if you have a one or two-year time horizon stick with stocks you that think you'll want to keep. >> kayla, what are you watching? >> jackson hole next week and how china opens sunday night. >> great points. we will leave it right there tonight. thank you so much for joining me on this "closing bell" special. have a great weekend. we'll see you sunday night. melissa, take it abap. >> breaking news. a historic day for stocks on wall street. doesn't get much worse than it did today. the dow, s&p and nasdaq all closing down more than 3% apiece. and with today's move the dow is now in a correction. it has been 1,418 days since the dow's last correction. it is here now. so what do you do with your money tonight? the question is simple. guy. >> proper respect for this market. what do you do with your money? you just mentioned, it's not always a buying opportunity. when was the last time you heard somebody say it's a selling opportunity. i think we've been trying to say that. we've been saying it in terms of the russell, the iwm, the small caps when it broke 121. we talked about the transports

breaking down months ago. b.k. has been on this whole theme about commodities telling you something from not a supply side, from a demand side. steve's been pointing out the levels in the s&p. the signals have been there. what happens next week? it's critical if you have one of knees big flush days to the down side following by a spike like mike santoli was just saying in october of last year, it happened around the 1850 level. there's a potential for us to trade there early next week. >> the volume levels today for friday in august were extraordinary. the qs traded 300 times their average -- excuse me 3:0000% their average daily volume. apple more than 200% its average daily volume. >> it definitely felt like there's quite a bit of a puking going on which is a non-discriminate selling going on. the one thing i would say is on a day like today when you're down 530 points on the dow today's not the day to panic. you've got to go out and buy umbrellas before it rains. when the market's up. today is not the day to payne. you don't wake up on monday and

sell everything out of your portfolio. we're already down 10%. at some point here, and i did some buying today, at some point this is a buying opportunity. maybe for a bounce. i tend to think lol longer-term we may have some problems. but tomorrow or monday morning you don't panic and sell. >> i couldn't agree with you more. if you're signature at home watching this show the worst thing in the world you can do on monday morning is wake up, call your broker and sell stocks. we're at a level right now that's very interesting. i personally think we're set up for a bounce, a trading boun here. i'm look firing bounce through next week. it could be short-lived. but i don't see significant down side risk here to this market. >> i'm not sure, when you say get up and don't call your broker and don't sell stocks, that probably would have been good advice -- or wouldn't have been good advice today. it depends on where we go from here. i think the technical damage is vicious. we busted through a lot of these key levels. i think you really have to wait till the market holds. it's almost like that three-day rule as a macro level. >> i think that's a good point --

>> but also let me just jump in. what you said about volume. expiration. you can't tell much about volume today. you don't know if it's a capitulation day when you have skewed volume with expiration. >> i think that's a good point. in terms of technical damage this is the second day in a row when we are closing smack on the lows of the session for the major indices. that is concerning. >> it's concerning but we also talked about a tape over the past several weeks that would rally on no volume and we weren't concerned about that. look, i understand and i get the technical ack aspect of it. but my view is this. it started out early in the week with a risk off scenario in the names that were really high flyers. really crowded trades. >> on the close today i was covering a boatload of stocks in every space, every sector, and they weren't budging. so they were met with a lot of liquidity on the sell side, which means there's further damage, there's further liquidation possible. >> so you need to know when is the right time to get back in. so i look at levels.

they're big for me. so i can make i think a pretty cogent argument that you don't need to buy necessarily anything or add to anythingses until the russell that we spoke of, the iwm specifically, trades back and holds 121. until the ten-year yield gets back above 2 1/4%. until you see crude oil opens down $3 and then closes up 2 on the day. you have seen days like that before. you haven't seen them yet. if you're looking for things to watch, those would be three key things i would look for. squlu said you were buying today. why were you buying? >> i came into the day short stocks, particularly short european stocks. probably around 10:00, 10:30 i covered most of my passions because i thought we were going to get a day like guy said where you have this big down opening and you rally back. we've had that over the last couple of years. after that episode i went in and i bought european stocks. i bought the dax. i got dxge, which is one way to do, it buying european stocks and short the euro. which means i'm long u.s. dollars at this point.

