"fast money" starts right now. live from the nasdaq markets overlooking time square. i'm melissa lee. the traders are tim seymour, brian kelly, and guy aamy. bonds on the volatile market this year. and where alibaba might head for the doors. herb greenberg weighs in. but to the top story of the day. apple is on pace to beat the iphone first week record. and while that may sound good, it is what they did not say that has the street talking.

let's get to the story with josh lipton with the details. josh? >>. [ technical difficulties ] >> apparently we're having some audio issues but the critical thing is last year, when they went into sales of the iphone 6 they did release the number and this year they did not release the number. should we draw any conclusions? >> we're splitting hairs now? >> really? >> i think they could smoke people on terms of the phone. it is all about the phone. and i think the stock has traded particularly well. and we talked about it a couple of weeks ago and i pushed back and said they are mutually exclusive. and you stay long against 103.5 and which is what we saw on august 24th and 25th. i think you have a defined stop and go high from here. >> and we've ironed aud josh's audio issues. back to the story.

>> reporter: that is the magic of live tv. melissa, you have a couple of different options. if you are tim cook, you could have released no data or preorder data and that would allow the street to compare and contrast or you could do what they do and not give the preorders but say they are suggesting what you can beat what you did last year on the first weekend of real sales. remember the bogey was $10 million. and you did have some analysts, a well respected guy, he said the fact that they didn't release preorders might -- and he emphasized might -- indicate they didn't hit the 4 million in preorders they did last year but saggin aggie is a bull and has a price target of $135. for the information we did get today, what apple told us is preorders were very strong around the world. and they especially calledous

the 6s plus and beat the preforecast for orders and the inclusion of china, now included in the lauchbl. and i talked to rbc this morning and ammod is looking for more like $12 million because china is now involved in this thirst wave of the 6s and the 6s plus cycle. last year china only came in around mid-october so a different time frame and a different impact of china this time around, melissa. >> so you would think they would prerelease or release the numbers for the preorders because china doubles the total addressable market so it should be a slam dunk that this year they're going to beat, right? >> reporter: you know, like i said, they could have done that. they chose a different tact. but just to tell you what we are seeing in the preorders indicate that what we did last year in the week of sales, $10 million, we're going to beat that this year. didn't say how much they will

beat by. but so far i heard was 12 million. >> josh lipton in san francisco. so back to this. then you add china in. one of the largest markets out there and should they beat the record. >> of course they should. >> so why don't they give the number? >> why do they have to give the number. maybe they don't totally know and they haven't gotten the right picture. they couldn't be units or more expensive phone. but recode has an article saying the phone is selling out now in china. so say china is not a big part of the demand -- and a lot of people were saying this. two months ago, everyone was talking about the china slowdown and said this is the end of apple or a slowdown in the momentum and the name. so i think, look, nothing bad about this. i don't know why you have to read the negative into it. why do they have to say anything. >> what do you think? >> well i've preached about this whole refresh cycle. and let's remember, everybody said this phone looks no

different. that is not what it is all about. if you are looking for looks, look at the rose gold and that sold out in 12 hours in china. what it is about right now, you are talking about the volumes, i do think they crush the numbers. we'll see when the numbers are released. but when you look at the functionality and that is what people are looking at, you look at the camera and the processor and the force touch and the different elements that people seem to have wanted and are getting out of the new phone cycle and the fact that only about 30% have been refreshed, i think this is a slam dunk and we'll see some powerful numbers. >> we've covered this pretty well so let's look at the technicals. you are in the bounce zone. from the 134 level to the low and the balance doan is $113 to $118 and it has to clear that to be viable again. >> when we get the numbers, everybody thinks they will beat the record last year and the stock is up less than a percent.

