well? i would imagine. >> just a little bit. in light of the range, we have the alibaba playbook. so we have the trades. not only on alibaba itself, but yahoo, softbank adds well as the chinese internet stocks. and we talked about the nasdaq crush all day long. biotech, one of the sectors really feeling the pain. so we have a top biotech analyst here. what you should buy on this pullback to be positioned in 2015. >> we'll sit here and watch. go ahead. >> i hope so. "fast money" starts right now. live from the nasdaq market site in new york city's times square, i'm melissa lee. your tjaders are tim seymour, danica patrick, karen finerman, and guy adami. just last week saying to short crude oil. >> you have to be short of crude oil. you have no choice. and you have to be short of brent. >> why he is now changing his tune when he joins us live a little later on in the show. first, the top story. the nasdaq suffering the biggest drop in more than six weeks, seeing the worst percentage decline since july 31st. clocked in with its worst

percent drop in over a month and a half. guy adami, you always thought iwm was s sort of the canary in the coal mine. >> i think it continues to be. it bounced a little late in the day. not much. i still think that's the one you have to look to for leadership. well can talk about maybe people are readjusting their books, they're pairing out of things to get ready for this. that may be the case. but i still think this russell was telling you something. i think it heads to 108. 108 to me is a line in the sand. we'll see if and when it happens. i think it will. >> there is no surprise we're seeing volatility. we have a fed meeting. we have a scottish referendum and a big ipo at the end of the week. >> and risk asset started to get injected with volatility a couple of weeks ago even though markets didn't respond. last week if we look at the interest rate moves, the currency moves and the dollar, those are things that should have been roiling the markets. i'm not surprised at all that we traded like this a day from going into the fed meeting tomorrow. it's interesting that actually the data that we had on industrial production, the data out of china over the weekend, oecd downgrading global growth,

these are things that maybe should have tempered the market a little bit today going into a fed meeting where people think they have to be more hawkish and they didn't. it was all names. it was growth names. high risk. emerges down eight straight days, almost 5% since early september. these are the things that people are playing. and it's all about the fed. >> and at the same time, you're saying perhaps it is bringing -- using some of their shares as an atm for alibaba later this week? >> no doubt. listen. >> for real? >> well, listen, this is how it goes. this is the largest ipo the world has ever seen. when you think about it, they're going to raise more capital than the market capital google the day it went public ten years ago. so this is a big deal. and it's obviously a great growth story, but it's also a story that is going to have legs for some time. i don't know if the stock is going to work forever, but lot of big holders have to get in now. and they feel that, you know what i mean, they need to make some room. and some of the other stuff that may have been sold in anticipation of getting into this new growth story has had some big moves in the last few months. >> i get that. but i could get selling baidu.

do you sell twitter? >> i want to get into that. i do want to take a look at some of the stocks that have seen the biggest losses today and whether or not it is related to the phenomenon and what you should do. twitter is one of them. >> i think it has more -- i don't think it has anything to do with alibaba. look at tesla out of the gate today. here is a big sentiment shift. this stock broke out and it failed. and this has been a market leader. i don't think it has a lot to do with alibaba. i think it has to do with what these guys are talking about, the iwn, the russell 2000 has been underperforming. the s&p, what did it close it? closed flat on the day today. the nasdaq was down 1%. so to me it's been the same trade that we've seen all year long you. had some momentum and some high valuation moves, shift. >> i agree on the tesla. the morgan stanley cautious net, the guy sells a $320 price target. he is far from bearish. all the things he said about tesla in terms of reasons why to be cautious. you could have made that case a week ago, a month ago. it's not like he woke up today and oh, all of the sudden, bam, the chinese infrastructure won't be supportive of the big growth