so to me that's the way to trade this. when you look at the capital flows around the world, when the dollar has bottomed and i think we're getting close to that point, you start to see a bottom in the market. so you're talking about sunday night, what do you look for? you watch the currency markets. they're going to be key to this. when you see the dollar start getting stronger or the euro start getting weaker, then it's okay to start dipping your toe in and buying. >> let's get deeper into the technicals. and grasso, we turn to you. what are the key levels you're watching on the s&p 500? >> this is a good question because everyone today, all my clients were asking what levels, what are the key levels, everything we discussed right here at the top of the show. we don't know a heck of a lot below this level right here, which is your 200-day moving average. so you have to go back in history and say what happened the last time? the last time we broke that 200-day we broke it by about 4 1/2%. so you come over here and say let's see what degree, if it happens to the same degree, where does that bring us down to? so that level today was right

here. 1990. we broke right through that level. so the key now is you want to focus on this right here was a sell-off of 9.8%. just shy of that 10% that everyone looks for for a correction. got it in the dow. didn't get it in the s&p. so if the market wants that 9.8 or let's call it 10%, you've got to look all the way down to 1920 in the s&p. that's where you get your 10%. but to guy's point, this is his point of reference. the low from that october 2014 was 1820. i don't think we have to go down that low. this is where we reassess, look for this level, 1920. the key level today is your low of the day. 1970. that's the level that must hold on monday. if that level does not hold, you will see a precipitous drop right to this one bang. people talk about the s&p down 10% correction, not just the dow. >> let's say it doesn't hold on monday.

david seaburg. would you still be in the buying camp? >> yeah, look, i believe it's going to hold on monday. i think this week started off like i said, it was a real sort of risk off, or a rotation really, out of the very highly concentrated crowded long positions. there's a very few select stocks that have led this market higher. those became too crowded. people took risk off. they became -- >> what names are you talking about? some of these names have been down for the past month. not just the past week. >> look at facebook, netflix. even google on a relative perspective underperformed the rest of those. but you look at these names and say facebook was a consensus crowded long trade. you're sitting back, you've got this exposure, you're going to take it down from a massive overweight to equal weight rating. that started to occur. you're going to shift into energy or some of the beaten down names. we saw that begin to occur. then global macro fears set in. when the global macro fears set in it became very fierce selling. the buying stops.

the value names stopped. and the guys are holding back now a tremendous amount of cash. they sold -- >> they're ready to buy you're saying. >> and let's remember the time of the year. we're coming toward a vacation week. it's the end of the month. if you've had a bad month our just want to get out of these stocks, it's friday afternoon, let me sell. >> well, it's been such a volatile week that we will be here on sunday night. you want to tune in. 7:00 eastern time for a cnbc special report, "markets in turmoil." we'll be here to get you ready for what will likely be another action-packed week for the markets as well as the global economy. 7:00 eastern time here on cnbc sunday night. coming up next, oil officially below 40 bucks a barrel and that has the commodities king dennis gartman ready to make his biggest call of the year on crude. we'll hear from him next. and later the dow may be down in the dumps but there are four dow stocks the traders think may have found a bottom. we're naming names and giving you the trades. later in the hour the vix did something extraordinary today and it could signal the end of the selling. we'll tell you what that is.

as we head to break take a look at the s&p 500 heat map. no surprise a sea of red on this brutal day on wall street. much more "fast money" straight ahead. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.

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now to oil breaking the $40 level for the first time since the financial crisis. dom chu's back at headquarters with more on the carnage and the historic week for crude and energy stocks. dom. >> it's been just such a huge, huge week in terms of the energy trade right now. let's put it all in context with the macro elements first. let's take a look at crude because overall on a year-to-date basis you can see here 25% to the down side for the west texas intermediate variety, and that down slope on the right-hand side of the chart happened just in the last couple months here. if you take a look at the one-week chart it really just gets exacerbated and you can see why we've seen this weakness here, down5% just again in the past week. $40 you can see right there. but we dipped below that level earlier in the session. like you said, the first time since 2009. all of that carries over into what's happening here with energy stocks overall.

if you check out the xle, this is the energy select sector spider, the one that tracks s&p 500 stocks in the energy sector. you can see there the worst-performing sector on a week to date base i. here down about 8 1/2%. if you take a look at the energy sector overall year to date, that translates into again a 21% drop. again bear market territory for sure. a variety of the stocks in the sector are there as well. among some of the big losers you can see this week here a sharp down trend. some of the individual stocks that are making some waves here, at least on the down side. chesapeake energy on the natural gas side. also apache energy. philips 66. integrated stocks like chevron and exxon all part of that down side picture. so a very ugly trade so far developing. however, it's one where at least some people are starting to get a little bit enticed. whether or not it works out that's going to be a big question in the next week or two. back to you, melissa. >> tremendous weakness in the

refiners. and i'm wondering, grasso, if you think it's sort of like an atm trade we were talking about -- >> definitely. i think the refiners are due for some headwinds but the big tell is mexico hedged out all of 2016, that $49. that's a huge tell. >> stick wen ji here, one prominent market guru is changing his long-held position on oil. here's what dennis gartman of the gartman letter said back in june. >> i think it's going to be very difficult to get wti past 65. i think it's going to be relatively easier to get wti down into the high 40s or low 50s. so i think at most it's 2ds h$2 higher, maybe to $12, $16 lower. that's the position i would have got. >> crude oil is down 30% since that bearish call but today gartman said he thinks a bottom could be in. dennis gartman is live now on the "fast" line. dennis, great to speak with you. why the change of tune? >> the thing about it more than anything else is the cost of

