little shout-out to nick and norror, bill griffith's puppies. if you haven't seen them they are totally adorable, guys. pet plays, there they are. >> and they seem very attentive. >> they are actually watching the "closing bell" in that screen shot. thanks so much for joining us. that does it nours on "closing bell." "fast money" begins right now. very cute dogs. "fast money" does start right now. live from the nasdaq market soit overlooking new york city's times square, i'm melissa lee. our traders on the desk are pete najarian, brian kelly, steven sieberg and brian grasser. lumber liquidators getting taken to the wood shed and a shocking call on the market. why one well-known insider sees a 10% pullback in the s&p 500 right arounded corner and where he's putting his money to work and later is one of the hottest trades in 2016 about to come to a screeching halt. what it is and why it could have

big implications for stocks and first the markets. stocks snapping a five-day winning streak ending at lows of the session. the s&p 500 closing below 2,000. oil was weak sending energy stocks lower by 4% and financials pulled back also to the teen of 11.5%. so with cracks starting to show in the month long rally that we've seen, which half stocks or sectors could be the first now to burn out? pete, what do you say? >> you know, i'm looking at the energy sector and specifically when i look in that sector i'm looking at will drillers and the problem with the drillers is they were so shorted and so hammered that they have added an absolutely incredible run-up. oil has made this move 26 to call it 37 and now all of a sudden you get a bit of a pull back and look at some of those names. they pulled back right along with it. i'm not so sure that those names really have flipped around in terms of has the company really -- has much changed about everything with the drillers over the last week or two? i really don't think so. i still think there are many issues they have to address whether it's c-drill or diamond offshore or many of the other names, many issues still in front of them, and because of that great run-up.

a lot of it, in my opinion, look like short covering, but fundamentally i don't know if enough has changed. oil underneath 40, i don't think enough has changed for these names to go the way they did. >> isn't it just that we needed oil stability here, that we didn't want oil and we wanted things to be stable and that's what changed? i mean, isn't that a big thing that's changed? >> it's a big thing, and we all sat around this desk, i don't think anyone bought on the fact that oil and anything substantly has changed in the backdrop. it was about china and china national congress and china being stable and being able to stablized their marketplace, and i think we realize they are not going to be able to do that. i think oil, energy, oil, materials, all of them, too far, too fast. those are the three things that underperform today, and i think those are the things that are probably going to sell off financials, probably going to sell off based on the fact that oil is not stabilizing. there's a lot of linchpins in this marketplace. yes, oil for me has always been the tell. it's been the tell on global, growth, which there is none.

>> okay. so you've got a big pullback in oil today and things are different in one day. they are different. anybody a buyer of oil at this point? >> no. >> got to be a seller of oil here. >> a seller of oil here. >> oil didn't really stabilize. i mean, when we talk about stabilize, you want it to sit for like months at a time at a price. we went down to the 20s and then ripped off the low. that's not stable for anybody. >> is that short covering? >> could be short covering or a lot of different things, but there was an important news on oil today, and that's the "m" in the mlp space. there was a ruling in new york that said that -- that these mlbs with now break contracts with the pipeline companies and mlp companies or the pipeline companies can break with the mlp companies. look at what happened to the allairian mlp. that's highly correlate it had to high yield and remember high yield is the thing that started this off or one of the things that started this off, so if we start to see hyg fall, then you're going to start to see everything else continue again. >> ruling bad for mlps an bad

for hyg because it's highly correlated and bad for the stock market. >> and the emps didn't bounce when the news came out. the mlp news hit and the emps didn't move further down. >> they were beaten up first. >> you know what i think it is, i think it's a fear of being short, right? i mean, a fear of being positioned incorrectly. that's ways driven the metals and mining names up, the retail names up, any of the sectors you look at. it's fear and in your positioning and the way it's structured. nobody wants to be short going into any of the meetings. talked about that last week. that's been the game. everybody thinks the market is going to pull back a little bit. the zps are going to pull back a little bit. they are just afraid to come in here and get short ahead of the ecb. >> the stabilization, i agree with you. i don't know that it was stable, melissa, just made that move. the moves are 3%, 4% -- >> didn't somebody say volatility fell down a little bit? >> that's usually a character of how volatility works. as we rise, volatility is going to start to come out of some of

