and get 30% equity. it is time for "fast money." melissa lee joins us with a preview of what's coming up. >> last week we saw the temper pan trump in full swing. today we have the man who's been prepping a short fun for a very long time. he'll tell us what he sees in the market and whether or not he is ready to short stocks right now. >> over to you guys. "fast money" starts right now. live from the nasdaq market sis in new york city times square, i'm melissa lee. dan nathan, steve grasso, guy adami. weak corporate earnings weighing on the broader market. home depot is up today but the company missed earnings expectation sparking new fears about the lagging housing market. dan nathan, you are a bear but does this feed into your thesis here? >> i'm not a bear. i'm just skeptical here. for anybody to look at what went on today in the xrt, the retail

etf, this has been happening now for months and months, if not quarters, that retail companies u.s. focused have been missing and disappointing on sales. a lot of the earnings beats we've seen have been manufacturing. these guys are buying back stock hand over fist. reminds us of what happened in 2007 before things turned. i don't see it as a brig surprise. i'd say that q1, it was the really harsh weather. if we don't see a pick-up in q2 in retail sales, it is going to be ugly. >> we are entering a seasonally weak period for retail. there's no catalyst, no back to school, no holiday season. this is not the time to earn retailers. home depot said the housing recovery is on track. >> when you start off the show with home depot, other stocks were more indicative of what retail was that she showed on the screen while dan was talking. the retail space to your point, there is no major catalyst going forward into the summer and

going into what -- i don't know where these economists find 4% gdp. that's the major problem i'm battling with. you can blame whatever you want on the weather. if we're talking about major trends that are reversing, golf for dick's sporting goods, that migrates out to callaway. these are major things that you can't change with better weather. >> grasso you brought up an excellent point on dick's. >> thank you. >> phenomenal. well stated, too. >> go to commercial. >> on dick's sporting goods, what i thought was interesting is that they said in golf and in hunting they're going to reduce the floor space that they're going to allocate to these particular areas. that has nothing to do with weather. that's a secular change. i'd look today at cab, cabela's, look at callaway golf, ely. both of those names are very vulnerable after what dick's said. >> not to pile on to the dick's disaster we saw today, but they said second quarter is generally

strong in terms of golf equipment and apparel, but it was weak. >> the way home depot traded was interesting. this stock had a tremendous run into the middle of 2012 into early '13. it's now been basically flat-lining for the last almost a year, if you look out. we are at a huge crossroads. price action today was good but i wouldn't make too much of it. we are definitely either basing here and taking the next leg higher or we've completely topped out. what's my point? you don't fade the next 5% move in the stock. if we break through $80, this stock is going significantly higher. if we do break $75, i'd get out of the way. >> talk about price action, look at tj maxx today. a few weeks ago we had whole foods. the stock hasn't had an uptick since they disappointed. down 20% or more. tj maxx had its worst decline today in five years. we're starting to see some very hurky jerky price action. not from just the netflix of the

world. zble . >> every time investors have written off the u.s. consumer they've been brown. the 4.5% decline on kate spade. we had the ceo on. that's not a buying opportunity. >> if people are looking for better price merchandise, if rounds of golf are down -- >> you believe in the golf indicating. you're predicating your investment thesis on golf. >> we could branch that out. that's a granular and micro on golf. when you say how are they wrong, when you see actual trends change versus we're just saying that jobs are weak and the consumer is weak. >> to me it is not whether or not the consumer does spend. it is whether they should be spending. that's what i get caught up on. the health of the consumer shouldn't be predicated on whether or not they're spending. it should be predicated on whether or not they're in a position to spend. because the u.s. consumer historically will spend regardless. i think they're in a position now where they probably shouldn't be. i think they've gotten

themselves -- >> they shouldn't be. fine, good point. should not be spending but will they. that's all that matters at the end of the day. >> to a point that's all that matters. because they'll reach a deflection point like we saw in '07, '08 where things stopped very quickly. not saying we are headed there but that's what typically happens. >> at the end of the day, it only matters what they do. >> we're missing the sentiment in the market that's changed. since the momentum meltdown, look what happened today. fed comes out and they are -- one of the fed members a little more hawkish than usual. market sells off. what happens if the economy falters? market's going to sell off, too. >> these gdp numbers, to your point, are going to come down drastically. everyone was looking for 3%, 4% growth. now everyone goes where's the growth? >> they're still a whisper away from record highs. you're still more inclined to buy than sell. >> i said i trimmed my positions significantly. i'm 43% cash right now. for me, if you look at this marketplace, we need to sell off