story that we're projecting now. >> its reaction to the stock. it didn't make sense. >> down 10%. >> i do think twitter is a function of alibaba. you've been in, i think you're sort of in that camp as well. so i do think people might be paring down to set themselves up for it. but that doesn't mean these stocks might recover a week, a couple of days after the alibaba ipo. i think, again, the russell is trying to tell the broader market something. we'll see if the bond market starts cooperating in terms of what i think is going to happen as opposed to i think what timmy thinks is going to happen. then things get interesting really quickly. >> it seems like two totally different things, twitter and alibaba. if i think about alibaba and the replacement, what do you want to put in your portfolio, what do you want to take out, it would be an amazon or an ebay. those would be much closer to me than a twitter. and if you look, ebay down 3%, part of that is they had denied the rumors of google last week. amazon down, i don't know, 7 bucks, which for amazon is not a disaster. so i don't know. i sort of think it's a different

phenomenon going on. it's just momo. >> if one believes that these stocks are in any way atms for alibaba, then one should believe that the softness should persist a bit because i'm sure the underwriters are breathing down your throat saying you know what? you stay in this stock. you're not going to flip fit we give you an allocation. >> i don't think you can really tell investors that. i've been in a lot of hot deals and no one told me i can't sell after the deal. no way. i wouldn't be in that deal. to be clear, i don't know that there can be that kind of pressure. i do think also you have a lot of crossover investors in this deal that haven't been in chinese internet stocks. so people are worried about how they're going to trade them. but to say that there is a one for one, or there is almost a zero sum gain in terms of i have to sell something to buy this, congress are that exists as much as people think. i was surprised to see the sale from the chinese energy sector. shouldn't this be an opportunity to buy stocks that sold off. >> is it? for twitter? for tesla?

>> definitely not tesla, not for me. i think solar city, this is the premier rooftop play in this space. things that people haven't priced in. that gets sold off with tesla quite often. that's a name that i think is interesting. >> and down 4% today. to me, it doesn't have any of the sizzle that solar city does in terms of valuation. it's not cheap, definitely. but seize an opportunity to buy. >> tesla down 9%. for a trade. >> i think tesla could retest that 225 level that we talk about. that's where it gets interesting to me. >> and twitter, they price these two converts that they announced last week. the deal didn't trade so well. so there was some hedging going on. i think that exasperated some of the weakness in that name in particular today. >> let's stick with the nasdaq sell-off here. biotech taking a beating falling more than 1%, and the xbi sink mortgage than 2%. are there some names right for

buying? great to see you. >> thank you. >> this is not as sharp of a decline or pullback that we've seen compared to other pullbacks earlier this year. from highs, we're down maybe 3.5% minimized. >> minimal versus the 15% earlier in the year. and look, biotech is still the place to be for generalists. we have above average close. 300% more growth in the s&p and we're only trading at a very small premium. so still a place to be. >> but you're already thinking about using these sorts of pullbacks or ones down the road to get position in 2015. it sounds like you like the large cap ones right now. >> we're still bullish in large caps. three good ideas now. i know gilead is up 60% this year. still a stock that would be up 30 to 50% next year. the main reason why, a lot of the overhangs are going to be removed, competition, pricing, but also capital allocation. they're going have $15 billion net cash next year. what are they going to do with that? they're going to put to it use in their pipeline that could lead to some multiple expansion. stock could be up a lot next

year. >> regeneron, gilead, celgene, and but i'll play devil's advocate. how do you wrap your head around close to 30 times forward earnings in regeneron when the rest of the space a lot cheaper? >> got it. this company has a platform that can make antibodies very quickly and they're going have a drug on the market next year that could be a 4 to 10 billion market opportunity. about 3/4 of their market cap is based on their eye business. only one quarter to the cholesterol drug business here is where you get upside. pricing the drug is modelled too low. the market opportunity is modelled too low. they're going to launch it in the middle of the year. the stock is going to go up. >> in celgene, you see a catalyst? >> a couple of things coming up. number one, the patent issue. people are really worried that revelman could come out. we're going to learn if that's true or not next year. a big overhang is going to be removed. and second, revel may get