and the stock market was down slightly today and apple did outperform. but in another tape, in another lifetime, they would have been up 2%, or 3%. >> i think where we are, at $121, that was the level that we held until a couple of weeks ago. so what was support should become resistance and we'll find it in the form of $121 and see how it trades either side but that is where we're headed over the next couple of days. >> our next guest has two sectors to buy ahead of the big fed decision. head of technical analysis, he's breaking it down at the smart board. chris, what are you looking at? >> we should be careful here. and a big problem in the work right now is only 42% of the s&p 500 is in an uptrend. so the trend has weakened. i'm inclined to favor the move given the weak internals. i think when the market is

questionable. you focus on leadership. home builders are number one on the list for us. this has been a multi-year base for the home building group recently breaking out. relative new highs as well. deer horton, lennor are two good stocks. and airlines, we like. delta, dil, $46 today and we think 52 is in play. so focus on leaders when the market is questionable. >> so even in a negative tape, you expect these to be outperformers and do they lose less than the over all markets or do they gain? >> there is still 35% to 40% of the markets are working here and the names and the groups are in that category. i think you can go up in otherwise lackluster tape. >> chris. thank you. do you agree? >> i tend to agree. in the airlines, i think you've had a test that ultimately came before this big move down in august. i think a lot of guys were questioning the whole structure

of the sector itself. you can't go after the home builders when you see the housing trends that are based upon supply. so when i look at the over all market, it is value that is underperforming and so to what chris is saying, this is a great opportunity to make your shopping list and get ready because there is a lot of babies chucked out with the bath water. >> there is plenty of water out there. and the airlines, when they are down and you look at the evaluation levels an the ability and the pricing power they've got. i think delta is the best name in the group. but united has lagged so much. and now the transition of the ceo and the potential going forward, maybe the new ceo can grab that potential and send it to where it should be. but it has to hold around $56.25 and if it does that, it will be on the upside. >> and you've been in home builders, kbh and polty.

and when you see dr horton and the other ones, those are the safety neighbors. when you look at kb homes, you have to believe the home market goes up to own those. >> do you believe the home market is going up? >> it is very important that you bring that up. >> that is why i asked you. >> well phm is still higher than where i bought it. kb homes,ite fighting a death match. >> why bother fighting? >> because this is not the market that paid you to buy the lag erts but the level that is torqued up in kb homes with such a low evaluation and once they evaluate the acreage they own, especially in california, i think it rips higher. but on the airlines, how about jet blue. guy talks about it a lot. up 66% today. >> that was strong too. >> it is a whisper now of the all-time high, i think from sometime in '03 and '04.

delta might be the best airline, i haven't flown in a while. but i think jet blue is the best stock. they didn't get bludgeoned like the rest of the space did. it has done well and you saw it today. >> go pro may be down 40% but today the stock is rallying on one tech name could be looking to buy it. and the details and what it means. and how alibaba could fall 50% and selling the stock lower. find out what we say are the real red flags for the amazon of china and whether they can turn the tide for investors. and later, the fed meeting this thursday. and find out why dennis gartman said right now is the perfect time to get long bonds. much more "fast money" state ahe ahead.

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google kicking off our top trade. the tech giant making a big move by hiring the former president of crew car, john krafcik. he is from hyundai. google has yet to give a day when the self-driving car is available or for sale and whether they will sell it or

license the technology to automakers. big deal, pete. >> yeah, i think it is. and when you look at the deal, why did they hire this guy, because they are not going to develop the cars themselves. i think they'll move themselves out and offer it to gm and daimler and the various names out there. i think they want to have the technology. i don't think they are concerned about developing the cars. put it in as many cars as they can and develop the partnerships. and this stock held up extremely well today and timmy can speak to this but they had seriousish ups in -- issues in russia. >>and ex is the legacy purchase provider losing ground to google so this is a question of whether google can exist in other emerging markets and can they compete with bidu. but the reason you want to own it is because it is market expansion. the alphabet soup is what this is. and so you can feel better about that there is a guy running the business when you know the core

search business which is a cash cow is something that -- that is safe. >> does this hurt the russian thing when they have been found guilty with the anti-trust. >> i don't think it does. except for the fact these are the kinds of things that go on in russia all of the time. and they are closing ground but that is not a key market. >> it won't make or break what they do. >> it is not about that. you are exactly right. >> and we all know about china and how they had to fight with bideu. >> but this makes the self-driving car a hobby for google for a potential real business. >> many hobbies. if they hit on this, this is a huge thing. they don't have to hit for the stock to do well. the last quarter, that was an amazing quarter they reported and the stock acted in kind. it has pulled back since. but i think you can make an argument that google is cheap on an evaluation basis and you'll see continues quarters like we have a couple of months ago. >> and facebook looking to work

