>> hey there, live at the nasdaq markets by kicking off the holiday weekend. that's up on tuesday, here's what's coming up in the show. >> money will always be paper, but gold will always be gold. >> and there is something in the charts that suggest now is the time to buy it. we'll explain. plus, how would you like to protect your profits at ammonson for nothing? >> nothing? >> yeah, that's right, nothing. we'll break it down and talk

about car trouble? gm shares are tanking. there are signs it's about to get worse. we'll tell you how you can cash in. the action begins right now. >> let's get right to it. another record setting week for stocks, another warning sign has appeared in the market. treasury yields have been sitting year-to-date lows. what is behind stocks and bonds, what does it mean for the market? >> what do you think? >> obviously, u.s. equities are some of the strongest around the globe. they've kept that bid, broken out to new all time highs, it says something differently. you take a look at the s&p, some of the sectors are defensive. you look at health care, consumer staples this year, it doesn't speak to inflation trade, obviously, some are viewed to be bond proxys, also,

to me, just because the s&p made highs more than all of last year didn't exactly speak to a thing when you overlay the fact that persistent bond yields. >> they support lower valuations, there are sort of two sides to this. >> that's right. one of the reasons the rates remain where they are because of some of the economic news, capital goods orders. the fed is lower an ambitious growth estimate as well, when you take a lock at that. basically, the look is lower than it has been, of course, it will be justified. you need to see signs of economic growth and material

signs of inflation, maybe that's false employment. you need that to see rates go materially higher. >> key know the ten year continues to weaken. there is a message there. the real thing is independent financials risk off has been in effect all year. december 9th, materials, energy financials have peaked. they have all been under performing the market. there is nothing that suggests that will change. >> she mentioned the slf. the etf, the s&p is up '078%. we know a lot outperformed immediately after the election as carter said. when i look at a stock like goldman sachs and i look at the way the stock has acted down about 13% from its 52-week highs made on march 1st.

in that is a really bad quarter for april, when i say really bad, on a relative basis to a lot of their competitors was fought particularly good. gold is considered best of breed and the backlog is not what people expected. the stock went down 5% the day after the earnings. the thing has not been able to recover. when i look at this i see a big air pocket between 220. not far below where the stock is trading now. >> that is the intersection of the post-brexit lows last june. i think you want to look out to q2 earnings that come july 18th. i think there is an opportunity for that stock to fill in if you want to call eight gap towards 200 here. i want to use a simple put spread, options prices are relatively low right now, especially at a time where this stock is trending lower. it's making a series of higher highs, lower lows, the me the trade is simple. it will catch that earnings

event you could buy the july 220 put spread paying $5 for that. that's a half percent. at 215, your max gain, that may be a little aggressive. here's the other thing i want to say about the trade, this has outperformed since november 8th. it's off 22% or so s&p is up 13%. i have to think in the next couple months, we will get a broad market sell-off. bank stocks will be in the middle. also, to me, i think 2-2 earnings could be the catalyst. >> do you like the target of goldman sachs, specifically? >> i do like that we saw maybe for the first time in quite mile, morgan stanley trading revenues were doing better tan goldman sachs. okay, they have the asset

management. if i was going to look at these two, i'd rather own morgan, dan's trade cap cures earnings, this thing isn't going to decay as quickly as short dated options typically would. i think it makes sense, if you look at it on the basics it looked cheap, one times two times tangible. i think this trade makes a lot of sense. >> it's not specific to goldman sachs. if you look at regional banks, other investment banks or brokers, if you look at dan's pattern again, not only is that air pocket there, there is a minor head and shoulders pocket. the burden of proof is on the goal. gold has performed since september 11th. it hasn't gone up. it's going down. >> would you apply this to the

regional banks? >> i would. i guess what got me going is stocks pulled up 5%. that was huge number after the q1 earnings. if they put up another that resembles q1. >> now to gold, the precious metal hitting high in the month. what are you looking at? >> let's go look at these first-hand d and figure it out toke. i wanted to start out with something not about to trade. if you sit at home monday or use the back at the office. just remember these first three charts. it's very much an investment. so i have picked non-random, gold is in blue, s&p in orange. >> that is from november 11th 2007 the prior absolute peak of the gold market. the winner is, gold.