approved in europe. there could be a therapy expansion so upside to earnings as well. >> you were sitting here throughout our whole conversation. are you getting any sense investors going into the end of the year are looking to take off some of the growth year or the big returns that they've had in that biotech is one area? >> definitely. this is a point in time where everyone sort of takes profits around this time after a big run. and they're looking for what do we own by the end of the year? what is safe to own? and then what do we want to rotate into next year. that's why they're looking for stocks like celgene that have underperformed, regeneron that have underperformed. i would say celgene is the one people might rotate into if a biogen completes its run next year after the pipeline. >> in biotech there is a rotation into the larger cap names or is there still room toward the end of the year to have a smaller high flyer in your portfolio? >> there is still room for the smaller highfliers. a lot there is no rotation out of that. actually, small cap and mid cap did very well in this pull

baghdad. they didn't really pull back. it's really large biotech that pulled back. it's just profit taking on the big names that have made a lot of money. >> one small cap name? >> one small cap name, i've mentioned it before. achillion. they have another data point coming up early on in november. and we think that stock is not only a catalyst, but it has a catalyst but also a takeout target as well. >> robin, thank you so much for coming by. always good to see you. >> robin is great in the space. celgene is an unbelievable. it's pulled back about 8% since its all-time high. i think you buy celgene. the move in gilead has been too much too fast. that's why you saw the sell-off. and she knows rejohn ron. although it is expensive, that's a stock you want to look at as well. >> you're still in the biotech etf? >> it's a volatile ride, though, even for the etf. >> but you're sticking with it? >> sticking with it. coming up next, heineken rejecting a takeover proposal from miller be, threw could be

some big deals brewing in the beer space. a look at the takeout targets after the break. and later, big day gains for apple after record numbers for the iphone 6. one analyst says he is police departmenting some of the longest lines ever when the phone goes on sell this friday. the details and what it means for the competition later on. ♪ the all new, head turning cadillac ats coupe. it's irresistible. ♪ with centurylink visionary cloud a brinfrastructure, and custom communications solutions, your business is more reliable, secure, and agile.

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♪ oh, the beer song. >> yes, it's a beer song. big sales reportedly brewing in the beverage, this after heineken turned down a buyout offer from miller saying it sfwends to remain independent. >> consolidation of the beer industry is a three-year trade. it's ban great trade. we were long on anheuser-busch, bud, the ticker. when that merger got done and bud basically was consolidating tons of debt, it ended up being a great play. we've seen this with molson, coors. even miller in place. what happen here is? i think the best of these days are over. all these guys need to consolidate. u.s. beer volumes are going lower. you need international. i think miller in play. bud could be making a move there too. it's a very incestuous thing.

right now i like brown forman, i like remi, long vmlh. these are aspirational liquors, and we talk about the luxury trade all the time on the desk. >> on the back of this reported deal making? >> no. >> which tells you what? >> well, listen, i think that generally, we've seen some activity in some of the consumer staples. just as an example today, there were some really good action in e staples. why was the s&p unchanged on the day? we saw coke. with we sauce proctor, and we continue to see bullish flow there. but i don't think people have their arms around a u.s. story anymore. i don't know. >> it's a brazilian beer company. >> that's fair. next up, the saga continues for darden restaurants and olive garden, although rallying on an upgrade to outperform from an underperformance csla there was a lot of drama last week from olive garden's never ending pasta pass, a scathing criticism of the restaurant change and how it needs to cut costs which we

outline last week on this show. now john oliver in last night tonight even getting in on the fun, throwing a little homage to "fast". >> seeking to replace olive garden's management released this damming report, essentially pointing out that all that pasta you can eat [ bleep ]. >> including easing up on bread, pushing more alcohol, and salting the pasta water. >> now we are honored here at "fast money" that john oliver has turned to us as the preeminent sort of information. today, john oliver if you're watching, olive garden came out swings back saying it defends its practice of giving customers as many bread sticks as they want saying the policy conveys italian generosity. for that we go to guy. >> that's your nickname. >> no self-respecting italian or half italian-half sicilian is stepping foot. >> thank you. >> ever.

