. . we're live . . we're live at the nasdaq. these guys are getting ready to give you their best moves. first, here is what's coming up. you ain't getting no coke. >> that's probably a good thing, because we've got a shocking chart that says america's favorite befrm will fall flat on earnings. >> plus, wire investors suddenly flocking to ford. >> ford's new slip-screen roof, ultrasmart. >> no, it is not that. we'll tell you how you can double your money in just a couple months. tom lee will explain why now is a great time to buy stocks. the actions start now. i want to start the show with two questions. given today's jobs report, the

is the recovery for real? where do you want to position yourself right now? dan, you have answers for either of the two questions? >> of course, i have answers. >> here is the thing the jobs report did for me and some people that were skeptical. they were waiting for a little wage inflation. despite the unemployment rate ticking up a little bit, the revision to last month, this number, they are great. we know the american economy, the u.s. economy is doing better than anywhere else. wage inflation was an important point. we are going to talk about ford. those auto numbers were off the chart. if more people are getting jobs and they are making a little more money, they are going to have money to spend on discretionary items. >> the auto sales numbers seem tremendously popular. we haven't seen the big bump up at spending, some of the consumer names that we thought would benefit from lower fuel prices, we are seeing in terms of auto sales. the wage inflation is the thing that's given us most concern. as unemployment is dropped,

that's where we weren't seeing it. seeing a bump there is a real positive. >> it is a little bump. one data point doesn't make a trend. we need more in the way of wage growth. the jobs have been bad jobs. >> we say this all the time. forget the equity market. let's look what the smart money, the big money is doing. bonds, yields, they started moving up in front of the employment number today. when you look at the move in utilities today, if that wasn't confirmation all of the sudden in one fell swoop, the market is starting to price in higher rates sooner than they thought a week ago. >> i want to get straight to your trade. there are a lot of different components we can talk about in relation to the stock you are trading. >> we are looking for it because i don't want to chase gm. they have been very newsy for more than a year. what caught my eye, it started out with the blowout january numbers. ford posted the biggest january since 2004. then, i just kind of put my charter work hat on a little bit. when i saw the breakout in autonation, o'reilly automotive,

delphi, they broke out to massive volume, all-time high. ford has been trading between 13 and 18. it is right about at the mid-point. it has had a big rally. i don't think you have to chase it right here. 16 is a really important level. it is about the mid-point. it would be a break-out level. today, i was thinking i looked out to may when ford was 15.90. why did i look at may? i want to tell you why. we are going to get a few more monthly sales report and then their q-1 earnings report. if you want to buy ford, if you think it is going to participate with increasing in wage inflation over the next few months and increasing sentiments towards some of these sorts of plays, you look at the may 16 calls, basically, 70 cents with the stock at 15.90. your break-even is at 16.# 0. what you are trying to do is shoot for the previous high, a breakout at 18. >> dan was talking about all the

different factors. he did not mention a strong dollar and the roll of oil price. where does that factor in in your view if it does? he specifically mentioned this will capture the q-1 report. >> the oil prices are an issue. what we have seen with oil prices and lower gas prices at the pump, people have been increasingly turning to suvs and trucks. the largest selling vehicle in the united states is the ford f-150. it is a newly released vehicle. it is a completely new design. i think we are looking at some old vehicles here. that's not accurate. there it is. that's the aluminum f-150. that's really gonna be -- i live in texas. i know a lot about pickup trucks. this is one of the things that could propel this. this is trading at ten times the earnings. >> we could be at peak auto sales. we are running almost at 17 million rate. sub-prime auto loans are at a

record of 25%. $1 trillion dollars in outstanding debt. is this the time to make a commitment to a group that's all-time highs. the duration of the debt is average six years. you are the chart guy. i'm the absence guy. i think the defined risk, there is a lot of ways this stock can become attractive to investors. >> the auto companies carry a lot of debt. that's more leverage in the equity which favors an option to make that trade they call him the chart master for a reason. carter worth is 4 for 4 in last earnings calls. what's the next play? >> we are going to trail coca-cola. this is a big name, a dow name. it might arguably be the most

recognized brand in the world. it is not looking good. this is coca-cola versus the s&p. you have real meaningful underperform form mans, almost half as much as the market. that's one issue. then, we have how this instrument is doing compared to other subsets of the marquette. the blue line is coke. it has basically made no progress. if you were to look at coke relative to all beverages like dr. pepper, pepsi, it is underperforming. all beverages are underperforming the sector and staples is underperforming the market. not a good setup. coke made an all-time high of $40.87. we have gotten back there. it looks to me like we have stalled. we literally touch the high. here is the daily chart. we tried once and backed away,

45. we tried a second time and backed away. right at this critical juncture and then we backed away with a gap, with another gap, distribution. to me, this looks like a fairly major topping out formation. i think we break this trend. i'm a seller at coke. >> mike, where do you stand fundamentally? >> on a fundamental basis, this is trading a little over 20 times earnings. that is not historically high for coke. take a look at revenues. revenues have been declining slightly over the course of the last couple years and are forecasted to. this is a secular head wind as people move way from some of the core products. it is a problem not dissim lair to the one mcdonald's has been facing in their challenges. as i look at this, i think what we are seeing is an indication that people think the fundamentals are likely to follow suit as a result of those head winds. coke is basically like a utility in terms of volatility. the stock is not very volatile.

