we are live at the nasdaq. stock paid record highs. the guys getting ready to give you their best news. first what's on tap. we are saying that gold miners could be set to rally. we'll explain how you can cash in now. plus -- >> devilled cheese and sausage? >> maybe investors shouldn't go for seconds. we'll explain why one fast food giant could be about to cool off. what do you get when you mix trading with romantic hits from the '70s? you're about to find out. "options actions" starts now. ♪ do that to me one more time >> what will matter the most to

the market next week? you the consumer. retail names like jcpenney, target, home depot about to tell us their earnings. dan is upbeat on the sector. >> i'm upbeat on a component of the sector. think about what we've had over the last couple of months, a lot of talk about lower gas at the pump, what it means for the u.s. consum consumer. 75% of usgdp is driven by the consumer. we've seen guide downs because of the headwind from the strong dollar. there is a part of u.s. consumer or retail that actually doesn't have the effect of a strong dollar because they get all their sales from the u.s. and their consume irs are benefitting from lower gas at the pump. kohl's a couple of week ago had a massive breakout and kept going and nordstrom which actually guided down for fiscal 2016. the stock reversed and finished at an all-time high.

macy's next week. >> basically, certain poshgts of the consumer is strong and nothing to dao with gas prices. >> to the extent that gas prices have something to do with it, i think it's lagging for sure. it takes some time for people to accumulate and realize they have more money in their pocket. nordstrom as an sexample is nota name that pops to mind. the average nordstrom shopper, no. kohl's a different matter, and macy's somewhere in the middle. >> of course we're talking about stocks and record high. we have the s&p and dow at record highs. >> the rth has exploded, xrt is very steep. this particular subset, there are only three stocks in the s&p 500 so-called department store index, this has been a laggard, macy's down 10% from january. it's a great bet it catches up,

does what kohl's did and catches up. >> i would add one more point. they had a lot of news in the last couple of months. they made an acquisition, reiterated 2014 guidance, said comps were good. it really comes down to guidance. what nordstrom is telling you today is the stock could still advance with the downgrade in the guidance. nordstrom trades about 20 times less expected gross. to me, this one sets up as a good trade next week. >> today when the stock was 63.25, i actually bought, i looked to march and bought the 65, 67.5 call spread. i bought a march calls against it. when you really think about the trade, i have a break-even up at 65.60, a few percent away. i'm selling that call, the previous high that carter talked about. it's been down about 10% from there. i think it sets up as a good

earnings trade, risk/reward. >> i think this is a decent play. the only thing i would point out is options going into earnings are cheecher than they usually are. the stock is cheap. if it does rally, it's possible i think for it to break through that high we previously saw. so from my perspective i don't even mind just simply buying that call. 90 cents. the amount of money you're saving by selling that other, granted a third of the price, but the call you're buying is very inexpensive. >> it's a good rebound candidate. the stock is out of toutperformd it's a catch-up trade. >> precious metals got a little less precious, gold dipping below $1200 today taking the miners down with it. could the dip present a golden opportunity? let's ask the chart master carter. >> i think it is an opportunity. let's go to the charts and figure this out together. the pick here of course is looking at the aggregate. gold miners gdx. let's go through macrocharts

first. this is a long term chart of the philadelphia gold and silver index. it's been around for a long time, a 30 year chart. basically if you were to look at this period here when gold st k stocks were cheap this is the height of the 2000 bubble, this is when gold stock expensive, when s&p is plunging. we're at the general bottom of the range on a relative basis compared to equities generally. take a look at some other charts. same long-term chart of the group, again, about 35, 40 stocks. we are just now right at the relative strength low versus s&p. we started to bounce off that line if you look at that on a detailed chart. that is an important tell. another couple of important things. this again is an important aggregate against the s&p. this is exactly where qe 3 started. you get this dump in gold and the s&p takes off over the last

two years. only one stock in the s&p is the gold stock. it's the second best performing stock in the market. third best performing. by my work, this is all the hallmarks of a bears to bulls. it was up huge today on good earnings. so the presumption is here it is relative to other miners, that this spread that miners will go the way of the biggest miner, at least the ohm one in the s&p. the bet being this is the gdx, an aggregate of many stocks. it's held the lows. you had this nice head fake which gets people beared up. it's thrown back above. we're on the line. we think we ricochet here and miners go the way of the biggest miner for a buyer of gdx. >> let's say you want to play along. >> it's interesting because i've often said i wasn't a gold bug. the news today was very interesting because they talked a lot about their cost which

came in much lower than expected. that's the area where i expect them to say, turns out it was a little harder, more expensivement i was impressed by that. the other thing about the miners in general the s&p is trading more expensive than its historical aaverage, the miners are not in aggregate. newmopt isn't. you want to look at seccors trading a a slight discount if you're looking for something to play catch-up. >> just a question. you've got to think about this in the broader context of commodities. crude oil while it's stabilizing here it's not giving a lot to bulls who think there will be a sharp snapback. i think it goes lower. what happens to gold in that scenario? >> that's a good example -- >> if crude goes lower? that's one of the best things for gold miners. they take a lot of input from crude. >> i understand that. but the next leg down, isn't that a function of global