>> but i think the stock is absolutely viable right here. last week we talked about it. said 45 is your line in the sand. it bounced off those levels. i happen to think the bad news is in. you're going to get all the activist headlines are going to continue to come out. you have a 10% short interest. and for you folks out there, the carrot, a close to 5% dividend. thing is some momentum behind the stock. up big today. i think it goes higher from here. >> we started to look at it. what i like about it, the margins are terrible. they spend a ridiculous amount of money. what is appealing about that is that can change under new management. they do a tremendous amount of traffic on a store basis. there is a lot of potential here. >> but what do you do with this valuation? this is not attractive valuation. i didn't are someone who seeks out value. >> their margins are so much lower than they should be. and they're even lower than they appear because they have such a benefit of rent. >> would you buy a company before you see any sign of an inneck in those margins?

>> i would buy a company where the ceo is going out. >> which is happening. >> which he circumstances and they have such easy cost. you see the pictures of the headquarters. it's ridiculous. or redonklous. >> karen, you're looking at it. what point do you think you pull the trigger? >> if you held a gun to my head right now, i would say buy, right here. >> all right. coming up next, the analyst who says apple changed the game last weekend. how it's heading to 115 sooner than you may think. all the trades on alibaba. in light of the range from software to the chinese nets. that's later on. "fast money" means trading. everybody's got to bring their best information each and every night. the entire trading day is the preparation for the show that night. >> it's idea generation. it's all about giving you a framework for how to look at the market. as the world as changed, our show has evolved. i am guy adami. i am "fast money." >> i am pete najarian. i am fast fast.

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apple shares up 4% since its big event last wednesday. iphone 6 and 6 plus preorders breaking records today. brian blair follows apple for rosenblatt securities. he joins us now with his take on. this brian, good to see you. >> thank you. >> a lot of analysts are raising their expectations in terms of first weekend sales for next week based on the preorders. what is your expectation? >> you know, i think something we have to be very careful about. a lot of guys put their numbers too high two years ago. they were wrong. that's what caused the stock to go down. opening weekend we could easily see a number between 5 and 7. but the thing is it's not going to be huge because we know that the 6 plus is available in limited quantity. and so i think that people have to be careful about getting too high of an expectation for the opening weekend. the bigger question is what does the december quarter look like when we're going see this in over 100 countries in full vuchlt i think that's really the bigger -- what investors should be looking at.

>> what are you expecting for the december quarter then? and what is basically the road map to 115 that you're seeing? >> so right now a lot of analysts in the street, i haven't seen everybody's report, but i've seen a lot of guys in the 50, 55 million unit range for the december quarter. this could be 15 to 20 million units higher than that. we could actually see a number of iphones for december in the mid 70 range. and that is why -- that's where a lot of my bullishness comes from on the stock right now. a lot of the things they announced, the apple pay, the watch, those things are going to be very small incremental the first half of next year. it's all about iphone in december. and i think that's what can drive. this and the reason i think that, you know, i've talked about $115 and $120 price target is because i think that investors and analysts are still too low. a lot of my opinion comes from some of my supply chain checks going back to may of this year when i was getting not perfect information, but lot of good supplier insights. they were pointing to a production number for the back half of the year of 90 million,

80 million. it seemed crazy at the time. but more recently there are a lot of reports that are corroborating that. >> hey, brian, you just mentioned that the december quarter is all about the iphone. are you worried about cannibalization, this iphone plus, you know, it's a 5 1/2 inch versus the mini at 7.9. is this something that people are basically going to have to make a decision about when they're going to go out and buy an ipad mini? >> yes. that's a great question there will be cannibalization of the mini. the mini screen is about 7.9 inches. the 6 plus is 5 1/2. so some people will choose the plus over the ipad mini. but what is important to know here is it's a higher asp. this is an $800 product versus about a $400 product. so even if there is going to be cannibalization -- >> hold on. i own an iphone and ipad mini. and i will have only one device going forward. that's kind of my point. so i don't care a whole heck of a lot about this first quarter that we're releasing these new products in sizes that apple has never had. thinking of going forward, yes,