on a 360 degree video app that will help by tilting phones. it is in the early stages of development. as mark zuckerburg has called virtual reality the next computing platform. so we go to our expert, guy adami for this trade. >> good thing i'm here tonight to address this very important thing. i don't know how the show would have survived. you guys have been looking at each other dumb whitted, good thing i'm here. and again -- you have to give zuckerburg credit. every acquisition and move over the last five years has turned out to be a home run. not least of which is what is up, when it happened, that was a genius. as did instagram. and they can monetize these things. people say it is expensive. 35 times forward earnings. i would push back and say the best is yet to come for

facebook. could this be neither one they pull down the road, absolutely. after the last five years, i see no reason for it to stop. >> the instagram thing is massive. so many people don't understand. instagram has over 300 million monthly active users. that is bigger than -- or the same size as twitter. we talk about twitter. and what a great acquisition that was. but when you talk about zuckerbu zuckerburg, to your point, innovation. you will buy some of it and develop it and that is what they are doing better. >> and a big day forgo pro. and their content and video eco-system make it a compelling target for apple. and a rally after the company is about to extend the lead in the video ship making space with computer vision for am bar ella, to help others perceive what is around them. >> i agree with am bar ella.

they are up. and i think there are a lot of things going for them right now. they have intelligence in video and that will play in facebook with the virtual reality we just talked about. but i can't see go pro. >> why? >> because i can't see them being bought out. are you going to wear this on your head? if we talk about evaluation on hardware -- >> because they are a hard wear company. >> sorry, let's take them back. if they buy them, what will they pay. >> $6 billion. >> this is your theory. >> why? >> because you get hardware and software and content and it builds everything into where they are going. >> but let's go with what -- hang on. let me finish. so if you go with beats, they paid two times sale for beats. >> the largest acquisition. >> and that brings it up to speed with the market cap existing right now. so you have to go forward. and this is a piece that i read

today. if you go federal and establish 25% growth you pay for 2016 growth and that still brings you to $4 billion in upcap in the market name. >> don't they need another product. and their a hard wear company as you stated before. >> i don't know. one of the things about the iphone release or the last week was the 3-d touch. i think it is a much bigger issue for these guys. and it gives them the virtual reality access point but keys on camera and the phone. i don't see why hardware-wise, apple needs to be any further into the space than they already are. they are already there. and to the extent they have a loyal audience that would allow them to launch them into the eco-system. >> i think the weakness is the back end. it is not the camera but what do you do with the video and if they had a system to cloud it. >> which is what apple is all about, original content. >> but i'm playing the devil's advocate here. >> drop in the bucket forgo pro.

$6 billion, i don't think it matters for apple or makes a huge difference. pete said this last time he was on, i think last wednesday or so, they make perfect sense for these guys. i've been a bull on go pro and i've been wrong. but this is not farfetched to think a company like apple could tuck them in nicely. >> and the one stock that fell more 9% alone and whether anyone on this desk is getting in. here is what else is coming up on "fast." >> move over barons. herb greenberg is here to sound the alarm on beaten down alibaba. what he found that could send investors running for the exits. he'll unveil his biggest concern yet for the amazon of china. much more "fast money" ahead.

big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. (vo) what does the world run on?

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and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... ...in this big, bold, beautiful world. alibaba falling 3% after fighting back against a scathing article in baron's magazine, saying it could fall 50% more. and herb greenberg is cnbc contributor. herb, it is great to see you. and we should note, you raised the issues back on june 2nd. and you are coming out to say

remember this and what is that, herb? >> well, what it is is a number of things. you have to understand, when we did this report going back in june, my friend don is a forensic accountant and a fraud examiner and he said there were some issues. and don, come on, everybody knows about the pace of alibaba, what could possibly be new. and he presented the information to me and i said oh, i see, that is important and nobody is talking about it because everybody cares about whether the number is meeting or beating numbers. and we are concerned about the company's investments in dozens and dozens of other companies. they call this investment in investees and the problem is there isn't enough disclosure to know whether the company is investing or whether they are really they are expenses so they are underreporting costs. we don't know. don has done hundreds of

