so, did anything happen to the market this week? the guys are getting ready for the big show. while they're doing that, here's what's coming up. >> the only thing we have to fear is fear itself. >> you got that right, fdr, because the fear gauge is doing something extraordinary and it could signal your opportunity to buy. plus -- >> i wanted to get up right now and go to the window, open it and stick your head out and yell, i'm as mad as hell and i'm not going to take this anymore.

>> that's how bio tech investors feel this year. and -- >> i love gold! >> well, you're probably looking at the wrong medal, buddy, because it's silver that's surging. why it could be going even higher. the action starts right now. ♪ >> you want to see something scary? check this out. that is what you get for lending your money to the swiss for the next 50 years. less than zero in the hunt for yield, investors appear to have lost their minds. what does this mean for stocks? let's get in the money and find out. the first thing to comes to mind is the banks. >> listen, the big headlines at the end of this, a week on for the brexit situation is that the footsie and the s&p filled in the gaps, but there was damage done in other assets classes. if you think about it, the two-year treasury yield below 60. that's where it closed.

ten-year treasury yield closed down 1.8 at one point and touched as low as 1.3. when you think about what's going on, there's a ton of damage that's been done to the investment landscape and then you put the bank stock index in europe out there and look at how little they recovered. how little of the gap from last thursday's close. that tells you something is going on. to me, you have to look at the banks again. >> the narrowest in nine years. you can't make money in that environment when you're lending. >> not if you're a financial and if you're an investor like a pension trust, you're left with few choices. you basically are banking on trying to get 7% a year. you not going to get that in fixed income now, unless you get to the credit risk you're taking oond you're going to have to see support for equities.

which is probably around 6% and growing slowly maybe, but it has a chance to show. bond yields have no chance to grow. you buy what you get, that's it. >> trading desks are shrinking, bank k is under duress and with it this low, it's not a good proposition and then technically, which i'm sure you'll talk about. you have the sharp breaks and theb you all kre, thrown back to the scene of the crime. >> that was some pretty good news. the price action in some of them since the news came out a couple of days ago hasn't been fantastic. i think it's in the stocks and you have to think about the rate environme again and it's one of the reasons, we have a chart of the euro stock bank index.

it's below it's 2009 financial crisis lows. i think you look at the u.s. banks, look t a bank of america that has a ton of exposure to the united kingdom. more so than jpmorgan. i think that's where you take a shot. that thing touched 12er yerl this week. got back above 13. the low from february is 11 and i think that you can look out to august expiration, catch their july 18th earnings report in the, i think the q2 report is on the 18th before the opening and the strategy is simple. i think you buy puts. yes, you did have apgss. they've come in a whole heck of a lot, but you have this event, a july 27th fed meeting. if you look at the way european banks, there was going to be capitulation this summer.

august expiration, buy the bank america. 13 puts. pay about 50 cents for those. pretty near the money participation on a move just not too far away. >> i understand where you're going with this, but i don't know that the stock is actually going to go lower. >> people said brexit, whatever it's going to cause isn't going to base us now. they pushed that off. seems like every concern we've had, the market has brushed it off. >> doesn't matter, it's two years from that. they have to renegotiate this agreement. >> you've got 50%, but instead

of just any other. >> looking tat charts for when it was released wednesday evening that the price action banks have been accident. it wasn't on thursday. we held on to gains pretty much. >> the question is, is it more positive than this proceeding negative, meaning the collapsing associated with brexit? if it was really, really positive, you would retrace all the damage done. >> like the broader market, you mean. >> at least attempt to do that. but the banks didn't come close to that. >> puerto rico default, that was big news. >> bank of america, it's done 40%. >> the s&p 500 is within 2% of

its high and that u.s. bank stocks, which used to be one of the most sectors, can't get out of their own way. something's going on here. has nothing to do with brexit. something's doing on and this sum eric we're going to get a sense of that. zpl i think a lot of bad news the baked in here. you're spending 50 cents on a $13 stock. i mean, you're talking about around 4% of the premium, this is going to expire around 60 days. i might think about looking to spread it. maybe even believe it or not, doing something i know you don't like, but a one by two to take in. that's where all the premium is. >> good discussion. now to bio tech. back at headquarters with the details. >> hey, that's right. we're checking in after the first half closed on the sentiment and putting out a note saying it's just about the worst they've experienced among

investors. we lookeded at ivb, the biotech etf. its performance in the first half. we found that the first half that just close d was the secon worst performance. we dropped 22% for bio tech in the first year. in 2002, tech had just gone through its dot com bubble. this promise around the human gee gnome project. right now, people say we're just seeing confidence get roaded because people are worried about drug pricing and the election and even the big buying techs, people are starting to lose confidence in them. these big companies need to buy and have a lot of cash. a lot of people are hoping that will turn things around in the second half.

