>> we'll have a look at china and the market open from hong kong. but also, kelly, you guys are caulk talking about carats. we're going to talk about chips. the impact of china on chips. i don't know if you know this but i lot of these chinese telecom stocks today in today's session were trading down and a lot of the chip stocks were decimated before the lows of the market. we'll take a look at which are being thrown out with the bathwater so to speak. >> straight over to you guys. >> thanks, kel. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square. i'm melissa lee. your traders on the decemberric steve grasso, dan nathan, karen finerman and guy adami. tonight on "fast" oil recouping some of its losses from a brutal week but one top strategist is here with a bombshell prediction. find out why crude could fall another 15%. plus, just how big a threat does china's market pose to the major chip stocks and which names are the most highly levered to china? we're naming names in just a few. but first to the whipsaw day on the street. stocks staging a massive comeback. the s&p 500 breaking below its 200-day moving average early in the day.

only to end in positive territory. while the dow recouped a 218-point loss. closing the day higher by 93 points. this all as crude oil staged a solid reversal as well. was it as simple as that, steve grasso? the reversal we saw in crude. >> i'm not sure it's as simple as that because things do definitely have to play out. crude was probably grossly oversold. but i think what you touched on first, the s&p breaking through that 200-day moving average. the last time this has happened was october 2014. the time before that, more interesting, is november 2012. that is a tremendous, tremendous event for the markets. i think there's further weakness to come if you look at that in the perspective of history. >> if i'm going to be glass half full, for a moment, and i know that's rare according to a lot of people out there. but if i am to be i'd say because it has happened so few times and because we did manage to stage a turnaround that's actually a good sign, it shows that trend is intact. >> it is a good sign. steve's been talking about these

levels for a while. we flagged 2054. what we traded down to today is what we traded down to on the trough of sunday night when things were really going nuts. it reversed from there very quickly. what does it mean? again, the market continues to bounce off these levels that we flagged. if nothing else it gives you a tradable bottom. what does that mean? you trade from a long side against whatever today's low was in the s&p. i think it was a very healthy reversal and a number of things, not least of which, by the way, the ten-year treasury. we've talked about 2 1/4 now. it was resistance. becomes support. look at where it basically closed today. a lot of things hurt inflection points right now. >> we're talking about usa, usa here. you just mentioned the tlt, u.s. treasuries. the dollar's doing fine here, right? and then you have this flight to quality in u.s. equities. so this is what's going to happen here when we see asian equities flying all over the place. we saw european equities close on the lows today. obviously they're going to hopefully catch a bounce tomorrow morning or overnight. but you're really going to have to see this stuff hold here because if you think back to the

whole crisis playbook and i know that sounds like so long ago, we used to see these bounces off these levels and they really do have to hold. sometimes they can go for a couple days, but countertrend rallies in bear markets can be very violent but i'm not so certain it makes sense to chase them all the time. >> we chased a little actually. >> you did. >> one thing we did was we have our hedges on all the time, so we rolled down. that's essentially selling puts. we tried to do that when the volatility index gets high, which it did today. we certainly did not do it at the bottom, for sure. but things like a solar edge, which has gotten obliterated. it's down 30% maybe in the last month or so. i don't think that the company is worth 30% less. probably was ahead of itself then. but that's one that has correlated to oil so closely. and if we're at some sort of bottom for oil i think solar edge is going to be a good place to be. >> this was a broad-based comeback in terms of the markets. and it's interesting because when we did see the reversal in

oil we did see a bid in a lot of consumer discretionary names. >> but when you look at consumer discretionary names you have to put it into the perspective of what we saw before. you saw a lot of retail names. karen loves the retail space. she's very educated in the retail space. but we didn't see the retail space get a lot of buying power when we saw the first dip in oil because they were more concerned with growth. so to dan's point i think it's a global issue. and to jump all over the map completely let's get back to the dow industrials. two negative quarters. last time we had that, 2007. that was the top. 2000, that was the top. it was down 38% from that second negative quarter in 2000 and was down 54% the seconds time we saw it in '07. we have not had two back-to-back negative quarters since '07. >> i don't quote the dow but look under the head. it's kind of a disaster. a handful of names driving all the performance. apple is a big one there. there's a few others in the banking sector. but aside from that anything industrial, anything transport,