companies in the last five years and many companies an he just, after several weeks said, i condition tell you about the numbers. and that gets to something very interesting here. because if you are talking about multiples and where the stock can go, nobody can say that. you can't talk about multiples here because you don't know the numbers. they just don't disclose very important figures here. >> so tell us, herb -- >> you can't foot it. >> in layman's terms, circular transactions, because that is the concern here. >> the concern is definitely circular transactions. and you don't know how many or where. in other words, circular transactions are where you have a related company or somehow you have a company you are involved with them and money is coming in one way and going out the other. and we tried to contact the company about it. we sent them an e-mail and went through the investor portal, the way any investor would and they never got back to us. so our approach with the original report and after the company had the 20-f, which is

the annual report, we went through it. maybe there could be answers in there. there were no answers, just more questions that we had. >> herb, you've been doing this kind of thing for a long time. does this remind you of another company and how they had circular transactions. i'm trying to get at -- i don't want to say that alibaba is doing x, y and z but -- >> look, melissa, i won't sit here and say -- look, we don't have enough information. and no investor -- no investor has enough information to know whether the company is engaged in circular transactions. it is the concern that there could be. so you have to be very careful with this. but i can tell you, no investor does. and so i would like to sit here and say we know alibaba is a great company and they've done great things in china and it is a great play on china, but when you look at thur profitability versus amazon and you say are they that much better and how are they doing this and you take a look and try to tie together the pieces and then look at

jd.com, which is a competitor, with fewer investments with investees, does a better job of disclosing the information. so you can foot it and see what it is. alibaba must disclose more so all investors can figure out what the real numbers are. maybe there is no issue, melissa. but you don't know because you can't see it. >> and if there isn't, then they should have that information available. herb, thank you. >> they should have that information. and we would love to talk to the company. >> absolutely. thank you, herb. herb greenberg, pacific square. when things aren't going great, people pick up on the worse. we knew they had issues from the get-go but everybody wants to believe they were the greatest thing under the sun to play on china. >> people want to give chinese company a pass in terms of

transparency if they thought they were buying growth and this isn't the first company that got the pass. and when i look at 18 times 2016, i think it is in the price. the reason they are suffering, is there are people who don't think there is any transparency here. i'm not disputing h raising the flag and saying there could be problems here. but if you look at the company, the biggest problem is they are not growing enough. jmb for the first quarter -- excuse me, second quarter, was a good shot for the company giving you 40% to 50% growth. that is the big deal. operating leverage is lower. a big deal for the stock. once you get past that, i'm long on stock after new jersey average of probably three transactions of $93 and not happy. and you have a case where there is a lot of bad news in the stock and a company that is not broken. >> do you think it is in the stock? the lockup exploration, everybody knew about that. the slowdown in china, not until the came out and talked about it

last week, a few weeks ago. and this seems like we don't know anything. >> and herb does extraordinarily thoughtful work, number one. >> sure. >> he's beyond reproach. so is it in the stock -- i have no way of knowing. i think tim has a much better handle on this than me. but i will point out a couple of things. it benefits yahoo and made them take their eye off the ball as the stock was doing so well with the ascension of alibaba, i think it let them get into a level of complacency and i think it shows you show valuable amazon is. >> if we believe barons, that it will fall another 50%, what does it mean for yahoo. >> it will fall as well. because everybody is worried about that. but why guy left off, amazon, the canary in the coal mine, was alibaba ran out of gas. and they are mirror images of

each other. if alibaba goes down, amazon goes up. >> and find out what has dennis gartman saying he is getting long bonds in stocks. and drones. companies are looking everything to adapt to the change in the defense environment, including moving into the commercial drone market. a look at the major players in the space. much more "fast money" right after this. and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. i've got two reasons to take that's why i take meta. meta is clinically proven to help lower cholesterol.

