appreciate it. kick off the month of august on "closing bell." dan greenhaus and our courtney reagan. "fast money" coming up in just a few moments with melissa lee and the gang. melissa, over to you guys. >> thanks a lot, kelly. "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 desk are tim seymour, pete najarian, dan nathan and guy adami. apple breaking through a critical level and one that could spell trouble for the rest of the nasdaq. a top technician explains later this hour. plus shares of michael kors getting slammed today but we've got the analyst who says there's a 40% up side to the stock and the breakout could happen sooner than you think. we'll tell you what it is that has him so excite. we start off with our top story tonight and that is the steep sell-off in stocks today. crude the big culprit again closing down 4% in today's session. bond yields tumbling as investors seek safety. the question is is this the start of a summer swoon? these are levels in crude we have not seen since the financial crisis. is the market telling us something right now? >> the market is clearly -- there's major divergence. if you look at where the s&p is,

in fact it closed down 30 bips. big deal. and in fact, to try to preach a lot of fear mongering right now is a dangerous thing to do. having said that, there's a lot of damage underneath the surface. there's a lot of stocks today. we talked about how we've been printing many new 52-week lows across the board. and commodity prices are telling you something. and clearly is this deflationary? absolutely. is this good for the consumer? i think absolutely. does this mean that global growth is plummeting? i don't think so. so on some level there is a supply issue. on some level there's an asset issue. and i think that's how you have to look at it. but to say the stock market is very healthy right now because it's only a couple err percent off the highs is not something i would say. >> the tlt outsize move up more than a%. xle on the s&p 500. that's not good. >> 2 1/4 in terms of ten-year yields. that's been a pivot point for a while. we're somewhat significantly below that. i still think yields go lower. i think the move in equities is intact to the up side as long as the russell stays above 121, had a rather benign day. transports actually up today. for me it's 2054-ish in the s&p

is the line in the snd. if we get a close below that for a couple days we'll have another conversation. but the broader market has shrugged off every piece of bad news for the last five or six years. >> tim just mentioned something. when you talk about oil down here it's going make a new low. that's going to happen. and it may happen much more violently than when it double bottomed back in the first quarter of this year. but when is this benefit to the consumer going to happen? we just got through q2 earnings. we didn't see a lot of managements talking about this being a boon for their customers. and we don't see it from an input standpoint, we don't see it yet either because all the strength in the dollar is destroying our multinationals. we saw it in companies like procter & gamble just in the last week or so. to me i think we have a very dangerous situation especially when you see these sorts of industrial commodities acting so poorly. it speaks to me this time around more of a demand issue than a supply issue. >> then you layer on top of it the loss of leadership. we haven't talked about apple yet and we'll get much deeper later in the show. it broke below its 200-day

average p. it's in correction territory. >> there are some areas in the market you look at and say i feel pretty comfortable. other areas, energy, technology, that makes you uncomfortable. you look at financials, health care, the pooid spooidar, the s&p 500 bounced off the 200 day and moved up to the 50-day moving average. there's all types of ways to look at this market. the concern i would have right now i brought this up earlier in the day is the focus. the focus now is going to start moving away from earnings as we've gotten further and further from the earns season and that's what's pushed us up to these higher levels. but now as we look at china and greece and there was more news out there today, when we look at what's going on globally, i think there are some concerns. the fact that the volatility index is 1256 on the close today, i would be a buyer not of the vix itself but of the s&p puts below to be able to have some protection along the way. because they're hitting it. >> i would be defensive. guy talked about the iwm. to me this is the best way to play volatility. i think you get the most bang

for your buck. historically it's how i've been hedging emerging markets. friday's payroll number i think you have a setup where a lot of these things could bounce. some of this has been predicated on dollar strength. the assumption the fed has to move -- the input costs or the deflationary element from commodities into what's going on in terms of core cpi and even ppi is something i think you have to watch. whether it's taking the fed out of the picture it doesn't matter. weak ism today, weak data. to say that going into a payroll number where expectations are this couldi isbe at least a slightly softer number, it sets up for all these things. they're way oversold to have a very interesting bounce. i would not just start throwing stuff down the sewer right now that's been in the commodity space. i think it could be dangerous to do that. >> just quickly what sector or stocks would you be most concerned about in a market that wants to go lower? >> right now i think it's the one you mentioned, this concentration in some names. right now the nasdaq is holding on by facebook, google, amazon and that sort of thing. theymaker me very nervous, these companies that have 200-plus

