hey, hey, at least the markets close and stocks don't go any lower. coming to you live from the nasdaq market site on expiration friday. the guys are getting ready behind me. while they're doing that, here's what's coming. >> there's no place like home. there's no place like home. >> that's because that's where some traders are placing big bets. and one name in particular could be setting up for a sweet trade. we'll explain. plus, three bank stocks are on the verge of forming a death cross. >> no! no! >> you know it be true, luke, and it could spell more trouble for stocks. we'll give you the names. and miss the rally in underarmour? >> we'll keep that to ourselves for now.

>> we've got a way to get long shares for less. we'll break it down. the action starts right now. okay, here's a question. if global growth is slowing, which sector will feel the most pain? let's get in the money and find out right now. what do you think? >> i think it's industrials for the most part for u.s. multinationals. we're going to talk about boeing, but boeing made a high back in january and it's been lower ever since. at one point it was up 22, now up 5% and up a whole heck of a lot from the lows last august. industrials to me is the sector you want to focus on. the fed said it out loud yesterday that they are worried about global growth, and it is actually, you know, causing them to actually think twice about how they're going to affect policy here. so to me that's the sector that you want to stick with. you want to sell rallies in industrials. >> it's interesting because i think in the past week or so, there was increasing optimism. general electric had the deal approved and then it got added to focredit suisse's focus list. we hadn't seen that in a long time. >> i would put boeing in a

different camp because a lot of growth we anticipated from the airline manufacturers wassing if to be coming in china which is an area where we know there's going to be problems. we were talking about 5,000 orders. with the nippon 747 cancellation, boeing has no net new orders for 2015. they're basically telling us. we don't need to wait and find out to figure out whether there is any growth there. they're telling us there isn't. >> in term of performance of individual securities here, more of it's driven by a sector issues than it is. so it's not just industrials. of course, it's materials. it's energy. it's anything that's signalable. you take a decision post-fed whether you want to favor growth or value, whether you want to go cyclical or defensive, industrials, energy and materials, i put them all in the same bucket. these are places to be avoid, to sell it if you have it, to short it if you don't. >> if the fed hiked interest rates and was dovish, would your views on industrials be

different? >> no, and the reason it wouldn't be different is because, again, i think the -- look, the fed is acting on the same cues we are. we're all looking at the same set of information. they're digesting it the same way we are. and basically what i would look at if i was looking at one of the growth stories in aerospace like boeing, i'd be looking for new orders. demand is telling you what you need to know. >> and there's two things and they're both obviously interrelated. the strength of the dollar is a big issue and then weakness in emerging markets. those are kind of related but two separate things for all intents and purposes. like mike said, with a company like boeing, 60 of sales come from overseas. 12% from china. growth is why you buy stocks like this into a cyclical upturn. in some ways the highs that we saw in boeing in january could have been the top of the cycle, in my opinion. >> right. so you're looking -- you're throwing out the t.o.d. once again. >> oh, listen, guys, the try-hill adept here, look at this chart in boeing. you had this high that we talked about earlier in the year, it's

been making a series of highs. it bounced off of 140 that was very big support. in late august it broke. now, it's come back, but where did it retest and fail yesterday? $140. i think this is a really good opportunity for a retest of those prior lows from last month. and i just want to make one other point. we have one other chart of option prices in boeing here on a short-dated basis. look at that. they obviously were up 100% into that august swoon. they've come all the way back down. they're actually relatively cheap. i'm looking to look out and identify the next catalyst which is going to be their q3 earnings. i expect a possible miss and a downgrade to forward guidance. so i want to target -- it's going to be i think october 23rd or 22nd. so i'm going to look out to october 30th weekly expiration. and today when the stock was $137, i could buy the october 30th weekly 135, 120 put spread for $3 and buy one of the october 30th, 135 puts at 380 and i'm telling one of the october 30th 120 puts at 80

cents. my max risk is at $3 between 132 and 135. i lose it all above that but i can make up between 132 and 120. >> this is trade that makes a lot of sense here because it's trading at less than 16 times, to your point, you might get guidance looking a little wea r weaker. it's tough with it trading cheaper. obviously it's been one of the better growers. so i think the best way is probably something like this. >> the setup is perfect. what makes an opportunity is a setup, right. so you have well-twined lows at a common level. 140. and a sharp break. 17%, in fact. 140 to 115. and what this is known as is a reaction move. meaning people react to the weakness by buying. people thought it was cheap. once a stock throws all the way back to the point at which it initially broke down, which you can see on the lines that dan drew, it is right back at the kill zone. you whack it again. it's a perfect entry point for a

