direction a little bit. >> exactly. thank you for joining us. thank you both so much. that does it for us here on "closing bell" today. closing things out before that big fed rate hike that is still expected tomorrow. "fast money" is coming up in just a few seconds. melissa lee, we'll hand it right over to you guys. >> thanks so much, kelly. "fast money" starts right now. traders on the desk are tim seymour, dan nathan, karen, and guy adami. we will hear from the man who has predicted some of the biggest market moves of our time, from the flash crash this summer to the massive october rally. jp morgan has had a quantitative strategy. joins "fast money" for his first tv interview in years. plus, finding danger in the herd mentality, and if yellen is about to send investors heading for the hills. it could be one of the biggest beneficiaries from the force. will "star wars" send imax rocketing higher? how is the company gearing up

for the biggest movie release in years? the ceo of imax joins us live. but first, we are now just hours away from the biggest fed decision in nearly a deck indicate. the dow closing higher by 156 points. oil higher by more than 2%. first, what happens at 2:00 p.m. when the decision crosses tomorrow, and two, what are you trading? we're going to start with the consensus here. the fed raises 25 basis points. and we get a dovish statement. what happens to the markets? >> i think the market rips from here. i think you're going to probably go sideways into this announcement. i think the knee jerk is up 20 to 25 in the s&p. people digest it. and then we close. if you had to script it, i think you'll get exactly what you just said. i think you see a rally at 215. >> dovish hike.

why is the s&p not ripped today? why has it been in the funk that it's been in? look at the two-year note. as hot as we've had. why is the market going to say everything is good to go when it's had that information for the last two weeks? >> does it feel like a sell? given the very context of a run-up today, does it feel like a sell event tomorrow? >> i think today's price action is probably the worst possible thing. if you were trying to be constructive. let's remember where they are as far as the range of the s&p 500. 21 hundred has been massive. i think they start to lighten up a little bit. i suspect with the s&p down about 75 basis points on the year, that we're up or down 2% from here. probably a 5% selloff at some point from a high in january to

february. and that has to do with global growth concerns as it has the last two years. >> i think it's going to be important what the data is. there's a lot of economic data coming out tomorrow morning. if that is showing some strength in the economy, then i think with the fed raise, which seems the more likely outcome tomorrow, then i think people will think that the economy is doing fine. we can certainly withstand a quarter point raise. >> off to the races in what sectors? the financials, which was ripped in today's session? >> i think the financials is where they'll first take it. the economy is fine. not according to aa and other manufacturers. you have one economy that is seemingly doing well. then you have this other economy the u.s. founded on. it's absolutely floundering. ans i think they're going to take the banks up again. big move today.

i'm still sort of in dan's camp. i think we end the year on the s&p 30 points lower, about the 2020 level. >> what happens with trade like emerging markets to the u.s. dollar? >> i think emerging markets are going to continue to struggle. big reversal on the dollar. what does this mean for e.m.? major, major kind of pullback, or in other words strengthening. but pullback in the numerical. so the mexican peso, for example, which to me is way oversold. but currencies will struggle with a strong dollar. having said that, unlike other asset classes and sectors in the equity market has not necessarily gone through this whole period. capital flows i think in many ways have already happened. i think the currencies have adjusted. >> what happened to fang today? facebook, amazon, netflix. >> for the last few weeks, we've been hearing a lot about selling. that put pressure on the market last week. and then we saw -- conversely, we saw strength.

it underperformed today. i suspect it has a very tough first quarter next year. i think when you see stocks like amazon, facebook, that have gained $200 billion in market cap in a year without this real commensurate kind of increase in sales in earnings, i think they're very crowded trades and i think they have a tough time. my playbook here, i think you go u.s. domestic here. i think you want to avoid that dollar strength. this is in the new year. >> small caps? >> utilities. i think you want to avoid small caps altogether. utilities and telecomms. >> bank of america merrill lynch had a note that cash rate companies will be rerated in a coming year in a rising rate environment. but there's going to be a higher premium that these stocks will deserve because they have so much cash on the balance sheet. and i have to take a look at an apple, for instance, which hasn't gotten that premium at all this year basically. >> i don't think i really agree