billion dollar market caps that are insanely valued and they seem to be concentrated right now. >> crude oil getting hammered falling to its lowest level since march. crude is now down more than 50% from last year's highs, which may not be a bad thing for stocks. in fact, according to our data our genius friends at kensho, in have been five times crude has dropped 50% or more since 1986 and in the following year stocks were positive 80% of the time with the average returns of 24% for the nasdaq, 14% for the dow, and 11% for the s&p 500. so is crude's crash actually a good thing for stocks? let's bring in dennis gartman, editor and punler of the gartman letter. so dennis, let's start off with that very question. is this a good thing for stocks and if so when will that happen? >> i think if one has to worry about where the stock mafrkt's going to be tomorrow or next week or next month, weakness in the crude oil market is probably deleterious to the stock market. it's probably not beneficial. if you have the great ability to look out two years, three years forward, then i'm sure crude oil

prices for the consumer, for businesses, energy being such an important component of production of everything, three years, four years down the line it's very beneficial for the stock market but to get through for the next two weeks, three weeks or a month probably very difficult, probably detrimental to stock prices in the short term. >> i want to ask you about the direction of crude but i want to show you a chart, dennis. our friend raul paul the global macro investor tweeted this chart out today which caught my eye and basically was a trend line going back to 1999. it's a trend line from $17. and he says if this level's breached, which is about 4351 or so it is "game over for worldwide gdp." would you agree? do you think we will breach this? and how far do you think crude will go on the down side? >> raul's a very smart guy, one of the smartest guys i've come across. been honored to be on a platform with him several times. but i would hesitate to say the problems incumbent in crude oil are reflective of problems incumbent in world gdp. i think what you have here is simply a huge amount of supply

coming at you. the comments by the iranian oil minister over the weekend that iran could have half a million barrels of crude oil added to production within weeks and could be adding a million barrels within six months of the end of sanctions is a stunning surprise. that caught everybody off guard. it even caught the saudis off guard who are clearly going to be supplying crude oil as aggressively as they can to defend their market share. so i would say you're probably going to break that up trend line in crude oil. i think crude is in very serious problems. production is going into crease, not decrease. but do i think that's detrimental for global gdp? probably not. >> so it sounds like then you would be bearish stocks in the near term, near to midterm. >> i think one should be bearish in the next month or so. i think we're probably going to take out the 200-day moving average. i think the leadership of the market has been hurt. the generals who led the battles are now the ones who are getting killed. and when the generals go down, that's a problem.

for the next two months at least stock prices are under duress. but as we talked about earlier, if crude oil's down 50% and if history shows is that two years later stock prices are going to be higher, if you have that ability and the capability to bite your lower lip, two years from now it's going to be terribly beneficial to stock prices but for the next month or two not so much. >> dennis, good to see you. thank you. >> thanks, mel. good to see you. >> dennis gartman of the gartman letter. deleterious for the next -- >> great word. that's a haiku word. i'm not sure -- >> i don't know. good or bad, mel? is it good or bad? >> what? >> deleterious. >> bad. >> bad. >> come on, dude. >> if you've been looking for a reason to buy these names. conoco phillips, is it interesting? this is where it traded down to back in 2012 when they spun out psx. so if you're looking for a level

this 49.50, 50 level might be it. i'm not saying it's right on valuation. i'm just talking in terms of trade. the fact their dividend is close to 6% now is scary because it's risen for the wrong reasons. but if you've ever been waiting for an entry point, c.o.p., this might be it. >> a number of the airline stocks and rails, you've p had a very big bounce. the argument there's been an upgrade in the airlines. one is they're seeing stable saix in the prasm, passenger revenue per available seat miles and toward the end of the year they say they could strengthen a bit. if fuel stays low and the multiple stays low. airlines up 3% to 4% today. beaten up interesting multiples, lower fuel prices. >> but it wasn't just today with the airlines. you go back last week we had days 3% or 4%. you go back to july 1st and you look at what's happened with united, delta, alaska. we have seen paper, dan, you've seen it as well. the options world. there have been upside buyers and they've been able to capture a lot of gains when you look at

some of these names. the move to the up side extraordinary. >> core shares getting slammed as a number of firms get cautious ahead of its report. one ablt says he sees major up side in the stock. auto stocks failing to accelerate despite moving sales. what's the major roadblock? the answer might surprise you. and apple shares did something very scary today and that is one of the street's widely followed technicians. very nervous. he'll be here with a huge call in the stock that could have big implications for the tech rally. much more "fast money" straight ahead. hello. i am here to offer sophisticated investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at intelligent.schwab.com

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welcome back to "fast money." check out what's happening right now with biomarin pharmaceuticals down about 2% on 40,000 shares' worth of trading volume right now. the company did report earnings of -- a loss rather of 51 cents a share. that beats the average analyst's estimate for a loss of 53 cents. also revenues come in better than expectations. 251 million versus $218 million. they also got strong revenues from a drug called naglizyme which treats a rare set of disorders relating to cellular enzyme interactions, that sort of thing.

