automatics, dealerships and the banks and consumers taking stock of lower gas prices to get us across the line of that record year. >> that is a good point. just look liking for bright names in the market. autos have been the bright spot in this economy. thank you so much. mike and kayla. "fast money" begins right now. and we are live from the nasdaq market side overlooking times square. this is "fast money." i'm melissa lee. your traders on the desk. tonight on "fast," the boldest call of the day. jp morgan saying the era of buying the dip is over. that strategist will join us live to explain what has him so bearish on stocks in 2016. plus chaos, the middle east sending oil on a wild ride today. but the commodities king dennis gartman said there is a secret signal the bottom is in. he joins us this hour. but first a major selloff, getting slammed on the first day of the trading year. all ten sectors lower on the day, led by banks, health care and materials.

those led the declines. china sparking the selloff as the stock market fell 7% before being halted. a similar pattern we saw back in august. so the question for the desk, are we retesting the lows or is today's selloff a buying opportunity. guy adami, what do you say? >> could it be both? i'm not trying to be vague. but i think it could be both. we will retest the lows. today could have been worse. this should be worse than it is. shanghai down 7% and the dax down 4% and we closed down 1.7%. given the selloff, i thought the bond market would be larger and yields would have gone lower. that didn't take place. you saw strength in retailers. so i still think you will see a bounce off these levels. but further down the month, i think there is a good chance we retest the lows from august. >> karen, welcome back. you've had some time off and come back to a selloff. what do you make of the markets. >> fresh and rearing to go. >> agree with gee.

we came down 40 handles in the morning and opened at 36. so to close down 26 wasn't bad. it isn't seem to be panicky during the day. that is good. and then we get the rally in the afternoon. there are pockets of stocks that last year did terribly. and pockets that did fantastic. and we'll get to the fang stocks later. but to do a rotation, that makes sense. there are things that had their day and others that didn't. and as gee said, retail actually did very well today considering the market. on an absolute basis up, but on a relative basis up big. >> a week ago we asked whether china would be -- >> what did i say? >> you said china would not be an issue. but i go to you. how do we look through this volatility we saw in today's session and granted the price on the u.s. stock side was good but still extremely volatile. >> global marks were unnerved. not just by china trading through circuit breakers and a

lot of news in china, with the forced restriction selling by insiders on january 8 and the chinese new year. had you a 65 basis point move which means this is the largest move we've had. a lot of people feel of all of the things that need to happen in china, this needs to happen. i'll give you my playbook later on in the show. so as we get to what went on last night, in the global context, in the markets, we had a second sub-50 print on the ism for the first time since 2009. we talked on this show how we are in an industrial recession of sorts and i would agree with that. so you add that up and add to it the fact the fed may have a play in here, i think that is where markets were on the first day of the year. >> could you quickly kekts the dots between the currency and the broader trade. we saw the trade against the you an and it is expected to

depreciate further. >> and china gave us the heads up we're going to do more of this. we are not using a trade weighted index and we're going to let this thing go and not be as pegged to the dollar as it has been in the past. that is what today's move tells people. there is more to come. china and fed volatility, on top of what we had, vix is up 50% on the intra day high in 1 1/2 sessions. >> dan? >> i would add this. you could look to china and say yes, that was the spark that ignited the fuse. but the market would selloff. i'm not telling you it is one and done. i think there are lower lows. i agree with guy. but equities globally in 2015, the only markets that rallies were easy. we jaw japan and the nikkei were up and a lot gave back most

gains in one day. large u.s. cap stocks were holding on for deer life. people were waiting to sell the high growth, high valuation names. so you had a few dozen stocks in the stock market that were dragging up the entire s&p 500. we know that the rest of 2000 was down 5% on the year and down 12% from the 2015 highs. so other than a handful of stocks or a few dozen act poorly. the bull market is over, people, i hate to tell you. >> we could retest the lows and still have a buying opportunity and still have both at the same time. so at a session like today, do you step in and buy or do you wait. >> today's action you might see one of the bounces over the next couple of days. it should be worse than it was. i will throw this out. we'll have dennis gartman on. oil had the opportunity to rally. given the headlines overnight, if it was going to rally, it was on a day like today. greater forces at work in the