economic activity? what does that mean? >> it's very simply an issue of how much storage you have and how much oil you have in storage. that's not the same dynamic gold will have frankly. >> what's the trade, mike? >> relatively expensive, i'm looking out to june at the 21.26 call spread. you can buy the 21 spread, spent 1.85 for that. spend 1.40, little over quarter of a distance between the strikes which is usually the level we're looking for. i'm trying to target that $26 price carter has identified. >> what about the dollar, carter? >> that's a part of it, too. at this point the dollar having surged one of its biggest six month moves on record is the dollar probably headed higher long term and hur roe headed lower? sure. i think the path through the dollar passes through a lower price. it's over. done. >> doesn't the dollar just stay here and crude could stay here. it's not going to be a great

scenario for gold miners either. >> anything could happen. when i first started the business, the one thing the director wouldn't let us put in is "could." anything could happen, carter. >> this is a trade until june. >> listen, i think what's really nice about the trade, it's a quarter of the distance of the width and you have to find a range where the etf has broken down six, seven months ago. it seems like that would be the level it goes to. you're basically in my mind kind of risking one to make one. if you look on the downside where the support is, it's somewhere in the high teens. >> if i read between the lines in your assessment of carter and my trade, dan, you think they're nuts. >> no. i don't know why gold goes up or down. i'd rather be in the gdx than the gld. it probably breaks that big support. you tell me where gdx will be. >> the biggest reason gdx or gld has gone up is because of the dollar. if it maintains its current situation especially with strong

fundamental news, it does give an opportunity to be propelled slightly upside. >> got a question out there, send us a tweet. check out our web site. we've got the hottest options, gossip this side of tmz. while you're there, sign up for our newsletter. here's what's coming up next. one call does it all. >> in our traders are calling for domino's disappointment. why it may be wise to avoid fast food. plus, mike like you've never seen him before. that's when "options action" returns.

how about some fried noodles? noodles and company plunged

today. and not the only ones, panera, chipotle dropping shortly. dan, are we seeing a bad trend? >> last night we had the ceo of red robin on. he made a couple of interesting points. he wasn't ready to say that lower gas at the pump is something they're seeing just yet. he says he's seeing a little data. i thought that was squishy. to me, that stock is right at a 52-week hive. there's plenty of success stories. i think the ones they listed there, when sales gross starts to deaccelerate on high multiple stocks you see the declines in those names. that's why domino's pizza hit my radar. it's had a massive run. taco bell is having trouble with pizza hut, i think sales grew 1% and margins were down. when i look at domino's, which is reporting next week, the stock is kind of priced to perfection here. the chart is gegt ttting topee.

it wouldn't take much to get it down. >> those names while they all performed poorly after their earnings, it's what they did the prior quarter. they're losers. but things like buffalo wild wings, sonic, jack in the box. more restaurants have beefed and gapped up than those who have gapped down. the issue here is domino's itself idiosyncratic. it's expensive, sure. but the last quarter in october 14th, you're talking about a stock that surged on massive volume, often when you get one beat like that you get a second beat. i would be careful. >> it is expensive, but it's not overwhelmingly so given you've had low double digit top line growth. one thing we can remember about domino's is this was really a company in a lot of turmoil had kind of lost its way. they examened their problems and actually changed the quality of their food. they did a lot of things to turn the story around. some of the other names, panera, you can't really say, that noodle and company hasn't done anything major to try to pivot

their strategy. domino's has which probably justifies a better valuation. >> it could mean they're kpcomi up difficult comparisons. this is a company that is a delivery pizza company trading at 30 times earnings deaccelerating to high teens. to me, it is priced for perfection. i would make one other point. panera did gap down 7% after their earnings a couple of weeks ago from new all-time highs. it can happen and you do not like to see the gaps. >> right. but you usually have weakness foreshadows weakness. i would say the burden of proof is on the bear. >> if they do execute, then you can't say it's necessarily priced for perfection right now. >> but i don't think they'll be able to demonstrate the sort of growth that will justify a multiple. at some point everything comes to an end. >> which could be the same case before the prior herb earnings report. >> that was much lower. the stock fell 45% in seven

months. what is it discounting? to me, this is the sort of thing where this is an options joke, i like to look to defined risk setups. i would merely look at a $10 y looking at a month or two and look to no more than a quarter of the spread. coming up next, a man and his options. we're taking a look at the sentimental side of mike.

♪ careless whisper we're not just about puts and calls. we're also about love and passion. that's why we're presenting you with this once-in-a-lifetime offer. take a look. ♪ you're the meaning in my life ♪ >> imagine having all of mike's greatest strategies in one collection.