now, the company does really kind of -- just looking at the stock reaction here, we do have a stock that's up about 63% year to date. up 140% almost overt the course of the past 12 months. so yes, the expectations a little bit better than expectations. also some strength from one of their drugs. maybe perhaps a little bit of profit taking here. light volume down about 2%, guys. melissa, back over to you. >> dom chu, thank you. pete, what's your trade? >> this is a tough one. we talk about biotech all the time. we talk about those names that have great earnings actually and the ones that are more on the pipeline and how they look. bio marin i'd put in that category. you look at this gilead stock the way it was trading today in a terrible tape. you look at amgen last week after the earnings. i think you've still got to quantify exactly where you want to be when you're in the biotech space. are you in a big cap that already has incredible earnings or are you betting just on a pipeline? and that's what i think separates many of these famous names. >> in terms of biomarin i agree with pete. i don't think there's any reason to rush in at 144 or whatever it is's in in the after hours.

there will be an opportunity to bite stock. unfortunately it will be in the mid 130s. we've seen pullbacks before. every time it's an opportunity to buy it. but down $3 in this name i don't think it's ready yet to be bought. >> president obama laying out a ploon for more clean energy. he called out sole their particular. take a listen. >> we doubled down on our investment in renewable energy. we're generating three times as much wind power. 20 times as much solar power as we did in 2008. over the past decade even as our economy has continued to grow the united states has cut our total carbon pollution more than any other nation on earth. >> but all that solar talk didn't help the sector. take a look at the red arrows pretty much across the board. dan? >> lirngs, i know there are some people on the desk who really like this space, and i think you have to kind of separate what the long-term viability for this sort of stuff is versus the near-term investment opportunity and it doesn't just seem great. this seems like it should be very good news for remuable

stocks and we have sun energy that's down 30% since they bought vivant that day. if it can't catch a break on a day like today with this sort of rhetoric coming from the white house i'm not sure you step in right here especially with oil trading the way it is. you guys can talk about correlations all you want. solar stocks, don't -- >> sun edison seems to be a different story. there are some concerns about capital payments, the debt it's raised recently, and you also take a look at the yield cos and the yield cos in the market, terraform global which report ond friday they are getting destroyed. >> dance pointing out the correlations you can't fight them. the concerns on the yield cos is these guys won't be able to continue to finance themselves. if you're in an northwest where the same investors investoring in yield cos are the same ones that have high yield exposure across the energy sector some of that's funding's going to dry out. this is not 250i78 to run out of this sector but the irony is yes, obama's out with all of this on a day when the oil is getting destroyed. commodity set a new low. not just solar names.

look at the coal names, ore names. these things are going out of business. politically he's putting more pressure on states where this is their number one livelihood and that's not going to be popular in a lot of place zblpz this is what mizuho said about the clean energy plan. the analyst said this is mutually assured destruction of coal fire generation industry. meaning game over for coal. >> dan mentioned the correlation between crude oil and solar names. that has been true. but in solar city specifically scty for the month of july it doesn't seem to be taking place like it did prior. reported earnings a week ago. almost a 40% short interest. seemingly there are some tail winds to this stock i think. i don't think you want to be short this name for sure and if you do believe in the space this is one name you could own right here. >> could you possibly own coal? >> no. i would stay away from it. if there's any name in the solar space i like right now i think of the names out there first solar would be my favorite. >> macau's gambling revenue

falling 35% in july. is it a warning to the rest of the world? >> it's not a warning. this has been going on a long time. year over year you're down 34 1/2%. it's an improvement over june. depending how you want to look at it it's a relative victory. the chinese visitation to the macaw casinos is down about 10%. i think it's probably stabili stabilizi stabilizing. look at the charts of sands, wynn, and even melco. these are names it looks like the chart's very constructive and it's not time to run back in at least on earnings multiples. they look very cheap here. they're not cheap. it's based upon trailing. i don't know that you can say this is the right time to get in but i think things are stabilizing. the macro pressure, the regulatory pressure on macaw is also lessening. that's very important for these stocks. >> there's been no shortage of head winds in macaw. but the one thing we know nothing about is what is the chinese economy doing. we know there's a lot of regulations, smoking bans, the bustup in these bunkts or whatever. to me when you think about wynn

it had the nice pop. it's given a lot of it back. it's straddling this $100 level. i do not think you take a shot here. just like it overshot on the up side last year i think it's going to overshoot on the down side. yes it may look cheap on a lot of levels, may look decent technically. i think you're going to get to buy lower. >> michael kors falling hard today as a number of analysts came out with bearish notes ahead of its earnings report on wednesday. one analyst says he sees major up side in the stock in the form of potential buyout. oliver chen is a retail analyst at cowan. great to see you. >> thanks, melissa. >> is there a way out for michael kors if it's not an lbo candidate? >> i do feel like the near term's under pressure. but i do think in the long term this is a great vibrant industry. it's a $40 billion handbag market. operating margins are above 20%. and why does our leveraged buyout analysis work? it's because it generates a lot of free cash flow. 550 plus free cash flow annually as well as 1 billion of net cash. and keep in mind hand bags,