energy market will suck down the s&p. >> you hear it all of the time, buy the dip. and for the last seven years, it worked. but today jp morgan said the era of buying the dip is over. joining us from london is mislav matejka. great to have you with us. >> hello. >> what is different this year. why won't buying the different work any more in your view? >> i think there are a number of problems with the equity market. and we think all of this time that you should be buying in the dip but i think the new regime is selg the rallies -- selling the rallies. and why did the s&p 500 triple over the last years. number one, profit margins went from record lows since the second world war to the record high. that is done when you think about what is happening with the wage growth. and number two, fed was spending money like there is no tomorrow and that money is done.

and the asset trade could work in reverse as well and number three, the credit spread is tightening and the company has a great arbitrage to buy equity and the market is telling you clearly this story is done because the spread between the credit and equities is now very, very wide. so all of the majors are gone an the equity markets will struggle going forward. >> so the call is that the equity markets here in the united states will struggle not just for the next year but through the next 12 to 24 months and you cut your equity exposure from an overweight to a minimal 5% on the 30th of november. so you got on the sidelines late last year. in terms of where you go for returns, if not the u.s., is it europe? you still like japan, connect? >> the point is that you can't really be coupled too much, like japan. but if europe goes down, everything will go down.

just to give you a context, if you think about the cycles, the average cycles in the second world war was around five years and the longest ever was ten years when greenspan did his magic the first time around and the biggest productive driven in the u.s. we are now seven years and therefore we are long in the tooth and i would say structure over weight in equities for the last few years is just not appropriate any more. you want to be much more technical. you want to be selling any rally. and there is real place to hide. yeah, japan could do a little bit better for a while. but if europe goes down, everything will go down. >> we'll leave it there. thank you for phoning in. from jp morgan. in today's session, we'll revisit the question. he said don't buy the dips when it comes to the overall markets. we get that. when it comes to individual stocks, are you buying anything? >> look at the financials, which have been so overweight. in the last couple of months,

you are seeing fundamental change in the-year-old cur yiel. much greater financial sector. that is a place that is safer. and i would go to the list of the most banged up stocks from 201 2015. where the balance sheets are good. whether that is retail sector or macy's and whether it is occidental. these are names that are names you should be thinking about picking your spots here. >> today, what did you do? >> here is the thing. i've been seeing this for a couple of weeks. i want to be u.s.-centric and for me it is xlu and utilities, pharma and pfizer. could you own it and sell calls against it. and then in u.s. telecom. at&t and verizon with a 4% or 5% dividend yield. all of those are avoiding overseas dollar and they have a fat yield. this is a difficult equity environment for returns like last year. >> karen, did you do anything in values today. >> i didn't. but there is a number of things

i like. whole foods is sort of the interesting to me. but it rallied into the end of last year. i'm long the banks. been long for a while. they weren't down enough to step in and buy more. i am a little afraid there. but we also have a hedge on -- i didn't take back the hedge today. i probably would tomorrow. >> gee? >> karen said it earlier, macy's traded exceptionally well. up 2.5%. cut in half over the last six months. in a perverse way, maybe the cold spell is helping these guys. the valuation is reasonable. they will have a quarter at some point that surprised people to the upside. given the way it traded today, if nothing else off the 52-week low which we made today 34 and a nickel, i think you could let it in. >> coming up, apple a bright spot in today's selloff. why the biggest stock in the world could be seeing green in the new year. and de-fang. could the fang stocks be a

signal to make a big change to your portfolio. we'll explain what could be the next great trade later on. and the chinese markets are hours away from opening. what could turn the tide for a turbulent china. we're back in a few on a very busy "fast money."