it looks really ugly there. and that's one of the things that you would have expected industrials and some of these other things, they're very cyclical, they kind of catch some sort of bounce here. we didn't get it. >> so you don't believe this turnaround. it sounds like you're skeptical of this turnaround. what's your bottom line on this? >> the gorilla in the room is the fact we're coming into earnings season now. we're taking our eye off the ball with china, greece, puerto rico to a certain extent. nobody's talking about it in earnings season. it's absolutely going to matter. they're going to say you have to back out energy. i get it. but at a certain point the chasm between revenue growth which has been meager and eps growth which has been strong because of financial engineering in my opinion is going to matter. we'll find out this quarter. >> breaking news out of brussels and german chancellor angela merkel. cnbc's jeff cutmore is live on the ground with the latest. jeff. >> i just want to bring you up to speed with events here on some of the comments we've been hearing because the message of tough love is coming through very loud and clear here. the greeks effectively turned up

without any detailed proposals and said, why don't you give us some money just to tide us over through the month and then we'll talk seriously about a longer-term multiyear deal? this didn't go down very well at all at the leaders' summit. and judging from the comments we're hearing, angela merkel saying we've seen nothing that leads us to believe we have the basis for a negotiation going forward. and the greeks need to come back with something more detailed thursday or friday ahead of an emergency summit that's been called for sunday. and this will wake up a few people who may have bought back into the market thinking that a deal could be in the pipeline. jean-claude junk cker, who is t president of the commission, came out and said we do have a grexit plan in detail if we need to execute it. donald tusk, who is the head of

the eu council, also making it clear that patience is running out. let's listen to what he said. >> the stark reality is that we have only five days left to find the ultimate agreement. until now it have avoided talkig about deadlines. but tonight i have to say it loud and clear, that the final deadline ends this week. >> so the message really is that this whole greek issue has to be put to rest, and donald tusk making it clear it needs to be done within the week. and of course we've already seen greece miss an imf payment, and we have a very big payment back to the european central bank. 3 1/2 billion euros, which is due on the 20th of july. now, the greeks would like temporary short-term funding to get them through that payment. but at this stage after this

leaders summit tonight, it is not clear that we will actually see that funding made available. there is a mechanism called the european stability mechanism which they could go to if members of the eurozone are willing to give them that money and accept the proposals on the table. but based on what we've seen this evening and what chancellor merkel has said, there is no basis at this stage for fresh negotiations. come back, try harder, we will see you later in the week. back to you. >> all right. geoff cutmore in brussels. thanks so much for that. i mean, i would think that it would be good news for the market to actually hear that there could be a deadline and something could actually be resolved bit end of the week instead of this continuous sort of deadline pushing. >> i think the market is starting to digest a greek exit. and i think that you know, i really can't understand tsipras acting like he's got all the cards, meanwhile the market hasn't opened since june 26th, their banks haven't opened.

this is a real crisis -- it seems like he doesn't get it. >> they haven't yet run out of cash at the atms. >> or does he get it and he knows that germany has the biggest vested interest in them staying in the union? has he played it perfectly? i totally get you. but obviously he thinks he's got their backs up against the wall at this point. >> but germany can't let -- they have other entities that could end up in the same situation if they let greece off the hook. >> not as bad as greece right now. and do you think right now -- >> but bigger than greece. >> do you think right now the deal that greece is going to get is going to be better than they would have gotten months ago? >> i think the damage to greece is much greater than they would have gotten last week, ten days ago. >> what does this -- >> because ultimately they're going to stay. >> they're going to stay? >> yes. i think they're going to stay. >> does it make a difference? if karen is right in that the markets have digested a grexit anyway -- >> everyone told us they digest

td already and look at what we've seen the last couple weeks. we've heard for the last couple of months that the market already factored in a greek exit. >> i don't agree with that. >> you didn't hear that. that wasn't the case. >> coming up, betting on the casino stocks. credit suisse making a bold call that the worst is over for macaw. but should you roll the dice? shake shack getting grilled today. and failing to take part in the big rally to set a brand new menu item debuting. we'll find out if it lives up to the hype. oil, the bottom might not be in. could crude slide another 15%? a top strategist explains. much more "fast money" straight ahead.

tesla getting hit hard today, sliding the most in more than five months kick off our top trades tonight. this after deutschebank downgraded the stock to a hold from a buy while raising its price target 14% to 280 from 245. the firm saying tesla's share price matches most of its growth prospects and specifically they spent a lot of the note saying what the opportunity was in the total addressable market for energy storage, blah, blah, blah, blah, blah. it's already in there. >> listen, now it gets really interesting in tesla.