michael kors handbags still sell at that $250 to $300 price point. it's a vibrant market and this generates a lot of cash. it's a global story. it's an online story. and it's a european story. >> you also point out and this is a good point too, that it doesn't have any debt on the balance sheet, it affords the opportunity for a firm to go and lever the thing up. but i wonder because in the note you say would you buy the stock on post-earnings weakness. does that mean you think this lbo will in fact happen? because you spend a lot of time also talking about the near-term pressures from the category and what looks like peaking north american market share. it sounds like in the near term you think it's really going to be trouble, yet you're still saying to buy the stock on weakness. is the lbo in your view going to happen? >> well, i think the near term is a little bit cloudy with the sector. i think mall traffic's an issue. outlet competition. coach is getting a little bit better with their product. that's something to be cognizant on. they report this week on thursday.

our top idea in the space is kate spade. we are cautious on coach as well. so i would say on the long-term perspective we like how we've modeled the lbo. will a leveraged buyout happen? the numbers say it's a compelling deal because i basically do believe that, a, the brand is very healthy and remains very strong and that they can they can continue to achieve 20% operating margins or above and that spits out the free cash flow. whether or not a deal happens it will have to do with the ability to obtain financing, timing and valuation trends. but i do believe management has strong conviction that their internal forecast and how they think the business will run is closer to my lbo model. and i'm also a big positive on the brand equity. as we survey consumers we think the brand remains very strong. it's more of a function of tough comparisons propp. >> oliver, going to leave it there. thanks for joining us. appreciate it. oliver chen of cowen. what do you think is going to

happen to kors at this point? >> calling a takeout here is very difficult to do. calling a change in what's going on with their comps which are going to still stay tough, the handbag pressure dan knows very well obviously. some guys aren't buying as much anymore. >> man bag. >> man bag. but ultimately you're in a place where if you look -- let's talk about -- let me bring it back on the rails here. talking about coach, talking about kors, you're in a place where these are both companies that have enormous sales expectations globally. china is slowing down. coach is a turnaround story that is still in turnaround. you don't need to run in ahead of the numbers. >> i think the difficult part about this is if there's interest out there, leveraged buyout, that gets pretty curious and pretty interesting because that's something we don't like to do very often. we sit on the desk all the time and say if you were buying this because you think the stock's going to get bought out, it's probably not the right reason. >> auto stocks stalling out. despite soaring sales what needs to happen to get these stocks in gear. we have a special report after the break. in the meantime here's what else is coming up on "fast." >> something very bad just happened to apple.

maybe not that bad. but it could mean game over for the rally. and we'll tell you what it is. plus, he's back. with the fleckamageddon for the ages. >> famed short seller bill fleckenstein is naming names and take aim at one group of stocks that he says are poised for a crash. the stocks and the man himself when "fast money" returns. [ radio chatter ] ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris jackie joe. minor damage, or major disaster, when you need us most, we're there. state farm. we're a force of nature, too. ♪

not all the auto stocks today seeing a boost from better than expected july sales. auto sales may be soaring but the stocks have been stalling. so we're going behind the wheel -- behind the disconnect, excuse me, with cnbc's phil lebeau. phil, what's the story here? >> basically what you're looking at here, melissa is a lost investors look at sales numbers and say that's great but it's not helping me in terms of what i see for a future investment. which is ironic. when you look at these numbers, fafrn fantastic across the board in the month of july. all but 1% better than expected. in terms of what people buy when they go into the showroom it's the suvs, the pickups, the crossovers and the average transaction price of just under 33 five is up 2% compared to last year. and many believe it is likely to continue to go higher over the next couple of months. having said that and having

looked at the sales that we've seen so far this year and the fact we are now for the first time since 2000 stringing together three straight months with a sales base of greater than 17 million, you might be sighing wow, is this the time to invest in one of the auto makers? well, these stocks have done nothing. you've talked about this at some length. take a look at general motors and we're going to compare it to a riley automotive over the last three years. you see the split over the last year and a half? that basically says it all. and what i hear back from a lot of people when i talk about the auto stocks, melissa, everybody says the same thing. this is as good as it gets. they're at the top. it's not going to get much better in the u.s. doesn't mean they're going to fall off a cliff. it just means where's the growth coming from in the future. that's the concern i hear back from a lot of investors. >> all right. phil lebeau, we're going to leave it there. thank you so much. what's going on here with the auto stocks? are there any worth a pick or are we looking at peak conditions here? >> people don't know how profitable these guys can be. and if oil prices stay this low, f-150s are going to continue to

