walmart will be interesting. but in a different way. we lump it all together. but it feels like the whole thing is fragmenting. that does it for us. thank you for joining me. a crazy day for the markets. that does it for "closing bell." "fast money" begins right now. "fast money" does start right now. i'm melissa lee. the traders on the desk, tim, dan and guy. worst day in over a month. the man everyone looks to to understand the market said amazon is worth half of where it's trading right now. what is he looking at that no one else is? we'll ask him. later, one group of stocks is doing something very extreme. and it could signal the perfect buying opportunity. we'll give you the name. we start off the markets, a

brutal day for stocks. the dow and s&p having their worst day in a month. concerns there could be a fed bombshell tomorrow in the form of the minutes. home depot sold off hard, and you have to wonder, is the market saying this is as good as it gets. we kick it off with dan, who's been bearish. >> i've been skeptical. to me, i'll just say this. i'm not actually bearish. the market has been banging around 2050. for it seems like weeks. when you look at the s&p 500 in particular, i think it's just above an important year term technical support level. that's about 2037. that's the april low. i think you have room down to 2000. that's no reason to run for the hills if you think about it. it's just a couple of -- >> whoa! >> listen, i'm of the mind-set, not too different from last may, we've been banging it around. it will take something somewhat external or miscue by the fed to break us out of the range one way or the other.

>> the miscue could be the fed could be out of the picture here. look over the last week or so. we've had oil rising and the stock market falling. that's something that's different over the last several months. look at what the fed can do. if they're worried about inflation, they can raise rates. if they raise rates, then oil falls, the dollar goes higher and we end right back in the situation we were earlier this year. i think one of the pillars of the huge bull market is now out of the picture. >> if i look at oil, i'm having understanding where this thing will fall so far out of bet. if you believe the fed is going to jump in aggressively, look out oil, look out a lot of things. who -- >> i'm not saying they are. they can't do one or the other. >> therefore, oil, first of all, by the way, that's a v-shaped bottom. 85%, and 85 sessions, oil has come back and rocketed back. it's going to 50, it could go to 60. oil's not going anywhere. oil has gone straight up.

it can certainly correct. if we say the fed is not in the picture, i would say the other asset factors would be more or less fine. >> what happened today. because the common theme today is that the people were selling the winners hard. that's why we brought home depot up as an example today. the stocks didn't have a chance from the start of the session. >> stock was north of 140, i believe, just after they reported. we never saw that obviously during the regular session. what is it saying? it's saying what home depot said, this is going to be our best quarter. the commensurate rate was commen commensurate with the beat. i think they can go down a couple more dollars from here. i think the fed is absolutely on the table. i sort of agree with tim, even if the dollar rallies, i don't think it will derail this crude move, which i've been wrong

about. but it's been extraordinarily powerful. but fed in the picture, raising into what i think is an earnings session is not good. >> do you think they'll do that? >> yes. the data today could give them the impetus to make a move. that's what i think. >> so that's -- to me, that's why you saw the market fall apart today. as inflation goes higher, not really high, let's be clear about this, but in the fed's picture, they've hit their unemployment target, they've hit their inflation target. they're at a point where they can raise. if you think about that, that will make the dollar go higher and we end up back the other way. the other side of the coin, the fed can't really let the dollar fall. you get the oil going through the roof. your $60 oil is going to look really good if the fed lets this dollar weaken. >> we talk a lot about oil but let's talk about gas at the pump. it's up a lot just since 2016. we never got the tailwind from lower oil. we just didn't see it.

it never really happened. at some point i have a feeling it could become a headwind in the very near future. especially when you consider -- i know retail sales were okay. think about the jobless data we got in april. think about some of the retail data we've had on the individual company level. i think it's really -- >> how do you explain doesn't help on the way down, hurts on the way up. by the way, if it's going up, here's what i say to brian's comment, so many cries for the recession, maybe not on this desk, but so many cries for recession. it's almost technically impossible for this to happen in 2016. this industrial production number showed that the second and third quarters over the last couple of years have been much, much stronger. and they probably will be. >> are you buying on the sell-off? >> yes. >> first of all, the defenses are going to continue to be defensive. today was the first day, at least the beginning of a pullback in a handful of the names. general mills, kellogg's, clorox, high bid traders that will trade at a premium.