basically at $100 since the low we saw this spring. 282 level. i think we traded that by friday before the holiday. now what? now you're in danger zone here. you could potentially have these huge double tops at the 280, 290 level or the stock's going to blow through. how do you trade it? if you've enjoyed the ride to the up side now is not a bad time to take some money off the table because i do think you're in absolutely no man's land. if they report, if the stock close above 290, maintains it, i think then you buy the ensuing breakout but right here i think you have to take something off the table. >> so $11 ago you said tesla was good. but $11 down it's a no man's land. >> that's the thing. consistent is a moving target, and it changed. we'd be having a much different conversation if today the stock was 29 5 on a close and it was breaking out to the up side. it traded exactly where it needed to trade to. it has seemingly failed. you can't be monday morning quarterback a week from now if it's 240. you have to get in front of it.

i think you get in front of it bytakering some profits right now. >> i agree with taking some profits. tesla told us china was going to be one of their biggest growth areas. the market has told us that china is not going to be that biggest growth prospect for the blanket of all equities. forget about tesla. tesla right now seems to be the greatest hope for china. and i mean that in a bad sense. i don't think china's going to do anything moving the needle for tesla at all. try to challenge those highs guy talked about it failed and now tesla's going to be 250. >> you were concerned on valuation but mostly because of china. >> well, elon musk told me that china was going to be -- >> told you personally. >> he told all of us collectively that china was going to be their growth area. >> elon musk. his spacex thing last week. this guy is levered to a lot of things the government is propping up here. if you ever came back in some sort of financial crisis, that guy who was on the brink seven years ago could be on the brink again, and that will weigh on his publicly traded entities. >> next up, a solid day for the

macau casinos, credit suisse saying the worst is over for the gaming sector. upgrading las vegas sands and wynn m kau. there's a shift toward more supportive policy. dan. >> i guess to quoeft everyone's favorite atheist christopher hitchens that can be asserted without evidence, can be dismissed without evidence. where's the evidence that something has changed there when you really think about it here? to me it's a contrarian call here. the stocks got very, very oversold. the sentiment was hugely poor. and if you look at las vegas sands, for instance, it held that 50 level on a few different occasions here but there doesn't appear to be any evidence it goes back to china also. if things are going to continue to be vomit' to be volatile here i'm not so certain this is going to be a good place to jump in after a 12% bounce. >> this is an interesting -- >> you think they're interesting. >> i never understand. because i had been thinking that the corruption pullback will definitely fade. i don't believe it will stay that way forever.

i never understand that these things are underowned. it doesn't make sense to me. i know they say well, the indexes don't -- somebody is on the other side. somebody owns these shares. i never get that. it's not a reason for me. >> dan is looking at this in an a pryori fashion. i'd rather say a pofteer yori. we'll know after the fact if it's fixed. we've been talking about las vegas sands and wynn now for a couple weeks. specifically the level he mentioned, $50, it held, it looked like it was going to bounce. that stock was outperforming today when the the tape was trofg and then it continued to go higher. i still think there's room in both lvs and wynn. >> now to alibaba. the stock falling to its lowest level since going public in september. slumping to its all-time low of $77 a share. let's bring in rob sanderson of mkm partners. he's got a buy rating $115 price target on the stock. rob, thanks for phoning in. we appreciate it. are you concerned at all about the impact on the chinese consumer and their ability or desire to buy goods online from

alibaba given the slump we're seeing in the stock market there? >> yeah, the stock market aftermath is something that's a new consideration into the thesis. and you know, not a positive clearly. but the fundamental story behind the expansion in online commerce in china is not so much driven by consumption growth as it is driven by migration of consumption from retail into online retail. i think that story still has legs. maybe there's some headwinds. the aftermath is yet to be seen. but the underlying story i think is still intact. >> well, that underlying story can only be intact if you believe that retail sales as a whole won't be impacted by the chinese consumer and in the pain that he or she is feeling from the decline in the shanghai composite. if that pie gets smaller, then the migration therefore is also smaller, isn't it? >> but the consumption growth expectation is still, you know, high single digit, and the migration from brick and mortar