sell off the clip. it's a high margin. they're not giving them away. they're going to retail customers at full margin. ford to me is the best risk reward in terms of price, valuation. stay with ford. >> can we have a conversation -- can we have conversations about uber getting $50 billion valuations and gaining all these customers without going back to the auto sector saying some of the sales are going to be displaced perhaps forever? >> we have tesla. a lot of weird things. tesla which had a bad day today in terms of the stock. we had a conversation about it. i think one of the names to be playing until recently has been a name like auto nation. you have mr. jackson on the network all the time. that got upgraded today. $70 price target. >> gm may be more than dead. it may be close to a great entry on the short side. if you go back and look at post-ipo, $30 is a massive level. it's bounced off there a couple times here. and like phil said, there's a lot of good news in the names and they don't rally. this is trading back at those recall levels to me. i think if you have a few percent to the up side i think you take a shot on the short side for traders of breaking 30 over the next three months.

>> coming up, apple breaking through a major level today as the stock heading even lower. a top technician reports why it could spell trouble for the nasdaq. shares of twitter hitting a record low continuing its slide after a rough earnings report last week. can it recover? we got details after the break. much more "fast money" straight ahead. i called for help as soon as i saw her. i found her wandering miles from home. when the phone rang at 5am, i knew it was about mom. i see how hard it's been on her at work and i want to help. for the 5 million americans living with alzheimer's, and millions more who feel its effects. let's walk together to make an even bigger impact and end alzheimer's for good. find your walk near you at alz.org/walk.

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welcome back to "fast money." a wild monday on wall street saw stocks slip to kick off the week. the dow falling by 91 points in the first trading day of august. historically the worst month of the year for stocks. crude though was a big loser today falling 4%. here's what's coming up in the second half of "fast money." the force is strong with this one. shares of disney hitting an all-time high ahead of tomorrow's earnings report. we'll tell you the one thing investors will be watching for when disney gives results. and here's a hint. it has to do with luke skywalker. plus is a market collapse just around the corner? if you thought today's action was alarming it's nothing compared to what's coming. according to noted short seller bill fleckenstein. we'll hear from the man himself about why a major bear market could start this fall. we start off here with apple falling below a key technical level. that could spell trouble for the nasdaq at least according to cornerstone macro head of analysis carter worth. >> a couple charts.

a. the action is poor. imix mr.s are bad for the market. nasdaq composite. what would one say? one would say yes, a beautiful up trend. you can draw the lines any way you want. it's just sort of north by northeast. but the real reality is this is an optical illusion because it's a market cap weighted index. this is a different story. this is the advance decline line. while this has been going up for the better part of three years the advance-decline line peaked almost 18 months ago. in fact, the index is up 3%. the average tok is it up 3 and the median stock is down. a few names like apple have been pulling away. but now we're starting to lose apple. apple has just broken trend. and not only has it quite precisely broken a quite precise trend line. it is also hovering somewhat ominously right at the bottom of this range. in fact we broke just slightly today.

a range that's persisted for the better part of six months. so where are we headed? our guess is that we're back down to this congestion here, this mid-point. it implies at 6% to 8%. so from peak to trough at 135 you're talking about an 18% decline. we're already down 12. another 6 and we'd be basically almost in full bear market territory. but looks like that's what's coming. and of course the implications are going to be that this is not going to be able to hold up much longer. if you lose your leaders that have contributed to this outperformance when your median stock has done that, the leaders start to go. this then breaks trend. it's sort of a mathematical checkmate. >> wouldn't the other leaders also have to go, carter? what are you seeing from some of the other -- >> we had our first one go, biogen. big name, broke hard. apple starting to falter. that's how it's sort of a hit parade. you lose one, you lose another. and then you look around and you wonder how did the up trend broke? it's because stocks broke first. >> another 6% to 8% down from

here, which would mean what sort of level are we talking about, carter? >> that would put us at around 108, 110. and we close at 118 and change today. >> carter, thank you. >> thank you. >> carter braxton worth, cornerstone. guy adami, what do you see? >> we've got to give tim credit. back in may he said the stock was 131 into earnings, take some money off the table in apple. i think it topped out within a week of that 133. it has not traded well, clearly. 120 was sort of my line in the sand in terms of closing. carter mentioned 108 to 110. 105-ish is the level it basically held all through january. doesn't mean the company's broke. it doesn't mean it's a bad stock or whatever. technically speaking this closed below 120. if it happens for a couple more days sets you up for 105. >> what you were asking also carter is what about amazon and google and facebook. some of these stocks have acted very, very well. so i think that google was really interesting after its report. we had that massive gap. it came in a whole hevg a lot. i think how you play this is the