it is a place for people to hide out for dividend yields. that means the options are inexpensive. look out for april, buys 40, 38 put spread. you can spend about 40 cents for that, about one-fifth of the distance between the strikes. it did go up to 50 cents at the end of the day. i wouldn't recommend spending much more than that. somewhere in the 40-50 cent range is a good way to make a leveraged bet to the down side. >> my bet is that you have probably never traded coke. >> i want to trade coke. this is a smart trade. i think you want to think about procter & gamble last week. it is trading at 20 times expected growth of only mid to low single digits. that's what you have here with coke. i'll throw pepsi in there too. they report next week. >> diversify. >> i just said that. they have the snack business. there is no growth there. what are you paying for? you are paying for this yield.

i don't get it. proctor has not been able to get back on its horse. coke, when they reported their " q-3 in october. >> we have paul hinkey on. the expectation for international companies have been coming down. they look like they are beating but because of the currency head winds. >> multiples are high. it is not a good setup. >> exactly. got a question. send us a tweet @options action. options action is practically the reason the web was invented in the first place in case you didn't know. you want to check it out. here is what's coming up next. bull fight. >> the streets street's biggest bull enters the bears lair. let's see if he can convince our

guys. >> 4 for 4, that's carter's winning streak for earnings call. how are they making noin now? he will reveal when "options action" returns.

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with a guaranteed 2 hour appointment window and a 97% on-time rate, xfinity is perfect for people with a busy life. is it is it deja vu all over again. last year's stocks fell. this year, a tough january yet again followed by the market's

best week in two years. are we set up for another year of powerful gains? let's bring in the raging bull, aka tom lee. welcome to a desk full of traders who are in general negative on the markets, not constructive. can we glean anything from the pattern we saw last year? are we setting up well for a rally? >> it reminds me this is a bull market that has been around a long time. it is frustrating people because it has been hard to beat, volatile. it makes it easier to surprise to the up side. >> you think the markets will continue going higher? you are bullish still? >> yes, bullish and i think it is an up year in i think we will have several more years of gains. >> i want to go through some of the factors that a lot of traders say worry them. the collapse xh in commodity prices, specifically crude.

>> it is scary to see something relentless decline when you see something go from 100 to 30. you have to think, is this deflation? >> right. >> i think the way we get comfort is supply shock. second, at least in the u.s. and in the next year, we can view this as a huge dividend, a gasoline dividend and for corporates, because they consume a lot of p energy. >> you talk about that, all this useless consumption and that burst. what really worries me is that the fed is in a tough spot. if they raise rates too soon, we could be put back in a recession. if they don't raise rates, equities become the next bubble to inflate.

i don't believe that they are a wu bubble right now. if they leave them too low for too long, we could see stocks go up 1999 style and we now how that ends. if we have a scenario where the stocks go parabolic, that may hasten the end of the bull market early. it has to be levels that don't justify the type of growth we could see. so i'm kind of in your place. i think the fed is in a tough situation. their maintaining credibility is key. >> one of the questions i would have going back to the whole thing very quickly is cap ex. there is certainly a tailwind for a lot of consumer names we might expect. some haven't reported as quickly as we might see. the justification is that the fact that rates have been so low. i am tourus what you think or if you have modeled out what that has to be? >> i might think as cap ex as a story that has to eventually

return. they can't let assets deplete. it is over the first time in history. consumer durables have never been this bold. i think we are really waiting for everyone to feel there is a reflation signal. that's a real catalyst for spending. a bit of a chicken and egg. i think it is an eventual. >> year-end target, some of it is guess work. are you assuming quite a bit of earnings. you are at $129 for the s&p. how much multiple expansion gets you to your 23/25 and some of the other strategies. >> i think this is a -- earnings have done something very curious this year. we saw some really aggressive cuts, specially from resources and industrials. i almost wondered if people missed last year's decline so they are trying to look extra smart by doubling the magnitude of cuts now. i think we are in a position where earnings are going to start to come up 74% of

companies are there. that's a great ratio. people haven't modeled the consumer lifts i think we are going to get to double digit gains and a multiple rerate, because we think stocks are less risk why i z we were just talking about coca-cola. this is a huge multinational. there is no growth there. to me, there is a bubble in some of these stables and defensive. look at what happened to utilities. the index was down 4%. it is a dangerous time to be committing new capitals to equities. it seems like a very fragile recovery that the fed could really screw up. >> i agree with most of what you said. i think it is tough to buy a utility when you have seen the multiples go from 16 to 20 and staples acting as if there is no competition. i think a lot of sectors can rerate. i think tech is one. there is going to be a trade in financials and energy. i think the recovery might

actually have some better foundations. i think we are seeing in the labor market. i have my fingers crossed. >> tom, great to see you. tom lee. technology, energy, financials, would you be long any of these? >> with technology, i think you can take advantage of the fact that options premiums are high. that sets up well for overriding. in some of the other yield type plays where they are relatively low volatility, i would favor making drexel best to the down side on potential rate strikes which would include put spreads and outright puts and some of the places we have identified like coke. >> is what you are seeing in the charts match up with what tom is seeing? >> i think we know this, that the index, the s&p has been very hard to beat. acti active had the first in 25 years. i think that's going to be an issue regardless of what the s&p does.