to the online platforms is a much more significant component of the growth for online retail in china. >> at what point do you start getting concerned that that chinese consumer out there is going to pull back on spending? what are you watching, rob? because that's got to be a concern of yours at this point. >> the concession indicators, again, this is happening in real time. the stock market crash will unvariably have some impact on consumer. and that's what we'll be looking for, is the economic data on consumption. but again, on the backdrop of how much does that impact versus the consumption transition away from brick and mortar? don't forget that those infrastructure-related retail businesses get weaker as consumption drops and, you know, some of them fall out of the market. that's another thing to keep in mind. >> so let me ask you the question this way, rob. are you as bullish on alibaba as you were, say, two weeks ago or three weeks ago? three weeks ago before this huge decline we've seen in china. >> i think the long-term story

for e-commerce in china is still undeniably one of the greatest opportunities for large cap investors. and you know, macro dislocation in the near term throws some cold water on the near-term expectation but i don't think changes the fundamental story in the long term. >> all right, rob, thanks for phoning in. appreciate it. rob sanderson of mkm. again, a bull on alibaba. at this point you're all traders on this desk. are you worried? is this not the place to be? because there is some sort of downdraft. it trades here in the u.s. but it does business over there. >> alibaba was in a declining trend line going back months ago. it traded down roughly 24% while alibaba -- i'm sorry. while the index, shanghai index rallied 40%. so this to me has been a longer problem for alibaba. it's already in a downward trend line. now just for the last month or so you're starting to see both of those things just gather some steam. so the trend line is lower. i think alibaba's in trouble. this is not going to help.

china's stock market coming in doesn't help either. either way i wouldn't be a buyer of alibaba. >> technically and fundamentally also the picture's not good. >> it's been terrible. i'll buy some puts just to hedge to know how much ultimately i could lose in the name. i will let you know when i do that. i guarantee you that will be the bottom. time to buy. >> well, what does this do to yahoo!? >> yahoo!'s been awful now since the end of last year. so let's call it seven months. now we're getting toward levels the last time we saw it was this time last summer. 35 bucks or so, which feels like it's going to print. i've been trying to be bullish in yahoo!. it's been a fool's errand. i think you have to wait for the report on july 21st. and frankly i can't believe they're going to say anything all that encouraging. what you're hoping i think is that such a terrible quarter that they flush out the stock and maybe a chance to buy it down 34 1/2, 35. >> breaking news here on greece. let's send it to sue herera back

at headquarters. >> we are hearing from the greek prime minister mr. tsipras. and in contrast to the tone we heard from the e.u. leaders including ms. merkel earlier, he said that the discussion was positive. tsipras says that the target is to conclude the process by the end of the week, by the latest. he says he aims for final exit from the crisis at that point. and he says he sees that the eurozone understands the problem is not just a greek problem bay european problem as well. but he is characterizing those discussions as positive. and melissa, given the tone we heard from the ministers earlier, that's kind of in direct contrast to what we heard from ms. merkel and also the eu president. back to you. >> and the truth lies somewhere in between. >> yes, it does. >> sue herera, thank you very much. sounds like everybody is trying to bargain. >> he shouldn't use the word exit. >> final exit is -- >> it's a poor choice of words. exit from the crisis. i mean, that's really slippery right there. i think what you're going to see

is it's going to surprise. whether or not it's factored in at this point i think the market probably moves sideways tie bit higher if we don't see them exit. >> okay. from the latest in greece to the latest in china. find out what's next for the shanghai composite ahead of wednesday's open. we take you live to hong kong for the latest. in the meantime here's what else is coming up on "fast." >> announcer: shake shack gets grilled. the former cold stock officially losing its last buy rating as morgan stanley sounds at larm on valuation. >> hey. where's the beef? >> is the street's beef with the burger joint about to sink the stock? plus, bears beware. we've got your inside scoop on what could be some of the hottest earnings surprises ready to rock the street. all that and more ahead on "fast." ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist.

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we've got an earnings alert on the container store. let's get to meg tirrell in the newsroom. hey, meg. >> an unusual beat for the quarter for the container store. a smaller than expected loss coming in at 11 cents for the quarter compared with an expected loss of 13 cents. the company did miss on the top line, though, coming in $170 million in revenue for the first quarter versus analysts' estimates of $174 million. however, the company saying that revenue was affected both by the