there is a higher asp. but there is going to be less units sold in ios if you think about the whole pie. >> there will. and ipad units have been in decline since the beginning of the year. and i think they will continue to decline. what apple is likely to do next year to make people like yourself feel like you still need two devices is we think they're going to come out with a 12-inch ipad, something that is really akin to the notebook, but in a nice ipad-like form factor. so i agree there is going to be a window where you're going to want to carry one device. but if apple can come out with a bigger screen where it's a differentiated experience, maybe guys like you and i will have a reason to buy one of each. >> brian, good to speak with you. thank you. brian blair, rosenblatt securities. 120. what do you make of that? >> i think it's where you need to be. a lot of people believe that apple's multiple is contracted as the time it's in a position to start moving higher. it's not just the hardware, which i believe also is something that is going to be the start of a big cycle for these guys. but i also think the move into digital, the move into monetizing this $800 million

subscriber base in itunes, i own the stock. i thought it was interesting. dan thinks the real day to wait is friday or monday to see. that's when you actually sell the event. i think the stock should have already started to sell if people were ready to do that. >> apple held up pretty well today. >> he has been steadfast and right. look, i still think this is going to be the sell the news event. i still think it's headed to the high 80s. >> what is the event? >> this friday. >> okay. >> i think that is the event. dan has a view if nobody shows up in the masses that they have in past, maybe that is a reason to sell the stock. i'm sort november that camp. it's had a tremendous run. it's a great company. it might be time. >> would you rather stay out overnight and camp for tickets to mumford & sons or iphone 6? >> i bought it but i'm not going to tell you it's the next big thing. i think a lot of the move we had in the stock in the last six to eight months i think is about the product cycle. and we also got a bunch of ious. we're not going to see a lot of

the innovative products until next year. i think the stock can cool a little bit. >> you know, i'm long the stock. but coy keep selling, selling out of the money, one month out, and keep doing that, because even though we do get some data points, we really don't get profitability data points for a while. >> right. until the quarter. >> that doesn't really help you if the stock is going to tank like dan thinks. >> i didn't say it was going to tank. i would be a buyer at 90. i think all things are fine. brian contradicted himself a little bit. listen, we just saw a lot of stocks. tesla went down 9% today in one fell swoop. this is a stock that went down 45% after they released the iphone 5 two years ago. you guys, listen, this is the thing that drives me crazy. we're talking about this stuff. don't we have a memory here that stocks can go down? earlier this year, we saw a lot of high valuation stocks go 20, 30, 40%. i know. and this stock went down 45% when it was cheaper two years ago. so listen, let's have a little memory here. that's all i'm saying. >> feisty conversation on the right side of the deck.

feisty right side of the desk tonight. coming up next, last week, dennis ga dennis cartman said short crude oil. why he is changing his tune now, after the break. [ woman ] if you have moderate to severe rheumatoid arthritis like me, and you're talking to your rheumatologist about a biologic... this is humira. this is humira helping to relieve my pain. this is humira helping me lay the groundwork. this is humira helping to protect my joints from further damage. doctors have been prescribing humira for ten years. humira works by targeting and helping to block that contributes to r.a. symptoms. humira is proven to help relieve pain and stop further joint damage in many adults.

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♪ don't stop doing what you're doing, every time you move to the beat again ♪ welcome back to "fast money." we're live at the nasdaq market site. last week dennis cart mgartman t was time to short the oil trade. >> you have to be short of brent. it's going to continue to lose its premium relative to wpi. >> today he is changing his tune. we'll have why. that's next. plus, alibaba raising its ipo range. could this be a sign of a market top? and later, big ahmchmaahman dominant year. but first we have to start off with oil making a reverse toll the upside today after weak chinese data this morning that move catching the attention of dennis gartman who is now saying oil looks a little bullish after saying to short it last week. joining us now is dennis gartman, the editor and publisher of the gartman letter.