gilead with more than 20 million. celgene, there is a wide expectation these companies are going to buy. the question now is is that even enough to turn their stocks around now. >> so, the chart master here is taking a look at health care as a second half sleeper pick. it's a way of capturing both the defensive nature of health care. this stock is more parlayed with some of the lower beta names like pfizer lily. okay. top panel is amge nrn and the bottom to its peer group. it piqued at $81 in august. since that as it has gone down

on an absolute basis, that's very important. it's a defensive name in a fairly aggressive group and that's going serve you well if one were to do this trade. here is the actual chart itself on the long-term basis my eye seeing that. i think we're going to resolve this. there are plenty of people that make the bet this is going to do this. i'll take the other side. i think the uptrade is coming based on how good the relative performance has been. here's the action. no lines, line, i think we're

going to do it. sort after an offensive, defensive large low beta name. >> mike? >> so, i do think, to dan's point, we're in a world now where it's hard to imagine what the good news for any stock is going to be, but in some like the financial, i wonder whether there's a a lot of bad news baked in. i've seen the chart going sideways. going make a mildly bullish bet because it could indeed from my eye continue to track sideways. i'm looking to collect some premium. looking at selling the august 150 puts so collect $3.60 for those. these things expire in just over 50 days. clegting more than 2% of the current stock price to sell and in a world with no yield, this is a place you could look to get some. >> what do you think? >> i actually like the idea. sometimes really good to sell cheap options.

i'd almost take that premium if you agrae with carter's breakout call, take it for the put sale and use it to buy a call spread and do a risk reversal. mike's making like you said, a mild bullish bet and i think that makes sense. can a lighter group catch up? and two, if you're going to make that kind of bet, do you go with something that's held up better during the kai naj? and obviously as you saw in the brief statement before, it has the most cash. it has the lowest beta and it is the most offensive, so it's a heads you win, tails you win. >> trading at a cheap multiple. they have a diverse number of products for chronic disease, so this is one of those places where it's not any reason why the bottom should fall out.

>> if you sell this, 146 buck, two years lows around 133, if you buy the stock at 146 and the low is 132, in this market, that's not a terrible amount of risk to take and you're collecting 2% less thin two months. >> got a question, send us a tweet, check out our website. options actions.cnbc.com and sign up for the newsletter. better than fourth of july fireworks or something like that. here's what's coming up next. >> hey, you want to see something really scary? >> don't look at the vix because a so-called fear gauge could be signalling happy times ahead for stocks. we'll explain. >> plus -- >> fraternal twin p gold and silver. >> talk about a sterling call. carter said silver would soar and he was right. when options action returns. i'm here at the td ameritrade trader offices.

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 and 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. td ameritrade.

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. we're wrapping up a week when a lot of traders and investors tried to buy the brexit dip and boy, did they. we saw an impressive rally in stock, at least measured by the volatility index or vix. now, after trending higher in the days ahead of the eu referendum vote in the uk an the surge after the voting result, we've seen the collapse of the fear gauge since then. since that high in the vix, we've seen it fall by around 40%, maybe a bit more. that may mean that the bottom is in for stock, at least according to tom lee. in a note to clients, he showed the last four full-times weave

seen the vix fall by at least 35 in four trading days. those stretches were the ones end in january 4th, 2013, october 21st, 2014, december 22nd, 2014 and august 28th, 2015. he notes that in each of those instances in hindsight, the market had already made a bottom and in each of those four case, stocks finished higher three months later. adm admitly, it's a small size, but might be something to consider as traders look to see if these lows are in of course only time's going to tell, so something to watch. back to you guys. >> thank you. have a great weekend. so, i go to you on this. what do you make of this incredible round trip we've seen in the vicks? >> first of all, the vicks absolutely went too far too fast. the news is out, typically, what happen ss the vix will go up about one point. what actually happened, a 5%