welcome back to "fast money." check out shares of apple reversing course and managing the end of the day in the green despite the huge selloff. and that kicks off the top trade. here is what the traders are saying about the tech giant lately. >> 105 is a major level on the stock. 105, remember, again, i don't think you could buy it here. i think you could wait. >> i think you buy it right here. i think you're rip cord price is probably 102 on the downside. and you see what happens. >> i think you wait until 102. >> and now here apple is trading at just about $105.35 at the close. so are you buying this today? guy, what do you say. >> listen to what dan said. i think you wait until 102. the low today was 102, period. >> that means dan is right. >> it was a great job. and that is -- that is the level. that is what we talked about. it bounced off that, thought it

traded well today. i don't think anything has changed at all. to mention the 105 level and here we are now. if you have been waiting for it, you got it today. >> but my question is if the market is sellingoff and at times apple could not be judged independently from other fundaments. because of sentiment in apple hasn't been sky high, i think it decoupled a bit. if market is going to test the lows, apple is going through 102 and there is no question about it. and be careful on a market view here. fundamentally i could own this company, i still think the policy stays the same and as the comps get tough, this is a company i could stay with. >> and you still buy apple at 102? you think the market is going lower. >> it sold off in july, and sentiment was pour. and if anybody was looking to bottom fish, it was apple today. it was a no-brainer in 2015,

because of the comps and the investment community was so bullish. >> they still are. >> 43 buys, seven holds and one sell. and that is just sentiment. it is cheap with an amazing balance sheet and amauzing products. but this is what the investment world is focusing on. this is a mid to single high digit grower from now on. unless they could show us in march or april when they introduce a new watch, that wearables is a long-term thing. own it for the dividend but don't expect going back to the highs any time soon. >> i'm glad you mention the ratings, given the revision on supply chain sets and the hand sets sold in the fourth quarter, you would think there would be more rating changes and there haven't been. has sentiment come down enough, has it been tempered enough for that to be a catalyst. >> i don't know. that is a great question. i hate when everybody loves it. you wonder who else is left to buy it.

who know where's it trades before they announce earnings. that is the most important data to me. what they earn and what do they think they are going to learn. but expectations have been lower somewhat. and i think they'll beat. i think we've seen the retail phenomenon of where did the consumer money go and i think they beat. >> if it doesn't go higher, i think it has problems. >> have they done that before. have they beat on estimates for handsets and the stock doesn't follow through with a rise? >> it depends. in two instances it was budding up against all-time highs when sentiment was high. and that is your point. expectations now are very low. >> what dan is saying, if you look at the december and march quarter, are these enough to take the stock higher. dan's argument is it is not. and it is still an investment

stock. it is a stock you buy to hold and own. i don't need to do it today if we are talking about a world very uncertain in the next few weeks. >> and my point is this, and steve grasso agrees, i happen to think apple is a 30% that doesn't. we've seen bad days, apple is up and vice versa. >> since when. >> over the last six months or so, there were days when the market has gotten crushed and apple has thrown in there and vice versa and i think we might be on the verge of that again. >> if you look at apple over the last couple of years, the beta is 1.2. what do i mean by that? the market might move. and i think we have the bad blood out of there. but it is the ultimate proxy stock. >> and tesla shares getting crushed. despite meeting key expectations for delivery orders. has something changed about the story. a top analyst explains into i'm melissa lee and you're watching "fast money" on cnbc, first in business worldwide.

here is what else is coming up on fast. >> is fang losing its bite. a major shift from growth to value. and it could mean the next great trade. we'll explain. plus -- there is a secret sign that oil has hit a bottom. and dennis gartman said he's found it and he'll reveal what it is in "fast money" returns.

