. . . . we're here at the nasdaq on a very tough day for stocks. traders getting ready to give . . . . we're here at the nasdaq on a very tough day for stocks. traders getting ready to give you their best moves. but first here's what's coming up. that's why people are flocking to vegas. casinos have crapped out. is it time to double down. how would you like to buy facebook for less than three is it bucks? we'll show you how. talk about a bank job. >> take one of those big envelopes and put as many hundreds and 50s as you can put into it. after a vicious rally. time to get out? the action starts right now. live at the nasdaq markets. if you're just tuning in it's been a rough day for the stocks.

russell, dow and nasdaq all down more than 1.5%. is this a healthy breather or the start of a long-awaited correction? what was behind the move, dan? >> a lot of it came from overseas. we always knew that really whenever this market will hit a rough patch at least in this last leg of the bull market it won't come from here. think about what's gone on since the start of april. we had those disappointing march jobs data. weak retail sales data. weak manufacturing data. it seems like throughout. the market has been stuck in this range. the s&p 500 between 2000 and 2100 for months. when you think about how tight that range is it's turning. it's not something domestic that will send us down 5%. it could be the start of it, the volatility in china and maybe some weakness in europe but at some point i think investors are once again going to focus on the economic data here. >> you have two sets, two forces doing battle with each other.

for one thing you still have massive buybacks going on at the corporate level. we still are in a low rate environment. that supports stocks. but we have elevated valuations. that pressures them and then essentially what will happen at some point investors get scared just enough by one of the bad bits of data coming out. obviously, we have some concern what's going on in china and europe. if we see bad economic data in the united states, that will be where it actually rolls over. >> it felt bad, carter but technically was it that bad? >> market has a fatigue to it. we just have stalled as dan is talking about. it's one month. a third. then a fourth. we have had a breath issue for the better part of a year. it remains a moment of asymmetry. can you eke out gains? sure. you trade at great risk with a drawdown. >> so you think a 10% move is due. >> not a bad thing, a good thing. to keep the bull going you have to reset, shake some people out.

it's quote easy to make money in the stock market. >> before we had this selloff today, it was interesting. this dash for trash. you saw the minors. greedy printing stocks. a lot of speculative action in stocks. shake shack went up 20%. so to me i don't love that action especially as you say we're losing a little momentum in the broad market. we're kind of losing some momentum in some of the stuff that got us here. we'll talk about consumer discretionary. >> consumer discretionary. >> it's the second best performing sector in the s&p behind health care. we know why health care is up there. it is kind of defensive and all this mna. this u.s. consumer, yeah, they have been benefiting from oil but oil rallied 30%. what does it mean if we have higher oil. a lot of the consumer charts, a lot of retail i'm looking at seems to be rolling over. it lost that momentum, let's say months ago, and has not confirmed the s&p, basically only 2% from the highs.

i'm a little nervous about this sector. it seems like u.s. consumer which has been a stallworth is getting a little bit strained. >> the sector is steep and it is, of course, one of the best performing with the exception of health care. it has marquee names that are impervious. it does have stallworths that can't be chucked out. broadly speak the down side is there. if one plays for down side in the equity market, you do it through a high beta area like this. >> consumers were benefiting from that. there are tax refunds which a lot of consumers say they will spend and not pay down debt. and then the consumer has been okay so far. why now? >> consumer has been okay. there might be some ticks of hope on wage growth, which will be obviously very important. the other big factor has been where oil prices are. i don't think oil has a lot of legs here.

i'm not expecting it to rally back above 75 bucks or something. that's what it would take to start hitting consumers pockets. so from that perspective, actually, i can see spending on a total level, actually, going up. so i don't think that's going to hurt them. what concerns me are valuations. that's what i'm worried about. >> what's your trade. >> the biggest holdings are disney, comcast. almost teflon names. here is the thing. we haven't seen real drawdowns in these stocks in a long time. they are a lot higher than they were in october, that 10% drawdown you talked about. if we hit a period where we test 2,000 on the down side in the s&p, this is a sector you want to go after. that chart is isolating this range between 74 and 77. this is a 200-day moving average. this is the trade i am going to look at on monday morning.