that. >> i want to move on to the next sector to fall, grasso. you think it's financials. >> i think it's financials and i think financials are able to rally because they thought the market was stabilizing and maybe you weren't going to see an inverted yelled curve and maybe we would push off recession. there was a lot of maybes there, and it was built on the premise that if china's markets are going to be stable then the rest of the world can be stable. i own bank of america which feels like forever. i sold it today because i think it -- it topped out. it was down 3%. i don't like selling stocks on down 3% days but i do believe that the next couple of moves, you may get a little blip, ecb this week, the next couple of moves is going to be headed back down to the $11 mark. >> what about cfos talking about reserves, basically he said, fine. we think in terms of energy, we're in good shape right now, so the stocks hold off but didn't that give you a little bit more hope. >> no, i'm not worried specifically on energy. i think the overlay has made all of the financials run, but it --

it's in particular each stock has a different sector. i don't think bank of america was going to be taken under by energy, but i think it would have been taken under -- >> small yield curve. >> yield curve gets flattened. >> that's not good for banks at all. >> with another 25 basis point in rate will have a huge impact on the financials but just that tailwind, just that sort of bid to the group, based on the fact that there is the sentiment trade is very important to recognize, so i look and say the way these stocks reacted to the sort of negativity that surrounded the energy space was completely overdone. now if we're getting a little bit of a lift and there starts to be good data and starts to be sentiment trader. >> are you a buyer of financials? >> i like -- >> listen to me. >> wow. >> here's what i will say. >> i think the market is going to pull back a little bit here but i do support looking at these for a trade on a pullback because i do believe that the sentiment in the space is going to pick up to the positive side and i think it's going to be just a trade. again, just a trade, but i do think that they are working some

of the stuff out. >> both hands, sold on that. >> related to financials. >> exactly. >> so mine is a sell of a financial which is first republic group and frc. not only do you get the financial part of it but you also get the dead unicorn trade which we've talked about before so you have all these billion dollar valuations, maybe can't go public, maybe their funding is getting cut. first republic finances some of them and have exposure to san francisco real estate and you get a multiple catalyst here coming up so that's the one i sell and i sell it twice. >> and for your sector it's retail. >> the xrt i'd be selling here, think it's gotten to a level, a little bit overblown. gap stores up 10 bucks in a very short period of time and abercrombie & fitch basically the same amount. massive moves off the bottom. again, underposition so you had people come in and defend their positions and a massive amount of short conversation so i think too far too fast you sell that space. >> we've got some breaking news on the republican race for the white house. cnbc's john harwood's got the details. john? >> reporter: melissa, we've got

the results of the new nbc/"wall street journal" poll, and they show a pretty tight republican race. donald trump with 30% of the vote among republican primary voters, ted cruz with 27 and john kasich, the governor of ohio moving up into third place with 22% and marco rubio with 20%. now this follows a sustained hammering that donald trump has received from mitt romney and other members of the republican establishment. do need to point out though we also have an nbc survey monkey poll, different survey conducted online, that was also out this morning that showed donald trump with a 19-point lead, so there are challenges to polling. there are differences between telephone polling and online polling, and in a fast moving primary environment you never know exactly what you're capturing but we do show donald trumpaead heading into the contest tonight and state polls shows he leads there as well. >> the race is tightening, and larry kudlow made a very provocative prediction today on

"power lunch." >> usually does. >> 50% chance that marco rubio drops out before the florida primary which would actually change things tremendously, wouldn't it? >> i'm going say that doesn't happen. >> okay. >> i'll push back, i can say that is provocative but can't see that's happening. someone has to drop out. got to be rubio. got to see kasich drop out of the race, cruz as he does say, he's the only one who has beaten trump, however little it has been, he's beaten him and we want to see this race narrow and get more information out there. don't want mud-slinging but want a little closure. >> coming up, united continental is the newest target on the street under pressure to shape up its board but is it too late after a brutal year for the stocks and short seller whitney tilson is selling lumber liquidators once again sending the stock tanking. it's his comments that has the street talking. we'll bring those to you and from first to worst, is one of the most profitable trades from this year about to unravel?

we'll tell you what that is and how to protect yourself. much more "fast money" when we come back. perstars pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. you're not even registered; i'm done with you! i can...i can... savvy investors check their financial pro's background by visiting smartcheck.gov

can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many

vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems. welcome back to "fast

money." chevron ceo john watson spoke moments ago. listen. >> low prices today but a number of projects coming online to add revenue and also as we finish projects under construction we'll be able to take our spend down and between the two things we'll stay pretty well balanced in our cash flow and look forward to maintaining that dividend increase. >> the price of oil now about 30 bucks a barrel our oil stocks and specifically integrated, the one about the big dividends. grasso? >> if you want to play this safe, this is the best way to go. go with the large integrated names and exxon mobile that's up 6% year to date and chevron basically flat on year and maybe slightly off but you have to believe that the stabilization is going to happen to allow you to buy the emp space and the downstream names and everything else. you want to play it safe. you buy the integrated names. i do believe that it's going to be dead money but you'll be earning a yield to your point. >> let me ask you this question. what if there were no dividends?