storage. and it was interesting to me, everyone's heard me in this program talking about contango. the carrying charge. what the front months are trading relative to the deferred months. and it's fascinating to me that this week as crude oil has fallen several dollars that the contango has actually narrowed. the front months have gained relative to the back months. that's not how a real bear market should act. that's how bear markets act when they're ending. so for the first time in almost a year and a half, and i've been overtly manifestly, consistently bearish on crude, i came out and said today think the low is in. markets tend to go to what i laughingly refer to as the obscene number. and we got the obscene number. we put up a 30 on nearby wti. i think that's probably the low. i could be wrong. i've been wrong in the past. i've only been at this for 40 years and i've been wrong, i don't know, several hundred times. but i think at this point given

the fact the contango has narrowed, given the fact that everybody is overwhelmingly bearish, i think it's time to take a look at the long side. >> let's be clear, dennis. you are now long crude. and you took that position today? >> yes. actually, i put out a recommendation to be a buyer of wti. i probably was a little early to say let's buy it. there's one thing that changes the position from being bearish to neutral. and i probably was a bit reckless in going from being bearish to bullish. but the fact we put up a 30 tick on wti and the fact the contango continued to narrow today i think i'm okay. it's a small punt. it's a big change in psychology. it's a big change in my philosophy. but i think from here on out the time to be short is clearly passed. i might be early in being long but clearly the time to be short is over. >> so the lows are in for crude. is this a crude-specific story or do you also think that we've seen the lows in other parts of the commodity complex? >> actually, i think we've seen

the low in grains. we had an outside reversal day in soybeans yesterday. i think that was impressive. clearly we've seen the lows in the gold market, in dollar terms we've seen the lows in the gold market in euro and yen terms. that happened three and four weeks ago. so over time the commodities seem to be turning even oh the overt news, even though the headlines, even though everybody seems to be manifestly and overtly bearish i think the lows have been seen in a number of commodities. i think the time for being short on the commodity markets, that too has passed. >> dennis, great to speak with you. thank you. dennis gartman of the gartman letter. do you agree with dennis? >> i think, first of all, listen, in terms of crude oil it would not surprise me to see a rally here at all. although i thought crude oil would get to somewhere around $36. it wouldn't surprise me to see an overshoot. what concerns me, and again, we could have a rally here, but a strong dollar is not going to be good for this. and i'm expecting the dollar to start turning stronger. that's going to be a headwind for crude. >> dennis had it on the way down

and i admire him saying this now potentially on the way up. i will point out one thing. i think part of this contango he talked about was wrong into the october contract. not to get too wonky for you. but that is part of it. but the weakness that you cited in the refiners, which was significant today, steve just talked about it, and b.k. was on this earlier in the week, might actually signal a bottom as counterintuitive as that might sound to crude in the short term. >> it was valero down 9%, western down 7 1/2%. where would you go in the energy complex? you made a reference to the fact you think perhaps there could be a rotation into the sector. >> it's starting to happen. it's going to take some time to really get into full gear and i think it's going to happen. i think the enp space is the place to start. obviously beaten down. the xlpi, i'll be looking to get long here. and i'd probably look at it as a very long-term bet because this is absolutely not going to be a short-term turn within the energy names in particular, but i do think there's a lot of pent-up demand. there's a lot of money on the sidelines that's dying to get to the sector. >> much more coverage in today's brutal sell-off.

you're watching cnbc, first in business worldwide. in the meantime, here's what else is coming up on "fast." >> looking for bargains? we've got four dow stocks that traders say may have found a floor. we'll tell you what they are. and later in the hour, fear is in a bull market as the vix goes on an extraordinary run. but if history is any indication, it could be your signal to buy. and we'll tell you what it is that has bulls excited when "fast money" returns. up to five times faster than dsl from the phone company. call 800-501-6000 to switch today. perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks,