aggressively. >> talk microsoft here. taking us deeper in the hardware business with today's release of its new surface pro 3 tablet touting a 12-inch screen. the new device is meant to replace your laptop. lapability is what they call this with a price tag ranging from $799 to almost $2,000 for a fully loaded pro. will consumers bite? with us here, bgc financial director of research, senior tech analyst at the service event today. i feel like microsoft is really late to the game here. >> here it is. >> i feel like he's kind of white right now. >> he called it a combination of a toaster and refrigerator. >> consumers don't want. >> that's not fair. this is a nice device. it is well made. it is targeted to the enterprise. the enterprise market. it's what they should be doing. it's what they've done. if they sell just 5 million a year which is about one-half of 1% of the billion enterprise pcs out there, it will move the top line by 6%. >> what's that stat again? >> .5% of the 1 billion

enterprise pcs out there, our surface tablets, with an asp of $1,000, that's 6% of top line. could that be doable? yeah, that's doable. >> but there is a deeper issue here. that is why do something that is just doable. why not try and actually create a new category, create a new product that's actually going to be innovative instead of sort of being an incremental innovation? >> when you got 4% market share and the tablet market, which is faster growing than the pc market, and 5% share in the smartphone market which is arguably the personal computer, you've got to take matters into your own hands. that's what they're doing. the new ceo spoke today saying, we're not in hardware for hardware sake. it combines all of our services and cloud offerings and this is the device where you access what microsoft is. that's why they feel they need to control this layer. we'll see how it goes.

i'm not saying they'll be overwhelmingly successful with it but at least they didn't roll out a seven-inch tablet targeting consumers. a low-priced tablet or something that won't get any traction. they have a chance of selling this. >> what is then overwhelmingly successful? in other words, what numbers would make you say, that is overwhelmingly successful in terms of sales of this thing? >> 10 million a year annually. is that doable? if you want to break it down, you got that billion enterprise pcs. of which a pc gets upgraded every five years. that's about 200 million a year. you sell north of 300 million a year anyway because you got the consumer segment in there. could you sell 10 million of the 200 of surfaces? i wouldn't put it in my model but it is possible. even if you get to the 5 million number, it is a decent top-line mover? >> isn't this all semantics. i know we are talking enterprise but google already wrote the script for this. they said we got this great thing going with software an we

all all these oems that want to put our software in their devices. i don't need to be in this low-margin commoditized business. teams a little desperate. there are a lot of things going for microsoft and why you'd want to buy this stock. this is not one of them. zblichl . >> i'm with you. things happening in the industry that they're very late to. that will still be rippling through their income statement. the june quarter is historically one of their best quarters but you have the nokia deal closing. that will hurt the income side. you got to wonder how much did they push revenue in to the previous quarters to try to have good numbers for steve balmer's last quarter. i would be nervous about this june. >> microsoft has had a pretty decent run. it is up 6% -- >> it's not expensive. it pays a dividend. >> it is okay. >> it is a stable name. >> that's the problem with microsoft. it is just okay.

it's all right. >> not everyone is a go-go growth investor. some people want dividends. unfortunately in a tech name, the cash flow is the -- cash flows are hard to predict. they're going to be variable. it is not a safety play. >> off that last quarter if they lay an egg off that last quarter which was historic by whatever metric you want to use, this stock will be beaten mercilessly. won't it? they should know that, i would think. >> it is possible. yeah. not mercilessly because it is microsoft. but the new board member is bringing to the table in terms of his ability to drive change and perhaps spin off some of the xbox divisions or redo the capital structure. there's excitement that there is going to be more activity in this company but i don't think it is coming any time soon. >> collin, great to see you. we had had dan niles on not

too long. he said he was short microsoft. it is a difficult name to short because it can engage in financial engineering which would take shares off the market. >> 20% of their market cap is in cash. this is a company that i think that in the mid 30s i think the company -- if they have the hiccup on earnings that collin suggested they have, they probably go about it the way apple has been doing and they kind of get creative. they've done massive accelerated buy-backs in the past and special dividends, also. >> they are on the opposite side of what everyone else wants to be. they are already in the cloud space, trying to get into hardware. but they have tremendous margins where the rest of the guys try to gain those margins. they already have it. i think they are in a good spot to try to test some of this hardware. let's get to cnbc's josh lipton who is at headquarters with the latest. >> melissa, 11 cents on $1.23 billion. that was better than what the street was looking for.