through the 50-day for the first time since dec 31, it's not going to stop in one day. >> you have to watch about the breakouts. did you see kraft today? they had this magnificent breakout a couple of weeks ago and today it just got destroyed. that failed breakout, that's something you have to keep an eye out for some of the market leaders. home depot trying to do the same thing. couldn't break out. i would be careful on some of those. i think investors are starting to get very conscientious about valuation. >> what should be on your shopping list? >> still the bond market, without question. i don't care what the dollar is going to do at this point, the gold market has been telling you something and continues to tell you something. gdx is up 100% since the low in january. i also believe, and you had jeff gunlock on talking about ten-year rates below 1%, i don't know about that, but i think the tlt is going a lot higher from here. >> gold, it's completely

ignoring the dollar. tlt, i'm a little up in the air. i don't have a position in it, because i'm not a hundred percent sure the fed's going to raise the rates. >> what should we avoid? >> stock market. >> i think you avoid financials. we've had discussions on how financials do well. but i think the yield curve was the flattest it's been in nine years or something. is that right? that's crazy stuff. it's headed -- i think it continues to go, if not inverted at some point. >> that's a good point. we're going to talk about extreme positioning later in the show. >> is that some of the names -- the consumer staples are so crowded. >> those are names that are not multiples. they're ones that could probably pull back a little bit as i said. i'm talking about an amazon. >> can i throw a stock in there? paypal. tomorrow they have their first analyst meeting since they were spun out of ebay. why does facebook work so well,

they are at the forefront of a secular shift. paypal is a name like that. they'll meet tomorrow. that's a stock that could break out in the coming months. you want to have those sorts of dynamics that are going on there. to me, that's one that's very interesting growth at a reasonable price. >> dan likes paypal. he likes something. >> dan knows a lot. >> despite the day's sell-off, the stocks could rally another 20% higher from here. tony is chief market strategist. specifically, tony, 15% to 20% in the next 6 to 12 months? >> what i really love to do, i love the conversation. what i really love to do is take all of our opinion out of it. because that's just what it is. and look at what historically happens when both credit and market breadth go from being so terribly weak to so terribly strong. we're talking about oil potentially selling off and not being a tailwind but being a headwind. we're just back to where it was at the end of last year when it

was a disaster. so you still have the positive influence of lower interest rates, lower energy expense, and you have this -- the only times that you've had such a negative ten-week rate of change on the moody's, remember the high yield debt was blowing up and it was going to bring us into recession, the yield fell so much in the first two months following that first two months of the year, the market is up on average median 21.3% when that's happened over the last 25 years. since actually since 1970. never been negative six and 12 months later. i like to look at when you have these kind of reversals, it was historic. the decline, which i missed, but the reversal higher in the improvement in credit, and energy, and emerging currencies, that leads to higher prices over time. and that's really where we're focused. >> it feels like there needs to be a catalyst to snap the investors into it. because people are wringing their hands not really knowing -- they think fed rate

hikes will equal the market volatility and step to the side. >> i think a lot of the fear now -- i went neutral in mid march. you had such a big rally. like in the canadian dollar even, you pull back. but you have to buy that pullback. the catalyst in my opinion is when we get through june. you have opec on the 2nd, i believe. the fed meeting on the 14th, 15th. you have the 23rd, that's a big deal. if the uk leaves the eu, it's a big deal. >> 15% to 20% rally in the s&p. how do you wrap your head around valuation for the s&p? right now, my opinion, an earnings recession, 17 1/2 times-ish. you have to ratchet that number up to the low 20s to get to that number. >> unless you're in recession, you don't peak a bull market until you combine the operating earnings, pe and inflation, it gets to 22%. in the 1970s, when you had

inflation at 14%, a market pe at 8, you got to 22. now, you have a pe of 17 point -- let's say 18. i think you have multiple expansion in front of us with top line growth with better global economy. >> you just mentioned when bull markets top out. the last two times bull markets topped out in 2000 and 2007, fed funds were at 5%. here we are just off the zero interest rate. can you throw out all that data, everything you think about how you think bull markets top out? it's different this time. >> i put it in the note today. it's not different this time. it's never different. when i got in the business -- >> but it is different this time. >> in every cycle it's different because of the leverage, the fed has to go lower for way longer. so i found a quote from caroline baum from bloomberg. she wrote pushing on a string when the fed went from 9 7/8 and