strong dollar and by the west coast port delays earlier in the year. now, if you look at comparable store sales, a big beat on expectations there. they declined just about .9% compared with an expected decline of 3.6% in the first quarter. a lot of conversation on the call about these new initiatives the company is putting into place. its custom closet program it's started and also an in-home organization service. the company saying those two programs in the stores where it's going to roll out already are contributing the most into creasing same-store sales, melissa. watching the shares trade up about 6.9% in the after hours, mel. >> all right. thanks a lot, meg tirrell on the container store. karen, where do you stand on this? >> it's nice they didn't totally mission as has been their way. but it's far from cheap even down here. it's lower but not cheap yet. i'd pass. >> i bet you love the container store. you love the containers and the little things -- >> i'm big on organization. >> i know that. >> with that said, karen's right. the trade is close to 40 times

forward earnings. how do you trade it? pretty significant short interest too. those people are going to get squeezed. i think it's still on a down trend but it's trading probably 18 1/2 right now. there's no reason to think this can't gap up to $20 over the next couple of days. you sell it again there. if you want to trade it i think you can try to trade it from the long side for about 9%, 1% and th 10%, and as we used to say in the business, this is trade school, you sell the double. that means you sell your long position out and you get short. trade school. sell the double. for you folks playing at home. >> that brings us to our call of the day now. shake shack getting smoked after morgan stanley slaps an underweight rating on the stock, maintaining its $38 price target. it's saying, "the stock is overpriced and it could be reflecting brand-related optimism not supported by fundamentals." and we just want to know if there are no analysts on the street now with a buy rating on this stock. so quite a reversal from those initial days, dan. >> i'd say that's a very poor job on morgan stanley. they were an underwriter on this issue here.

>> maybe that's why. >> well, the stock went to 90. i mean, i just don't think it adds a whole heck of a lot of value there. there's a lockup expiration coming at the end of this month. obviously the shares rundowner pressure now and they're probably going to continue to be under pressure and i'm just going to say this. you want to look at a level that's probably down. i know that sounds crazy. down 20%. it's not far away. that would be about ten times forward sales. and that's a good level if you want to get excited about the business and the potential brand value and everything. >> i think there is a reason why morgan stanley held on to a buy rating for so long. i'm not -- the conspiracy there is because it was underwriter it held that -- >> they've got to do a better job, though. i totally agree with dan. it wasn't overvalued at 85. at 59 you decided to -- that doesn't make any sense to me. poor job. >> unless the fundamentals have changed versus when the valuation was 80 or 55 or whatever it was. >> i don't think a lot has changed over the last five or six months. dan's done a great job of this. if you want to play the space, $50 is the level.

that's where shack exploded from. maybe you take a shot. yum brands, on the other hand, given all that's going on in china they report i believe on july 14th. that's going to be really interesting because that stock sold off about 8% since its all-time high. i think you can take a shot here in yum. and for the first time in a while mcdonald's actually traded pretty well today. so maybe that's something to look at as well. >> all right. now for the moment we've all been waiting for. they've got a new menu item. shake shack, that is. available only in brooklyn. but it's the chicken shack. here it is. this is a whole intact one. the traders have little quarters on their desk to try. >> it's a sample. >> could this be something that could help same-store sales, et cetera? >> grasso's got his mouth full. i'll tell you this. >> because you gobbled yours down already. >> if you walk into a shake shack, you go for the double meat patty here, people. you don't go for the fried chicken because i've got to tell you this thing's got to be probably worse for you than the burger and the burger's delicious. so i think you stick with the burger. >> mm.

>> your thoughts on -- oh, your mouth is full. >> this is chick-fil-a. i'm just saying. have you ever been to chick-fil-a? >> yes. i did a whole thing on chick-fil-a. i've gone to every single chick-fil-a in atlanta. >> i bet you they get this stuff from chick-fil-a. just kidding. it's a joke. very good, though. >> now he speaks. >> first of all, their burgers are outstanding. i don't think they need this. burgers are outstanding. but it was a small deal. small float. you spoke about this when they came out in public. but it has an abnormally high short interest. so be very careful because this thing could pop with any hint of -- >> bottom line eat the burgers, don'ts buy the stock. >> not yet. >> chinese markets set to open in just a few hours, there's no telling whether the latest government efforts will help stem the breathing. special report live from hong kong next. and later oil touching its lowest level in nearly three months today before recovering some of those losses. we've got a top analyst who says crude could fall another 15%. wow.