let's go to the next time frame, non-random time frame. this is a longer-term -- and what this is from the absolute peak 345u67 24th of 2000. this is 17 years ago. this is gold versus the s&p. you would say, okay, stocks have dividends. all right. i have that. this is we are invested dividends and what you see here, yes, we know that dividends are a big part of the total return. still it's a blowout. let's go to gold metal. here we go how do you droch the line? my eye sees is this, i think you have a nice, call it attention, lower lows, higher highs, let's put this in a few more context. next chart. what this is very important. the bottom is relative

performance to all commodities. even as gold has been going down, gold's performance relative to all commodities, whether tin, nickel, oil, natural gas, cocoa, pork bellys is up. keep going, here's the here and now. i think we have this. here are the lines. okay. we will draw them ourselves, sometimes the computer doesn't work. watch this, thank you, computer, up and out, i'm long gld. >> mike, how are you trading gold? >> i'm looking out to august. i think you can buy the 121, is 127 call spread, you can sell the 127 for 85 cents. that's a net dividend of $1.80. that's math we happen to like. i want people to think about this, to carter's point as an

investment, land can be an investment. it doesn't generate income. so investments can be assets. i think that's what he has been referring to. >> if you see flows into emerging marks, that would be bullish for gold, too. >> we have sort of seen that in flows in the emerging markets. you think the stockmarket is set for a pullback to be a beaver in gold, dan? >> i don't think so, there was an interesting occurrence this week, obviously, bitcoin got a lot of attention with the surge it had, the bitcoin surpassed that of the gld. listen, we know there is trillions and trillions of gold reserves out there. we think of traders using it against an equity decline. that surge got pe thinking of gld the same way you are thinking about it.

if there is truth for it for equity, owning that 127 call spread in the gld looks like an easy one. and you like this risk-reward. >> you get much more equities out of gdx or gdxj. either way, gold the bouillon or minors, it is going to work. >> check out our super cool newsletter. so what are you waiting for? here's what's coming up next. >> you want to see something scary? check out general motors. we will tell you how to profit. plus, here's what shares of amazon are doing. if you want to lock in gains, we will show you how to do that free. when "options action" returns. those things today with the futures now newsletter. you will get the latest news, a

sneak peek at interview, stay ahead of the headlines, sign up now at cnbc/features e-mail. "options action" is sponsored by think or swim by td ameritrade. 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. see options data like never before. with thinkorswim only at td ameritrade.

oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. welcome back to "options action". amazon reaching an all time high, a fraction of the 1,000 milestone investors have been watching. with shares so close to 1 thichlt. does it mean it's time to split it's stock? hi,deidr hi,deidre. >> mellissa, amazon wants the glory of four members, it's a few bucks away.

if they lock up the dow, it will have to split. right now, it's 36 times the lowest priced one ge. since the dow is calculated on price, amazon's sky high tag would throw it all awreck. they have split its stock three times since it's ipot. last time was 18 years ago bezos said this week they have no plan to split soon. additionally, it may have to pay a cash dividend. every name in the index doesn't. again, there may not be likely given they have never been shy to reinvest back in the business. another reason to hold out may be the curse of the dow, back in

2014, app shares were approaching a thousand bucks, they did a split and sell 17% over the next 12 months and it took nearly two years to hit another record high, all tern naattively, at&t exited the dow. letting the stock run up, amazon is becoming less and less accessible to younger and mom and popen advisors. guys. >> thank you very much we have a way to help you protect those gai gains. >> the stock was more than 100 million in market track. investors are focused on that. we get asked all the time, how do i use options? buying puts can be a huge drag on performance, if you do that too frequently, one strategy would be to buy a caller. what do you do? you are selling it out of the

money call, you are using the proceeds of that sale, are you basically interested if protecting gains, you are looking to do it for a minimum outlay, rather than buying puts, which costs you, you want to do that for no premium whatsoever. here's the thing, you have to be willing to give up some potential upside to have that downside. let's go through what a cashless caller would look like, back in 2011 to 2013 when the stocks doubled, it's all about north american retail sales. when it doubled back in 2016, it was about als the cloud service, now it's parabolic. people are talking about other things in the future. the way they use data. let's move forward. this could be one reason why you want to protect the stock were to go down.

