hey there, we're live from the nasdaq marketsite in time square. crazy day for stocks. guys behind me are going to try to make sense of it all. but first, here is what is coming up. well, it might be time to go back, because casino stocks hit the jackpot today. we have a trade that could beat the house. we'll explain. plus, bullion breakout. not the little cubes you put in hot water, talking about the gold bars you put in the bank. because gold is setting up for a generational trade. we'll break it down. and how would you like to buy home depot for just a buck?

"options action" begins right now. >> what the heck happened today. mike, turn to you first? >> you know, very few drug addicts give it up voluntarily. right? so, when someone says you don't have to give it up this week, they celebrate, and i think that is what we're seeing. if you are looking at the market right now, it looks a little bit nuts and i think it is. i don't know if there is more i can say than that. >> so bad jobs means the fed is on hold for longer, so therefore the drugs will be -- >> q3, 4, 5, 6, eternity maybe. sure, why not. i mean, we're going to continue to throw liquidity at the problem. and if take a look at which areas did well and didn't do so hot, that is exactly what you're seeing. because here the market really rallied and the area that was doing well on the back of the notion that rates would rise, financials, didn't do as well as everything else. so, while i'm taking a look at

that, that is the only interpretation we have. >> and what does that reversal look like to you? >> they are not mild. i guess the issue is d anything really happen? on the week, the market was up 1% despite the volatility, fairly benign. but what we know is that there was still net damage done. it was undercut and the health care sector undercut its 24th low and the index and so forth and so on. so it is not a particularly good thing that you rebound. you want to get this out of the way. you want to go down and really have some pain. the fact that we keep bouncing back, i think that's the problem. >> yeah, and i would just add that what have we seen. the market feels like it has gotten its footing back and sentiment appears to be better, but i think it's important to talk about the damage done and some of the biggest market leaders. you just talked about bank stocks. most of the bank stocks just the other day broke the lows from

august 24th. that sort of damage and the stuff in the biotechs over the last week and a half, i don't think you can have reversals off of that sort of damage. to me, we were talking about it before. i think on this desk we've been talking about it for weeks now. that you want to be a bit more defensive and be out of high valuation and high growth. you have a great call, sticking with these fang stocks, the things that everybody is crowded with, the amazon, netflix and facebook, and they are. that is the last battle fought in a way. but to me, if you take those out there is a lot of bad stocks. >> there were a lot coming off the bottom, it's the casinos, the energy stocks. >> it is just junk bounce. >> and dan you are looking at? >> at consumer standard & poor's and the s&p is the xlp. and one thing that is interesting, i think we have a one-year chart here. it was trading well for the better part of the year. but right now it is only 6% off of the all-time highs it made

earlier in the year and it's showing very good relative strength, the s&p. the s&p 500 is down about 5% and this is down maybe 50 bips. or something like that. so, i'm of the belief they'll get to the high-growth stocks. i don't think you want to be there. because i believe we'll break the august lows at some point. i don't think what happened today is healthy and i think you want to move to defensive sort of stocks. a lot of staples have been hit hard. proctor and gamble is down 20% on the year. and so i think some of that may be discounted. so, today, this is really simple. and i want to make one more point we're the options show here. volatility is low relative to the other sector etfs. so today, i looked out to november, and when the stock was 47.45, you could buy the november '47 call for $1.45. that is 2% of the underlying stock price for all intents and purposes and your break even is 48.45. and i think a stock like this or

an etf like this could make a move back to the prior highs if the market goes higher or if the market stays around and stays volatile. i think there is a lot of scenario this trade wins. the options are not expense in a hi high-volume environment and i think you have a low risk here. >> i agree that the options are cheap but i don't know that the stocks are particularly cheap. the only thing that you pointed out that could potentially support them is that this is potentially going to help weaken the dollar which is big for multinationalities but the palmolive and tobacco and stocks that have declining revenues and eps and still trading at 22 times earnings, that doesn't seem particularly cheap. i think using these calls, which are cheap, would be the only way to do it. >> and last week you were

looking at al2shgs eria. >> and taking to have your cake and eat it too. on a four month basis, staples have outperformed the basis point. but if you look at the relative down trend line, they are just making relative highs above the downgrade. it is important. i would concur here. >> you love it? >> how about that? >> concurring for him is love. let's move on to the red hot commodity which is gold. the metal enjoying the best day in more than a month, but gold bucks may still be breaking hearts. jackie has that story. >> that is exactly right, melissa. we did see a $23 pop in gold prices today after that disappointing jobs number. gold trader logic is that we probably won't get the fed rate hike this year. that is good for gold prices. having said that, it was about a 2% move on the day. we were watching on august 20th and that was a 2.25 move. but it was the first positive

day we saw for gold in six. and that is a good sign. and for the week, it was down 1% and for the month it is down near 4%. having said that, if gold finishes 2015 down, it will be the third straight year it is seeing losses. we haven't seen a record like that since 1997. last point to make sheer, the trading range of 1100 to 1150, people i speak to say we could test the 1150 resistance but they don't think there is enough momentum to break out, so they are looking to trade the short-term moves in either direction. back to you. >> jackie, thank you. so which way will gold break? we turn to the chartmaster? you have a trade. >> it is a long downtrend but it looks as though it is coming to an end but let's try to figure it out together. so gold, this is a disaster. i mean, if you were to define a downtrend and move to the top left to the bottom right, but if you were to draw a line basically along the peaks, at or near the highs of 2011, we flirted with this line three or