stayed there for six months. you didn't have a v bottom in the fed rund rate. actually used the term pushing on a string. it's not different. that's the key here. it's just taking a lot longer. the catalyst for change isn't time, it's the fed. >> it's more debt. what are you talking about? that's the thing, tony. think about how much sovereign debt around the world is in negative interest rates. something is broken here. >> why wouldn't you want to own equities in that environment? >> it should be. because that's what the -- that's the bottom of the financial crisis. but you don't see something's broken here? >> let me ask you this. the only time you know that the fed is not working -- >> why have the stocks not made a new high? >> we're waiting for earnings. >> you have to have earnings. 1985, 1986, was the last time you had a non-recession negative earnings environment. six quarters in a row of negative earnings. worse than you had now. yet a 15% correction in the s&p 500.

and by june, from june of '86 to the peak in '87, you had 55% gain. >> but we're talking about a completely different economic environment than the '80s and the '90s. >> the '90s started out so weak. you remember. the post-snl crisis. >> we had the internet boom. we had the technology boom. >> how about if the catalyst becomes monetary stimulus. the eurozone -- you had it at 5% in the 1990s and it went to three and stayed there for 16 months. >> so let's talk about the eurozone. >> you only know that the fed is pushing on a string in hindsight after you've gone into the next recession. because it's taken years -- each time since the 1970s, it's taken more time. when you think about the eurozone, they're buying corporate debt. the only thing that's left is buying the s&p. i agree with you, this is going to end so badly. but we're on the right side of it. >> well, i don't -- i would

agree with you five years ago. >> at the end of the day -- >> i'm saying there's something different going on in the market and the economy. it's been different going on for the last -- >> but you have to -- >> do you think there's a 15% to 20% rally in the next six months? >> no, i don't. >> and you don't? that's the bottom line? >> a lot of the things that -- >> the last time i was on this show -- >> the stock market trading where it's at, on the basis of bull history, we're in a place here where actually i think you can actually say it could trade through the 22%. because the world is awash in negative yield. >> how about if the eurozone, which is the leading economic indicators are, money supply year over year change in china is ramping. what if the surprise is to the

upside and you get economic vitality and you get some ramp in earnings in the top line. there's your multiple expansion. there's your 15% to 20%. >> unicorns can fly, too. >> tony makes an select point. the best point he's made is nobody expects it to rally, not even me. i will assign probably a 20% probability in my mind to some kind of fomo rally. fear of missing out if you get the thing to break out, wouldn't surprise me at all to see the thing go up 20%, just on fear. >> that's a good guess right there. >> good job, man. >> good looking man. i can't wrap my head around the valuation -- i understand what tim's saying. but it's -- again, it's inherently wrong to have 30% of all bonds in a negative yield right now. >> up next, the wearables market continues to grow.

why are stocks in garments seeing big losses in the past year? could this be a case of good product, bad stock? citron pounding the table on cnbc. but get this, the stock surged. we'll explain what's behind that move. plus, the dean of valuation of the favorite growth stock has a major problem. he'll tell us why he thinks amazon should be trading at half its value when "fast money" returns. there are two things you shouldn't do after a kidney infection. go skiing.

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welcome back to "fast money." valeant seeing big gains on the day. citron reversing course on valeant and getting long on the stock. >> it got to a point, actually, i figured, i'm going to put my money where my mouth is. and i got $1 million check, cashier's check to the ms society. this is my money. this is not the money of hedge fund, or investors. that's all i want them to do is test their drug. just test your drug against the same synthetic that you bought to put on a shelf. i can tell you one thing, if

valeant did what mallynnckroot is doing -- >> telling us that the company is basically making great strides in transforming itself into a pharma company that's consistently meeting or exceeding expectations. dan? >> i would say that was a fascinating interview. now he categorizes he's long in valeant for being so right for so long. i think it's important for viewers out there to understand here, he also said he's long put. he's defined his risk on that one. doesn't see it going to 60. obviously sounds very convicted. if you look at the chart, back in 2013, there's an air pocket down to about 40 bucks. to me, that one seems interesting. with all that short interest and sentiment so badly, i don't know how you at home play it. i'm certainly not.