>> that's a problem. >> look at our target. >> it changes the equation completely? >> our rating on the stock is predicated on that and that's why we have an outperform rating. we have a $122 target and predicated on that dividend. if it gets cut, all bets are off. >> and if oil stabilizes. >> which all of you don't think is happening so far. >> let's assume that it does it for a long period of time which actually if you look at the natural gas market that's what it did, right, we had an oversupply and went sideways and oil goes sideways at $40 for the next two to three years that chevron dividend is not going to be good. >> wait, at $40 a barrel you think exxon and cheffon's dividend. >> over a three-year to five-year period. >> over a five--year period. >> and i think to that point i think you're right but rex ilerson, a tape recording of what they did, did everything they could to preserve the dividend. >> they have to. >> they want to bolster the balance sheets and if they can and can survive the whole thing

which they can, if oil doesn't go way back down into the 20s again and stay there for any length of time i think they have done the right thing here, they want to preserve that dividend and look at the two biggies to your point, exxon-chevron, more about performance and something people can count on and that's why people are flocking to it. >> next up united airlines under pressure and two investors team up to take aim at the airline nominating six directors including former ceo gordon bethune who speak to cnbc earlier today about the move. take a listen. >> if you're in a horse trade and not winning you're not winning and under a relative basis they underperform the market and i believe the shareholders are not happy with having no airline expertise at the helm. everybody loves including me oscar. it's the board that has got kind of a country club atmosphere and hasn't been paying attention or set the right goals and quite

frankly hasn't followed good governance processes and procedures. >> so, pete. >> yeah. >> does this make you more optimistic. >> it does. >> because i think they are finally addressing the bigger problem because when you look at the big three. american they have found some of the synergies and delta found some of the synergies and united has lagged for a long time and that's directly because of mismanagement and that's partly at least why the ceo was changed and all of a sudden the ceo has to go on hiatus for a heart transplant. this is a great opportunity for them to say the activist to step up and say, you know what, we've been patient and it hasn't been working. we want to put ourselves right in front of everybody and be a part of the board. we want six seats out of the 15 and we want control of where the direction of this airline is because the gakses of the world and those with all the targets, they are way above where we are right now because they understand what the synergies should mean and goldman breaks it down. they have an $80 price target for a reason. this stock has lag the the rest of them. it should come back and hasn't yet. >> are we at the point now where in the industry there are cracks

starting to show. just got the traffic, traffic reports basically from american and southwest and jetblue. the common theme is capacity is up, load factors are down. >> right. >> and so that's the economically sensitive problem, so if you have this situation in a different environment, then i'd be buying united airlines with both hands and i think in this environment i've heard anecdotal stories of cross-country flights from san francisco and new york are half full and half empty depending on how you look at it, so for me i would stay away from airlines all together. >> this could be a massive change for ual. there's so much interim change and it's a massive corporation and in order to affect change you have to get complete internal buy-in, so they need to get this done. first of all, second of all, if they can do that, it's a slower process but just from a moral sentiment internally and from a pr perspective, if they can start to show signs, this stock will work out. >> what's interesting is if you look at everything they are trying to become or everything

they are trying to chase, delta is down 8% year to date and american down 4% year to date so how much is in united already pre-primed in there waiting for a result but at this point if you want to play the airlines, i'm with b.k., i don't think you should be in the airlines but if you want to play, use united as a short stop. i would be a buyer right here. >> yeah. >> all right. still ahead on fast, disruptive trends that could transform the entire industry, the auto industry and three key predictions that could send some waves to the space. i'm melissa lee and you're watching "fast money" on cnbc, first in business word wilde. here what else is coming up. >> reporter: short teller whitney tilson taking aim at lumber liquidators, again. saying there's a 50-50 chance the company goes bankrupt. is there anything that can save the stock from that deadly outcome? we've got a deeper dive. >> plus. >> you don't even think to call

me godfather. >> well, mr. corleone, we're giving you justice tonight but it might not be good news for stocks. when one of the biggest names on wall street weighs in with a shocking call on where he sees the markets heading next. much more "fast money" after this.