they thought we'd see 10 cents on $2.21 billion. they gave a q2 revenue guide of $1.29 billion. that's just ahead of the street's expectations. you saw deferred revenue up 34% to $2.3 billion. subscription up 36% to $1.15 billion. that conference call is just starting. we'll want more color about the guide, bookings, what the sales force results tell us about other cloud stocks. i'll be listening to that call and bring you headlines as they cross. back to you. >> josh lipton, thanks. pretty much in-line quarter. >> i don't think the stock is rallying as much as it probably should. bookings number represents a 35% year over year growth. better than street was looking for. margins better which is also good. to your point the backdrop isn't particularly great for these.

given the sell-off it had, i think it should probably be higher. >> i don't think you go in tomorrow morning and buy this stock. >> do you buy any cloud names? >> no. not in this environment. >> there you have it. facebook striking a new deal but some analysts say it could bring in as much as $1 billion in new revenue. we have details next. why bill fleckenstein says there could be a flash crash any day now. he's here live next on "fast." when we arrived at our hotel in new york, the porter was so incredibly

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♪ >> you know who that is? >> elvis. >> no, it's not elvis. jerry lee lewis. >> nickname? >> johnny -- >> i don't know. >> the killer. the killer. >> what was yours? crazy horse in high school. crazy horse adami. good point. a brand-new drama on tumbler. kicking off our top trade tonight, the ten-episode series with be called "halt in cash fire." it is the first-ever tv show to pro mere on tumblr. >> i think the bigger theme is a

la carte from cable companies. i think this is a negative for cable companies. cutting the cord. they're going to have to start taking hits on margins. they will have to offer a lot more a la carte. i think it is a negative, as a whole, for cable companies. >> general motors recalling another 2.2 million vehicles to face safety flaws. gm plans to take a $400 million charge against the fourth quarter earnings. >> the hits just keep coming. einhorn got out of his 15 million share position announced a couple days ago. down 3.5% today. 32 has been your line in the sand. it was as recently as late march, early april. it's very hard to trade this stock with all the headlines that continue to come out. as much as i like to say it is cheap, i don't see it being particularly -- >> could this be a short on the options side maybe? >> given all the recall, implied volatility is really cheap. it's been cheap throughout this whole thing.

you could either buy puts to protect long stock but to me i think there is risk to $30 at this point. >> facebook striking a deal that reportedly could be worth hundreds of millions of dollars. it will better craft target video ads. morgan brennan has details. >> facebook and publicis announcing a advertising deal that focuses on mainly premium video afltds. facebook could generate $1 billion in additional annual revenue. facebook also announced today it is launching the service in seven other countries. it's already been quietly already rolling out more video ads in recent weeks like this one for unilever's dove soap. here is the first ad for "diver

"divergent." 5-second video spots placed at the top of news feeds but no soun unless directly clicked. facebook is adamant about maintaining user experience. but ads on instagram, what facebook calls image based story telling like this taco bell campaign. we've seen similar offerings from competitors like twitter which inked their own deal with publicis last year. this is perhaps in response to criticism that digital advertising is largely ineffective, facebook's also giving publicis unprecedented access to its data analystics. this deal is really -- not to mention the news about it rolling out in other countries is really a big step in the direction toward that broad video rollout. >> morgan brennan, thanks for that. brian kelly, is there a trade off of this? >> i think if anything it is a short facebook on this. because they're giving out all

their data to publicis. that tells me they don't know what to do with it. it is a problem internally with facebook. its stock hasn't acted well. it's basically gone sideways after coming off its highs. >> mr. shorty pants. is facebook a short here? >> this is predicated on the belief that people who use facebook want to see video ads and see these stories played out. go look at these people's news feeds. i think this is going to be the banner ads of 15 years ago. do whatever you want with public of is, doesn't matter. people will reject it sooner than later. that simple. why bill fleckenstein says the next flash crash is right around the corner. he joins us live to explain. later, dan nathan is back in action with another name that's already give the grim reapary run for its money. the stock that may be heading for an early grave. that's next.