short. >> you actually approve -- dan's triangle of death? >> i always say -- >> you can use that if you want. >> no. you can call it whatever you want because i don't call them anything. i think that is sort of just trying to get attention. but here's what it is. it's not about you. it's not about the triangles. here's what it is. here's what it is. it's an excellent setup. you have an excellent trade no matter what you want to call it. >> well, listen. and i'm just going to make -- we call a lot of chart formations names. they don't really mean anything. what's going on here is that these stocks are in big down trends. you toe, you guys all got very accustomed to buying tips. i think we're in a market where you sell these rallies. moving on. curiously enough, home builders were amongst the hardest hit this year, but our chart master says one home play could be a sweet way to make money. carter? >> it's home builders and things related to it but i'm going to pick a big name, home depot, obviously one of the largest stocks in the market.

as the technical expression goes, it acts well. in fact, it's been up eight out of the last ten months compared to the market. here are a few charts. so what i've got here first is just showing you the outperformance of home depot relative to the sector that it's in, consumer discretion, and in terms of the market. so you have equities as an asset class green line, consumer discretion, a subset of the green line outperforming equities. and you have home depot, of course, outperforming its own sector in the market. now, if you look at home depot, however, compared to yes, other areas of the market, home depot now is underperforming certain parts of home building and home construction, materials and other parts of the market. we think that's an opportunity. take a look at a few charts here. now, this is the inverse relationship between ten-year treasury yields and home depot. and the torque starts here when there was more and more and more easing. now, take a look here. this is exactly where qe3

started. and that's exactly when home depot really starts to explode. and what did we learn this week? the fed is stuck. whether they're trapped or they're afraid, they didn't do anything. and so stick with a winner like this. here's the chart. i think you can draw the trend line like that. and i think you can presume that this sideways action is the setup for another bounce off the line. home depot higher. buy it. >> mike, what's your take? >> you know, this is a situation -- i'm having a hard time picking stocks to really get long here. i have to say. and so my inclination -- even though options prices in this stock have fallen off a little bit as the stock has rebounded slightly off the volatility we saw earlier, my inclination is to try to make a bullish bet where i am excelled it's lower than where it is trading right now. for me that's got to be probably somewhere in the neighborhood of a 10% discount. and the nice thing is that the way options prices are setting up right now, kind of like dan was looking at last week in apple. this is one of those situations where you can buy an upside

call, try to sell some of the more overpriced options to the down side and then you obviously are going to mitigate that down side risk. and i'm simply looking at the november 105, 120 call spread. so with the stock trading around 115, it only has to get up about 5 bucks, but you're going to get about a 10% cushion to the down side. that total trade is going to cost you about 90 cents, which is less than 1% of the current stock price. you also notice i'm going out to november, i'm giving myself a little bit of time for this trade to play out. but i don't want to carry it all the way into december because frankly, if another shoe is going to drop and we get flipped around as far as the fed is concerned, that's probably when we'll see it. >> do you like this trade? do you like this stock? i feel like you wouldn't. >> here's the thing. carter and mike have been all over the itb and hxb and the strength has been amazing and they focused on one of the parts of the u.s. economy that is doing very well. you know, it obviously doesn't have all that exposure that's spooking the rest of the planet here. listen, the way that stock dropped in late august, 20% in a

day, i don't know how much time it spent below 105. that's scary business. the fact that mike is selling a 105 put out in november, it's going to catch their next earnings event. i think the only real risk to put the stock there is if the market crashes. to be very honest with you. so in some ways, home depot will be the last battle fought, in my belief, but, you know, you're actually getting paid for the risk of buying that upside call here. i think if you want to put money to work in the u.s., you want to stay domestically focused, home depot is obviously the name and i like the trade structure. >> just to sort of extrapolate this whole home depot theme, you also like the home builders still? >> fantastic. still one of the -- after, frankly, internet retailing, amazon, netflix, it's the best performing area of the market this year. it's construction, materials, building products, yeah. and if the rate environment's going to stay benign, the home builders don't care about putin and china, they're just going to build. >> this trade structure also importantly takes you right back to a level where we began the year. so if you missed that rally,

this is a situation where the worst thing that happens is if you bought it in january. >> send us a tweet. to @optionsaction. if it doesn't contain the word "your" and "mama" in the sentence, we might read it later in the show. run, do not walk to optionsaction.cnbc.com. here's what's coming up next. >> ah! >> yeah, that pretty much sums up the banks and it's about to get much worse. we'll tell you why. and how would you like to get paid to buy shares of underarmour? >> i like it a lot. >> well, we have a way, and we'll explain how when "options action" returns. 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.