qqq, the nasdaq 100. i'm long september puts in the qqq. apple makes up about 13% of that. the other ones make up a ton. i think the top ten make up almost 50% of the weight. if you are going to pay for leadership failing, that's how you do it in the qqq. >> how are you trading? >> i'm in some apple calls. right now i'm feeling the pain. this is a single day -- as guy points out, i don't think you want to put this on one day. but multiple days we close under 120 i've got some concerns. i look at the xlk still above the 50-day moving average. we talked at the top of the show spiedrs have held up. this xlk looks like it's going to break down. apple looks to lead the way if it pnz continues. >> apple i bought 123, 124. probably every guy here said that's a level i'd step in and buy the stock. the other thing remember about apple is if apple is failing, and carter talks about the leaders, and if they are falling off the leaderboard, apple is the biggest leader. and is the ultimate momentum

play of markets you should be most concerned about apple falling out of the race if you think this is a bigger move. i think the advance decliners chart very telling. we've talked about this, that the strength underneath the market not so much. >> sticking with technology and ugly charts, let's go to twitter. yesterday's buzz kill falling about 6% hitting a record low and on very heavy volume in today's session the stock is now down more than 15%. since the reported earnings just last tuesday. you're feeling the pain. why do you hold on to this? >> listen, at this point it's gotten so ugly the ipo price at $26, that's going to be on a lot of people's radars. i've got to give carter some credit. a couple weeks ago on "options action" he called it as a short at 35 bucks. he thought it was going to break that $30 support level. at this point i think you need to find some support, 29 1/2 was the all-time low here. that's where it needs to kind of find some stability. >> guy, what do you think of twitter? >> this was the low. $35 was my level. after earnings you had that big move up to 39 1/2 and until they opened their mouths on that conference call the stock was intact. that wasn't a bad quarter. it's everything they said afterwards that has crushed it.

listen, i think the company has value, i think it has intrinsic value. this level is where we bottomed out in april. but again, 35 was my number. now to me you're sort of in no man's land. >> it was two words. considerable time. that was the problem. the second they said that. >> that's a janet yellen move. >> unfortunately we are in a market right now where people don't have that kind of patience. so when you say considerable time they don't want to hear anything about it. they start selling. today they sold -- the stock itself they traded almost the entire day volume, first 2 1/2 hours of the day. incredible selling. >> we said -- when you say considerable time, we said on that night or the next day when we heard about that, dan talked a lot about the call, kitchen sink. these numbers were not bad. twitter is a very unique offering. 300 million m.a.u.s is very good. to say this company is not going to survive and the price action tells you it won't i think is crazy. and again i think a lot of people on this desk said 35, 35, looks like a good level. dan went in and bought some, or

at least played it synthetically. i think the stock should look a lot better toefrn on the desk that was saying 35. if anything maybe some of the technical levels people have. think about it that way. >> coming up veteran short seller bill fleckenstein says the only possible outcome for this market is a complete collapse. that's upbeat. he'll explain why and name stocks he's currently short after the break. plus we're less than 24 hours away from disney's earnings report. the three most important things you need to know to have the earnings edge. right after this. everyone loves the picture i posted of you. at&t reminds you it can wait.

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welcome back to "fast money." check out what's happening with aig shares. right now just about flat and about 548,000 shares of trading volume. the company, the insurance giant beat analyst estimates, but perhaps more notably so on the shareholder return programs they basically said they're going to more than double their quarterly dividend to 28 cents per share. they've also said they're going to tack on another $5 billion to their existing stock buyback program, which already has about 1.3 billion left. so a total now of $6.3 billion. shareholder return certainly a big issue with aig especially since it emerged from the financial crisis, melissa. back over to you guys. >> dom chu. thank you. tim seymour, what's your trade?

>> the stock has rallied significantly into numbers. 18% or so. it's a capital deployment story. they're going to sell off 15 billion of assets in 2015. i think if you were playing this stock to get a higher dividend you're getting it. and it will continue to. to say the stock has enormous up side i think a lot of people priced this in. property and casualty's been weak. fx head winds also been a drag. this is a stock a lot of good news is in the price but if you're paying for divs they're going to go higher. >> aig was at center of the financial sxries one man called that disaster right here on this show in 2007. now he's back with what he says could be an even more dire warning for stocks. bill fleckenstein is the president of fleckenstein capital. he joins us on the "fast" line. bill, it's always great to speak with you. >> thanks for having me, melissa. >> one of the reasons we have you on is you're getting ready to launch your short fund. before we get to the timing of that and why, i want to ask you about the shorts that you have on right now in the market because they focus on a sector that's already been completely beaten down. i'm talking about semiconductors.