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stocks today with the russell 2000 pushing down towards correction territory. our next guest says it is just a matter of time before the rest of the market falls off a cliff as well. bill fleckenstein, president of fleckenstein capital joins us on the fast line. bill, always great to speak with you. if thanks for having me. >> we've been saying all program long that you see a flash crash coming. when? >> no, that's not really accurate. what i had had -- what i think is that we could have one any time. i don't think that anybody really understands what might happen with the trading now leaving a bad taste. that doesn't mean i believe anything can happen some time soon. there's no way to predict that.

what i do believe is that the reason the markets are where they are is because of the money the fed has printed. when you take a step back in the last 15 years the fed prints a bunch of money, they print too much, the markets go wild, and then the fed tries to back off and the markets collapse because the fed overdid it on the way up. it was the story of early 2000. it was the early in '08. now we have another go-round where the fed has been able to push the markets up for five years now and they're trying to go back to a normal policy. they won't be able to get there and at some point the s&p and the dow are going to join the nasdaq composite on the downside. now will that be tomorrow or after another round of tapering? i don't know. i just know that the fed cannot get to zero or near there and have the markets not be disturbed. >> you've been very clear about that each time that we've had you on, bill. in terms of comparing what you see now in terms of market

conditions versus the last time we spoke to you which i think was a couple months ago, are things worse now for equities? do you see this correction coming where there has to and reversion where the dow and s&p join the nasdaq or russell 2000? >> i think the exhaustion nasdaq name -- the momentum high flyers with the really insane valuations, i think might have been an exhaustion move. i think maybe the s&p and dow will join them on the downside. that seems to me far more likely than the outcome where that whole group puts themself back together and joins the rest of the tape on the up side. i think that's the early warning salvo that the market is headed lower. having said that, it's not really very investable from the short side because the fed is still in charge, so to speak,

which is to say that if we were to get a big break in the market and the fed stopped tapering, there would be another rally. that might get more interesting but it is maddening how long these things all take to play out but the fed is just so out of control that, all you can do. >> bill, one of the unintended consequences of our fed, japan. i think they've lost control of their markets. does that scare you at all? do you have that same belief? >> and do you see short opportunities in those countries? >> well, guy, that is an excellent point. fed is not alone in its activist -- the fed is an activist central bank. has been since greenspan took over and it's just gotten farther out of control. japan is arguably in much worse th shape than we are yet the yen is stronger than the dollar. they're printing more money. it doesn't make sense.

i wouldn't short japan. i wouldn't want to go all the way over therefy don't think i can make a lot of money here yet. >> bill, thanks for phoning in. we appreciate your insight. bill fleckenstein. you guys are all sort of on the same page with bill but are you more likely to actually act on your bearish -- >> i'm short s&p right now and long yen which is a de facto short the nikkei. i might have a shorter time frame than bill but i think now is a great time to be short. i don't see how in this environment if the fed is -- if the economy is too strong the market doesn't like it. if the economy is too weak the market doesn't like it. how does the market go up in that environment? the man who coined triangle of death is back with another name that's setting up for lower lows. dan. >> this wynn resorts, you got to get out of this thing. look at that thing. i mean this stock from the 52-week lows to the 52-week

highs was up 100%. the thing has stalled out. it gapped up 7% may 1st on q1 results that were better than expected. it hasn't seen an uptick since then. banging along that key support at $200. they get 75% of their earnings from macao. look at shanghai to china. that's the one-year chart. if you back it out to five, it is banging along the five-year lows. this is a china trade. i'm not telling you that china is a hard landing here. wynn is an expensive stock, it should not be trading with the s&p. i have bearish options trade. i'm looking to finance longer dated puts. i think it is a tough short. i think you hit it on the short side when it bounces back to the line around 210, 215. >> dan nailed the price action on a head and shoulders -- triangle of death.

for the next two months, the seasonality of this stock is on average, five-year average. it is down 7% for month of may. four and change for the month of june. when you get to july on average it is up over 12% for the last five years. you might want to take a hiatus for the last two months. >> last week we were in las vegas. remember these two gentlemen were with me in las vegas. he said there could be trouble for these companies that are dependent on macao revenues. >> october 6 there's going to be a floor-wide ban of smoking in macao. that's going to be -- you walk out of those floors smelling like an ashtray. don't smoke, kids. >> that's a lesson. that's a lesson! coming up next, amazon trying to capitalize on chinese growth in a new way.