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welcome back. >> sorry. >> melissa. >> you take it. >> mary thompson has breaking news. [ laughter ] >> thank you, melissa. this is a breaking news. carl icon has upped his take in chan ear and he now has a 9.5% stake in the natural company. he took the stake on september 14th and we point out that because on september 9th there was said to be that he had a short position in chenier because it is a looming disaster ahead. he said the gas demand isn't growing any more, according to chin os.

we have excess capacity and we are about to double that over the next four years. but carl ikan upping his stake. >> thank you very much. mary thompson. and they are adding two board seats on chenier which would make his hand stronger. >> but you wonder, i think jim chanos has compelling arguments to the negative side. and when you look at the 1% bump, and in the post market, you have less volume. would you see a nice significant move to the upside, 1%. that is relatively small in these circumstances. implied volatility of this stock, there are bulls an bears and they are in a fight right now. the volatility of the options is extreming to the upside. >> we should point out, because jim chanos is short and carl ikan is long, doesn't mean

anything. in the long-term there could be enough change to get enough value of the stock to make it profit. >> to carl's credit, and there is nothing wrong with it, but he doesn't often stick around long enough to see any change. he's there to agitate for change and make a move. but as they point out, is carl still having the same impact and is this game working and right now it doesn't look like it is. >> what do you think? >> you can invoke change in certain things. you can change aisles in a supermarket and do things -- >> i hate when they do that and you can't find stuff. >> but that guestimate is waning. there is nothing uncle carl can do about that. but the same thing with freeport macmaran. you can change balance sheets and fix it but if the end user isn't there and the guys and gals that buy the stuff aren't there, there are no magic bullet there, sister. >> okay, brother. >> it is a tough environment to buy energy names no matter where

you are on the spectrum. i think he does better work taking about apple. >> let's bring in dennis gart man for more. dennis is from the gartman letter. what is your view on net gas. what do you think of this position? >> well, net gas is awfully cheap here in the united states and still expensive abroad and the rational behind honing chenier, if you wish to own it, you will take natural gas and put it into a ship and send it abroad. that is the only reason they are involved in it. don't fade carl icon and i think that is a terrible thick to do -- thing to do under any circumstance. and given the arbitrage, it makes sense. but the problem with liquified natural gas is the boats that you have to make are so bloody expensive. there are one or two shipyards that make them and nobody wants to have a terminal in their area. we have one building in the united states. but to off-load that or to be

involved with liquified natural gas and know the dangers incumbent in it, makes it difficult. nonetheless, if you can buy it at 2 cents or under and sell it at $0.13 abroad, that is a heck of a deal and that is what they are after. >> and you outline all of the reasons why the story wouldn't work in this environment. >> i think the chenier story does work, melissa. if you can buy 2 cents natural gas and sell it at $0.13 abroad. >> but you said the ships are so bloody expensive but can you make them and have the storage wherever you need it. you made it sound like it was -- >> that is the problem. we try to make ships here in the united states at newport news ship building a few years ago and quit doing it. it was too difficult. but the koreans have a wonderful job of turning them out, and are they turning them out as quickly as anybody would like to have them no. but we would like to join the

fray. and have japanese ship builders join the fray but the koreans are doing it now. >> and there is a fed meeting this week and you say it is time to be long on bonds, why would that be. >> i want to be long on bonds and short on the market. it is one in the same trade. it is not like i like to be short on stocks or long on bonds, but if you look at the past six months, if you owned bonds and everybody is bearish in the bond market and calling for higher interest rates and think the bond mark will collapse and it keeps going, if not to near new highs and at the same time over the course of the last several months the stock market is moving from the upper left to the lower right. so the trade is to own the bond market and be short on the stock market and i'm not afraid to carry that through the meeting this week. the overhyped and over developed and overinvolved in meeting

we've gone through in my lifetime. >> so in a rising interest rate environment, you believe the fed will raise rates at this meeting or the next meeting and you want to bet that the yield on bonds will go down? >> i want to be long on the bond market at the ten-year interval and short of stocks for the next two, three, four, five weeks. i think that is the trade. i think the fed will tight ebb before the -- tighten before the end of the year. even if they move up 50 basis points before the end of the year, and that won't happen, what will happen is the yield curve will narrow and the long end will hold fairly steady. that is detrimental to the stock market but won't hurt the bond market. it is a spread trade. i'm long on the bonds and short on the stock market and the chart that you put up, if anybody had done that over the last six months, it is a wonderful position to put on. it is not a big winner and it can go against you on both sides