with that actually. the cash currently earns .008 and it will earn something really small still. i think it's important that the company do something with the cash. so google would be the prime example, whether or not they earn this much or a little more, i'd like to see capital allocation that's a little more aggressive. >> now let's get to a cnbc exclusive, a man whose research moves the markets. he accurately proved the flash crash in the october rally. joining us for his first tv interview, the jp morgan global head of quantitative research. great to have you with us. >> thank you for having me. >> it's interesting in your note. we're trying to decipher what the market is going to do for perhaps the most telegraphed rate move in history. and you write that the fed promises gradual pace of tightening, but the market response doesn't necessarily have to be gradual. what do you mean by that? >> that means basically if you raise the rates a number of times, let's say next year, basically the response of a system like markets, which is a

very complex system does not have to be gradual. so think of it as water turning into ice when you gradually decrease the temperature below freezing point. so complex systems do not have to respond gradually. you could have sort of a big risk off event if the pace of the hike is too fast. or frankly, their message is too hawkish, or may see tomorrow potentially market could adversely react and have an abrupt reaction like in august. >> i asked what the fed would do if it raised and basically market consensus. do you think we get some sort of outsized market reaction to that? >> i think that's the most likely outcome wi. i agree with that. i think the market reaction would be basically equities going higher. perhaps dollar going lower. option markets are basically

implying what the move is going to be. they don't tell you it's going to go up and down. it implies about 2%. 2.2% for gold. 1.5% for euro. these are relatively high moves. i wouldn't call them huge moves. >> it sounds like you think there are certain market conditions that may exacerbate the sorts of moves, the lack of market depth, for instance. can you explain why this will happen, and does that make the move less important? more important? >> i think market depth is quite a bit of a problem. the last few years, we have seen declining market. there's still debate what's

causing it. is it capital requirements? high frequency trading? or less of a risk taking sort of capacity in the system. but we do see that decline in the market. so basically what happens if you have a big shock to the system, the system cannot absorb the shock. we saw it on monday, august 24th, basically some of the systematic strategies came to selleck wity. we think in 20 16 we'll see higher liquidity. >> do you think it's going to be the next year of reversion? as a context or recipe for increased volatility, deeper market moves, and also the impact of strategies like risk parity in the market. it seems like it could spell disaster, when you're talking

about moving into unloved trades. >> gold has been bad. emerging markets have been bad for many years. people have been expecting this mean reversion for a long time. >> if you look at the positions in fuch , i think they look long u.s. dollar, short euro. so basically this momentum trade is a consensus trade for a number of years. and it's been working for a number of years. but if you look at the actually -- the current spread of momentum asset and value asset, it's actually at record levels. so the valuations is priced very high. positioning is very stretched. we are three or four years into this type of momentous rally. you find that these things do run out of steam after three, four years. and you find the reverse eventually happens. so we think it will happen.

questions obviously what are the catalysts. there are a number of possible catalysts. it's impossible to predict which one is going to trigger it. first you have seasonality. beaten down assets tend to outperform. then, what we may see tomorrow, we may see that actually on a margin, the fed becomes slightly more dovish than ecb. slightly more hawkish, like we've seen on december 3rd. you could have a dollar causing that. you mention inflation. you could see some up tick in inflation. can come from commodities. so sort of a few potential catalysts. it's hard to pinpoint it. but we think that sort of in 2016, we'll see start of this reversion. >> so we have the start of this reversion. we have a lack of market depth. we've got the strategies. it's defending risk parity strategies last week. saying they're fine, they're fine, they're fine. i'm just wondering if you think we could be poised for a market event like we saw in august.