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♪ i don't know what that is. amazon -- it's j.t. justin timberlake. amazon targeting china. the company's reportedly investing $20 million in chinese food delivery company yummy 77 in its first chinese investment since amazon china lauchblgnche 2004. senior research analyst, gene, good to see you. $20 million is like .01% of a drop in the bucket for amazon. what does this signify? >> chump change. yeah. it is a change in their strategy. before whether they acquired their way into china, they took ownership of joyo. i would say alibaba has had huge success. this is an important change in terls of how they approach the

chinese market. going the investment route and leaving the control up to people who know best who are on the ground in china instead of trying to run this stuff out of seattle. i kind of put this as -- i approve of what amazon's doing because essentially they're learning from the lessons that -- the hard lessons they've gained in the past about how to truly compete in china. >> at the same time, do you think the strategy is going to work? you were just on the ground and were you not impressed with what amazon has on the ground right now. should they instead be focusing on the u.s. market and improving the market here? >> yeah, that is their focus. ultimately in china, they're struggling. part of it is a pr game. part of it is they are trying to take some of the things from the u.s. and apply to the chinese market. i think this seems to be striking the right balance and essentially putting the investment in and stepping back and saying let yummy go after what's a big online grocery market. i think this is absolutely the right strategy and let amazon in

seattle focus on what they do best which is the u.s. an western europe. . >> amazon got smashed with this rush into value the show-me stocks versus those bubble stocks. for that reason and for their forecast of that tremendous loss that they had forecasted out, are we looking at this -- are you thinking about this as the buy of the decade in amazon or is this just a fall into the abyss from the $300 price range? >> i think it is a great buy. it is if phenomenal story to ow it. eventually they'll see some of the return from the spending and the market is just a huge market. about 9% of what's bought in the u.s. is bought online today. eventually that's going to be 30% or 40%. ultimately amazon is just going to ride that wave up. >> gene, we'll leave it there. gene munster, piper jaffray. seems like amazon is biding its time. >> it is not going to move the

needle but is the stock now tradable from the long side? i mean, maybe. maybe that foray below $300 was enough, maybe we flushed enough people out where the stock can bounce back to the levels we dipped from last quarter which was $345. we anticipated the stock rallying into those earnings in the post-market. we got there and it sold off since. nothing says it can't retest those levels but i think you're just flipping a coin, to be honest with you. >> drop for orbitz. >> i know it sounds crazy, this is none expensive stock. they sold off because they got a 7 1/2 million share secondary which sent stocks tumbling. see how it trades post that pricing to indicate whether or not it is worth getting in on this. >> pop for carnival. >> i played this with the same seasonality trade we talked about with wynn. 6% is on average what it is up in april. that's what i played it for. next two months seem like

negative months. i would not be playing carnival to the up side just yet. way for deeper into the summer. >> pop for pandora up 2%. >> it was up more than that, too. cfo speaking at a conference. positive story. all this talk about apple and beats. any time apple has gone into the streaming i radio, people said it is a pandora killer. i think the beats deal, and the $500 million capital, it is a value. >> i don't think you buy here but if you want to see what happens to a momentum stock that breaks, pull up a chart of molycorp. after 2011. once these things break, they can really break. >> 2011. wow. that's when we had the ceo on. >> guy was 60 back then. >> that was bk's fire eye back

there. drop for #happy. mcdonald's introducing a new mascot on monday and the twitter reaction was terrifying. happy, the new happy meal ambassador was greeted with such unfriendly tweets as that is scary. and hey, mcdonald's, is that gary busey? with his bulging eyeballs and toothy green -- >> this might be the worst song in the history of mankind. >> that's gary busey. he doesn't sing this song? >> no, he doesn't. >> that would be funny. wouldn't it be ironic if gary busey sang this song and looked like the mcdonald's guy? >> no. it wouldn't. let's check back on salesforce slightly higher in after-hour sessions. cnbc's josh lipton has the latest from the earnings call. >> we know salesforce trying to move beyond its bread and butter