here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or 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. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. welcome back. welcome back. a lot of traders focusing on the financials. there's a good reason during that market malaise, we've seen momentum, sentiment, down trends. chart watchers are watching a couple patterns develop here in the financials. first of all, check out morgan stanley shares, right? if you take a look at the stock, all of a sudden on this side of the screen here, can you see these shorter-term average price of the stock dropping below the longer-term average price. something some traders and technicians call a death cross. could it be a signal that momentum is shifting? morgan stanley is already hitting that. check out a couple other big names getting close to that

momentum indicator turning to the down side. goldman sachs, you can see here, those trend lines are starting to converge. perhaps we'll see maybe negative sign there. and then on the other side of the banking spectrum, wells fargo, huge bank, doesn't do a lot of securities but does a lot of lending. those shares as well seeing those downside perhaps momentum indicators show up here as well. so if you check out morgan stanley already in the death cross, goldman sachs, wells fargo getting close to there, financials very much a focus. back over to you, melissa. >> thanks so much, dom chu. just a couple weeks ago, here's what cohen harter said about the banks. >> if we were just to go back to this trend line h this implies another 12% to 15%. >> i think you look to the november 24-22 spread in the xlf. >> and of course, as you know, since the time of that trade, it's only gotten worse for the financials. carter, what do you make of these death crosses? >> yeah. we want to start with that first or -- >> whatever you want. whatever you want. >> if you think about it, that's

fancy language, too, and nothing to say about what dom said, but in order for -- to reach the point where shorter-term average has crossed a longer-term average, by definition, you've made no upward progress in at least four or five months. so the moment at which the one crosses the other, you're already four or five months into the circumstance. so it's not in and of itself a big deal. but what is a big deal, of course, is the massive deterioration in financials generally and then specifically over the last several sessions and then post-debt. this is a very bad place to be, and there's every indication it's going to get worse. >> look, i mean, there's no circumstance basically where you start to see asset prices falling and that's good for financials particularly financials like morgan stanley which has moved increasingly to asset management. the other is this is a crowded trade. what were the favorite places for institutions to be coming into this time of year, they were long financials and long airlines. would you really want to be long those if you start seeing volatility? not a chance. >> especially when you're not seeing a rise in rates.

>> exactly. that was just in the argument. the whole keystone's falling out of it. banks weren't the only winner here. here's what dan said last week about the utilities. >> i think this is a good shot to take a shot for a retest or at least a retracement of 50% of that 10% move that we've seen over the last month. today when the xlu was 41.40, i looked out to october expiration. you could buy the october 4-44 call spread, paying 50 crepts. >> that was a popular trade. are you sticking with it? >> i am. i saw very few reasons why stocks in the u.s. should have rallied no matter what the fed did. i saw a lot of reason why xlu should have shown relative strength and it did. here's one that's working versus the market. it's oversold and i see a lot of reasons based on what the fed said, why you want to stick with a high-yielding sector domestically focused like utilities. >> carter? >> so this is, to some extent the reciprocal obviously of the

banks and very much related to rates. let's just say this. in the event that this is all going to sort of unravel to the point where we do not only go below the august 24th lows but we start to approach the lows, everything is going down. it's a question of what's going to hold up better. i would argue one of two things. things that are somewhat defensive for a reason like utilities or things, frankly, like netflix and amazon and starbucks that are basically sort of their own things that are going to likely come down at a less severe rate. >> do you think we're going to test the ebola levels? what's the number on that? >> that low is the 15th of october, 2014, it is 18, 20 and change and i think that's almost a foregone conclusion. coming up next, one of the nba's biggest stars just signed a mega deal with underarmour which has soared 50% this year. we'll tell you how to get in the game for less. more "options actions" right after this. 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.

here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or 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. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. it's all about being a part of the brand, partnership and taking it to new heights. the first years i've been with them, we've done a lot.