>> the reasons are lower liquidity. you have systematic strategies that are trading momentum. beat volatility targets, ctas, risk parity. those are players that do actually chase momentum. and when they start basically trading in a poor market, which has a poor liquidity that can cause these moves. generally when you have high rates, you have liquidity issues. so i think that's why large moves are more likely this year. >> we hope you'll come back to "fast money" soon. >> thank you very much. >> let's trade this. >> volatility will be the word

of 2016. it might start tomorrow. which i happen to agree with. if you look today, given the size of the rally in the market, the vix didn't sell off as much as one would have thought we would have seen given what the levels have been over the last 18 months or so. so i agree with him. i think volatility will be the buzz word. i do think we can make a high for the rest of the year sometime in the afternoon tomorrow. >> i think the hawkish or dovish is actually more important than the raise. i wonder if the fed seeing what's happening in the credit space would not be hawkish. even if they were inclined to be. because there's so much volatility there already, that to be turning up the heat quickly could create some problems in the capital markets. >> that's interesting. if they mentioned what's going on in the credit markets, i think that could spell trouble. wouldn't that freak people out? >> the interesting thing is the irony in september they couldn't go and they mentioned global conditions. much worse conditions. we have year end liquidity issues. i would argue that this is a much worse time to hike. i think they're going to hike.

but to tap on to what marco was saying, what he's saying is the most oversold asset classes are the ones that are going to do the best in 2016. all you need to do is have a move from terrible to just bad. you don't need things to go good. i think in the case of emerging markets, i've said for a few months and it's been wrong, but as soon as the fed starts hiking, these currencies will start getting it underneath them. i think that's something to think about. i think they will rally. >> we're talking about equity volatility. all around the world, we've seen massive volatility and almost every other risk asset. if he's talk about oversold stuff, that has to mean that equities come back here a little bit. there's been a lot of compari n comparisons to 2011 and the s&p 500. i actually would go back to 2007, when you think about it, we've traded in a fairly narrow range. both years, we had really sharp selloffs in august. we came back and closed at about the midpoint of the range. we are at the midpoint of the range right now. so when you think about the underpinnings of the volatility in the last few weeks, it's coming from places where people

think there's potential contagion, and if we do have that and that comes into q1, equities are going lower. >> be sure to tune in tomorrow to "power lunch" at 2:00 p.m. eastern time sharp for the fed's decision on interest rate where is they raise. the announcement and full analysis tomorrow on "power lunch." coming up next, soaring on a new deal with walgreens. it's what the ceo had to say today that was the talk of the street. plus, some of the most crowded trades in the market could become some of the most dangerous. how can you protect yourself? we've got the details. and later, stocks may be soaring ahead of the fed, but one well-known name sat out this rally. that would be apple. and it's nearing bear market territory. a look at how much worse the selling could get when "fast money" returns.

valeant jumping more than 15% today. that kicks off our top trade. ceo michael pearson spoke about the new deal and how it would replace its partnership. >> we entered it quickly because, two things. one is if they were true, it's a

real, real problem. second, given the investor reaction, we just wanted to separate and move to a new solution. this morning we announced our new solution. >> we should note that shares are down about 50%. so dan, what did you think? >> that quote is amazing. it wasn't just investor reaction. investor reaction is what sent the stock down 70%. i read that or i saw that interview and i thought a lot of it sounded pretty disingenuous. but i'm not involved with the name and i wouldn't touch it with a ten-foot pole. >> well, i touched it with some controlled risk on the downside. i'm not sure how long my pole is, but i put myself at 100. people are looking for a path forward to this company in terms of their game plan and pharma and distribution.

walgreens is a major credibility boost for a company that needed it. that was really the whole story for me. that's a case where i think you can actually say there's more to go. >> the benefit is that they're going to distribute their dermatological and but they're going to sell over-the-counter drugs at generic prices. that really makes you think they've got to get tremendous volume to offset the price that they're giving up. >> i saw you talking today with meg tirrell about exactly that issue. at what margin? so that's great. they lock in sales. the it's a vote of confidence. however, you really don't know what that means to the bottom line. so if it's saying it's replacing philador sales, which seems to be high margin and this seems to be less margin, that seems to me somewhat problematic. >> an analyst day tomorrow as well. that should be an interesting dynamic. >> to tim's point, though, it's

going to be about that, but it's not going to be about that for another three or four weeks. until then, it's about the shorts that now have to cover the name. dan and i got -- not into a heated debate, because we don't get into heated debates. i didn't dude him. we talked about potential for a move of this magnitude. >> still ahead, apple sitting out this rally, dipping below 110 bucks a share for the first time since october. we'll tell you just how much more pain could be in store and if share shoulders should be worried. i'm melissa lee, and you're watching "fast money." in the meantime, here's what else is coming up on "fast." to follow the herd or not? with the fed potentially about to hike for the first time in nine years, what happens to some of the most crowded and most dangerous rising rate trades

heading into the big decision? we're breaking it down. plus, the fever over the force. could it catapult imax into a galaxy far, far away? we'll hear from the company's ceo as he gears up for the mega movie release. much more "fast money" right after this.