when you associate a business with the word formaldehyde, that's bad but when you associate it with cancer, that's devastating. lumber liquidators has now just gone off a cliff. i believe the business has gone from worse to truly horrific. i'm hearing multiple reports from the field and this is anecdotal and apparently the cancer scare has krishd the business. >> that was short seller whitney tilson saying why he's re-shorted lumber liquidators that the cancer risk from the wood flooring could be triple the original estimates. the stock sent tanking. for more on the developing story. let's welcome back herb greenberg of pacific research. >> great to be here. >> in terms of what whitney has isolated because the company reported earnings, in the past couple of weeks business has

fallen off a cliff and he also made the case that the company is not prepared in a financial sense for any of the potential lawsuits that could still be out there. >> which would seem to be a very compelling reason, you know, let's just say not to be long the stock if he's correct, and i want to point out this is not a company that's on our watch list, so, you know, be forewarned, but i think that it took a lot for whitney to come out. you know, he's on the record and i quite frankly have been watching the network throughout the day was surprised that some people would raise questions why he should reshort the stock after having covered it at a higher price. there seems to be some tension over that very issue and that's what, you know, i shock my head at that one, melissa. >> right. >> well, that aside, herb, because he apparently had made money on lumber liquidators, but it is interesting. it just short of shows perhaps his conviction in his bear case after putting on the short once again, after the stock has hit

seven-year lows on earnings. >> exactly. and that's what you have to look at. what somebody comes out and makes a statement like that and you assume based on the past that he's creating a good -- i would suspect having done this kind of work, when you've done it, you create a good level of sourcing, you know. whitney is not a dumb guy. he i suspect is saying what he knows based on his research to be true, so when you come out and do that and put your money behind it and say in his case it's a 4% position. >> right. >> he must think he has something. >> i want to bring in these guys on the desk because i know they have a lot to say. i had a chance to speak to an analyst over at oppenheim about "power lunch" and we asked him, look, is there anything in your model, financial model for your company, you know, maybe provisions or reserves for lawsuits, and he said, no. it's not -- it's not in the model right now which is -- i think that's kind of scary for a company that's seeing double digit sales declines at this

point. >> well, you look -- herb was talking about this, and we've had whitney talk about it. when you have a stock that's lost 90% of its value, it's very aggress i have to say i'm going to reshort it now and shoot for what's left in the bucket right now so i think it's very risky to do because you run the risk of anything slightly positive although we haven't seen anything, slightly positive moving the needle and allowing you to pull that short back and lose men very quickly. >> does this make you believe his case even more, because he's willing to do that when the risk/reward is not very apparent. >> i think in this tape, look, you know, good returns are a scarcity, right, so if you're a portfolio manager and hear the word cancer and you hear anything negative in a name like this, you are absolutely going to stay away from it, so i think -- i agree with grasso. he's 100% right. you have to be very careful shorting a name down here, but i believe the money won't find its way back into the name. there's nobody willing to take that risk so right or wrong. >> and melissa, when you

mentioned that analyst, i thought that was pretty remarkable because you think about it. they have got to be factoring that in. why are they not factoring in potential liabilities like that, and obviously the analysts can't do the level of work and don't have the level of sourcing i suspect that whitney has but now you must factor that in, you can't not and when you start seeing the potential cases, it can go anywhere and, of course, it can go nowhere. we get that, but the liability is now a huge part of the story, if indeed there's that risk. >> and even if there's a small liability, a settlement, that's all downside to these models, that's really the bottom line is nobody is factoring that? >> herb greenberg, pacific square research. >> is there -- >> do you invest long. is this the kind of trade even in the options world. >> the only way i would ever think about the short side of this would be through the options because when you look at the short interest of 45% we just watched and witnessed right in front of us over the last few

weeks short covering and how fast and what kind of moves that you can get to the upside. >> freeport-mcmoran and a lot of different names where you see huge shorts and the moves to the upside drill some of the names, we talked about it at the top of the show and that's the reason you always look at the options world and you look at that and say, you know what, if this has downside still, i put on an option trade and buy a put spread to the downside trying to take advantage. >> i would imagine the premiums are pretty expensive. >> if you're a customer of lumber liquidators and i wonder if my floor is dangerous. maybe i should look that floor out and go back to lumber liquidators and sue. >> here's the question. is the drop-off in sales because of the cdc report? i think it's probably a big part of it, or is it because people are not buying flooring, so look to armstrong wordwide awi. >> people are buying floors. >> no, my point is based on how the stock is trading, people