>> we've got power drills here. >> i know. >> i'm never distracted. >> i'll say this, it is not a valeant bullish call at all. it's an indictment rather than than endorsement. >> it seems like it can't get much worse for valeant. this group has traded as a group for so long. highly correlated. for him to say this is a pure trade -- >> it's not quite a pure trade. this is not the place i would not do a pear trade. investors really need to be careful about that. again, as we look at the valeant, sum of the parts, this is where i think investors are grappling with do i have enough transparency in this balance sheet. >> if you do have a ball, go ahead and buy it. for me, of all the other things out there to buy, why would you

buy valeant at this point in time. the risk is so unknown. it doesn't make any sense. >> why would you buy equity over the debt. it's got a $10 billion equity market. at some point if they really can't kind of raise some cash through asset sales -- >> or -- >> i don't know. what i'm saying is, do the math. if you're a cap structure guy, you want to own that debt. the debt holders, at some point, lower, don't want to see that equity exist. >> if history is any indication, a stock about to hit a brand-new high in months. i'm melissa lee and you're watching "fast money" here on cnbc. here's what else is coming up on fast. >> if you thought that was extreme, wait until you find out what one group of stocks are doing. it will really blow your mind. plus, this man, the deep of valuation says amazon shares should be half their value. what he's looking at that no one else is.

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welcome back to "fast mon " money." a news alert on donald trump. john? >> melissa, a couple of things have happened with donald trump. first, he's filed a new personal financial disclosure with the federal election commission. the headline from that is he's reporting an annual income of $557 million. that is more than three times as much as "the wall street journal" estimated in a story a couple of days ago, what his annual income was. so that's significant. he reiterated that his net worth is more than $10 billion, which is, he said is larger than what

it was -- over $10 billion a year ago. secondly, he's given an interview with reuters in which he said some interesting things. he's not an enemy of janet yellin. reiterated he's a low interest rate guy. said he would renegotiate the paris climate accords that president obama negotiated with other countries around the world to re dice carbon emissions. he said he would release an economic program that would eliminate, dismantle most of dodd/frank within a couple of weeks. and finally, he said he would also agree to talk directly with north korean leader kim jong-un over their nuclear program. this is something that president obama has not done, and that president george w. bush has not done. so all of that are developments in the donald trump campaign this afternoon. >> ambitious agenda. john harwood, thank you. setting up for a big move lower, the names and whether you

should buy. right now, the dean of valuation is in the building. he's got a shocking pick on where he thinks amazon should be valued right now. he'll explain when "fast money" returns. can a toothpaste do everything well? this clean was like - pow. it felt like i had just gone to the dentist. my teeth are glowing. they are so white. 6x cleaning*, 6x whiteningá

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welcome back to "fast money." a big sell-off on the street today wiping out almost all of yesterday's gains. the nasdaq was the worst performer, now nearly in correction territory, down about 10% from the highs back in july. microsoft and amazon the big losers there. big names on deck for earnings tomorrow. but there's one name that traders are betting could rock the market. we'll tell you what that is. plus, get your pencils and notebooks out. summer school is just getting started. our "fast money" traders are

helping pick one lucky kid's trade. shares of the online giant breaking below $700. this comes as the company had the annual shareholder meeting today where jeff spoke about the progress made. josh lipton is there in seattle with the latest. >> reporter: melissa, there is no hotter fight in modern technology right now than the business of cloud computing. that's a fight that amazon intends to win. that was clear today at the company's annual shareholder meeting here in seattle. amazon ceo was on stage, fielding questions from shareholders, and touting the strength of aws. his cloud business, where he noted aws in his opinion has a big multi-year advantage over its rivals. it boasts a $10 billion run rate. and serves over 1 million customers. so that's everyone from mcdonald's to pinterest. aws has excited investors. that stock still up more than 60% over the past 12 months.

but bezos also knows he has serious rivals. you have microsoft, which will remain a big player in the enterprise. the client relationship support system and sales force, and google has a popular suite of business cloud apps. it can build data centers as well as any giant out there. now the cloud effort is led by the well-respected diane green. bezos told shareholders that his aws team added more than 700 new teachers last year alone. that was a 40% jump. but acknowledged, listen, customers will remain loyal to aws as they will any technology as long as we provide the very best experience, including something he and the aws team are going to continue to work hard at. >> josh lipton, thank you. amazon is a stock that's been debated here on the desk. we brought in the dean of valuation himself.