>> well, completely beat uh down is a relative term. and if i explained why i wanted to get short generically they might make sense. because it has to do with my methodology as much as anything. >> okay. >> the reason why i closed my short fund in march of '09 is the very same reason that i'm going to launch it again. and that's because of the fed. i knew the fed would print money. i knew the market would go up. i never dreamed we would have all the stuff that we had. but we did. now the market and the fed are trapped. the fed was successful in driving the stock market to 2000 on the s&p or 2100. but they weren't so good as resurrecting the economy. it's been better than it was, you know, in '08 but it's no great shakes. now there's a debate as to how strong the second half is going to be. some of us think it won't be very strong. expectations are very high and a lot of bad news got shrugged off in the first quarter. but in the second quarter reports it started to matter. so the critical thing is from a

short selling standpoint in managing risk the fed is out of the equation. they may hike, they may not be able to hike, but they can't ease. so the market's kind of on its own and it's sort of tenuous under the surface. it's a lot weaker than the averages look like. so the fed's out of the way. stocks are reacting to bad news. expectations are very high and i don't think they can be met. and i have a lot of targets that i can pick on. so then when i couple that with to my eye and my reading the market is uniquely crash prone. and what i mean is i know that crashes are very rare events. i get that. but i think the market is very brittle because of high frequency trading, etfs. a lot of momentum investors. i don't think there's going to be any painless back door. i could be wrong. this is just a theory. so i'm short semiconductor stocks because there is an

inventory correction at a minimum and there might be saturation. whether you want to talk about pcs, cell phones, industrial and maybe even apple cell phones might have hit a saturation point. but we could debate that. i have lots of targets where i have catalysts, i can manage my risks and the setup is here. i've been waiting eight years or seven years for a really great opportunity and now i think it's here. >> let's get to brass tacks and name names. you're talk intel, qualcomm and xp semi and skyworks, correct? are these shorts you have on right now or are these targets that you're buying for when you launch that short fund? >> well, i'm short some now and i own puts on others. again, this is the first time in seven years where i've wanted to do anything. i'm trying to be careful because i could be wrong getting going here but i think as we get into the third quarter earnings season, so intel you say it's down. i say it's up. it ran from 19 to 35 on the hopes that the pc rebound that

came on the xp ending, people decided that was going to be permanent. that's not. everything is weak in tech at the margin except for data centers, and there's reason to suspect maybe that might be slowing. intel's got some unique problems. i don't think they guided properly on either of the last two quarters. i think expectations are way too high. i have a stock that can't go against me. maybe i can make 30% on the down side. i can manage that. qualcomm has problems. the companies in the apple food chain, whether it's nxp or skyworks or cirrus, you know, they all had good quarters and they guided higher, but apple didn't hit its units and it got a lot higher units to hit coming forward in the fourth quarter than they got planned. and this is not exactly an exciting new phone potentially. so again, there's the equipment companies. there's a lot to do and it may -- there may be more to do. we have to see how this evolves. >> i want to bring this back to your fund in the time available.

you've been on the sidelines for a while. you've come on the show while you've been on the sidelines. finally you're back and you say you're going to launch the fund. this launch is going to happen in october, correct? >> i'm shooting for october 1st. >> you're shooting for october. okay. can we extrapolate, bill, then that you think sometime in the fall the markets as a whole are going to be weak? >> yes. >> okay. >> yeah. i mean, if it wasn't for the logistical problems of getting everything launched if i could snap my fingers i'd be ready to go tomorrow. but things don't work like nap it's only been recently that i decided enough things have come together that geez, i've really got to do this. and so like i said, if i could snap my fingers and be short tomorrow and just be ready to go i'd do it. >> bill, we're going to leave it there. we hope you'll come back on when you launch your fund. >> thanks, melissa. >> bill fleckenstein, fleckenstein capital getting ready after all these years to launch his fund. >> it makes a lot of sense if you talk just purely as a fed play. to bring that into the semiconductor sector there's a lot of people that believe

there's tremendous weakness that the fundamentals continue to deteriorate. a lot of that is in the price, but what bill is talking about is a massive deterioration and actually a capitulation. sounds like it's born more out of market instability. i can't argue with any of that. what i will say is while i thought intel was going to hold 31 it's brokin down through. the sox are down 5 1/2% versus the s&p 3. saying that's a crash not so sure. >> he called the market crash-prone and brittle. those are interesting words. >> bill's a really smart guy. and he didn't come on here to be willy-nilly. he's not on every single night talk about the same thing. he's picking his spots. a lot of things he said raoul paul has said recently as well. i think you have to have your levels. my levels i'll go back to 121 in the iwmtion 2054 in the s&p. the market has held those levels every time it's tested. we'll see if it's different this time. >> listen, you guys are much older than me clearly. but as long as i've been in the business it's about 1997, i've

actually seen two crashes. i've seen two times where the s&p has been cut in half in the last 15 years. so to me bill just said that we don't crash that frequently. well, it depends on your time horizon. and you know, maybe it could be setting up that way. >> still ahead, disney on deck for earnings tomorrow. with why traders are betting on the stock falling. despite the blockbuster "star wars" movie just around the corner. back after this. make faster, smarter, better trading decisions with vectorvest mobile. the most powerful app or managing your portfolio from the palm of your hand. only vectorvest mobile analyzes, ranks and graphs... ...over 16,000 stocks worldwide, everyday,... ...and gives you clear buy, sell, hold recommendations... ...on every stock; anytime, anywhere. vectorvest mobile comes free with your vectorvest trial. get it now! visit vectorvest.com/mobile to get started