aren't making that substitute, so i wonder if the drop-off in sales is industrywide as opposed to just lumber liquidators. >> maybe, i don't think so. >> maybe it's a slowdown industry wide. >> all i'm telling you, anecd e anecdotal anecdotally. i went in and i'm doing a floor in my house, a smaller floor and i went in and asked specifically -- i asked specifically about lumber liquidators and i made sure that it didn't have any chemicals that was associated with lumber liquidators, so it's still prevalent in the minds of the retail audience that are actually walking into these stores. >> how much of a premium for an organic floor? >> it's a 30% premium. >> wow. >> it depends on how -- you can even go higher than that. >> and how much did your linoleum cost? >> there's nothing wrong with linoleum. >> nothing wrong with linoleum, a great linoleum floor in our kitchen growing up. move over, don corleone, we have one of our own godfather, one of the wisest men on the

street and when he talks investors listen. find out what has centourian's joe grano sounding the alarm on stocks and where he's putting his money to work right now and later is one of the hottest trades this year about to come to a screeching halt. we'll tell you what it is and why it could have more implications for the market. more "fast money" when we come right back. [woodworker] i live in the fine details. that's why i run on quickbooks. i use the payments app to accept credit cards... ...and everything autosyncs. those sales prove my sustainable designs are better for the environment and my bottom line. that's how i own it.

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welcome back to "fast money." markets ending lower snapping a five-day winning streak. dow dropping five digits and retreating from a key 2000 level. material stocks are the worst performing sectors. here's what's coming up in the second half of "fast money." ford is betting big on the future and the woman who makes sure they don't miss a beat is here with three bold predictions about which direction the auto industry is heading next. plus, jeffrey gundlach making shocking comments on where he sees gold heading to next. we'll bring you the headlines in just a moment, but first it is time for an offer you cannot refuse. all week long on "fast money" we're taking counsel with the godfathers of wall street. tonight we're joined by a man who has conquered battlefields

and board rooms and broadway, from being a decorated broadway veteran to directing "jersey boys" he boys" he runs centourian holdings. welcome. >> thank you. >> what you see for the s&p 500 is a little shocking. >> i think it's more likely than not. it's going to go down 10% to 20%. >> 10 foss 20%. >> what's going to be the triggers, something that we know already? >> 60% of s&p earnings are outside of the united states. we're not imperviofrvious to tht of the world, emergings markets and slowdown in europe and the geopolitical risks we're dealing, i think it's not a good scenario and we're not going to be impervious. we'll be one of the few places where you have anemic growth, 1% to 11.5% gdp, i'd take that right now if it's a guarantee. >> when you say down 10% to 20% and mention the geopolitical risks, what's a political

scenario in which you see the down 20%, is there a candidate you look at right now in the field and say if that person wins, then we're seeing down 20%? >> i would say if trump wins. >> if trump wins. >> s&p down 20%. >> i would say so. >> what concerns you most about his candidacy? >> look, i know donald, but i think -- if he doesn't start acting more presidential and tone down the hyperbole and rhetoric, he may get the -- the nomination, but i don't think he can win the presidency. 35% of the electorate is voting for him but it's a new group of people who feel disenfranchised. he's the manifestation of anger in the united states right now, and rightly so. people are very angry. so they are anti-politician, but he's going a bridge too far in my opinion. he's capable, frankly, totally capable, of being presidential, very capable of coming up with solutions, and by the way, he will surround himself with very good people. >> but -- sorry to jump in. you don't think it's his

personality, more about his policies about being exclusive to here and shutting all borders. >> tariffs. >> as far as trade and taxation and everything else that's going to drive the market down. >> the rhetoric is because he's manipulating and the best promoter around but the truth of the matter is there's a lack of depth here. now, he can fix that, and unless he does, i would have difficult supporting him. >> there are reports today about these tech ceos meeting to sort of put an end to the trump candidacy, the trump run. what's going on behind the scenes on wall street? i mean, obviously we outlined your background and know a lot of people out thereto with a lot of clout. what's the feeling? >> i think you can bifurcate wall street. half is really for clinton, for hillary, and the other half are totally perplexed with the donald. i think they would have liked to see either bloomberg jump in or somebody like him and i think it's going to be a difficult