decline. the vix went up by about ten. you say, all right, options premiums got hysterical and generally speaking, when options prices get hysterical, that's the time you want to get long. we have taken a long look at this. through many different cycles and we found that if the vix is is above 25, chances are you're probably going to get a bounce off that. z >> so, you missedi eed it. >> i don't mean you, but in general, people probably missed it. >> yet, maybe you did, maybe you didn't. maybe you said, what just happened and before you got a chance to think about buying or selling anything, the market had come back. i don't really feel like there's a lot more upside from here. i don't really. >> so, you don't agree with tom lee. if you look at to the vix future, they're still price iin about 20 in des, so if you're looking at spot vicks at 15 after such a historic decline, it's not telling you a lot.

>> it's all noise. has anything changed materially for the better over the past week or so. >> arguably gotten worst. >> some day da was better, but nothing has changed expect worst and we know equities and asset classes have done nothing for 18 month, yet they've treated you to three 10% plus drawdowns. >> everybody has gotten a second chance. brexit happened. market got slammed. and options premiums went through the roof. now, we've round tripped it and premiums are down, so ask yourself this one thing, which is that if you had another chance to hedge, would you? >> to me, it makes sense. >> use the low vix now to hedge. buy insurance. >> up next, mike doubled his money off of bullish gold and silver, so why does he have regrets? we'll explain when options action returns.

i'm here at the td ameritrade trader offices. 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 and 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. td ameritrade.

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ey 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.

how is this for a kill r call. >> i'm thinking higher, so 1660 closed. play for eight, ten, 12%. just up from here. zbloo looking at the august 16.5 call spread. spend about 50 cents for that. >> since then, that was just a couple of weeks ago. silver surged 15%. charter, what do you do next? >> this is tough. if you put money to work and your wrong, you know what to do. get the heck out. you put money to work and it starts really working, what if you take your profits and it keeps going? let's look at this. on the slv, trading here right for the show, if you look at where slv is now in relation to how far above or below it's

been, it is now bottom panel here, depicts the percentage. it is 25% above its 150 average. it's only done that two or three other times going back basically a decade, so do you trim it? that's the problem, then it keeps going. that will be maddening. do you get out and thank goodness because it comes back? here's the daily chart. you can draw these lines any way. the original set up. that head and shoulder, also a a bigger cup and handle. it's kind of a run away turn. i would take some measures maybe trim, but something this strong can take on a mind of its own. >> mike. >> we're short the 18.5 strike, which is close to where slv is trading. so, time is working on our side if we want to work on the trade. i think daniel made the point don't settle the upside call up and actually hooerks right because we did a little over a double. you would have tripled, actually, if you listened to dan

and not me and just said i'm going to let the cubes roll here and we'll see how it turns out, but i will say this is the trade off you made sometimes between the probability of profit and allowing premium to work in your favor or just letting it ride. >> that's a great point. you went for the high probability trade. that's generally the best trade. especially when premium option, directional strategies. you had him making a convicted call about the potential for a breakout. my only point was buy that call and if you start getting the move, then you have the pun intended, optionalty of kind of spreading it and reducing your premium. >> most likely and since you're in, i think you stay with it. >> up next, the final call from the options pits. i'm here at the td ameritrade trader offices.

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 and 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. td ameritrade.

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. some of our tweets. robert tweets please explain the difference between selling a put and buying a call. why do you do one over the other? so, mike. >> okay, look, very quickly. if you think it's going to move up slowly, sell the put, collect the premium. fast, buy the call. because otherwise, time's not working for you. gl you agree? >> yes, it's a matter of conviction. >> time for the final call ahead of the july fourth weekend. >> i like amgen long side. health care. >> mike. >> enjoy independence day weekend. if you're trying to catch lobsters as i have been, don't try to disguise yourself as one first. it's not working for me. >> meaning wear sunscreen. >> brexit or not, that was never part of my thesis for bearish banks here and i think something's going on with the european banks here.

i think you can look to express that in european banks. >> i'm melissa lee. thanks so much for watching. pr more, check out the website. have a great fourth of july weekend. enjoy your weekend. "mad money with jim cramer" starts right now. pie my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i've promised to help you find it. "mad money" tastarts now. hey, i'm cramer. a lot of people want to make friends, i'm just trying to make you some money. call me at 1-800-743-cnbc or tweet me @jim cramer. the next time you feel like