welcome back. the announcement could also have an effect on beaten down emerging markets. seema modi has this story. >> the impending fed rate hike has raised fears of an emerging market crisis. brazil, which is also dealing with a downturn in commodities and turkey are at most risk given that they borrow heavily internationally to finance their economies. rising rates means the cost of financing these loans will also rise as their currencies depreciate. investors also keeping an eye on holders of u.s. denominated corporate debt, where india is seen as most vulnerable, given its heavy debt exposure. a rate hike coupled with a stronger dollar could make financing difficult. the third concern is countries that have fixed their exchange rates to the dollar. china being the key example

there. fed rate hike, followed by a strengthening dollar means the central bank would have to sell more reserved to maintain their peg, hence why last week the pvoc announced its intention to measure its currency against a basket. melissa, despite some saying the fed rate hike has been well-telegraphed, the implications haven't gone away. >> okay. seema modi, thank you. shorting emerging markets has to be one of the hottest topics ahead of the decision. take a look at bank of america's fund survey. when asked what managers viewed as the most crowded trades in the market, 53% said long u.s. dollar. 10% pointed to short and global equities. so what happens to some of these crowded trades tomorrow after 2:00? it's interesting, because marco was just talking about what happens with these crowded trades when there's mean reversion here. >> i started buying e.m. yesterday. i think e.m. corporate debt is

largely largely an asian issue. this is tactical. i think e.m. is going to struggle. i think the currencies are oversold. >> in seema's report, we're talking about dollar denominated debt and how prevalent it is. a lot of this is related to what we're talking about with the potential contagion here with high yield and the commodity bust. if you think that the commodity structure is lower, structurally, it's a really hard trade. we know that petrobas has close to 30 million in debt coming up. i expect it is a mean reversion back to about 36, but then you want to be out. >> that level is getting above 33. >> it seems like that's going to be ground zero next year if we have any problems globally. >> tim mentioned the er.m. we made a run last week or so. against that level, i think the risk/rewards have been long. probably sets up really well.

as does in my opinion, the chance for gold to rally, especially if we see the dollar get whacked as this trade potentially unwinds. >> quick programming note here. tune in to cnbc. 2:00 eastern time. full live coverage right here on cnbc. still ahead, high yield, high risk. we'll take you behind the exploding options activity in the high yield etf, the hyg. plus, what it means for the rally. later, the "star wars" premiere earning mega buszz. stay tuned.

california's coastline is a welcoming, wonderful home to everything from surfers to seals. attracting visitors from around the world, around the year. along the coast, protected areas are set aside to preserve a fragile community of animals and plants. to protect these natural wonders, here's what to know before you go. stay at least 300 feet away from seals. this is their home. don't touch marine life in tide pools. take away your trash and your happy memories. always enjoy and protect our marine habitats. welcome back to "fast money" stocks. the s&p 500 up more than a percent. saw its first two-day winning streak in more than a month. the dow rallying 156 points. energy led the charge, soaring nearly 3%, as crude oil crossed above $37 a barrel for the first

time since last week. "star wars" mania in full force at its hollywood premiere. we're talking to the ceo of the company that stands to see huge profits from the blockbuster film. plus, bad apple. the tech giant falling 2% closing in fair market territory after a key supplier lowered guidance. we'll tell you why it could get even worse in a special report. but first, it is the eve of the fed's likely decision to raise rates for the first time in nine years. our next guest says we owe a huge chunk of the market's performance during that time to the anticipation and anxiety around the fed itself. barry, always good to see you. >> thank you. >> a lot of people do believe that a lot of the gains we've seen in the s&p 500 in recent years have been fueled by easy money. so what happens after this fed hike in your opinion? >> we already saw an advance today. and the chart that you're referring to that i thought was very interesting is if you exclude on the 148 meetings