>> the nice thing is if you use options sometimes what you can do is get a little leverage. that's what we're using here. the market is up and premiums come in, this is a great time to up your portfolio. >> timeless wisdom by the man some call the yoda of options. >> this put spread has actually nice numbers to it. you're buying it for a little over quarter the distance between the strike. >> a once-in-a-lifetime collection. "options action" presents kuow's classics, 16 mind-boggling strategies that will have you risking less and making more. the covered call. >> that is to do a covered call, that is you hold the stock, you look to sell a call against it. >> and even the one by two put spread. >> basically buy one of the 50s, sell two and you're targeting that 50s strike. this is a little bit of the

threading the needle trade. but wait, there's more. order now and you'll get fundamental indicators like ebita and everyone's favorite historical valuation analysis. >> it's actually trading at probably a 15% discount to its historic multiples on a price to earnings basis. >> pick up the phone and call today, 1-800-risk-less or order online at options action.cnbc.com. shipping and handling may apply. >> now that we've seen how sentimental you get about options, mike. >> you know, you described them as mind numbingly complex, but actually this is a really easy one. let's go ahead and take a look at one of the easier strategies that a lot of options traders can employ. what we're looking at is selling puts. one of the things you want to

look at if you're looking at selling puts, do i want to buy the underlying stock? do i think the valuation will be attractive? xmrai expiration, 30 to 90 days is the sweet spot. then finally i'm looking at an annualized rate of return consistent with what i would expect for being long equities. in this case looking for maybe 12% for an annualized rate of return or better. so why don't we take a look at a trade that i think meets all these criteria. specifically i'm looking at a heck of a tear, fundamentally, this is one of the better stocks around, 20% annual year on year top line revenue growth. just getting approval for expanded use in the u.s. and europe. you can look out to april and sell the 115 strike puts for $2.60. that's a little less than 60

days away. so you will notice that you'll be collecting a little over 1% a month to do that. if you are forced to buy the stock. if the stock declines down to that 1.15 strike price, you will be obligated to buy the stock there. but of course net of the $2.60 your effective purchase price is actually going to be $112.40. if it stays we'll get paid. if it goes up, we'll collect. and if it declines we'll buy it at a significant discount to where it's currently trading. >> carter, do you think it will ever hit those levels so mike can actually be an owner? >> i was just thinking of that sound track. does this come with that sound track? celgene is a good story technically. it's lagged the ivb by a touch here. we think it has the prospects of hitting the levels it's talking about. >> of course it does. it was trading at 114 friday. this is the thing about selling

puts. i think about it differently. if you own it, i would think of selling puts as maybe a yield enhancing strategy if you're prepared to buy more later. if you're going to keep riding this stock, maybe you sell one month out puts at a level you would buy more because if you're not full up on your stock positions, this is a great way to add yield. >> if you own the stock already, another way to play it, given where premiums are, you could even -- this is going to be in the subsequent edition -- sell both puts and calls against, buy more at lower levels, you'll be called out of your stock at higher levels and in the meantime you could collect probably 4%, maybe 5%. >> what kind of music goes with that one? >> "dance the night away." coming up next, we are taking your tweets. stay tuned.

we love getting tweets. let's answer a few. peter asks, how about selling puts on oil through uso? >> you know, so the etf that's supposed to track wti here. this is one that's interesting as far as options prices. it can only go to zero and it won't. and calls are more expensive than puts. it's a scenario where at the moment it's not ideal but probably better than buying the uso right here which has been very volatile. i would look to sell puts and use the proceeds to buy call spreads and look to create a band with long much lower and actually have exposure to the upside. >> mike? >> right now options premiums are relatively elevated. obviously oil has been extremely volca volatile. this is one way to get long exposure, get paid for taking

it. if you have uso put to you it will be at significantly lower levels. >> consensus is we're definitely going to 40. that's -- >> or 30. >> that's why it stopped and started pushing toward 52. if one can put enough time on the trade i think selling puts on uso makes sense. >> and please follow up with carter worth regarding his numerous calls of retest of 1820 on spx. >> if you can think about that drop, september 19th, october 15th we plunged 10%, that's a foreshadowing of what the next one will look like, which is worse by all accounts. the further this goes without that kind of drawdown the worst the inevitable drawdown will be. we think we'll visit 1820 and go below that. that used toe happen all the time in normal markets. once the fed is done, this thing will not be able to -- >> once the fed is done, june time frame? >> once the student can't go to extra help anymore we'll see how bad a student he really is.

>> wow. sticking with the bear call, the final call carter? >> well, at this point we think you should be contrarian and bull miners, buy some gold. just get up the courage and do it. >> mike? >> sell some puts. >> macy's define risk call spread. >> our time is expired. i'm melissa lee. thanks for watching. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull at work somewhere. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cr welcome. my job is to teach and coach uf. call me. call or tweet me. we've had a real good run here. pretty much week after week after week. it feels terrific to end this