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because we should fit into your life. not the other way around. welcome back to "fast money." we want to call your attention to a stock that's moving after hours called med assets. mdas the ticker. the stock is up 6% on 242,000 shares' worth of volume. this is a medical technology data and analytics company based in georgia, and the reason why it's surging right now is because in a regulatory filing starboard value the activist investor run by jeffrey smith has sent a letter to med assets saying they think the company is deeply undervalued. they've also taken an 8.7% stake in the stock. so again, those shares popping on that. year to date med assets is up about 19%. up about 12% over the course of the past 12 months. that's the reason for the pop here. medassets up about 6%. starboard value, jeff smith's

shot takes an 8.7% stake. that's why it's moving. >> 1.4 billion market cap. dom, thank you. shares of disney trading at all-time highs ahead of its earning report tomorrow. one analyst says there could be more room to run. here's your earnings edge. >> i'm doug creutz the senior media research analyst at cowen and this is "fast money" earnings edge. disney is reporting earnings tomorrow after close and there's three things you're looking for. one, if you get some idea of how the television advertising market is progressing. it's been relatively slow recently. there's a lot of concern about digital media taking share. two, we'll be about the strength of espn. there's been a lot of scrutiny about espn's results recently. we do think that because they have long-term contracts locked in with both the cable companies and with the sports leagues some of these concerns are likely overblown. the third will be performance of the studio segment. they had a very strong performance from vrnl"the aveng

age of ultron" earlier in the year. tomorrowland didn't do so well. ultimately we think the direction of the stock is likely higher in part because a lot of people are anticipating "star wars" which is coming out in december. i'm doug creutz. this is "fast money" earning edge. >> direction of the stock likely to be higher. but some options traders don't see that. dan, what do you see in the options action? >> the implied move in the options market is about 3%. on average it's moved about 2 1/2% over the last four quarters. there was one bearish trade that caught my eye, the largest trade of the day when the stock was trading at 121. a trader bought 85 lunn of the august 1.50 puts. it's about 560,000 in premium. it breaks even down 5 1/2% august expiration. this is the time that it reported back in april. the stock gapped up to new all-time highs and it actually sold off. it consolidated around 110, and then it's recently broken out. so it's run into the number here. and this trader may be kind of thinking about this, is implied

volatility the price of options in disney. they're relatively low. below levels they were the last couple times. maybe it's a holder looking for disaster protection that they think is cheap in the options market. i just want to make one other point. this is the ten-year chart of disney's p/e. you see it here, upper right. that means it's kind of expensive here. maybe just some cheap protection aagainst a long that's worked. >> you're in disney, right, tim? >> yeah. that's the same chart for the entire sector. a lot of multiples have been enhanced and i think they stay high. disney until they disappoint you stay in the name. >> all right. more "options action" every friday 5:30 p.m. eastern time. meantime we've got your first move tomorrow when we come right back. stay tuned. jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement.

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some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. it's an old-fashioned food fight on wall street. two fresh faces squaring off and the prize is -- but which is supreme? the taste test is coming up. plus does imax have what it takes to be the next smash hit? "mad money" is next! time for the final trade. tim. >> and he with talked i lalt about how the financials have held up. morgan stanley had fantastic numbers very diversified on the top line stay with morgan stanley on this weakness. >> pete. >> i'm looking at disney. dan was talking about some of that down side. i think it's protection. i don't think it's bearish. i think it's going higher. i like the pipeline. got to buy disney. >> dan. >> if you agree with fleckenstein on the semiconductors i think you look at the ms -- smh, excise he m, the semiconductors holder etf. i think you can look for a break

of 50 down to the mid 40s. >> guy. >> he mentioned the airlines. jetblue's breaking out 2 1/2% today on a lousy tape. i think jblu is going higher. >> gets you done. >> i'm melissa lee. thanks for watching. see you back here . 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, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to camer qaa. other people want to make friends and i'm just trying to save you a little money. my job is not just to entertain, but to coach and explain so call me at 1-800-743-cnbc or tweet me @jimcramer. just as there are two sides to every coin, there are also two sides to every piece of market data. we always remember the first side, but we tend to forget the latter at the drop of a hat