since mid 1997, the day of and the day before the fed med, the market's flat at about a thousand. you know about half the market is due to the fed. >> over that timeframe since 1997, the fed has become includingly communicative. is the effect muted as time goes on? >> no, in fact, june of 1997 is when thailand devalued. it began the savings glut. we borrowed those dollars, bumped up housing and then it busted. the modern world as we know it really did begin in june of '97. it's only become cumulative. >> so let's say we get exactly what consensus says we'll get, and that's 25 basis points and a dovish statement. what would you be inclined to recommend people buy or sell? >> yeah, if you think about it, when the fed moves a quarter

point, it's really not very much. what's more important is the communications they give about what they're going to do in the next year. it being an election year, i think this is a somewhat political quarter point. i wouldn't want to go into the most populist election in almost 100 years with zero for ten years. so that's going to be done. as far as in the past, i heard your guest mentioned that the dollar typically weakens and that's true. in the late '70s, and in '04-'06. energy and financials typically did fairly well. also the dollar fell or went flat. >> thanks for joining us. appreciate it. >> the central banks all over the world engaged in similar behavior which you didn't

historically have. >> you have the eurozone doing things they historically haven't done. >> i think we're talking about the fed hiking. we are. we have other central banks around the world acting in kind, acting differently, and i think that throws a monkey wrench into everything he just said. >> i think if we get to a place where we try to say what's different, the transports typically rally and outperform the s&p into a fed hike. now they've been destroyed going into this number. can transports actually outperform? i think you have a lot of sectors that have bottomed and will do the opposite of what they have done in past fed cycles. >> let's talk about apple, sitting out after a key supplier put out a negative warning for this quarter on weaker demand. apple is now approaching bear market territory. the stock is down about 18% from its 52-week high. >> record high at that level there. apple's near-term future got a little bit dimmer. we're not going to cast a bear flag on this just yet. evidence is pointing to the weaker iphone sales theme that

has been developing the next few quarters. it continues to mount and the increasing bad news is putting pressure over the stock. you can see down 7%. we know about how far it's fallen from record highs. that was $134.54. that was back at the end of april. now, apple stock has fallen, again, about 15%, 17% since then. as the stock approaches that mark here, many investors are wondering if they should buy apple on the dip. our colleagues over at cnbc pro took a look at some of the numbers to find out how the stock could trade in the days ahead if they use history as a guide. again, history as a guide does not guarantee future performance goes that way. since the iphone was released back in 2007, there have been about 14 times when apple's stock was down at least 15% from its peak going down to some of the levels that we've seen currently. on three of those occasions, the stock was actually down more than 40%. very deep pullbacks. the average percentage drop during all of those instances is about 27%. but it's skewed by those three

very big moves down. if you remove those three drops and you assume they were outl outliers, it's still around 20%. these are look at certain instances in history and making some assumptions about the returns. there has been a buy the dip mentality, although we will point out the iphone is obviously the vast majority of this company's business, and a big contributor to profits. if they do see slowing signs here, it could be different this time around, guys. back over to you. >> so let's go back a little bit. so the average drop is about 20%. you're basically saying apple essentially recoups its losses in a month? >> it recoups -- again, the average move is about 20%

higher. if you're going off the low base, it takes a lot more than a 20% drop to get back to break even. there's a lot of considerations to be made. but what it has said is apple has been a by the dip stock. but whether or not iphone sales justified? time around going into 2016 is probably going to be one of the big wild cards in that trade, guys. >> do you think it's still a by the dip kind of stock? >> january 26th, one of the things i've been thinking of, we've seen, where's the consumer been? where are they in terms of retail? i think a lot of them are also going to iphones.

i think we'll see a very big number. we just try to hang on to it. >> is apple a tradining stock o not? i don't think it is. they're install based. >> consensus is calling for mid single digits earnings in sales. we know who the investor who's going to step in with the $200 billion in cash. 90% of it is overseas right now. they have a third of their market cap in cash. they've also been mounting a lot of decks. i think there's a lot of things going on. don't forget, 24% of their sales came from china. look what just happened? that was a quick move. i think the weakness the last week had something to do with the weakness in the one. >> in october, if you short apple on the supply chain

thesis, you watch the stock go from basically 100 to 132. you got your face ripped off. last night on the other side of the coin, our friend carter braxton talking about how the technicals shaped up for a move lower. you've got something for everybody. i tend to be in tim and karen's camp. you ease your way into a long position against earnings. still ahead, "star wars" premiered to a star-studded red carpet last night in los angeles. we talked to the ceo of imax about what the franchise will need for its bottom line in an exclusive interview right after this break.