so we're just getting started. and i'm excited to be, you know, long term. >> that was nba all-star steph curry earlier this week on "fast money" talking about his monster deal with underarmour which extends now through 2024. underarmour stock is up 50% this year. dan's over at the smart board with a way to play it for less. dan. >> i got this question a lot this week because this is one of the first stocks in the entire market that actually not only made back the losses from last august but also made a new all-time high. so what did steph curry just say? he said a long-term deal. the company also gave long-term revenue guidance that the street was really excited about, investors were, and it made, like i said, that new all-time high. when you look at the chart right here, you had this breakout in earnings a couple months ago above $90. that is the line right here. it broke out and made a new high. listen, people, i don't chase runaway breakouts in a market like this. i know carter was just talking about other growth stocks in amazon and netflix, that sort of thing. and they may be safe havens but

it's not my bag. and let's focus on how we can use options if you are inclined to get some skin in the game in underarmour. $90 is that big level. that was the breakout level. i think that's a level that maybe you'd want to put a limit order on the down side if we were to see more downward volatility. this is implied volatility in underarmour options, the price of options. now, obviously they shot up when the stock got hit in late august. they've come in but still elevated. i think that's giving traders who are patient an opportunity to put in a limited order. if i want to focus on that 90 level, i want to look out to october 30th weekly expiration. that's going to catch their next earnings announcement. and i want to look to the october 30th weekly 92.5 puts. today when the stock was 103.50, you could have sold for those $2 here. 92.5 strike put selling them for $2. your worst-case scenario if the stock is below 92.50 on october 30th expiration, essentially at 90.5. that's a long ways away, people.

and i just want to make one other point here. okay. so if you're nervous about the market, that's what options prices are telling you right now, okay. those options only have about a 25% chance of being in the money. but the elevated premium is actually compensating you a little bit for taking that risk. so here's the thing. why are we choosing october 30th expiration? we're targeting a catalyst. why am i choosing the 92.5 strike? i'm going to worst-case scenario got the stock back very close to that long-term support. and then why am i selling puts? because the price of options are elevated. >> nike reports earnings this week. there's one critical difference between these two companies. that is nike is multinational and underarmour is primarily domestic when it comes to revenue source. >> that's definitely a potential strength there. they are still absolutely in an aggressive growth phase. we're talking about years of double-digit top-line growth which you're not going to get from nike even though you do have fairly solid eps growth there. i think you're right to look at selling a put that's well out of the money, though. this is a fairly rich stock.

it's trading at about 100 times trailing 12-month earnings. that said, you know, i take a look at the pictures from my kids' school yearbooks and what does everybody want to wear? it's all underarmour. they insist on it. and so i expect this growth to continue. and so if you're going to make a bullish bet, it's going to have to be in a growth spot. you want it to be domestic. >> carter? >> what's interesting, it's a good chart, of course, that's going up. but what's important is what dan is doing, think about it. the strength off the august low in underarmour is the exact same percentage as the strength that we saw in that ricochet in boeing. but in one instance, he's taking advantage of strength to favor on the other which is good technique. meaning if you have a broken stock, you want to sell that strength. you have a strong stock that's getting stronger, you want to stay with that strength. >> okay. coming up next, the final call. 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.

here at td ameritrade, they work wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or 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. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

wante we want to welcome a new addition to the family. alexander stutland was born this morning at 8:23 a.m. to our friend ryan sutland and his wife, danielle. mom and baby are both doing great. what a cute little guy there. let's get to a tweet. this one is from in the money. should i sell a put to finance the long call on tesla? mike. >> sure, no problem, but use out of the money probably 235 strike to look at the 275s would be a good trade. >> very clever twitter handle. time now for the final call. carter. >> home depot on the long side. i think it will do you well. if everything goes down, it will go down less. that's our bet. >> mike. >> sell the 2015 puts to buy the 120 calls in home depot. >> he said the word. skew. but here's the deal. so i think carter said it really well. i think industrials set up as a great reshort here, boeing's the one i want to do. i want to do it with defined risk looking out to late

october. >> our time has expired. i'm melissa lee. check out the website, optio optionsaction.cnbc.com. don't go anywhere. a very special edition of "mad money." jim's got the ceo of netflix coming up next. >> announcer: the following is a paid presentation for derm exclusive instant anti-aging, brought to you by beachbody. >> hi, everybody. i'm deborah norville. and i've got breaking news from the world of skincare. this time, there's a celebrity twist. keep watching. you are not gonna want to miss this. [ cheers and applause ] >> announcer: if you don't like the face staring back at you in the mirror... >> my skin was sagging. really heavy bags under my eyes. >> announcer: ...if age, sun, stress, and life have robbed you of smooth, young-looking skin... >> i don't want to go and get injections, but i thought that was the only choice i had. >> announcer: ...now there's a doctor-approved way to look up