welcome back to "fast money." fang stocks, the cramer coined group of stocks that included facebook, amazon and netflix and a company once called google. and these were the stall warts today today. let's go off the charts with carter worth of cornerstone macro. what do you see? >> it was a bad day, whether you call them growth or momentum stocks. it is not those four only. there are many. but it was a bad day. and the issue is does that lead to major change. let's look at a few things to maybe set this up. so what i have here is basically going back to the prior bull market in 2006, 2007. what we know is that the blue line, which is russell 1,000 gross, the s&p 500 plus the next big 500, versus value.

you have to -- more than a double in performance. so 54% better. now the green line is the index itself. so the two parts that compose the whole. so i'm going to present this chart a different way. here is as though i held the russell itself as a constant. so that chart and that chart are the exact same thing. but it is showing the spread. so the issue is basically since the bull market began, right, growth, starbucks and visa and nike and amazon has outperformed value. what we saw today was for the first time in a long time, a reverse of this now seven-year phenomenon. so at the low, the russell, there is a good etf, which you could trade. this is the russell 1,000 growth down 2.5. it ended up down 1.7%. and the value etf iwm was down 2.1 and ended up down 1.1. so you get the key, these names,

these names -- huge percentage declines relative to the market. so the setup here is this. if this starts to come apart in a more meaningful way as we've seen in disney and under armour, does that mean this will have a convergence. that is possible. but it doesn't mean it is positive for the market. because the money that comes out of the blue line doesn't necessarily go into the orange line. sometimes and often it just doesn't come back. so our bet is that there is convergence here but more meaningfully the whole thing shifts down. so equity is a bad bet. that is the view from my seat. >> carter, let me ask you something. i know you say it doesn't necessarily mean the money goes from the blue to the red, but is there nor absolute money in the blue or the red? >> and that is one of the things. there is the survive bias. once something has appreciated to the extent that amazon or

netflix has, you are getting more value in those few names versus lower levels of market cap in the coal names and the banks and so forth. so there is more interest, more sentiment, more immediate capital in the blue line or active capital than in the ornl li -- the orange line. that's the risk. >> and so the bottom line is you think the fang stocks are poised for a fall? >> they already had. we know that disney -- and it is typically with some kind of news. disney has the best news in the world, stock acts like death. what is the most prominent marquee brand, ferrari goes public. that is the kind of thing you have when there is a major shift afoot. >> carter, thank you. carter worth of cornerstone macro. >> who agrees with that? you agree with that. >> agree that netflix is going to have a tough time taking the valuation higher with the market it has. they have a magnet straight down to 95 which is where i think it

belongs. the churn is down. the love of the content works. this is about a crowded competitive space that i think they will fail in. fail as in they can't support a 200 multiple. >> fang, bulls, we'll say that you are paying for growth in the market. and in market, where there is no growth, you will pay these valuations for this kind of growth. >> i think stan miller said it so well in early november. he loves amazon because here is a company that could succeed in a low-growth environment the world over with an expansion opportunity. it is a good consensus reason why people have crowded in the stocks. these are the most dangerous things out there right now. if you own portfolio concentrated in these stocks, it is dangerous. because i think there is a whole host of stocks that could go sideways in a market that we are in right now and these stocks could get creamed just on a sentiment shift. and i don't know when that happens. but we've seen it before, we saw it in 2000 and 2008. >> completely agree. it doesn't matter what is

happening in the underlying baze is because it has gone into the stratosphere for some of them. in 1999, 2000, bubble burst and value had a tremendous year and the stocks got annihilated. same thing could happen here. >> and phoennetflix, tim is rig. the level tim mentions, $95, it traded down and mark cuban came on the show and picked that level as an entry point and it went straight up since then. clearly the napes are testing the resolve of people. but they are proven sellers wrong quarter after quarter now for the last couple of years. >> the market is about to potentially fail here. and the word concentrated. that is crowded. >> no, that is fair. >> for phoenix, if you are playing it for a content play, that is ludicrous and you have time warner with a $50 billion

market cap. they are not going to change the world in content delivery. and they are losing the battle i think in original content. and we know that time warner is the one to beat. that is where you go. time warner. >> so do i think all four of you guys are cautious on netflix at this point? you sound like you are -- >> you have to admit it is not trading well for the last few weeks. i would be foolish not to say that. but i think there is a good chance when they report they will surprise the upside. amazon as well. >> coming up, the commodities king is back and dennis gartman said oil has found its bottom. we'll explain why. and the one beaten down stock traders are betting is about to take off in january. we have much more "fast money" right after the break. [vet] two yearly physicals down.