but i'm not afraid of it going into the mfoc meeting at this point. >> good to see you. >> thanks, melissa. good to be on. >> dennis gartman of the gartman letter. what do you think? >> he said something i agree with. the next six weeks for stocks will be challenging. i think through mid-october, call it four or six weeks, where i think volatility stays high and it is not all clear sledding. i think people have over done the foreign central bank selling and i think there is a lot of foreign demand for the u.s. credit and the long end of the curve is where it will go. i think the rates will move higher, i think 250 to 275 is where we cap out this year. >> through the fed meeting, i don't know if i would go as long out as you are talking about here but i know it is a macro environment and china has been an in fluns in the market place. but dennis talks about a paris trade there. buying one and selling another.

and we have quality names that you like and the earnings were solid and then you see the inflated volatility in individual names where you can buy the stocks and sell options against that and simple strategy, buy right strategy, and capture that much more than you normally would. it is a great opportunity right now on quality stocks. >> still ahead, sunday night football kickoff ratings last night were up from last years 24 million viewers that tuned in. can sports save the cable industry. plus shares of gap were down 25% this year but there could be more pain ahead. we'll explain much more on "fast money" staraight ahead. you're a dog, right? i'm teaching watson to help you make healthy choices. i'm teaching watson to help design a vacation around your personality. don't judge. i'm teaching watson to answer endless questions. how big is infinity? where do babies come from? why can't i have chocolate for breakfast?

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more than 24 million viewers tuned in for last night's return to sunday night football on nbc. and as other people watched live sports, imagine advisors has more about the rise of the core cutting. mike vorhouse is with us with a first look at the results. great to have you with us. >> thanks, melissa. >> and cord cutting is a problem but court nevers seem like a

bigger problem at this point. >> well, yes, they both represent lost revenue. but the nevers are growing group and in many cases the key greep we expect to take on cable subscriptions during the household formation. so when you look at the people dropping and then the never-never, you have a large group of people not participating. >> so 3.7% of the total people who have the cord, so to speak, are cutting. that the bottom line? that doesn't seem like much. >> that is what the consumers told us. and they said they were extremely likely to cut the cord. so this doesn't include the people that said i'm likely to cut the cord. this is the fives on a five-point scale. and 3.7% is a pretty important number if you are trying to grow by 10% or 15% a year. that is another 3% or 4% that you have to pick up. and the small numbers add up to big dollars over time. >> what do you think are keeping

the -- or people have cutting the cord at this point? is this sports. since abc came out with the latest results, you saw -- or disney i should say, you saw sports wasn't the answer or keeping people in? >> well you kind of have a little bit of a competition between the young people wanting to cut the cord, and the sports people wanting to not cut the cord. and since a lot of the sports people are young they balance each other out. so sports still helps. it is an important dense for disney. but sports alone is not going to slow down the cord-cutting. >> when you look at the cord nevers, mike, do you think there will be a whole generation of people out there who will not know what pay tv is and therefore won't think about buying it. what does this mean for future generations here because once we see the shift, you see fewer people having ever paid for tv through traditional means? >> one of the nice things about the mass media world is not

everybody does everything. so i think we'll have an increasing number of never-nevers coming out of the younger generation but it won't be everybody. still plenty of people in the younger generation that have cable today and will continue to have cable into the future. this is not a cliff problem. this is more of a very slow drip, drip, drip problem. >> mike, great to speak with you. fascinating survey. mike borehouse joining us. so it is a drip, drip, drip problem, but the stocks, they got slammed it. wasn't a drip of a decline. >> no. and that makes for opportunity. and again you have to focus on the guys that have a lot of content within the cable mechanism. i think twx is the most interesting play because you have hbo and the turner element of this that i think is very undervalued. i like it. >> netflix, the move down on august 24th was concerned. but the subsequent move to 118 and this move to 95 is worse. kudos to tim who has been on this. i think there is tremendous value in netflix but the stock

is clearly telling you something over the last week and a half or so. disney, steve levels 96.5, 97 and stabilized there and trading at that level. >> and when you talk about the skinny bundle, disney will be part of it. and time warner will be part of the skinny bundle. to think it is all or nothing is a bad way to analyze it. they have great seats at the table. i personally own disney and i'm looking to the bounce back at $110 level. >> and i want to buy around $100. and i might use calls and options against this to get myself in the position because i'm not sure we get under $100 again or $96, i don't think that is in the cards. unless the market whooshes to the down side but then we'll see opportunities everywhere and i think it is oversold based on the cord cutting. >> coming up. a $2 million share in gap that is about to take a drive.