i would like to see the etf open up a little bit. today when the etf, the xl was 75. that breaks even down at 73, 75, basically risking 1.5% of the underlying stock price for almost a month of at the money, you know, bearish sentiment. to me i like the risk/reward of this trade. you want to do it when it bounced. i don't like to press stocks on days like today when it is down 1.5%. >> why do consumer discretionary as opposed going to retailers. we're not shooting against a disney or comcast? >> option prices are cheap here. that's one thing i would say. they are going cheap in a sector like this with names like this in it. to me it comes down risk/reward. if the thing breaks here it will go the low 70s. you'll have a double if you get that break. >> you also have what would be a fairly exceptional long term performance. only two sectors outperform the market. stalled in '14 now again asserting itself.

you're talking about a 50% increase over the markets since 1990. it's come a long way. >> with disney as the largest component of xly and news of "star wars" out, it's hard to imagine how that stock will crack next week. i'm just telling you this is the kind of thing that will encourage people to buy the stock, not sell it here. that said, the nice thing about trying to make a bearish bet right now is the fact that this could be the crack and if people think that, you could actually see a couple days of weakness even if they do come in and buy them afterwards. >> facebook. not immune from today's selling. the social media giant falling almost 2%. which way will it break on next week's earnings? let's ask the chart master. >> let's take a look. it was weak with the market today. but the position it's in would suggest that earnings can be good, and the stock can respond to the up side. here is a two-year chart. an uptrend of starts.

if you put in some lines, take away the lines. put in the lines. we've tracked trend pretty well. put in some more lines. we've tracked trend pretty well. and now we have what you would call a flat top well-defined. we stuck our head above it. hit 86. fallen back to it. that's a pretty good setup. after doing that revisiting, you'll come out again. so the stock has peaked the trough here, 86 to 80. we think it bounces off the top here and actually goes on to make a new high. relative strength quite good. >> what do you see fundamentally? >> this is an expensive stock. it's trading 80 times earnings on a trailing basis about 40 times estimated earnings. but what is interesting about the valuation here is that we haven't seen multiple expansion in facebook like we have in every other part of the market including names that have blown the doors off like netflix. there you do have multiple expansion. this is an interesting situation. if you take a look at a chart as

he just did of the stock price, since the ipo and map the revenues over it, revenues have outpaced the stock price growth over the last couple of months. i won't call the stock cheap. after i saw the reaction to netflix and i can see it hadn't seen multiple expansion which is my primary concern i could see some up side here. >> what's your trade? >> looking out to may, i can spend about $2.85 for those. one quick point. you can use weekly to play a catalyst or go further out in time. this stock has historically moved a little less than 9%. about 10% the week after. over the course of the month after earnings this thing usually moves about 15%. one direction or the other. you can spend just a little bit more by that month long call option and play this longer. >> seems expensive. 2.85. >> on a premium basis yeah.

you're going to need that out of size move to make it happen. if you're long on the stock sell calls against it. this stock is range bound between 75 and 85. i'm not certain there's anything in this report next week that's is going to make this stock finally break out in a seven month trading range that it's been in here. to me at $225 billion market cap it's trading at 13 times sales. that's ridiculous. everyone thinks it's the safest stock in the world. at some point, this stock will get cut in half. it has to happen here. it may be from 120 but i just don't know. it is ridiculous. >> it was ranged bound. it broke out of that range. it broke out of that range about five weeks ago. so it does have some room to the up side. here's one question i'm going to ask every person at this desk. in 30 days, do you think there's a chance this stock could be up more than $3 or down? what do you think the chance is? >> very good. if that's the case, you rather --

in that case, you rather trade options than purchase the stock. i don't think 285 is expensive. >> just quickly. >> it's marquee name. it made an all time high. it pulled back support. give support the benefit of the doubt. >> send a tweet to @optionsaction. we got the hottest news from the week and exclusive trade so check it out. here's what's coming up next. >> why is steve wynn so mad? >> if i don't see that sentence in this edited version of this tape, i will choke both of you after this question. >> because the stock has been falling and we'll explain how can you profit. >> plus, carter cashed in big on goldman sachs. they have a way to make even more money. we'll tell you how when "options action" returns. is when the world moves,

futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. all on thinkorswim. from td ameritrade. visit tripadvisor orlandondo tripadvisor not only has millions of real travelers reviews and opinions but checks hundreds of websites so people can get the best hotel prices to plan, compare and book the perfect trip visit tripadvisor.com today

tsplit second stats.