a professor at nyu stearns school of business. professor, great to have you with us. >> glad to be here. >> amazon is worth more like 325? >> i think the pathway for amazon to be worth 700 is there. but it's a very narrow one. i've always called amazon a field of dreams company. if you build it, it will come. i think what they've had going for them is they've always had the consistent story. we'll go for revenues first, we'll get profits later. it's built on that trust. and i don't think they can deliver the margins you would need to get to the 700. that's the basis for my valuation. >> they're at 700 now, though. why do you think it's worth less than half? can't they decide -- i mean, we've seen it for one quarter where they did produce a profit. >> you see glimpses of joe jackson out there. but i think in the sense you have seen some indications that

they're starting to look at making money this last year. but the margins have to go up substantially. >> how much substantially? >> 8 to 9% margin. now they're about 2.5% margins. cathet get there? absolutely. i have great respect for the company. but i think the pathway is a narrow one. >> the margins were at the highest in three years. when i think about that, there's risk. because some of the competitors are really hurting. how are they going to compete on price. that's going to hurt everybody's profitability. we also saw aws, which is less than 10% of their sales. we saw a sequential decline in their margins. like josh just said in the clip, we know these -- microsoft and google, i think there's a scenario where you see both of the margins contract. then this stock becomes amazingly overvalued. >> i think that's absolutely true. because the three businesses they're in, retail, media and cloud computing, are all intensely competitive businesses. they're not playing with small

boys anymore. you're talking google and microsoft. i think they push the margins down. they could have huge revenues. but nothing to show for the profits. >> the follow-up to that, microsoft and google is overvalued as well? >> google has its advertising business. which is this incredible cash cow. amazon does not have the equivalent of that business. microsoft has windows and office. cash cows, but still profit machines. i don't think amazon has a profit machine. it has a revenue machine, but it doesn't have a profit machine. >> where is amazon a victim of its own success in terms of antitrust? they're now 35 to 40% of every incremental retail dollar spent. it becomes a problem. even though they kind of deserve it. and they're making everybody better. where is this an issue for you? >> i think it's devastating for the other -- actually, the better bet is actually going to any business where amazon enters

and bet against the companies in that business. to me the biggest danger that netflix faces is amazon turning its attention to -- >> to amazon? >> amazon is a trader stock. god only knows where the price will go before it adjusts. i think you have a better shot betting against netflix than amazon. >> professor, thanks a lot for coming by. >> thank you. >> very interesting. >> he was looking at dan when he said huberus. >> would the better bet to bet against amazon -- >> anybody that they have wanted to crush, they have. going forward anything they want to, they will. if netflix is in their crosshairs, it puts netflix in a precarious spot. the stock has not traded particularly well now for quite some time. >> it's all about bearish

competition. amazon can squash these guys. they have major commitments in content. which possibly might be at the top of the market. content's never traded this expensive. you might have a bubble. netflix is going lower. 75 to me is the target. >> is no one positive amazon here on the desk? >> not up here, no. >> the valuation doesn't work for me. >> you're not. >> just real quick. we pointed this out a couple of days ago. the level is traded up to now, the 720 level, this is exactly where it traded post-market off the january quarter when dan nathan said get out, and i said stay with it. it did trade down to $500. not suggesting it gets there again. but this was the level it broke down from in january. >> still ahead, three retail names are doing something very extreme and could mean they're set for a major breakout. we'll tell you the stocks right after the break. plus, three big names reporting earnings after the bell tomorrow. we'll tell you which names traders are expecting to shock

the streets.

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trading at extreme levels. breaking it down is a man who lives his life in extremes. cnbc's dominick chu. hi, dom. >> melissa, i don't know why i go to extremes, too high or too low, there ain't no in betweens. my tip of the hat to the billy joel fans. there are a number of stocks in the large cap s&p 500 that have gone too extremes. so we took a look at which stocks have traded far above and then far below also their price average over the last 50 days. among the stocks that have rallied sharply above their 50-day moving average, you've got video game publisher electronic rts, nvidia, and newmont money that have extended far above their 50-day. the stocks that have fallen a long way down, a lot of retailers on this side of the coin, kohl's, and michael kors,

and gap. there are those who say the trend is your friend. either way, melissa, stocks like these could present opportunities for potential profits. they're watching them pretty closely. back over to you guys. >> thank you, dom chu. dom's so cool. going to billy joel. >> with all due respect -- no. i'm just kidding. >> it's not rhetorical. >> the concert, he's all excited about it. that's cool. >> billy joel in 8th grade was cool. interesting points. dom is very, very cool. but i think what's interesting to point out about that whole trend is the 50-day, the thing about the retailers, they're below the 50-day, because they had a big rally to start the year, now the emmeremmerer -- er has no clothes. they haven't had that positioning move.