good to see you. >> good see you. yes, i was a selling of crude oil last week. i had been a seller of crude oil for a listening period of time. so when i was on here i think it was wednesday, and i was asked about oil, i said you have to be short. and you have to be short of brent primarily. but what is interesting is in the interim, an especially today, with relatively untoward very bearish news that came out overnight and over the weekend with increased sanctions on the russian, which should have been deleterious to crude oil prices and with a less than stellar industrial production out of china, which should have put crude oil price down, and indeed this morning they were weaker. but by the end of the day, crude oil finished the day higher. that's very impressive. if a market turns on bearish move after a long and protracted decline, you have to pay attention. and secondly, the term structure, the differences between the front months and the back months had been moving quietly bullishly over the course of the past week and a half. i think you have seen the lows in crude oil for a reasonable

period of time. i will still say be short of brent. be long of wti. but i think from here on out one wants to err on the side of being quietly bullish in the crude oil market. >> basically, base odd on that trade, it sounds like you're expecting that trade to widen. so the narrowing of the spread between brent and wti which has really nailed the refiner trade in recent days and weeks, that's done? you think that's where it's going widen? >> oh, no. i think wti continues to narrow its discount. i think wti eventually goes back to a premium over brent crude. we have to remember, going back four years ago, and then going back for the previous 10 or 15 years prior to that, wti had always sold at a discount to -- excuse me, at a premium to brent. brent had always sold at a discount. and only in the past several years has brent gone to a premium. that premium is narrowing rather dramatically. and i think wti goes back to what has historically been a premium over brent. so, again, i think one can be

long of wti, short of brent. and at the same time, one should err on the side of being quietly bullish of crude oil in general terms. >> alcoa is a name you talked about. not a great day today. >> terrible. >> can you talk about alcoa quickly? >> sure i can. it had been my largest position in my retirement account since last october, and quite honestly, last thursday, we sold all of it. you had an outside reversal, guy. and you know about outside reversals. you went to a new high. good news that dayne boeing announcing a $1 billion purchase of aluminum for new airplanes over the course of the next several years. you moved higher on the day and you close lower. on that afternoon, i sold all of my alcoa. i am out. it has been a wonderful trade. i covered all my options. i was very lucky. i will leave to it somebody else to trade right now. but i'm out and i'm gone. it doesn't mean that the company is bad. i think the company is still great. and i have great expectations

for aluminum itself over the course of the next several years. but i think the run in alcoa probably has run its -- most of its fun for the past several months. >> dennis, thank you for your time. always good to see you. >> mel, thanks for having me on. always good to be seen. >> dennis is talking about the price action oil bad news, fairly resilient price action in terms of the refiners today. actually had a pretty decent day for the refiner. >> what dennis is saying that actually it's going to continue. the pressure on refiners will continue. i agree with that. i think tesoro, and to me part of the trade here, tesoro at 61 there is a batch that is holding its level. it's going to give it up. thought about adding. but i remain short. i think refiners are seeing utilization come in dramatically. this differential where they have such an advantage globally is changing. >> i'm glad that you mentioned alcoa. dennis is out of alcoa completely. >> that's good television right there. adding value to the people at home. >> for the viewers at home. >> on a monday. >> what are your thoughts on

alcoa? >> the reversal was stark. the price actually hasn't been great. i don't think the story has changed. but the price action has. >> after that boeing deal too which was very positive. >> so good news, bad price action you, have you to take note. trade the stock. don't let the stock trade you. big novrs day. woe we got a drop from microsoft down 1%. $2.5 billion deal to buy minecraft. >> that's how you pronounce it. 2.5 billion, a drop in the bucket for these $350 billion market cap company. but rbc just initiated i think with a $54 price tag. i don't know if it gets there, but as long as it holds 45, the stock is a buy. drop for north atlantic drilling down 4% there is concerns about increased sanctions on russia. >> they have signed up a very broad reaching deal with ross netf this is in limbo right now. and until we see clarity, the stock is going to be mired. i'm long. i like it. but i don't think we're going