four times now and we basically closed on it. so any kind of strength will do one thing. it will move us above the downtrend line for about three years. but i want to point out where this is happening on the long-term chart. so here is our long-term chart. and this is very important. the low of 257, the high of 1920 and the midpoint for 50% retracement, yes, is exactly where we are now, on this line. and so, if this is going to stabilize here and it looks that way, we closed -- obviously that is the absolute low. we closed higher. we're at 1136 now. if this in fact serves its purpose and we do in fact start to move above the downtrend line, that is not random. it is moving above a three-year line just as it reaches the 50% retracement level. so let's talk about goldminers. now, gold is only half-way back from the low. goldminers are all the way back.

in fact, this is the index out of the philadelphia stock exchange, we're at the all-time lows. so put them together, still gold, a 50% retracement, goldminers at an all-time low and we play off the all-time low and make a bet. so here is our etf, gtx, it is liquid, you can trade it. it closed at 4 and change. just to get to the downtrend line. yes, this downtrend daily would take us above the weekly down trend line to above 17. take a shot here. >> so you are trading in the gdx, mike, what is your trade? >> i'm taking a look. this is often a place where i said i'm not a gold bug but these are at the lower end of the range. the thing is that i wouldn't want to reach out and buy the stocks so you have to use options. so, unlike the xlp options dan was talking about are not cheap because the sector is volatile. what you need to do is use a

spread. i'm looking out to december. the 14.5, 17% call spread, spend just $0.75 for that. and the put spreads are much more expensive than the call spreads in gdx right now. additional indication there might be some washout there in the sector. >> i think that is the way to play it. if you go and look at the gdx chart, there has been a 20% rally from the trough. and these guys are not being particularly greedy. they are looking back to the downtrend. if they got there, carter and mike would say this is a great spot to probably lay it out on the short side. so to me i like these sort of defined risk plays, especially when you see squeezy action in sectors that are -- where the sentiment is just horrible. >> carter? >> i think it is an asymmetrical bet. if you get it wrong, obviously you cut your losses. that is what you do with all of wrong bets. but if you get it right, you might get what dan is talking

about, another one of these big counter turn around and make your 15 or 20% and get out. >> got a question send a tweet to options action. and if it is civil, we might read it on air. and we have the hottest options news and videos throughout the week and exclusive trades so check it out. here is what is coming up next. how would you like to protect your apple stock for next to nothing? we'll show you how. plus -- because something just happened in china that put casino investors hitting the jackpot and we'll tell you what that is when "options action" returns. here at td ameritrade, they work hard. 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. suffering from ringing in their ears, there's no such thing as quiet time. but you can quiet the ringing with lipo-flavonoid, the number-one doctor-recommended brand. relieve the ringing with lipo-flavonoid.

ahh... steve, other than making me move stuff, ces. 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. welcome back to "options action." macau casino and sands, wynn, las vegas all seeing massive gains on reports china may move to support the city's economy. jane wells is live in l.a. with that story. jane? >> melissa, same day we got the numbers for september on macau, they were terrible. but yes, the government is going to help? how? we don't know. but it was going to make everybody happy in the stock market. wynn resorts, fell 33% from a year ago to $2.2 billion, that is 16 straight months of decline. that is the lowest take in five years. the good news, the month-to-month declines are slowing and credit suisse said

momentum was picking up by the end of september. and mgm ceo said he expects comps to start returning this month and macau will bottom by the ends of the year and turn positive in 2016. morningstar agrees, a good sign. today the central government said china will introduce policies to help stabilize macau's economy. this is fresh off president xi jinping's visit to the white house where jim muren pled his case in person. and not know whether that will setoff the corruption of money laundering and limits on how much cash chinese citizens can withdraw when they're in macau. morningstar believes there will be a 20% drop in gaming revenues year-over-year. and that is still better than 33% drop in september. >> jane, thank you. so as jane aptly points out, the government promises but that seems flimsy, mike.

>> well, that's exactly the issue. are they going to allow more money laundering and corruption? it seems we need to have government officials taking their ill-gotten gains to macau. that is ridiculous. i don't see how they will fix this. but one thing i will say is that we should take a look at revenues and as a percentage of gdp we should probably see comparable to what we are here and that could mean stabilization. >> it almost doesn't pass laugh test. it bounces 22%. percentages don't mean anything when the stock is in some sort of violent decline like this. something is wrong. and imagine washington is going to step in to help vegas? it is a joke. >> that is tone deaf. >> but it speaks to --