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welcome back to "fast money." call it turnaround tuesday for the markets after falling more than 200 points in early trading the dow saw the biggest reversal since october of 2011 to close

higher by 93 points. the s&p 500 and nasdaq also closing higher after big drops this morning. here's what's coming up in the second half of "fast money." crude gaining back a bit of ground today after yesterday's massive sell-off. we've got a top analyst who says oil isn't out of the woods just yet. ahead we'll hear why crude could be setting up for another big move lower. plus earnings season right around the corner actually starts tomorrow. could be some major surprises in store. we've got a list of the stocks you need to watch that could shock the markets. let's start off with china. more than a quarter of the firms listed on chinese exchanges have filed to halt trading of their shares amid the whipsaw volatility. just the latest move in a series of measures to calm the wild swings in china's markets. cnbc's susan lee's in hong kong now with the details. susan, how does the open look today? >> well, melissa, some of it's not good because yesterday we were one of the first outfits to report that story, 25% of the stocks that list in shanghai's shenzhen, the so-called big a

shares, and the reason they're doing that is because they really don't want to stomach the volatility. so they said okay, we're going to take our stock off the exchange at least for now, ride this downturn, this bear market. that also locks up a lot of money for retail investors. china's a little bit different because 85% of the trading volume are mom asand pops. you've read the "wall street journal" articles and the "financial times." it's the hairdressers, the cab drivers that have their money in chinese shares. and the reason we've seen this selldown a lot of people tell me, this 42% decline in chinex, which is considered the small cap index, the nasdaq of china down 42% in three weeks. china shenzhen down 30%. and the reason is because there is a liquidity drain right now. a lot of margin calls taking place at a lot of these brokerages. and hence these smaller retail investors have had to sell off a lot of their stock holdings and hence we've seen this decline. but sentiment is not good. despite the fact we heard from the chinese premier yesterday

trying to talk up the market others he's been trying to do, set this floor, this backstop, this china put as i've been calling, it saying they have all the measures, all the tools available to meet the challenges of what's happening in the economy and also in stock markets as well. back to you, melissa. >> susan li, thanks for that. >> i think an interesting point susan is making is the retail investor most impacted by these halts in trading it's ironic because the chinese government is trying into jekt liquidity into the markets by having these large insurance companies and mutual funds buy billions of dollars in yuan of stocks and yet what's happening is these smaller high groerth companies, supposedly higher growth companies are halted and these retail investors are trapped. they're trapped in these shares. they can't get out. >> isn't that terrifying, though? how can that augur well at all for any markets? the fact that we just sort of glossed over that to me, it's a very terrifying thought in my opinion. >> so when i think about private companies versus public i think about some discount for

illiquidity. but you've got to think now in the public markets you used to have no discount for illiquidity going forward eventually even when it does open, you've got to think about it. and i think factor that into your valuation. >> for now at least trade at a discount because of this possibility of illiquidity at any moment. >> yes. >> good point. one area that could see more pain ahead from china's volatility is the chip makers, companies like qualcomm, applied materials, intel, micron all had more than 50% of their sales come from asia in 2014. what impact could a further china slowdown have on these stocks? cody joins us from dallas. thanks a lot for joining us. we were just talking about the sharper impact that could be felt amongst the smaller retail investors. those are exactly the people who are going to be buying whatever technology that is going to be the growth market is china. like cell phones, et cetera. are you concerned about this at this point? >> well, it is a big problem.

china's the largest cell market. it's the largest pc market. it's got the biggest concentration of spending right now for base stations. semiconductors heavily tied to all that investment. that consumer spending that's obviously been hit by the economic problems. >> we know that you know what flows downhill a little bit here. are you expecting when you think about it like obviously the oems, the guys who are actually producing the product selling to the end market, they're going to at some point have a little pressure here. but semiconductors in particular, this is a sector we talk about all the time on this desk here, they've underperformed for a very long time here. they obviously did very well in 2014. there were some product cycles and there was some stuff going on here. at some point do you find that the group is cheap enough where a lot of this may be priced in and then you want to start focusing a little bit on the oems? >> i think that's fair. you definitely have had some semiconductors who've had an

overleverage into some of the weaker markets like pc, like intel, some of the memory makers that's been helped and offset a bit by the smartphone players, by the growth we've seen in china, apple obviously and samsung. but i think one of the things i want to make sure that we also consider is not just the economic issues happening in china but also there's a lot of the regulatory concerns. chinese government just last week enacted a new law that said that technologies and industries that impact their critical infrastructure must be secure and controllable. and what that means is really very open-ended but it means the government now has the authority and plans to step in to make sure that there's a technology transfer, an intellectual property transfer between the biggest u.s. and international companies into some of the local vendors, and that could create a real competitive problem. >> so it sounds, cody, and this is the last question, it sounds like you're really -- there's a regulatory reason why to be negative on the sector. there's the chinese consumption