hoe. i don't feel like there's a good following on cruz. he only eats the right wing. chicken and would be very difficult and donald has to show us the depth. the pecking order as far's i'm concerned, good for the government, good for the country, kasich probably is the survivor with the best track record and the highest level of pragmatism. >> okay. >> in terms. risks to the market, when you're foreseeing s&p 500 down 10% to 20%, what is the number one risk? we spend a lot of time on the political side, but what really is your number one concern at this point? is it the fed? >> well, at 10 i would say it's the global economy. >> okay. >> if you look at what's transpired in the last year you've been reporting companies hitting their earnings target but not their revenue target. >> right. >> so you ask yourself, how could they hit the earnings target without the revenues in the answer is zero cost of money and increased productivity from all the laws of i layoffs.

that's not sustainable and until i see the revenues jump up and consumers jumping back in and the wonderful energy dividend that we'll get from the low cost of gasoline is offset by obamacare. >> what about m & a? will a big spur of m & r be created? is that a nexus -- >> i do believe you're going to see corporations who are cash rich and whose stocks have survived this to a degree, could look at this as a buy market share opportunity, and i see m & a and i don't see organic growth. >> right. >> i don't see the demand pool so i see m & a as one of the solutions. >> that could essentially keep this market going until it falls in. >> for the critical few. >> they need to bolt on revenue. >> for the critical few. >> so just last question while we have you, if you see this pretty sharp deline in the s&p 500 do you advocate having an allocation to u.s. stocks at this point? >> i managed pretty much my

kids' account. >> what are you doing right now? >> right now i'm telling them and friends look at a barbell. on one side of the barbell 70% of your atets are very safe, cash, cash equivalent, bonds. >> okay. >> and by the way, some very high dividend yielding stocks, the dividend coverage is there. on the other end of the barbell very aggressive by al tech, private equity and oversold stocks. there's some energy stocks that i'm putting on that and the bar bill. >> and olive oil. >> and stay the hell out of the middle because there's no reason to be there. no premium in the middle so there are some oversold stocks that you should be legging in on this side. >> right. >> and if the market goes down you're in a cash position and cash will be king. >> sure. >> and torques higher. >> only here two out of eight positions you make it and make a lot of money. >> thanks so much for coming by. >> you're welcome any time. >> my pleasure. >> the name ends in a volume. >> not a zero. never a zero. >> never a zero.

>> so b.k.ers? >> we think a lot alike and the strategist having a huge portion or a big portion in cash, more majority in cash and then you're in a position to take some risks on, you know, 10%, 20%, 30% of your portfolio. that's not a bad strategy whatsoever, but i'm in the same camp and when i look around the world i say where's the growth going to come from. i don't see it. will there be selective m & a that might help people out, certainly, but on a general big picture i would much rather be conservative as possible? >> here's a question for you, m & a under distress because there's no growth is. that a market catalyst or does that not -- >> it's a catalyst in the short term but after that it's a major problem. i love the barbell strategy and something i've implemented for a long time, 60%, 70% of what i have has been very, very safe money and then there's the 30%, maybe 40% that's always trading, always looking for the opportunity. >> we've got a news alert.

jeffrey gundlach wrapping up a webcast seconds ago. mary thompson at headquarters with all the details. >> reporter: gundlach maintained a very bearish outlook on the market citing slow global growth which would cause more space in the energy rates and the embrace of negative rates by central banks would be harmful to the banks. he's wary of risk assets saying this setup is not good w.wages rising and commodity prize stagnant, companies in the material space will continue to struggle. >> this is one of the reasons i think we're not out of the woods relative to risk. the fundamentals really aren't that good. the rally has been characteristic of the bear market rally. >> he says the s&p may have upside of 2% and probably downside of 20% right now. now, gundlach remains skeptical of china's ability to reach growth forecasts of 7%. he questions how u.s. profits can rise with revenues stagnant and rages and rates rising and one asset though, he does remain positive on, despite its recent

real is gold. >> we see that it's rallied some, too, but it looks like it could go further and i still look for 1,400 so i think you stay long. maybe gold miners want to trim a little bit. >> gundlach said he wouldn't be adding to the metal right now at these levels saying he's been long for a while so he's holding on. melissa, back to you. >> matter thompson, thank you. >> as if we timed it perfectly with joe grano's forecast of down 20% and gundlach's forecast as well. >> if you look at the 660 low on the s&p and ride it up to the 2134 top and draw your fibs, the fir fibernache level, you're running no a wall of resistance in the s&p cash. >> how about that gold forecast. >> why? that's not unusual. gold is absolutely ripped. see what's going on around the world.