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welcome back to "fast money." a wild day around the globe for the markets and the first trading day of 2016. stocks getting slammed as trading in china was halted

after a 7% drop. the dow having the worst start to the year since 2008, falling more than 450 points at the lows of the session. but managing to end lower by 275 points. the s&p 500 closing above the 2,000 level. all sectors were lower, with financial, health care and tech leading the declines. in the second half of "fast money," did elon musk deliver. the model s. soaring to close out the year but the stock getting crushed today. a top analyst explaining why investors are nervous. and shares of alibaba getting hit with the rest of the chinese market. after a rough year for the e-commerce giant. where some traders are saying the stock is about to stage a big rally. later on in the show. but first, a story that might be the top story, and that would be oil. after jumping 3% this morning and after saudi arabia decided to cut diplomat ties with iran. michelle caruso-cabrera is explaining what this means for the mice of oil going forward.

michelle. >> events over the weekend leading to a escalation in tension between the two competing powers in the middle east, saudi arabia and iran. saudi arabia is the dominant sunni power in the islamic world. iran is the dominant shiite power. the two have long had an in tense rivalry and fighting proxy wars in syria and yemen. in syria, iran is backing the leader of the country, al assad, and saudi arabia is backing rebels fighting to oust assad. but they are both fighting isis on the ground as well. in yemen, iran is backing shiite rebels. and iran and saudi arabia aren't yet directly facing off on the battlefield. but they did face off in the most recent opec meeting. both refusing to cut production. for the iranians, they say, look, we need the cash after not being able to sell oil due to sanctions for years now. for the saudi arabia, it is a

bonus that the iranians make less money than plans when oil prices are low. while the newest rounds of tension cover the death of a cleric over the weekend. middle east experts say that a key factor in the aggressive stand is the u.s. changing foreign policy in the region and now saudi arabia questioning the depend ability of their most important ally, the united states. looming largest in their mind, the u.s. attempt to end sanctions against iran after the u.s. did not back long-time ally moebar eck during the arab spring. add to that the fact that the u.s. did not bomb syria as promised when syrian leader assad used chemical weapons on his own people. now whether or not those moves were good for u.s. national interests, doesn't matter to the saudis. they see them as being against their own national interests. back to you. >> all right, thank you,

michel michelle caruso-cabrera. bet's bring in dennis gartman from the gartman letter. good to see you. >> good to be seen. >> why do you think oil wasn't higher today? >> i think oil wasn't higher for the simple reason there is a great deal of oil available to us at almost any instant. there are a lot of wells here in the united states that have been capped and brought on stream very quick little. the chinese have an spr getting larger by the day and the tanks here are filled up. there is a lot of crude that could come to the market in a moment's notice. the news over the weekend from iran and saudi arabia would have had crude oil opening $5 higher with no down tick. and today it opened higher and came into down ticks to finish the market on the lows. i've said on this show for the past several weeks that i think wti will be happy to spend the next year and a half or so in

and around $37 a barrel. this is where we are today. there is a lot of crude oil available. i think we've seen the lows in crude. but to get bullish, i think that is a long-time, a year, two years, three years into the future. i think crude oil could be boring for a long period of time. >> and i'm sure that would be music to many people's ears out there. is there a downside risk to saudi arabia pumping more oil just to sort of give iran more pain? >> well, clearly the saudis would like to induce as much pain as they could to their mortal enemy, the iranians across the other side of the water. there is no question to that. and they would like to continue the pressures on the permian and the eagle ford and the bakken here in the united states. so the saudis have a marked interest in advancing too far. they want to induce as much pain as they could. they are in a better fiscal circumstance than the iranians.