sales management offering. on the call the very first question the company fielded was whether they're actually now fully penetrated in those offerings or are there other drivers they can count on. listen to how the question was answered. >> our new engagement capabilities and communities capabilities. but the sales product remains to be such a dominant part of the company's success that there is no doubt that future growth will also be griffin significantly by it. >> analysts also asked the executives whether there were big deals they should count on in the pipeline. executives largely side stepping that question simly saying the company is executing well. they like their relationships, think they'll drive more growth. also for the year the company giving guidance now seeing revenue between 5.3 and $5.34

billion. that would imply growth of 30%. >> george bush ljosh lipton, thr that. >> it is going to be a commoditized thing. they have great margins on these things, they're first movers. a very well run company. it is a good company. i just don't think it makes a lot of sense at the valuation it has. there is no earnings. they're going to be growing sales for 20% of the year. i actually have longs and puts here. i had a trade earlier in the month that worked out well. i got something out of it. i think the fact this stock is only up a percent in the aftermarket, i think it will be down a lot. i think this stock will be sub-50 in the next couple months. coming up, cramer sits down with the ceo of salesforce marc benioff. must-see tv at 6:00 p.m. eastern. we're bringing in axiom's gordon johnson on what he thinks is one of the best shorts right now when he goes head-to-head

with the one and only, guy adami. in a special edition of "street fight." that's next. predicting the future is a pretty difficult thing to do. but, manufacturing in the united states means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done. who would have thought masterthree cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home.

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♪ are you reeling in the years ♪ stowing away the time notes >> shares of u.s. steel getting whacked today falling more than 4% adding to big losses so far this year. my next guest says chinese exports could force prices even lower. a very special "street fight." we are putting a full three minutes on the clock. woo! >> it's like a steel cage. >> gordon, kick it off. >> i think u.s. steel is a great short right now. reasons are very simple. this isn't a hard story. if you look at chinese exports of steel, the first -- first four months of this year, three months of the year they were above 6 million tons. year to date they're up 30% versus last year at record levels. reason is because demand in china is very weak. if you look at property sales down 8% in april in china. if you look at new starts of

construction, down 22%. the point is construction in china is down. that's 50% of china's steel consumption. china is 50% of the globe's steel consumption. with that down and with the negative dynamics we have in the backdrop, i think that china is shipping more of their steel internationally because it is not demanded locally because construction is down. they're shipping it internationally so they're shipping their prices which are at a $200 discount to u.s. prices internationally. i think there is big risk for u.s. steel in the second half. we think prices are going to go to $620. we think they lose money in the second half and the street has been making a significant amount of money. >> i think he makes great points. for the sector he is 100% right. but this is u.s. steel-specific. new ceo an they seem to be operating better than they have. this has been a bloated company for a long time but with the new ceo they've reduced costs significantly. their enterprise value per ton to your point is about $375. even if it goes down to the levels you talked about, it is still basically half of

replacement costs. volume had been below expectations but a lot of that has been a function of the supply side of the equation. haven't been able to get it. demand has been there, supply hasn't. weather concerns, what have you. u.s. steel is reeaping benefits of this thing called carnegie way. to date they've racked up $300 million in savings which is about $2 a share in eps. so the company's operating better. if we get even a little bit of a trough -- >> isn't historiy -- >> i think two summers ago when this was a $16 stock and the same arguments that gordon is making today we could have made then. we talked about it then. you buy this stock when the story is at its. i don't think it is at its worst right now but it is pretty close. >> in the u.s. hot-rolled coil is this much versus china, it always collapses. >> if you look at u.s. steel, the stock has a 67% r-squared

correlation to hrc prices in the u.s. prices in the u.s. are at $700. in china you are looking at roughly $450. that spread is massive. u.s. hrc prices collapse. this story is all about klein. china is collapsing right now. property stats in china are collapsing. what china is doing because there is no depand for steel in china they're exporting their steel to the rest of the world. prices in the u.s. haven't collapsed yet. we are entering into the seasonally weak period. project carnegie, u.s. steel won't tell us what the cost saves will be. >> it is close to $300 million. they told you. it comes out to about $2 per share in cost reduction. they are making inroads for sure. point about the sector is correct. i just think u.s. steel is operating better than they have previously. so if you do see any stabilization in the space, again this is a leverage stock, it goes higher. same thing that happened two summers ago whether it had a 17