it costs you money to store gold and costs you money to store cash at negative rates and what's the answer to low exports in the rest the of the world? it's a currency war and that's where we're headed and gold will do well in that environment. >> i'm not blind to the problems in the world. i totally understand that, but i'm smart enough to understand about central bank stimulus and the impact on the markets so when i think about investing, gold, whether it's gold, equities, what have you, i'm constantly looking and at evaluating different things. gold is an investment based on inflation. >> it's one more piece of everything you've got. want exposure there, right. >> but it's the anti-fiat currency trade. >> other people are buying it, it's going to go up. >> look at the short-term movements in the market. talk about m & a, that will continue to fuel this tape to the upside. things will occur whether it's corporate efficiencies, very efficient corporations. >> if you look to new highs though. >> not to necessarily new highs but keep it to a level before the real bad stuff sets in that we all agree there's issues in the world. before that comes in, and i don't want to paint a doom and gloom picture. before that comes in we have a

very long runway for this market for the market. >> i couldn't disagree with you more. i'm telling you we agree the tape is going to roll over. everybody is waiting for that in the near term and as far as cracking down 20% in my opinion i don't think that happens in the short term. >> we already did that from peak to trough. we're almost there, so why couldn't it do it again? >> i think we've done it. i don't see us retesting those lows again. >> i don't see -- i don't see anything that's going to stop us from retesting those lows, and i agree with that 2% risk. you have the 50-week moving average. you have a 2% risk to the upside and probably have more likely a 10% risk to the downside. >> i'll tell you what will keep us from stopping it. the fear of seeing and being short the tape. people don't want to be short the tape. >> that's a short-term phenomenon. >> i hear you. >> okay. >> a lot of hedge funds, long and short guys getting crushed this year. what happens at the end of march when they get the redemptions? they will just start selling everything so we have that whole

wave of stuff. m & a is not going to do it. >> this is an important conversation. >> m and & s of companies that are distress level, it's not going to fuel the tape. >> if you ask me a question where is oil going? i'm a fool if i give you a prediction. can't tell you if it's going to be $100 or $8 a barrel and can give you a range and tighten it up based on intellectual, you know, observations but at the end of the day it's purely in the short term about positioning, just exactly the way the tape is right now. >> wouldn't you be concerned if oil slipped and started to slip back even towards just 30, not even into the 20s, but we go from 37 back to 30. >> you're saying severing predicated on whether or not oil is going down. >> giving you an example. when you look at the overall market and think about what's going on in the world right now, we all understand there are big issues. i totally get that, but you have to also realize the way companies are setting themselves up, i believe and -- >> i think it's also predicated on oil, by the way. >> the positioning background that will help support that so i

tell you -- >> we've seen that trade. >> david, we've seen that trade and we've seen the unwind. >> what positioning are you talking about? >> institutional poxing, client positioning and retail poxing. >> meaning they have a lot of cash, is that what you're saying? >> a structured short opinion on an equity. >> there's more cash on sidelines than there ever has been when had you look at money mutual -- money funds, but that doesn't mean it's coming back into the snarkt. >> no. >> there's no catalyst for that. >> the reason why we're seeing utilities maintain a bit, telecom maintain a bit, consumer staples maintain a bit is the same reason why we're still seeing a bid in gold. there's a reluctance ton long or shortstop you want to have that 70% barbell in the safe. >> david, we just saw that trade that you're discussing about positioning trade. we just saw that take place in the last week and a half, and -- and now we see it's over. >> done. >> no reluctance on this guy's part. >> who knew gold can foster such a hot discussion here. all right. still ahead, one of this year's

hottest stocks could be about to cool off. we'll tell you what it is and just how low traders think it could go, plus, everyone wants to predict the future but this woman is actually doing it. we talked to ford's futurists about the biggest trends changing the auto industry. much more "fast money" straight ahead.