if i were saudi arabia, i would put pressure upon my mortal enemy and they are doing that. >> and dennis, remind us, what is your call for oil in 2016? >> boring. i think -- >> yeah, a level though. >> no problem. i think we're going to be $4 either side of $37 for spot wti. and we could actually speak in terms of brent. because now they are trading close to parody. for a long period of time -- if we tock spot wti and say it went to 41 and given the $7 con tango to the one-year forward, that gives you $48 or so for a forward hedger to produce crude oil. they will be happy as larks to produce. so i'm thinking $37. 33 on the low end and 41 on the high end for the spot wti for a long period of time going forward. boring is good for the economy. boring is good for the consumer. and a little bit higher prices would be very beneficial to producers. so i think boring is the term for -- the watch-word for the

next long period of time. >> dennis, thank you. >> thank you, michelle. >> melissa. dennis gartman of the gart man letter. so let's take about -- he does that all of the time. 33 to $41. is $33 enough to flush out the weaker players. everybody said we need to see bankruptcy and racialization. is that enough. >> no. that supply hasn't been hurt so oil prices have to go lower. and dennis's call and he is been consistent, we stay in this range. and i believe between the sanctions and the tip for the u.s., there are a number of catalysts you need. i think oil prices will move higher. i can't dispute today's trading activity was terrible. in the meantime, best the best -- buy the best balance sheets, iop and oxy. >> and oil today was disappointing to say the least. and everything dennis said there is a point i've been trying to

make, that we associate geopolitical risk with things going higher. the reason why kprud is going lower -- crude is going lower because of geopolitical risk which means it goes lower still. >> means which risk? >> the risk that dennis was just talking about, about enemies trying to hurt their enemies. >> saudi trying to pump more oil. >> that is what has been going on for quite sometime. >> and with oil at these price, companies will go bankrupt. they put in -- they sunk costs when projects were in a different environment. so the variable cost for now, it is still -- it is still worth it. but they are going to be sort of aging that's projects. and then we start to see them not be able to re-up. i don't know how long that takes. so agree with timmy. go with a good balance sheet. you could hurt. >> but hang in there. they will surprise. >> you look at the xle, 40% is

exxon and schlumberger. and exxon and chevron are up 15% and 20% respectively. and the xle is pricing out the bad balance sheet and suggesting there is going to be dilutive capital raises and bankruptcy issues. you could talk about crude. i don't know how to trade crude and make money off of it. that is dennis's job. but the risk is potential contagion. we've been talking about high yield and the exposure there. and that is the issue. and it has to do with brazil. we've talked about it here. that is a big risk this year. and i think that you can't talk about crude dish -- >> so the bankruptcies could represent contagion. >> we're saying buy good companies with -- >> have a ball, buy whatever you like. but if some of this stuff happens, it will be bad for everybody. >> in the short-term. >> in the short-term. >> that is the opportunity. >> that is the opportunity. you have a good balance sheet, you play it up. >> it could be painful in the

short-term. and i'm telling you, don't forget what is going on with the financial. goldman sachs up 40% from the 20 week highs. look at jp morgan and citi group. and like to suggest there isn't contagion out there is just -- >> there is a borderline on conspiracy theory because the banks aren't talking about exposure to the energy sector. >> i think dan makes good points. look at blackstone chart overlayed with a crude chart. and we questioned what was the problem with backstone six to mine months ago and we brought up -- i don't know that, but clearly something is going on, energy exposure could be part of it. >> what do you say? >> first of all, i don't agree with you. the goldman sachs and jp morgan, they have market exposure. when the market is down, when underwriting is down, that causes them to go down. i think there is more risk in credit and energy not on balance sheets and in high yield market and hedge funds. so i don't think we'll look at