concern. as an aspect of being negative. then there's also weakness in pcs which amd underscored with yesterday's preannouncement. what do you own here in this space? you cover the space. is there a stock you can actually recommend given these three major concerns? >> yeah, we like companies that are enjoying higher dollar content. so companies like skyworks and corvo who are seeing a doubling or tripling of their content, whether it be in china or globally, smartphones are still growing but if you can add to that a doubling or tripling of your dollar content then you've got some security. we also like things like texas instruments that are extremely diverse, not as consumer levered, more industrial aug automoti automotive, customer concentration not so severe. >> cody, thanks for your thoughts. appreciate it. cody ackrey of ascendant capital. i did not hear from cody, karen, micron technology. >> no, i didn't. clearly -- >> which was on our screen of stocks that had lots of sales to china. >> the stock, though, had a

horrible earnings announcement. that was difficult. we own it. we had puts against it. that were way out of the money. turned out to be in the money. i'm not going to double down here. >> nvidia was an outperformer in the entire group. so if you look at an intel, it's down 17%. if you look at a qualcomm it's down 15% or so-ish. and nvidia has been a great performer. as of late it's been taking on a little bit of heat with the rest of the space. but with the internet of things, with the 3-d processor i think this is the place you want to buy at a discount. if you get the opportunity. sort of like buying the airlines. you buy jetblue because that was the leader. i think you buy nvidia on this type of update. >> subway. >> subway putting out a statement about its relationship with jared fogle saying subway and jared fogle have mutually agreed to suspend their relationship due to the current investigation. jared continues to cooperate with authorities and he expects no actions to be forthcoming. both jared and subway agreed that this was the promote step to take.

that's from a subway spokesman. that investigation is reported, child pornography investigation this coming after authorities searched fogle's home earlier. back to you. >> meg tirrell, thank you so much. still ahead, oil hitting its lowest level in three months today before making a slight recovery. we'll explain why the drop could be a good thing for stocks. but this might not be the bottom for oil. a top commodity strategist says we could see a fall, another 15%. she'll explain why right after this break. much more "fast money" straight ahead.

what happens to the markets when we see a major fall like this? cnbc's deirdre bosa's got all the details. >> it comes down to this. bad news for the oil market is often good news for the stock market. we used kensho analysis as we love to do. going back to 2014 and found that on days where crude drops by more than 5% we actually see equities positive the next week. the s&p 500 is positive next week 80% of the time. and on average it returns .9 of 1%. as for the oil companies the

performance is mixed here. the super majors, the integrated oil companies with more pricing power, they hold up better when crude does drop. exxonmobil outproormz oil companies as well as the s&p oil subindex. positive 80% of the time. while chevron's performance is a little bit more mix. it's positive only 60% of the time. both, however, do see average -- positive average returns, i should say. oil services company schlumberger also trades up 80% of the time after a daily crude drop. when crude drops by 10% over five sessions, the s&p is positive 88% of the time. and the average returns are a little high here. they're 1.4%. >> thanks so much for that. deirdre bosa joining us from vancouver. all right. do we buy into this?

interestingly, she highlighted schlumberger, for instance, and a lot of the service names today had the biggest bounce off the lows. >> exxonmobil is interesting today, i think. three-year low in exxonmobil. 81 1/2 or so bounce, closed positive. maybe you take a shot against that low today but i still think if you want to play the space the beta is in the refiners. look at tesoro and valero, yes, they had a pretty volatile day, both closed green. i still think tso and valero go higher. >> usually guy and i are on the same page but we're not. tesoro's up 24% year to date. dangerously close to overbought in rsi. but if you look at eog and pxd, if you look at the enp space those are dangerously close to an oversold situation. i think you're going get the real beta out of those enp names instead of going with the refiners that have been the gem of the whole space. >> based on technicals. based on the fact that -- >> i think it's overdone on a technical level and i think that

people have factored in, they went from factoring in $110 a barrel oil down to $40 a barrel oil. then they re-established it at 75 and now i think reality is getting in check. >> let's look at the oil trade here. next guest says the commodity could fall another 15% from here. rbc capital markets head of market strategy 46789 halima cr joins us. >> thank you for having me. >> i want to get to the major reversal we saw in wti and brent today. was that the notion that that iranian oil is going to stay off the market for now at least? >> i think there had been anticipation -- if you just look at the headlines for the last week you would think we're not in a one-year overtime with iran deal, that this was a done phenomenon. and everyone was starting to think about a million barrels coming back. now that we've rolled at least to the end of the week i think people are starting to get a little more skeptical. because it was seen as a done deal. >> oh, i see. okay. so in terms of your prediction of a 15% decline from here. >> well, that is based on if