versus 100 shares of stock at 999.50. you could have a ten 45 strike call at $26. you can buy and august expiration that would cost you nothing. each option costs $26 bucks. you are selling the call for 26. you would have gains in the stock up to 1045. that's where your gains are capped. you have protection, losses down to 950. protection below that. that's what you would use a cashless collar for. >> mike, what do you think advance trade? >> i like this. normally with callers, further out the money than the call you sell. what ends occupy happening is you have less potential upside than downside risk. that itself not true here. actually, there is a favorable risk-reward. i have trouble if you own the stock you wouldn't be considering a trade like this it's like a extrinsic call

spread. i like the trade. >> let's start out at $1,000. i think it's arbitrary thing. i know for fact management doesn't look at that, doesn't careless. you buy a share. let's talk about the prospects going high. we know amazon has had two major draw downs at the lows in 2016, at the beginning of the year, it was down 28%. twice the market. we know pre-election, it was down. having a defensive play in what you are doing, it makes a lot of sense? what happens if the stock actually moves up? >> that's a great question, mem, one of the things, the stocks, let's say you own it, you are only up 33%. if the stock went up a little above that, you are basically, again, this is a major bullet point. you give up some upside for protection of the down side. the way i see it, below that 950 strike. you do have an air pocket to that breakout level of 950.

if they were to use earnings. i cozy august expirations, it will possibly siphon the market over the course of the seller. up next, energy having a mark. one of mike's trades, why you should keep betting against energy when we come right back. it can be hard to get air out,

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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. see options data like never before. with thinkorswim only at td ameritrade. >> welcome back to openings action. it's time to look at open trades. two weeks ago, carter voted against energy stocks and said it could come back short lived. >> it's just this and we are j you in that. i just don't want to, i don't want to be short energy. >> i'm looking out to september. the 67.560 put spread. you can spread the 67-and-a-half put i was looking at that early today, sell the 60s against it for 85 cents. >> plunging on disappointing news from opec this week,

carter, what do you do now? >> he is plunging. the real time is energy as crude as rally, s&p 500 energy has made a bakke 14-year relative low this week. why can't you love coal? maybe it will get worse and worse. stay away. >> mike. >> i think we stick with it. security runs out in september. we got plenty of time and rom for this drop further. >> dan. >> it's something to be said for buying lagers. >> no, in this market it's nothing to be said for buying lagers. you keep pressing with this. >> collin courter said it's time to hit the brakes on names, about a month ago, here's what they say. >> gm 10% down, i'm looking for the move to these lows at 30. so. >> i'm looking at the june 33 put spread. you can spread 80 cents for that, that's a small fraction. we have that catalyst.

it takes us auto aauto ojune. >> g mr. is down 4% over the past month. what do you think next? >> this is a situation, although the stock still looks weak, we actually need a little more time west virginia i can do, we can sell the put spread for about what we paid for, 80 cents, we roll further out. i don't think all the damage has been done yet in these auto stocks. >> and that's the key. it's not just general motors. the parts companies, auto zone. the whole thing is under severe pressure. >> up next. the options call. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face.

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what?pony neighing] hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. >> welcome back to openings action. the first tweet comes from matt hale asking thoughts on selling a july 21/24 call spread? >> it doesn't matter if you are bearish or not. it was up 5% in a straight line.

i think it will fill in that earnings gap back to 24. if that's your belief i wouldn't be selling the call spread. >> farmer john ask, would you rather. >> a call spread or the s&p put spread? mike? >> you know, we just recommended a gold call spread, so, obviously, i like that trade. right now with implied volatility, options premium this low, the s&p trading at highs. i think a put spread is a pretty good trade, too. >> carter. >> i think they're good ideas. you have to be cautious on equities and you want to have some gold. >> there you have it, farmer john. time now for the final call. ahead of the three-day week. carter. >> gld. i'd sell. >> mike ko. >> you know, i like the gold call spread and farmer john's put spread, so. >> mike, las to get back from vegas at some point. >> he sounds roughed up. i don't know what's going on out there all week. >> he's in vegas. >> the gold thing is this, the

stock is right at the point where it was when it reported its q1 earnings, it hasn't bounced a whole heck of a lot. >> our time is expired. thanks, so much for watching. i'm mellissa lee, check out the action. happy memorial day, my mission is simple, to make you money. i'm here to level the playing field for all investors, there's always a bull market somewhere. and i promise to help you find it. mad muffin starts now. >> hey, i'm cramer, welcome to "mad money," welcome to cramerica, other people want to make friends, my job is not just to entertain you, but to educate and tweet you. every time i come out here for two reasons, the first one is