the same kind of event we saw in 2008. i think you hang with the good balance sheet. who knows where the bottom is. >> that is a good investing strategy to hang with good balance sheets. not an in flexion like we saw in 00 and 08. >> you just said you don't know how to trade oil. how do you know we're at a inflection point. >> this is a good discussion. >> beautiful. >> could a shocking photo of a tesla on fire in norway be behind today's selloff in a stock. the stock could rally almost 50% from here. a analyst will weigh in. and a rough day overseas in china sending shock waves around the world but a major sign selling could be over. we'll explain later. much more "fast money" still ahead.

welcome back to "fast money." shares of tesla seeing the worst day in five months. less than 24 hours after reporting its quartly delivery numbers and an unexplained model s. fire. phil le beau has the latest. >> we'll talk about the fire in a little bit. but first let's talk about the delivery numbers for the fourth quarter and all of 2015 for tesla. it did hit its lowered guidance of delivering between 50,052,000 vehicles for the full year.

coming in at 50580 vehicles. 17400 delivered in the fourth quarter. now overwhelmingly, most of those were the model s. and that was expected. in fact, over 17,000 of the vehicles delivered were the model s. how many of the electric suv, the model x. were delivered. 208. about another 300 we are built and those will be delivered in the first quarter as they start to ramp up production and delivery. look at the growth in annual auto sales in delivery for tesla. last year you had 50580. the number to focus on is for 2016. that is 70,000, that is the guidance i'm hearing from talking with analysts. tesla has not given any official guidance at this point. so that 70,000, that is what a lot of analysts are expecting out there. it will be interesting it see when tesla gives guidance what number they come with. as for the fire getting a lot of attention. it was in norway. about four days ago.

these are still pictures taken at the scene. it was a super-charger station that caught on fire while a model s. was charging there. no injuries. it is under investigation at this point. we reached out to tesla to get a comment on the situation. tesla said we are undergoing a full investigation and will share our findings as soon as possible. as i take a look at shares of tesla, and yes, they were under pressure today, i have to add, guys, it is my opinion, i don't think they were down because of the fire in norway. i think the factor overall and the fact that this stock is wildly volatile in terms of what happens the days that it finally reports numbers in terms of delivery. so a very rough day for tesla shareholders. but yes, they did meet guidance of delivering more than 50,000 vehicles for all of 2015. guys, back to you. >> phil, thank you. phil le beau. credit suisse auto analyst is sticking by his bullish opinion.

dan, it is great to see you. what is your take on why tesla traded down 7%. was it the tape, was it the fire in norway, which is one of the top markets out there, or was it the delivery number that came in at the lower end of guidance? >> yeah, thanks for having me, melissa. i think all of those things played a role. the markets didn't help. high multiple groewth stocks ha a tough day today. the fire, any time there is a fire with tesla, it causes concerns. if there is a structural issue. we don't think there is. i think they've had a good track record in terms of safety. and the guidance, or the delivery number, we thought, actually, was outstanding. if you look at the big picture, delivered over 50,000 model s. this year, up 60% year-over-year in the third year of sales. that just doesn't happen in the auto industry. and if you look at the fourth quarter, i think expectations at the time they reiterated guidance were for a miss.