so what i found fascinating is -- i remember jane's report and the news was out that she was saying that the chinese officials were going to do this and the stock went down yesterday in wynn. and what happened today? a lot of weirdness. in our markets on a night when shanghai was closed we saw a lot of chinese adrs go ballistic. and as a trader you want to find similar situations and other stocks that have very poor sentiment where people have thrown them out and they go down every way. a couple ones, let's say cat tractor, caterpillar would be one. or joy global, they are tied, i think, to emerging markets. and if you look at the charts, it is just bad news after bad news. so could these sort of stocks -- i'm not saying 22% in a day but at some point, when you have a sentiment turn, it can turn fast and that is the point i would take away. >> but there is no chinese government sort of force to step in and say for cat or joy we're going to help this industry and -- >> but if they support the core economy which has been principally things like the real

estate boom which hasn't been filling the housing but building. that's essentially what propelled the commodity markets for the past decade. and if you get stabilization there, then some of the stocks have fallen sharply. but at the end of the day you need to see these companies and the mining companies that they have to get to a sustainable level. they can't be propelled off of artificial growth, which is what happened in cat in particular. >> what does cat look like? >> down and to the right. i don't know. just try not to buy stocks in downtrends. or if you are trying to do that with gold. maybe they are trying to break the downtrend. these are still in violent downtrends. >> so don't touch? >> i wouldn't. >> it was a sour week for apple but we found way to save you money and we'll explain when "options action" returns. here at td ameritrade, they work hard. 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. 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. welcome back to "options action." two stocks, two winners. time for the upside call, where we take a look back on winning trades to see if we could make more money.

first up, apple. here is what dan said last week. >> if you share the view that i do that the stock is dead money but you are worried about a sharp selloff, do something called collaring your stock. if you own 100 shares of apple and it closed out at 115 today. you could sell at the 130 call at $1.50 and you can buy one of the december 1 puts at $2.50. that structure cost you $1. >> well, good thing he bought protection because shares are lower by 3.5%. so, how are you managing this trade? >> i'm of the mindset that apple will be in a range. i don't believe it will be north of 130 between now and december expiration. so match that when it is offered at 30 or $0.40 over the last month but you want to focus on that put and that put increased by a dollar over the course of the week. and the stock was down a few bucks and the put -- the december 100 put was up a dollar. so at some point you may want to look to sell a lower strike put

and create a put spread. the structure cost you a $1. if you could sell the december '90 put went out at $1.50 bid then you have the structure for a credit. that is how i would manage the trade. you want to hold on to your stock, you still love apple but we're uses options tra teenically here. >> how does apple look? >> this is a transition from bull to bear. the break out at the high, i did the opposite and backed away. i'm fairly confident, if equities continue to deteriorate, this will change. >> next up, home depot. take a listen. >> this sideways action is a setup for another bounce off the line. home depot, higher. buy it. >> i'm simply looking at november 105, 120 call spread. with the stock trading around 115, it only has to go up five

bucks for you to start participating in the upside and that total trade will cost you about 90 cents. >> so we start with carter. do you still like this name? >> nothing has happened. we're still sideways. so the objective is a breakout. we haven't seen that so stay with the trade. >> i would certainly stay long. but i think one thing you can consider is adjusting the strikes. we are marginally higher right now and there are a little bit of profits. >> what do you think of the home builders in general? >> i thought they were selling off over the past couple weeks. and thinking about a rate increase and didn't catch much of a bid today with the rates lower. home depot, to these guys' point, the chart looks amazing and has been in a nice space. so could it have a nike move if they would put up an upside, no doubt about it because it is basing. i'm not sure the trading for housing up here in the u.s. has a whole lot of legs. >> coming up next, the final call. here at td ameritrade, they work hard.

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. suffering from ringing in their ears, there's no such thing as quiet time. but you can quiet the ringing with lipo-flavonoid, the number-one doctor-recommended brand. relieve the ringing with lipo-flavonoid. 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.

time for a tweet. thomas asks, assuming a price near 60 for steva, do i buy, right with december '60 calls. >> yes, i like that trade. the volatility is above and the stock has bounced off the bottom but nowhere near its highs so i think that is a good trade. >> okay, have you looked at the teva chart lately? >> no. it was doing quite well. it's collapsed. there is so much vol here. this thing has no direction. i would say try something else. >> well, this is the thing. a buy right is a situation where you are basically looking for it to bounce around. that is when you'll get paid on the trade and that is the trade we're making. >> next tweet. scott asks are you buying long

dates spy puts as a way to hedge in case of coming earnings disaster, dan? >> i wouldn't look to buy long if i was looking at the near term. edx is high right now it. it doesn't look high when you're looking at amazon, implied vol, but it is really high so it is hard to make money directionally here so i think if you are looking to protect your portfolio in the near term, you may want to look to do spreads. buy one put and sell another downside put. >> that is true. what is happening is all of this has initiated panic and people bid up because they raced out and bought the puts and that is the reason the price is as high as it is. >> and time for the final call. carter braxton worth. >> you like gold, gld, take a shot here. >> mike kuo. >> you want to do options and i like spreads. >> dan nathan. >> i like defensive stock stach ls here. and xlp calls into note.

8 clk monday morning. ben bernanke on "squawk box." you have don't want to miss that. and it looks like our time has expired. i'm melissa lee. check out the website, "options action" at cnbc.com. see you next friday at 5:00 for "fast money" and at 5:30 for "options action." >> 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 to 10 years younger in just