retailers struggling with the whole amazon effect here. i think that's where you have extremes. i talk about this all the time, relative strength indicators, at least short-term measures of momentum. you're at a 7 on the gap. this is extreme extreme. macy's, 7, jwm, i think are oversold here. >> i have something to say to you. do you live in a glass house? you shouldn't throw stones. >> great shot by you. >> i would just say this. back to the original conversation with tony, when you think about extremes, look at the crashes that we have seen in the stock market here in the u.s. in energy, in retail, some of those names in there. we've seen entire sectors just demolished. where's the underlying strength in the stock market? i just don't get it. that was the last point i wanted to make. when you see entire sectors get taken apart like this, that's just dangerous. it tells you something is different this time. >> i know guy thinks the one stock traded deserves it. >> yes, it does. one of them will be my final trade. >> interesting.

>> i will say this. newmont mining three-year high. i think it's just getting started. >> based on fundamentals? >> based on the fact that the gold prices are going higher there. cowboy, do you want to get in my grill there? >> he sniffs at that one. >> that's your thing. >> the best performing sector of the month. with summer just around the corner, which stocks to be poised to heat up. >> hi, melissa. summer is just about here. if you're an investor, you're probably thinking, i'd rather be outdoors enjoying the weather than indoors worrying about my holdings. which tech names make the most money when the mercury rises? we look back over the past ten years. and we trace the biggest winners and losers from the start of june until the end of august. the top of the list may not surprise you. because it's facebook. it seems to be topping a whole lot of our tech lists. jumps 10% and positive

three-quarters of the time. apple may be in a funk as of late, but don't count it out. returns over 6%, and higher most of the trading days. sales force.com, averaging 4% gains. and activision rounding out the top four when it comes to teblg. rising over 3% from june to august. on the other side of the coin, which tech names tend to underperform. micron technology down in the summer. and down half the time. yahoo! also falling around 12%. only trades up 20% at the time. sansdisk trades higher more often than yahoo! does. auto desk trades more positively than yahoo! but loses over 7% in the barbecue season. a look at the tech names in the hot season. >> thank you very much. apple is interesting. seasonally, that makes sense.

because it lines up with the fall launch of a new phone. >> right. this year, are we going to have the same type of tailwind? i don't think so. i think everybody's out of the stock on that one. what this comes down to is you're talking about momentum here. if the market has changed over the last 12 or 18 months, then this may be the time. most of those were 70% of the days up or something like that. this may be the summer that doesn't work. >> which names stand out to you? >> in the tech space, the apple effect is also one of these things you have a very good december quarter obviously the big quarter for apple. this is something that i think is one of the reasons you get a bit of a tradeoff in the summer. the fact that barbecue stocks and, you know, i don't know, you name those summertime activities, ultimately this is a function of the market itself that's significantly stronger in the summertime. >> i love a good barbecue. i think we should have a "fast money" barbecue. nathan's hotdogs.

hamburgers. >> mm-mmm. >> watermelon. all kinds of fruit baskets. beer. >> ahead, slash is back -- >> i make a great sangria. a good summer sangria -- >> like a white sangria? okay. >> are men doing that? >> taken to school by one of the traders on the big energy bet. the summer school series continues right after this break.