handle. >> for a backdrop, are you bearish the markets overall? >> i'm bearish on steel, yes. one other point on u.s. steel you have to remember, u.s. steel is a fully integrated company. this iron ore prices are fixed. they're still -- their competitors are going to benefit from that whereas they're not. their competitors are going to have lower prices. i think they lose money in the back half. if they lose money, the stock is going to $15. it is going to be a disaster. be careful there. >> who won? >> gordon just touched on the most important point, iron ore prices. roughly from december, let's call it, iron ore is down 30%. steel usually follows iron ore prices. steel is down roughly 15%. steel has a lot more to do. >> i got to go with gordon on this one. listen, guy makes some compelling points about you buy things when there's blood in the street. i just don't think there is blood in the street yet.

if that spread compresses there's going to be a problem. i'm with gordon that china is having some serious problems. >> and before i pile on -- >> go ahead. pile on. >> you made a great call last summer in the stock when it was down at out at the lows. i give you a lot of credit for that. but gordon's call is like what i was saying about wynn. it is leveraged with the china trade. >> your bromance is over with guy! >> we'll work on it. this thing is a massive head and shoulders top. 24 as the neck line. you do not want to be long and below that. >> tweet us who won. bull for guy, #bear for gordon. we'll have the results at the end of the show. still ahead, caterpillar was the biggest drag on the dow falling 4% in today's trade. we break down the options action behind that move after this. [ 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. caterpillar getting crushed, down 3.5% after reporting

disappointing retail sales numbers making it the dow's worst performer. what does the options activity tell you about cat? >> today was the worst decline of the year. options volume ran 2 1/2 times average daily volume. puts out number calls 2-. t 1. the june 100 puts, most of them look like they were bought. the july 97 1/2 puts, most of those traded. the stock had a great run. really a huge beneficiary from the rotation out of the high-growth, high-valuation names into the kind of the more low-growth, lower valuation s k cyclical names. the implied volatility is very low at two-year lows right here. maybe traders are looking to protect longs or making directional. that's the downside. >> you don't like cat here. >> i don't like it. it is back to the letter x.

i. >> are you with dan on this? >> i love dan, number one. our bromance is not in a state of disrepair. names like ibm, cat, walmart, to dan's point, these big, big stocks are starting to show some warts. >> warts. >> we can throw ibm. it went up to $195. >> it is back. it is back. >> aw! the love is in the air. >> i guess the big point about those big cap names, they were bought with impunity. they just kept on going up when everything else around it looked like it was failing. think that comes undone and it will be ugly. >> more options action 5:00 every friday. let's get to some tweets. we got a little bit of time here. this is for gi. thoughts on f5 network continues lower after a great quarter an outlook. >> ef time this stock sells off, it happened numerous times, gets sorted to the bottom of this rake. 105 inn $105 is not the bottom

range. $98, $99, you have to buy the stock. you have these series of lower highs. that's my concern. that gives me -- what's the word -- >> caution. >> -- caution. >> you're cautious but you're not chicken little. >> excellent point. i think you have to play this from the long side of that 5 until it breaks $98. >> talk about a trending of lower highs, ever since this march gap up 31%, it's made a series of lower highs. i don't think it is buyable. >> we come right back. stay tuned. wgg

this was a blowout when it comes to street fights. gordon took guy out on a stretcher. the bear won in the street fight on u.s. steel. gordon johnson of axiom is the victor. >> he didn't even wait! >> he knew he won. >> he left the building. >> he's like i got this. time for the final trade. dan. >> pandora. i think it is prettyattractive.

>> i'd rather be a seller of mostly everything but tesla impressive the way it bounced. keep that in your focus. >> i think it is time to get frickin' short to borrow tepper's words. >> i'm melissa lee, thanks for watching. see you backfocus. >> beakers? >> i think it's time to get short in tapper's words. >> i'm melissa lee. meantime, "mad money" with jim cramer 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. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i just want fewer days like today. my job isn't just to interta intertape -- entertain you but to teach you. call me at 1-800-743-cnbc.