there have been a lot of concerns about whether tesla could increase production this year. whether demand was there to go from mid 11,000 in q3 to 17,000 in q4. so we thought it was an outstanding performance for tesla on the delivery side in q4. >> you mentioned the year-over-year on year gains which proves that tesla is on the path to increase production at a rate that could get them to maybe what analysts are expecting for 2017, which is 70,000 vehicles delivered for the year. is that the way you see it? we also have the launch of the 3 in the meantime. there are other potential speed bumps on the way to 70 k in 2017. >> yeah. i think what i've been focused on talking to investors about is that there is a huge amount of disruption at tesla over the last couple of years in terms of growth. they've doubled the capacity of the plant over the last two years. they have spent heavily on model

x. development. they've improved the model s. on the low-end and the high-end this year. auto pilot, service centers. all of this spending, was intended to get them to the point where they are right now. with two vehicles to sell. both in great demand. we actually think that the spending growth will calm down quite a bit in 2016. we think it will be a lot cleaner year. you'll see spending start to ramp up again in '17 when they get into actually building prototypes and testing and validating the model 3. but we think 2016 will be a really good year to improve the profitability. and i think what the reaction of the stock told us today is that demand is not the issue. now investors are looking for tesla to show improvement in the bottom line, some improvement in the cash burn and we think that will happen in '16. >> dan, great to have you. thank you for your time. >> thank you.

>> do you agree, 2016? what if we have a down tape. >> talking about a 48% rally from current levels is his price target. there is a big short interest in the name. one of the wildcards out there is tesla for sale? is there a price given the environment that we are in that somebody bids $50 billion for tesla. i don't think that is ridiculous in this environment as well. at this level, $225 is a pivot point. if you are looking to trade it to the long side, here is the level you are waiting for into still three hours away from the open of the asian stocks after they were sold. three reasons why selling in china might be over. you're watching cnbc, first in business worldwide.

welcome back to "fast money." i'm seema mody with breaking news. dow jones reporting that service fund management is tapping ted birdic as chief investment officer. he has been there for 15 years and will take over for scott bessen according to the report. >> seema mody, thank you for that. and is the selling in china over. tim, the ambassador, is taking a look at three things. what are they. >> things you need to do to get comfortable with china. i want to see the company -- the government recap a number of

these bad private debts. that is the issue in china and put them on the state's balance sheet. the currency, people are unclear about what is to happen. five to 10% weaker is where it goes. and you need to see the industrial recession recover. and when that happens, that is the easier part of the equation. but recapping the bad debt is what i want to see. that is when china will have an all-in moment. and remember what happens to baidu and alibaba. they worked well from the august and september lows. >> speak of which, dap was taking a look -- dan was looking at alibaba because there is action there today. >> today call volume was two times that of put, down 6% like tim just said. the stock is up 30% from the august lows but still down 40% from the 2015 highs. today when the stock was trading at 77, shortly after the opening, there was a bullish trade, a trader bought 2,000 of the january 29th weekly 85 calls, paying $1. those break even at $86 on

january 29th. i suspect they are targeting the q4 earnings. up about 12%. define your risk. 80 is a huge level. so maybe this is someone looking to leverage a long position. >> check out "options action." we're back after our winter hiatus. 5:30 p.m. on friday. music to guy's ears, i'm sure. and the trades will tell you what they are watching for tomorrow. final trade 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.

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it is time for the tienl fradch the first for the 2016. around the horn we go. tim. >> conservator. dud in 2015. stud in 2015. walmart, you have the earnings revisions, stay in this one. >> dan, with a special guest appearance by -- kelly dan's daughter. >> at the beginning of the show, we were talking about defensive u.s. centric and i think you buy verizon and use a 44 stop to the down side. >> she is posing. >> very cute. >> much better looking than dan. >> way better looking than dan. >> we have a discussion about it. i don't know where it trades in the interim, but i like apple going into the first quarter earnings. you could ride out some volatility for a little while. apple, right here. >> gee? >> that is great. >> not the same with me. >> no way. >> it is creepy on you. >> macy's. traded well today. and i have to tell you,

geneticists of the world, take a look at this picture because it makes no sense. >> it is a conundrum. modern day science. i'm melissa lee. thanks for 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. 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 just trying to save you some money. my job is not just to entertain but also educate and put in context. so call me, 1-800-743-cnbc or tweet me @jimcramer. all rallies look the game but all sell offs are different in