and the drone wars are taking off as a company is ra ramping up spending. that is coming up. you're watching cnbc, first in business worldwide.

the doan wars are taking off as another defense company is

ramping up spending. jane wells is in los angeles with the details. >> hey, melissa, what do you do when the pentagon said it will kill your drone program? you fight back. that is what lobbyist are for. two years ago they wanted to ground the northrop grumman program to save money. and thought it could do the same work with the lockheed martin u-2, six years old but reliable and mans. the global hawk is unmanned. and it can fly longer. so after pressure, northrop grumman got them to agree to test the sensors and cameras with other quick and that will begin shortly. and expanding the customer base to nasa, nato, south korea. what about commercial markets? well it is $130 million eric. it won't deliver packages for zaurn. so program head mick jaggers. we have we have a defense story involving u 2 and mic jaggers.

say for example, maybe replacing one pilot in the cockpit of a long haul cargo flight. >> long haul pacific fleets, no requirement to have a right seat. you could unman the right seat and beam that technology back to a geography unit and still allow the pilot to make the long hauls. so we can replace the first officer with a global hawk and still allow the prime pilot to be in the left seat. >> it is an interesting thought. there could still be two pilots but one is on the ground. but who knows. but the fact that global hawk has flown more hours this year than all of 2013 shows how hard northrup turned disaster into success. but it is about getting new customers outside of the pentagon. for exam pet today lockheed is announced it is selling missiles to the polish air force for half a billion dollars. back to you.

>> jane wells. thank you for that story. mic jaggers and u-2. >> you have to love that. >> defense. >> are we going to play a would you rather game because this is a perfect opportunity. >> or you don't. >> the stones for him. would you rather gain. that is obvious. lockheed martin or northrop grumman? >> i think it is more expensive, but i think it deserves the valuation. this stock continues to grow into the valuation. ridiculous backlog. marilyn houston, of -- stud of lmt, make me pick what you just did. >> same question to you. >> north rap has half of the market that lockheed does. i think it is more impact for northrup. it is up 14% against lockheed up 7% and there is probably a reason for that. a yield is better with lockheed.

>> all right. $2 million. that is how much one trader is betting that the gap could drop. >> 2 million shares. it was 18,000 of the october through-put that somebody put through after a successful bet on the september bet. in october 8th, they will release the next revenue and sales figures and this person is betting the stock could be down 5% or more by october expiration. >> mikeco in aust. options action, check it out on friday. and plus the traders tell you what they are watching tomorrow, right after the break. stay tuned. 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. it's more than tit's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions from a trusted it partner. including cloud and hosting services - all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next.

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>> and scarlet for the female. >> wow! >> they look like raccoons though, no. >> oh, man, pandas. >> rusty looks like a fox or a raccoon or a squirrel. >> all right. time for the final trade. tim. >> i'm looking at japan. the nick a was -- sneak was down. >> we talked about home builders and airlines. i'm focus on delta and american. united some day but not yet. >> 386. >> i haven't focused on a single stock for a while. but it is lululemon's time. it is good enough for a sell stov. >> and the lady in red, one of the classics. don't pretend you don't sing that song in the car. >> i don't know the song, my man. >> liar liar, pants on fire, and

jet blue, that is on the runway. st. louis. >> gitty up. i'll melissa lee. thanks for watching. see you tomorrow. don't go . . my mission is simple, to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere. i promise to help you find it. "mad money" starts right now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you money. my job is not just to int tab but educate and teach. call me or tweet mere @jimcramer. every night, i tell you what happened during the day, why it happened and what you can do wi t