welcome back to "fast money." school may be out, but "fast money" summer school is in session. all week the traders are taking questions from students across the nation helping finesse difficult trades and moving students to the front of the class. today we've got will, an incoming sophomore at lehigh university. will, welcome. >> thanks for having me on again. >> today you brought a chart for professor lee to help. what's your problem? >> the problem is, i'm wondering whether or not i want to go enroll my call into the next month. or just go and take a small gain off right now. the plan originally with the xle

trade was in january, i thought, hey, three years later i think oil's going to go higher. i think the companies are going to benefit from that. and just bought a core position, and bought the calls here in april to go and catch on to the momentum. and not mess up my cost basis. but still trying to capture more upside. >> well, will, you did something that was kind of smart in the throes of a really nasty sell-off obviously in january. grks le was already down an awful lot. went a lot lower in the february lows. what you did was you looked out into the future and defined your risk and bought a call. you basically bought the right to own the xle out in june expiration at a much higher price. when you look at that chart here, it's not far from the price. it feels like a tie, kind of like kissing your sister or something like that. you may want to take the premium and roll it out to a longer dated month, maybe look out to

january '17 expiration and buy a call or call spread to participate in future gains. >> where do you think oil's going to be, will? what's your feeling on that? >> i definitely can't say a direct number, but i definitely feel like if i look at a year out, that oil will definitely be higher than where it is right now. >> okay. will -- oh, by the way. do you remember will? will was here -- he was part of our team traders. look at him now. now he's in college. >> he just started shaving last week. congratulations, will. >> best of luck with the trade, will. >> thank you so much. >> from lee high. what would you tell will? >> i'd tell him he should -- he just was on national tv. what's tonight, tuesday night? a big night at lehigh. he should be going out right now and saying, hey, i was just on national tv. that's what i would tell him. >> what's interesting, if you

take the xle, take it apart and break down some of the names like ex son, who make up the majority of it. eog to me, or even occidental that are high-quality names that have more operational leverage, you could stay long those, short the other part of the basket. >> what part of the basket do you like? >> in the xle, what concerns whe is 72 is major, major recess ta resistance. i would take my profits on this. if you still like energy, i think if we get up to 72-ish and get a pullback, then you want to get in. >> we should note out there, attention, if any other college students have a question about their trades, there's only one school to go to, and that would be "fast money" summer school. send in your tweets at cnbc "fast money" and we have answers for you. >> awesome. >> we're getting earnings from major tech companies tomorrow. dan, what are you watching? >> let's start with cisco. they have a lot of revenue exposure outside the u.s.

that's where they expect to get a lot of their growth going forward. the options market is implying about a 5% move in either direction. that's about $7 billion in market cap in either direction. the stock has moved on average about 5%. just add one point over the last five quarters, it's actually had two rallies in the stock after earnings. it's a cheap stock. they have a great balance sheet. they have a lot of em exposure, a lot of dollar exposure. crn, i throw this in the amazon basket as far as high growth and valuation. they report tomorrow night after the closing. implied move is about 8% in either direction, about $4 billion in market cap. on average, the stock has moved about 5% over the last four quarters. i'd add there, there's been two days after the earnings report where the stock has actually ral idea 11%. both instances, they're very

different stories. cisco valuation cheap, crm, expensive. >> we haven't done this in a long time. >> i knew this game was coming. crm versus cisco? >> i would rather sales force.com. cisco has had trouble all last year at $30. didn't make it this year. i think cisco, that 5% that dan just talked about will get you down to 25 bucks. >> i would go the exact opposite direction as my friend guy. cisco on valuation on dividend yield, the fact that the dollar's been weaker, the guidance, pick up on the industrial side. taiwan had a couple of good numbers. cisco to me, crm is another big multiple stock that, yeah, they're dominating their field. putting guys out of business, and it's well in the price. >> for more "options action,"

5:30 p.m. eastern time on friday. coming up next, the "final trade." stay tuned. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm 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.

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time for the "final trade," tim. >> not catastrophe, but the hyg has had a very good run. short. >> i'm happy to be a short seller this market, spy. sell that short especially if we break the may 6th lows. >> paypal, first analyst meeting as an independent company tomorrow. when they reported a couple of weeks ago they did not guide up for 2016. they might have saved a little something for the meeting. i think this breaks out over the next two months at 42. >> will from lehigh, great. he should go out tonight.

>> you almost said will hasselhoff. >> break it out. >> thanks for watching. see you back here tomorrow at 5:00 for more past. "mad money" tomorrow at 5:00. "mad money" well jim cramer 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. i promise to help you find it. mad money starts now. >> hey, i'm cramer. welcome to mad money. i'm trying to make you a little emergency. my job is not just to entertain. tweet me @jimcramer. it's getting hot in here, let's take off all our stocks.