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take a look. this is a shot of the dow heat map. a sea of red. the dow closing at the dead lows of the session. dom chu's got a look at the hardest hit dow stocks of this week. >> august 2, 2011. that's the last time the dow closed down by 500 points or more. so a very, very historic day, at least in recent market memory. let's take a look at the dow that was and the carnage that ensued. intraday again, like you said, the lows of the session down 531 points. if you then take a look at how that plays into the intraday, into the one-year, into the year-to-date numbers, we are now down 7 1/2% year to date on the dow and like you said we are now in correction territory, down 10% from both closing highs and of course record levels intraday as well. so correction territory there for the dow. whether it stays that way is go to be a big issue. among the dow losers an interesting cross-section here. chevron on the integrated oil

side, down 11%. the worst dow performer this week. followed by shares of boeing, down 9%. and then apple and intel both down by 8% as well. and of course i will make because it's gotten so much media attention over the past week, melissa, disney shares, they are also among the biggest losers. they dropped 7% this week but did catch a little best a bounce at one point. but still disney, one of the biggest drops in the dow this week, guys. back over to you, melissa. >> thanks a lot, dom. to put this all in context the dow tumbled more than 1,200 points this august alone. are there any stocks in the dow that have finally found a floor? let's go around the horn, the ones you might look at buying. grasso. >> i actually did buy disney to dom's point. it's having its own little bull market. down 20% since the beginning of august. but on a relative strength index basis the stock is oversold. the last time it was oversold it ral 4rid back almost 20%. pretty quick order. i took a dabble in it today

because while the market was selling off this one on a relative basis was becoming a lot more solid and did not sell off with the overall market. >> nike has had a massive run but i think this is a core holding in a lot of portfolios. they have pricing power. they have an incredible brand, obviously. and i really think makee's going to continue to outperform in a market that actually could underperform. if the market's going to move higher nike's going to be the stock that really outperforms. >> beakers. >> more than anything else the most important thing an investor can do is worry about their risk-reward. when i look at stocks i'm looking at where's my stop, how high do i think it can go. and one to me that is just a no-brainer here is johnson johnson, jnj. 94.10 is your 2014 low. it closed today at 95.56. so i've got 40 cents, 50 cents risk and i could make a couple bucks on the up side. that's where i want to get in. i know i have limited risk. let's say i use 95 as my stop and maybe we get back up to 100 again.

that's a pretty good risk-reward ratio. >> real quick before we go, this is a great -- it's good that it's a weekend here. you can sit back take a look at things. but we mentioned calling our brokers or advisers and stuff. have some questions ready for monday. at least you can go to him or her and ask what am i in, what's going on, why is the world looking the way it is. just don't sit blindly and let fate determine your fate. united health is where i would go. in the hospital space steve is talking about this. there's a lot of con sol zaigs in the health care space, not necessarily the hospital space, but you've seen a lot of rancoring to that effect. united health trades 20 times forward earnings. i don't think it's expensive there. great report two or three weeks ago. trading about 115. you probably don't have to go piling in next week. but unh absolutely one of the dow stocks that should be on your radar screen. >> be sure to tune in to cnbc's special report "markets in turmoil." that happens this sunday night 7:00 p.m. eastern time. much more on the sell-off and how to get you ready for what will be likely another action-packed week. you've got to watch p. we'll have the asian open,

must-see tv for sunday. time for the final trade. steve grasso, what do you say? >> i started out the show pointing out the board here, the spx. you want to look at the cash in the spdrs. if you look at this level you want to look at the low of today. the market must hold. reminder. 1970 or else it gets real ugly real fast. >> 1920's the next low. >> 1920's the next level of support. >> seaburg. >> you're going love this one. twitter. i'm going to say buy twitter here. >> what? >> i've been incredibly negative on this stock since it was 50 bucks a share. it's come in below the ipo price. there's been a massive amount of derisking in this name. i don't like the business. the core business i think is terrible. i think ultimately the stock is going to go lower. but i think the risk is they're going to make an announcement, it's going to be a ceo of some sort that they choose and the stock's going to trade up. so for a trade you can buy twitter here and make some money. >> you've been spot on on twitter. kudos to seaburg. beakers. >> this whole sell-off in stocks started with volatility in the currency markets. obviously sunday night you have to watch those currentsy markets, in particular if you're looking at the dollar inzex,

dxy. it has to hold 94.50 or o'. otherwise we could be in some more trouble. look for that on sunday night, look for the dollar to go higher. >> watch the special on sunday night. 81820 the october low. you want it to trade down there and hold and bounce. that's what i'm looking for. >> cnbc's coverage of the sell-off continues. something extraordinary happened in the vix today. could signal an end to the selling i asked my dentist if an electric toothbrush was going to clean better than a manual. he said sure...

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cnbc's breaking coverage of the sell-off continues. if you're just tuning, in here is what happened on a very bloody expiration friday. the dow losing 530 points. it's just had its worst week in four years and is now officially in correction territory. the s&p 500 losing 3%. it is now down 1% over the past 52 weeks. the vix jumping 34%. in the month of august the volatility index has more than doubled. and that would be a record. that has never happened before. and apple is now officially in a bear market. it is now negative on the year. how much worse is this going to get and what do you do with your money? i'm going to start with the technician because here's an interesting stat. the dow not only lost 2% two consecutive sessions but it