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to communicate exactly the content that people want to see. it will help people connect to their passion of living real madrid. when we bought lucas film, i know there was global interest in "star wars" movies. there hadn't been a film out in ten years. hadn't really been a release in certain parts of the world. so while we had strong instincts about level of interest and what it might do, we had no idea. i will say to you, in all honesty standing here tonight, interest in this film worldwide has exceeded those expectations by a lot. >> that was disney's ceo bob

iger at the world premiere. it will hit 396 imax screens across north america this week. for more, rich gelfond joins us in a cnbc exclusive. it's always great to see you. >> it's great to see you, melissa, even though it's from l.a. i feel like i can see you in person. >> just look at the screen, rich. the first question i'm going to ask you is fill in the blanks. this movie, "star wars" for imax, will be the biggest since what? >> since "avatar" i'd probably say. i'm not in the business of predicting box office, but we're in 66 countries. i think it's going to perform extremely well. how well, as bob iger said, is the big question. but i feel very good about it. disney and j.j. made an amazing movie. got to see it last night. it delivers on all fronts. i think consumers will come.

>> all right, so you saw last night you liked it. i know that you said you're not into predictions. wall street is all about predictions and what they're forecasting. mkm had a forecast out recently saying that you'll potentially gross a record of $30 million in the opening weekend. does that sound about right given what you've seen of the movie? >> as i say, one thing i've learned about the movie business is it's a different business than the prediction business. i think the movie is going to do very well. our advanced sales are very strong. i expect the reviews to come out at 12:01 this evening. i'd be surprised if they weren't very good. i think all the elements are there, but it's the movie business. saying it's a great movie and great marketing and putting number with it is a dangerous business. >> it sure is. i'm wondering if you think this is the movie that could save the box office. for the fourth quarter through december 17th, which would be the debut for the official release of "star wars." it is expected that the box office would be 6.5% below the same period as last year.

do you think this is going to change the game for the rest of the quarter? >> i do think this will dramatically affect the box office. i mean, there's no doubt that last year was "the hobbit" which played extremely well. i think the buildup to this film, the consumer demand, i think it's going to deliver for exhibiters, certainly it's going to deliver for imax. i think it will make a difference. >> how much by way of legs do you think this movie will have? dan nathan sitting next to me is going to see it tomorrow. >> thursday night. >> thursday night with his daughters. how many people do you expect to see "star wars" on an imax screen weeks from now or months from now? >> so great question, melissa. we haven't scheduled any other movie until february 8th, so that's about six weeks. we think it's going to have

tremendous legs. avatar, it was a different time and our network was a different size. i think it's going to play for a long time. this is the first of five "star wars" movies. this isn't like a typical movie where it's a one off and it plays and you say wow, can't wait to be the next one. their plan for the next four years going forward. most of them are two movies a year because one plays into january and the other starts during the year. this is more than a movie for both the business in general and for imax. >> is there an option to extend beyond february 8th sold there be the demand? >> that's a high class problem, melissa. we'll figure it out at that point. >> all right, rich. it's great to speak with you. thanks for your time. >> great seeing you, too. bye. >> rich gelfond, ceo of imax. so it's not just disney that

could benefit here. >> i'm curious, though, maybe you know the revenue sharing. >> watching imax over the years, these guys are in 150 new theaters. it's not achieve multiple. these guys are in such a great position to see the growth. their psas are up 5%. the industry is not seeing growth. these guys are. i think you can stay with this one. >> his stock is up 26% on the year. they were just hitting 52-week lows just the other day. they popped a little bit. i think to your point, this may be one of the first movies in a long time where people go see it multiple times. that's something that was before netflix and all these other things at our fingertips, so this probably has legs and we'll know that we'll have five of these movies the next five

years. >> you haven't seen any "star wars" once. any "star wars." >> that's an excellent point by you. >> that's a wookiee. >> yes. >> imax, volatile stock. i'm with tim, though. i think it revisits the june high. still ahead, high-yielding bonds moving higher. we'll explain why traders are betting there's more pain ahead right after the break. oracle reports tomorrow, its earnings, that is. we'll tell you what the street is anticipating. first in business worldwide. it's hard to find time to keep up on my shows.