it's so close to the options floor. you'll bust your brain-box. all on thinkorswim. from td ameritrade welcome back to "options action". let's get out the jane wells who is out in las vegas. some say it will be the fight of the century. >> reporter: i'm at the wild card boxing club where manny welcome back to "options action". let's get out the jane wells who is out in las vegas. some say it will be the fight of the century. >> reporter: i'm at the wild card boxing club where manny pacquiao trains. there's some talk that total revenues could be as much as half a billion dollars. for floyd mayweather who is the favorite in a single day he'll earn more than any athlete has earned in a year. guaranteed $10 million that could go hire. is the only reason this fight

happened was because you were willing to take less than half? >> yes. 60-40. agreeing what he wants. >> i've never waited so long to do any fight. >> reporter: look at this. mayweather putting his money where his mouth is. he paid 25 grand for a mouth guard. he breaths better with them in than out. we'll have to see if he keeps them in his mouth in the corner in between rounds come may 2nd. back to you. >> jane wells, thank you. that big vegas event comes as gaming revenue on the strip has been falling. the real problem for casino stocks is in macao where a crackdown on corruption has decimated the business. is there any reason to get into the casino trade or are these stocks left for dead. even today credit suisse came

out with a note saying that things are worse for wy in. n. dividend may be in jeopardy. >> it's really interesting because when the casino stocks start is going to wrong way they really can go the wrong way hard. we say it many time but the scale of macau is hard to appreciate. something that's multiples larger than las vegas and where those revenues are coming from, we now recognize it's pretty sketchy. if they crack down on this, how far and how fast that could go. who will get hit hardest in that kind of a cutback? it is going to be the high rollers. that's where they make their money. >> looks like the high rollers are investing in the hang seng and the shanghai composite. look at wynn they get 70% of their sales from macau.

they left. the stock has been cut in half. you've seen new account openings in the stock market just ramp. >> so billionaires are investing rather than gambling. >> they are not gambling in las vegas. so maybe they stopped gambling all together. the stock market is a beautiful gamble. >> and final factor is price. i was a summer intern as a kid in a brokerage firm. an old man said to me once, i've never bought a stock in a down teletrend in my life. if a stock is going down, there's something wrong with it. no reason to buy mgm or wynn. stay away. >> there's this anti-corruption and a smoking ban going into effect the end of the year. i'm serious. analysts are factoring that in because a lot of these vip people are in these rooms. if they can't smoke forget it. >> get the games outside. >> it sounds bizarre. >> just to button it up, when

you look at this thing, 250 a year ago, now 125. when you look at the five-year chart, $100. if you round trip this entire move this was a bubble and it burst. this is what it looked like when they burst. the countertrend rally, on the way up, getting lower and lower. leads me to believe you'll have a flush lower because the sentiment has not bottomed. >> all three of you don't touch casino stocks. is there more money to be made in the banks? our guys call goldman sachs. they have a way to make even more. back after this. when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. all on thinkorswim.

from td ameritrade. time and sales data.

