to you see you next friday. . >> female announcer: the following is a paid presentation for the new zumba incredible results system featuring the new zumba rizer brought to you by zumba fitness. >> zu-- zu-- zumba! [ cheers and applause ] [ cheering intensifies ] [ latin music plays ] >> male announcer: get ready, because the number-one branded fitness program in the world is better than ever.