there is going to be a performance problem. coming up next, the bump back up in rates could ruin one of the hottest trades of the past year. we'll explain when options action returns. you only know in a fire to get out, to escape and now ok you are outside and you are safe but what do you do now and that's where the red cross came in... . we ran out of the house just wearing our pajamas. at that point just to even have a toothbrush that i could call my own was so important... .

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♪ ♪ well, roberta flack wasn't the only one that made it through the fire. our traders did, too, with good and bad calls ahead of earnings. last week, carter voted against green mountain. take a listen. >> we tracked this trend. we get a little overdone. this trend we get a little overdone. you get a little overdone. risk/reward. by our work is not favorable. >> options markets are only implying a move of about 8% this time. that's going to set us up to actually make this bearish bet without spending too much. if moves up, you haven't risked that much. if it moves down, there's a high likelihood it could move to or through that lower strike and give you a nice 3-1 payoff. >> all right. now the stock fell sharply on earnings before making back some of the losses. so, carter first, what do you see in the charts? >> sure, it's a broken chart. right?

the question is does one take the gains from the trade which we have? i would say yes. more importantly, really, as an asset, is this a desirable asset? no. every indication of trouble. no reason to be long. >> mike? >> shortly after the open, we sent out a tweet and >> shortly after the open, we sent out a tweet and indicated -- my suggestion, this is an important tip. when you get into a trade, see the options run into the money, if you want to leverage your bets to the downside, that's a good thing to think about rolling. keep an eye on the twitter feed to get the updates in realtime. >> all right. last week dan bet against disney. here's what he said. >> looking at the earnings event, given the market we're in, options look cheap to me. when the stock was 92 bucks today, i bought the february 92 half, 87 half put spread for $1.50. this is the sort of setup i think these stocks, some need a reset. disney could have it next week. >> looks like the reset came but it was to the upside. >> yeah. this was a -- and the thesis was

kind of jaded. i caveated it way too much. i first made the bullish case and then i decided to put a bearish trade on for this one event. and so here is a situation where it's very different than a lot of the staples that we're talking about. they get 75% of their sales from the u.s. everything's firing on all cylinders. it was an epic breakout. carter called it, you guys. i hope you listened to him and not me and he said this one did not look toppy. >> last month dan bet against utilities. >> when you look at the top five holdings in the xlu, they're basically trading at about 18 1/2 times next year's expected earnings with a dividend yield expected only to be about 3.5%. so to me at 14 1/2 times earnings, the s&p is a better bet. i bet the march 48, 44 put spread for $1. >> with today, that trade is paying off. >> it was just today. literally this happened in the last few hours. this trade was about unchanged. to me, i was patient with this one. i believe in this thesis. i was frustrated. as bonds were selling off this

week, i expected utilities. it all happened at once. you stay with this. if you get a follow through early next week, you take it off because you had a huge decline in something that doesn't move a heck of a lot in a short period of time. >> what do you see in the charts for utilities? >> they are identical to reed's and these other people losing their minds. presumption is -- and you've got this just right. all right. coming up on "mad money" cramer's got the earnings game plan for the week ahead an looking long-term. how to set yourself up for success the cramer way. that's just ahead. coming up next, though, we're taking your tweets. don't reach for that phone. think nice thoughts.

let's take a tweet. let's take a tweet. eugene asks is there a good way to play tesla earnings with options? let's get the chart action first. because past couple weeks have been pretty good for tesla.

>> well, it's a very bad chart that's had a nice rebound, but the rebound leaves it something of a very difficult level. we would be short going into earnings. >> one of the first trades of the year was a shortest la trade. when it got back to the down trend. what carter is saying, it was a really bad chart. it topped out in september. it's come back to the down trend. elon musk, the cat could be out of the bag as far as chinese sales. that's one thing you have to be careful of. we have news of that. i'd look speculatively at the money, look at the weekly -- 200 is the target where you want to get back to. 180 was the kind of low from a few weeks ago. i would look at maybe like a 205, 180 put spread. short datd. >> quickly on tesla, are you constructive or not? start with carter? >> i'm with carter on this one, i think. this thing has obviously been moving around quite a lot, but, you know, i'm going to stick with carter on this. >> all right. time for the final call. last word from the options? >> well, it's a great name, but i think you should sell your coke. >> mike? >> you can use put spreads.

they are inexpensive. >> sell all those staples. if ford comes in at 15.5, look at the may 16th calls. >> our time has ex spired. i'm melissa lee. thanks for watching. check out the website, optionsaction.cnbc.com. see you back here next week at 5:30. "mad money" starts right now. (universal pictures theme music) ♪ ♪ (intense dramatic music) ♪