have transparence it is. >> oppenheimer upgraded to an outperform. >> i upgraded these guys. i think the structure have changed their course. they have gotten back to their business. they sold off the business that made great clear and their big down fall. back to networking and 4g is where these guys. this stock has room to run. >> a drop for salesforce.com. down 3%, the news of the ceo stepping down from cisco's board. >> i guess if you were a shareholder, you would probably want more focus, not that being on cisco's board is that big of a deal. maybe they're going to be competing in the future. the stock is down about 7% in the last three trading days. it's been a massive underperformer when you think of a lot of large cap tech stocks. i would probably take a shot on the long side, back at 55. that's the level the stock broke out at last month. but i wouldn't really chase it here in the middle of the earnings again. >> and a pop for surge soda. surge soda.

a group of facebook superfans have helped resurrect a soft drink unavailable for more than ten years. the online campaign convinced coca-cola to reintroduce the oh so 90s soda for amazon customers only. the first batch selling out already. but the brand confirms there will be more. hailed as coke's answer to mountain dew, it made its debut in 1996 but was later taken off the market after sales went sour. >> let me ask you a question. >> go ahead. this is a dating question. >> a dating question. >> you go to that match.com and one of those cats is -- >> drinking a surge soda? >> that's just not. i'm just curious. >> you got to walk away. i mean, i think so. what would you do? >> this cat is going to be fired up. he is going to have a lot of energy. >> i don't think him fired up is him better than not fired up. >> he is ready to dance. >> coming up, alibaba greasing the sides of its already huge ipo. but could bit the sign of a market top? much more "fast money" straight

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(train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities. ♪ i'm on top of the world, eh cnbc confirming reports that alibaba is boosting its ipo

price range to between $66 and $68 a share from the previous range of $60 to $66. so is overwhelming demand is sign of a market top? let's bring in chief market strategist nicholas colas. good to see you. >> good to see you. >> people love to think about things like, this huge ipo, market top. what does this mean in reality? >> the bottom line is big ipos don't happen at market bottoms, and they don't happen from the bottom to the middle. they happen from the middle to the top. if you go back all the way to the '90s, tell com, energy, came '97, '98. at&t wireless in 2001. all near the market tops, certainly past the mid point. you need that investor interest in equities to get these big deals done which is why these two things correlate. >> you wake up this morning. you put this out last week. which is an interesting note. you wake up this morning. we read this from "the wall street journal" of bill gurley saying things feel a little 1999ish. do you add these two things up

and think huh, if it happens closer to the mid to the upper end of the market, then maybe we're closer to the upper end? >> i shared a beach house with bill in 1996. maybe we were thinking the same kind of things. circumstances that the top of the market for you? >> closer to the top than the bottom. how about that? no, absolutely, there is a lot of resonant features to different things people see. as you correlate what happens in venture, what happens in public equity, you can definitely see a sense of things building toward the top. but two of the top 10 ipos, gm, facebook came in '10 and '12. it doesn't work every every time. you have a lot of enthusiasm for equities generally. >> speculate on the sell-off of the market overall today. we want to try to attach some baba to this. in terms of the investor base you think is chasing this deal, i think it's going to be lat of crossover investors, a lot of very large institutional folks that aren't regular players in the regular chinese internet space. but what is your view here? who is taking this thing down?

why will it be the smaller guys? i mean 500 to a billion dollars hedge funds don't think they're going to get allocations. >> this is fascinating for a lot of reasons. not a lot of indexes are going to add this stock. this is really a stock picker's trade. and you have a to really like the fundamentals, which people do. it's going to be a lot of individual folks deciding they want to own this name there. is no index coming in to back you up. that's not going to happen. you have to like the name on fundamentals for a long time. >> let me ask you. let's say they think bri this in at 68, top of the range and it opens and it trades at 71 and sits there. what does that tell you about a market top or not? >> it tells me first the underwriters did a pretty good job marketing the deal. that's a successful transaction. it tells me the demand for equities is stable. what is going to happen over the first month and three months and six months. you lockouts coming up very soon. it's not the usual 180 days. it starts at 90 days and sometimes even before. so fact that people are willing