there was a deal. we think that basically the fundamentals of the market, what we have seen is improving demand, a strongly improving demand environment. but the question is now if you want to get to 75 like the saudis are talking about you need to have a supply response. so what we're waiting to see is does u.s. production really start to roll on the back half of the year. do smvt opec producers slow down production growth? they've had iraq going like gangbusters. saudis have raised production. nobody's rolling at this point. our concern is to gets 2075 from where we are now you're going to need to see some supply come off in kind of a big way. demand has taken us only as far as it can go. but if you had the iran deal on the back of the negative sentiment on greece, on china that's what we thought could push you through 50, potentially 45, not that we would stay there but sentiment would be very negative. >> going through 50 at this point on what, wti -- >> wti. >> is still on the table. >> i would watch what happens on

friday because they're now saying friday is the final final. i'm a little skeptical because we had final final for an entire year. but let's say we get a deal on friday. i think that is where we could see another leg down. if we don't get a deal, if we roll the talks over again for another couple of months, then i think that will be some positive support for the oil market. >> helima, thank you. >> thank you. >> rbc. what say you? >> i'm sort of in her camp that we're going to have the next down to the next test to the lows dpsh. >> given you that stick with refiners? >> yes. because i think the spread between brent and wti i think matters for the refiners. i also think she says supply. i do think it's a demand story. dan was making that point last night. but that's a whole different show, different conversation. >> that was actually on a stock. baker hughes, halliburton is in a deal to buy them. $3.5 billion break joup feet. 13% of their current market cap. if we do have a down draft in the commodity and these stocks come in a little bit that's when i think you could take a shot on probably in the mid 50s because you really do have some sort of

embedded put there which i actually like. >> quickly, still in tankers. what's your true top tanker holding? >> i don't even it now. but dht is one in the tanker space -- >> that you're looking at. >> yes. >> dht. coming up earnings season is going to kick into high gear. we'll tell you why one trader thinks it's going to be off to a strong start. much more "fast" straight ahead. i'm here at the td ameritrade trader offices.

ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim?

for all the confidence you need. td ameritrade. you got this. alcoa reports tomorrow after the bell and options traders are expecting the stock to move more than 5%. question is which direction? dan's over at the smart board with the action. >> like you said, mel, 5% in either direction and call volume was ripping today. six times average daily volume and six times that of puts. and like you said, you know, there was this call volume that built up through the course of the day. the september 11 calls were the most active. average price of 53 cents. stock had a big intraday reversal. closed just above 11 bucks. and i just want to go over the chart here. when you think about this implied move like you said in either direction here, if you're going to play a chart like, this down 30% on the year, something that's very level to what's going on in the global economy

right here, the idea of paying 50 cents for an at the money call looking out two months makes a lot of sense. you define your risk here. i just want to make one point. look at this run-up it had. midway through it i think you want to define your risk if you want to play for a bounce. >> thanks, dan. for more "options action" check out the full show 5:30 p.m. eastern time this friday. meantime, we've got your first move tomorrow. come right back. stay tuned. a company that will revolutionize the way you stay connect in the clouds. i've got an exclusive look. plus can oil recover or is this commodity toast? "mad money" is next! [ male announcer ] eligible for medicare?

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is. it's time for the final trade. let's go around the horn. steve grasso. >> fitbit. i'm long the name. one day its reign will end. that day is probably a couple years off. >> dan nathan. >> ugh. spy. if you're going to move back off -- s&p 500. going to move back to 125 on any greece resolution you sell it there. >> angry dan. and the final trade. karen. >> yes. the long side of milin and teva. i'm actually long both but i would say buy teva if they come back. i think they will. they're both going to trade up. this is a texas hedge. long both. >> texas hedge. sell the double. let's make it sands.

why? >> why? >> because analysts are going to start playing catch-up on this thing into earnings. the stock is telling you something with the recent rally. lvs. >> all right. i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 for more "fast money." > my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to make you a little money. my job isn't just to entertain but to teach you. call me at 1-800-743-cnbc. or tweet me @jim cramer. you know what? it was only a matter of time before we got so foed up with europe we just said, that's it!