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we post your job to over 100 job boards with just a single click, so you can reach millions of qualified candidates. then we'll give you the tools to help you manage, screen, and rank your applicants, all so you can find the right one. try zip recruiter for free today. >> goldman sachs shares rose >> goldman sachs shares rose this week on the bank's impressive news reports. that was good news for mike and carter. "options action" is how we trade like wall street legends. risk less so we can earn more. that's what carter did. he thought goldman was just about to break out. but just buying stock, that may be the case but buying 100 shares, that would put you back so he bought the 195 strike call for $7. to make money he needs goldman shares to rise above the strike of the call.

or in this case above 202 by july expiration. >> can't tell you how excited i am. >> it gets better. if goldman shares go up, those calls will increase in value faster than the stock will. meaning more money in mike's pocket. >> greed, for lack of a better word, is good. >> you bet it is. since the time of the trade goldman shares have rallied 4% making this trade a quick winner. now "options action" fans all over the world are asking just one question. >> can you say that again? >> no. what they really want to know is how can they make more cash? >> so, do you still like goldman? >> it seems okay. the stock has fallin back with the market. you're back to where it started. the presumption is a stock like this is out pulling other

financials and outperforming the market. good place to be. >> mike? >> we have small profits in the option. at one point when it speck you could have sold the 200s for almost eight bucks. could you have locked in profits? at that point and still had some up side? that's way you want to play this. if we get any kind of rally look at the 200s. take some money off the table. >> i find it troubling. amazing report. it was. you could always look to sell some puts to help finance this purchase. >> dan also had the hot hand. take a listen to what he said about ex son. >> when you this i about it, it is down 7.5%. down 18% from the 52-week, all-time highs made last summer. it is trying to make the bottom. for those looking to make the fine risk drexel plays, the

options market is one way to do it. i looked at it when the stock was 85.5. you can look out to the june expiration. the june, 85 calls were offered at $2.50. >> dan, what you doing with the trade? >> you had this quick move and it doesn't always work that way but sometimes you have to consider what's going on. the trade cost 250. probably worth four and a quarter. we're looking out to june. june expiration. what i'm trying to do here when this stock is at 90 it should be at a double. that's when i'll consider rolling it up and out. or possibly selling a higher strike call in june expiration to lower my break even and lower my risk. >> a big week for oil. a big week for energy stocks. risk/reward sort of neutral. >> neutral. >> it's not surprising to see some of these stocks strike given the increase in oil.

you are buying oil reserves. oil has fallen much more that the stock has. >> coming up next the final call from the options pits and one activity that brings out the best in all of us. tweeting. back after this. when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. all on thinkorswim. from td ameritrade. dovisit tripadvisor new york.

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tsplit second stats. it's so close to the options floor. you'll bust your brain-box. all on thinkorswim. from td ameritrade a> let's take let's take a tweet. andrew asking us, will amazon climb again this quarter after earnings? >> take a look at netflix. this is a high valuation name. investors have not required them to make money to see the stock go higher. like netflix the options markets are not expecting to it move as much as it does. to me that sets up an opportunity. if you're inclined to make a bullish bet and the stock was down, you might make some calls 30 days or so. >> big gap last quarter. gaps come in pairs typically or

more. likely play it for a gap pop. >> gaps come in pairs. words to live by. >> gesh asks us, i bought, baba at 98. should i hold it? >> everyone is focused on this lack of expiration that came and went in mid-march and the stock pounced afterwards. now the stock is once again threatening that 80 level. they haven't set the reporting date yet. remember how poorly the stock gapped down at least 10% after the last report was disappointing. let me tell you something. if they miss, this stock will get creamed. a lot of those people waiting to sell who are maybe in at lower than 68 which was the ipo price they will sell on poor results and i got to tell you. i think at some point this stock will trade back to its ipo price. i'm not a fan. >> time for the final call. the last word from the options pit. carter? >> own it. looks like a good quarter coming. >> mike? >> calls are cheap and safe way to play.

>> xly i don't want to short disney or comcast but i'll take a shot on monday on the xly. >> our time has expired. check out our website options action@cnbc.com. "mad money" starts right now. >> announcer: the following is a paid presentation from travelocity. >> i'm connor o'leary, and this my dad, dave o'leary. welcome. >> welcome. >> we've traveled all over the world twice on the hit cbs show "the amazing race." >> you know, you might say that, for me and connor, travel's a passion. we love it! and after all the great places we've had the chance to go, we know a little bit about how to take awesome trips, and to do it on a budget. today, we want to share with you what we consider to be our