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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 to "fast money." shares of oracle rallying with the rest of the market today. expected to announce earnings tomorrow after the bell. dan, what do you say? >> i think it's a really crucial report. stocks down 15% on the year. in the new year, they're going to have to have a workday.

>> got to let them prove themselves. january 1st i think was the high for the year. it's been effectively downhill ever since. if they do move to the upside, i don't think you're going to miss it. >> i think ultimately, i think they can. i think expectations are so low, and if they are losing, i like oracle. >> the recent collapse in the high yield bond markets got options traders in a frenzy. dan, what did you see? >> options volume has exploded. that is the etf that tracks the high yield index. there was one bearish trade that caught me eye. there was a buyer of 25,000 of january. 77/74 put spreads. about a million dollars in

premium. down about 4% with a max gain of 260. this is extraordinary what's going on here. there's been a lot of chatter that these etfs are a problem. carl icahn has been saying that. i would argue the other way. look at the explosion in options open interest in the hyg. this is the one-year chart. it's been used as a very liquid hedging trail for people who may own some of the underlying equity or debt. this is the implied volatility. you can see the recent speak here. that reflects interest in put buying that we have seen over the last few weeks here. but it's not anywhere near the levels that we saw during the sovereign debt crisis back in 2011 when these options and the bonds were much less liquid, and this is the seven, eight-year chart right here of the hyg. we saw it came down just the other day and bounced off a really key level. this was the level from the financial crisis right here. this was the level from the

sovereign debt crisis. this is a really big level here at 80 bucks. i suspect we continue to see putt buying until there's some sense that investors are out of the woods here. >> so dan at the smart board. let me ask you a question. i was wondering if i were third avenue and i knew last week that i was going to come out with this bombshell announcement, given how liquid you say this market is, i would have bought a lot of puts short of the hyg, knowing there was going to be some real pain the next day. do you see any trade that caught your eye last week that would have maybe -- would have been something like that? >> there were massive trades. i talked about a 25,000 contract position in the hyg right there. on the close on wednesday, about a half an hour, before that third avenue press release came out, it was a buyer of 75,000 short dated puts that gives you some protection. who knows who that is? that could be the fund who's in the process of liquidation trying to mitigate some of the downside risk. it could be a dealer bidding

during that liquidation. you just don't know. but i'll tell you this. these options are trading like water, and they're actually pretty liquid, and people are using them for hedging and to make directional bets. >> check out the full show, 5:30 p.m. eastern time on friday. up next, the final trade. stay tuned.

welcome back. tomorrow is the day the fed will make its announcement on whether or not it is raising rates, so how will stocks trade after the decision? we asked you at home on twitter earlier today, and here are the results. more than 500 of you voted. a pretty tight race. 49% of you think stocks will rally. 37% think stocks will fall. 14% say the market will do nothing. all right. we'll see you tomorrow, of course. tune in at 2:00 p.m. eastern for full coverage of the fed decision on cnbc. time for "the final trade." tim. >> i think hyg association, not anymore. i'm back in. >> dan nathan. >> no matter what the market does tomorrow, i think into the new year and whatever the fed does, i think you want to be u.s. domestic and defensive and that's utilities xlu. >> chairwoman. >> during the break, we had an extensive fight, dan and i. that was about apple. i'm long apple, so i'm going to

go with apple. >> guy. >> goldman sachs clearly watching the show. adding visa. letter v. a little late in the game, but welcome aboard. >> i'm melissa lee. thanks for watching. see you back here tomorrow for more "fast." "mad money" starts right now. >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm trying to save you some money. my job is not just to entertain but educate teach and put it into context. call me or tweet me @jim cramer. sometimes people just need to realize that it's not the end of the