to trade it up to that point is probably a positive sign. people think it's going to trade over 80, that might not happen. >> nick, thanks for coming by. >> thank you. >> nicolas. let's get to the alibaba playbook. there are a lot of trade related to. this let's talk yahoo, because that is one that there has ban lot of -- i don't want to afroth, but stock has gone up. >> a lot of the move, a lot of people thought happened in 2013 has all the rumbles of a potential deal happening. just until about a month and a half ago, the stock was underperforming, it was going sideways and had this massive rally. to me there is one trade that really stands out. it's kind of a karen finerman stock. if you were long on the stock and you think there is more upside, implied volatility, the price of options has shot up dramatically. you can sell an out of the money call in november, you can sell the november 50 call, the stock is at 42.50. that's a callaway level. if the stock was 50 or higher, the callaway level up 20% in two

months. that's a great trade if you want to stay in it. >> genius. ! . >> i got it from you. that's how you play this sort of thing if you think you're going to -- >> so you can hold it. >> i would hold it if you think that's going to happen. i actually believe, i don't know where the stock stops going. i think this will be a high in yahoo for a very long time there is no earnings growth here there is no sales growth. they're going to have to do some sort of transformative action with this cash. and i don't think investors think they're going do a good job with it. >> we saw 42.5 to 45. timmy is probably somewhere in between that. >> i'm in the take profits mode right here. it doesn't mean shortia hoop. it means take roft profits into this event right here. >> i want to get the trade on softbank. we had a lot of tweets about softbank. what do we do with softbank. >> it's similar to yahoo. it's a little busier. sprint has moved a lot, went down a lot. lately it's been up a lot. clear you have a big alibaba position as well.

i think similar to guy, start taking some off. >> okay. and tim? weibo, but also chinese internets in general. >> this was total take profits. last monday i said people are talk about how do you get exposure. alibaba owns 30% of this country. they may want tooid that. that was a trade that went up 25%. i don't really know why, even though i think the company is doing reasonably well with a lot of competition. i've been out. the stock got destroyed today. and that feels nice. but i think it almost feels lucky. if you look at the chinese internet space, the way you play today's move is you buy baidu. baidu which sold off, you buy best of breed. baidu and alibaba are the way you want to own china, at least in the near term and that's the way you trade it right now. >> thinking about whether or not you want a piece of baba, now that they have raised the range, what are your thoughts? >> if everything we have been talking about still makes sense, is that this valuation coming

here, maybe it's coming at 24, 24 1/2 times still trades at a major discount to where baidu is trading if you're getting 48% growth which is what we got in the second quarter numbers, i like that. i like the size and people are going to want to end this company. still ahead, bill ackman's company having one of the best years. plus jetblue falling as the stock gets hit by a down trade. we'll show you where traders are betting it goes next, right after this. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.

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they have not. the international routes, this is very interesting. i would buy it. >> all right.

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time now for the final trade. let's go around the horn. tim seymour? >> gold spot has been a losing trade. it has been for a while. somewhere near one-year lows, trade it near 1820, 1830. >> risk reversal. >> twitter sold off today. it got hit. who knows why. if you get this back into the mid to low 40s, that's where i add back some of my position. >> mid to low 40s. karen finerman? children's place, which we talked about from time to time. it has traded down a little bit since very good earnings. what i really like about it is gymboree, one of the major competitors is absolutely imploding, and thing is very good for children's place. >> guy adami?

>> that cat did, john phillips? what show is that. >> what? >> darden? >> the guy that did the clip. >> oh, john oliver. >> john fitz, great. darden. >> i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 my mission is simple, to make you money. i'm here to level the playing field for all investors. there is always a bull mark somewhere and i promise to help you find it. "mad money" starts now! hey, i'm cramer. welcome to "mad money"ful welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job not just to entertain but to teach you and coach you how this works. call me or tweet me@jim cramer. we've got an amazing acquisition i situation brewing here with this ali baba ipo. and it's