now it's time for a segment we call "fast to the future." one major u.s. automaker is looking to transform the way you drive. in fact, it hired an executive who is devoted to predicting the future. sheryl connolly ford's manager of consumer trends and futuring is here with three high-tech trends over the next ten years. sheryl, a pleasure to have you on the show. >> thanks for having me. >> i think everybody is fascinated with self-driving cars or autonomous vehicles. how close are we to that? >> we're actually surprisingly close. you know, we have the sensors and the systems. thinking like active park assist and adaptive cruise control. these are the fundamental building blocks that will get us to an autonomous future and the hurdle that has to be overcome is what about liability and how do you nottinghamshire for these things? city planners will have a stake hold in it as well figuring out infrastructure. >> in terms of infrastructure, is that going to be a huge

obstacle because some people make the case that autonomous vehicles, it's going to be a slow creep. we're going to not even realize that complete self-driving is here. not going to be like one day a car is completely self-driving. it's going to be a creep of technology, different features in a are added over time. when it comes to the cities though they have to upgrade the infrastructure so the cars can actually be talking to the lights. >> exactly, and you're exactly right. it's going to be an evolution, and a lot of it is already here but companies like ford motor company, we think about the cities as our customer. to the extent that in the coming decade you'll have two-thirds of the world's population living in city centers and figuring out how you'll move people and goods will be really crucial to the functioning of those -- those regions, and so we can try to figure out systems that include cars, trucks, utility vehicles but also expand and include multi-modal so people will be making decisions about do i drive, take a train, went a bike so we'll journey plan for them. >> part of this march towards

self-driving vehicles is the greater activity that we're seeing right now. that's a big plus and can be a big minus as i understand as some of the most common complaints that there's a failure with some sort of, you know, computer system in the car. how is that impacting what ford does in terms of, you know, having to deal with these problems, if they are, and is it easy to correct since they are -- they could be over the airwaves corrections? >> yeah, so we actually have a strategy that's three-pronged. when we talk about connectivity we talk about the things built into the car, brought into the car or beamed into the car, so they can complement each of those services and the occasion where you do disrupt, you lose your wi-fi or lose your signal so that we keep that connectivity seamless, and by 2020 we expect that there will be 20 million vehicles on the road that are equipped with sync and they will have embedded

modems that will also enhance their accessibility in terms of the internet. >> thanks so much for taking time out to fill us in. sheryl connolly, in order's futurist. i know you were dying to ask a question if she can predict traffic? >> when you look at self-drive cars, not really that straightforward to play because you look at mobile eye which is up 52% from the recent bottom and still down 20% year to date. these are not safe bets, a lot of pent-up demand and this rollout really starts to play in and i still think that google is probably the best way to play it, even though it's a small incremental move on the overall picture. i think you're better off playing it with a muted play than a direct play. >> why not an auto company. >> how about a gm or something like that? >> ford, virtual showrooms and all the things going into the future. >> unless you don't know.

>> here's the problem with the auto stocks is the other thing that was on there that we didn't get to is that we're going to have a shared economy and cars will be shared and there's predictions that auto production will be cut in half in the next ten years so i don't want to be long in auto stocks on that environment. >> still ahead, one stock that investors have been piling into and traders are betting the stock is about to collapse. we'll tell you what it is next. we're watching "fast money" on cnbc, first in business world wide. >> some. markets biggest losers are coming back in a big way. still an opportunity to buy the stocks on s

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herthey work hard.ade, wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: 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.

td ameritrade. welcome back to "fast money." lumber liquidators responding to whitney tillotson's announcement that he's shorting the stock, the company saying tilson has elected to create confusion in the marketplace for the purpose of making money by lowering our stock price. we are confident that we have the right team and plan in place to move forward to enter the

company's next phase of success. >> thanks, seema. coming up next, we've got the final trade. de.

to move forward to enter th final trade? >> i love fedex, i think it's going higher. there are buyers, i'm in. it is going higher. >> brian kell? >> start of the show talking about mlps. you short hyg on the news that came out. >> david sieberg? >> xme, a metal and mine etf, too far too fast. i'd be taking profits here. >> grasso? >> i feel like i should be guy tonight. was it a nice show? >> compliment me on my hair and then say something -- >> sealed air. sealed air, i smoke to management. they are very build up for very good reasons. sealed air. keep it on the short stock in

case the overall market does not cooperate. >> giddy-up. >> now we've got a full guy. i'm melissa lee. thanks so much for walking. see you back tomorrow here at 5:00 for more my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a work somewhere. i promise to help you find it. mad money starts now. >> hey, i'm cramer. welcome to mad money. welcome to cramerica. my job is not to just entertain but coach and teach you. call me at 1800-743-cnbc or tweet me @jimcramer. did you miss the big run in home depot? did you fail to catch the games in verizon or