we're live at the nasdaq markets kicking off the holiday weekend but don't pack up and leave just yet. the guys have a few ideas you can put to work when the markets open back 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's something in the charts that suggest now is the time to buy it. we'll explain. plus, how would you like to protect your frofts at amazon for nothing? >> nothing? >> yeah, that's right. nothing. we'll break it down and talk about car trouble, gm shares are tanking and there are signs that 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 but a potential warning sign has appeared in the market as stocks hits all time highs treasury yields have been sitting year to date lows. what's behind stocks and bonds rallying together and what does it mean for the market. let's go to the money right now. >> well, obviously u.s. equities are some of the strongest around the globe here. they've kept that bid. they've broken out to new all-time highs. the fact that bonds are rallying right now says something differently. when you take a look at the performance of the s&p some of the best performing sectors are all intensive. health care, consumer staples this year, it doesn't exactly speak to some sort of refellation trade and that is something that's due to be bond proxies also. so just because the s&p has made 19 or 20 new highs this year doesn't exactly speak to a particularly healthy thing

especially when you kind of overlay the fact that you know, persistent low bond yields for the last couple years had been something that equity investors had been worried about. >> at the same time though low bond yields are two side to this. >> that's right. i mean, it does help from a discount rate perspective but one of the reasons that the rates have remained where they are is because of some of the economic news that we saw this week. capitol goods orders weren't as strong as someone hoped. they're lowering what were some ambitious growth estimates so i think when you take a look at that the reason that you're seeing rates where they are is because basically the forward look is lower than it has been and then of course it would be justified. you need to see signs of economic growth and you need to see material signs of inflation which people might expect when you have full employment and maybe that's false full employment. you would need to see for rate

to go higher. >> we know that two-year money is holding up as ten-year continues to weaken and there's a message there. the real thing is this. >> reporter: that if you -- it's independent financials. risk off has been in effect all year long so december 9th, relative performance of industrials, financials peaked. they've all been underperforming and there's nothing that suggests that's going to change. >> he just mentioned financials and bank stocks have underperformed this year. bank stocks only up 2%. we know a lot of them really outperformed immediately after the election and from december 9 ths have gone sideways. when i look at a stock like goldman sachs and i look at the way the stock have acted down from its 52-week highs made on march 1st in that is a really bad quarter that they printed. when i say really bad, it was on a relative basis to a lot of their competitors was not

particularly good. goldmann's considered best of breed. m and a backlog is not what people expected. the stock went down 5% the day after the earnings and 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 right now down to about 200 bucks. that is the proposed brexit lows last june. i think you want to look out to q 2 earnings that are going to come on july 18th. i think that stock is going to fill in if you want to call it a gab down towards 200 here. and option prices are relatively low right now especially the time where this stock is trending lower. it's making a series of lower highs and lower lows so to me the trade is simple. look out to the july expiration. when the stock was trading at 220, 250, you could buy the july 220, 195 put spread paint, $5 for that. about 2 and a half percent of

the underlying stock price. it breaks down at 215 and your max gain is up to $20. that may be little aggressive but here's the other thing i wanted to say about this trade. this stock has outperformed since november 8th versus the s&p 500. the s&p is up 13%. i have to think at some point in the next couple months we are going to get a broad market selloff and i think bank stocks will be right in the middle of it it's not just goldman. i think q 2 earnings could be that catalyst for bank stocks to go lower. >> do you like the target of goldman sachs specifically? >> if we take a look at the last earnings results we saw that morgan stanley's fixed income trading revenues were actually doing better than goldman sachs and of course they have the asset management business that is a little bit stronger than goldmann as well. so if i was going to look at these, i'd rather own morgan

than goldmann. this thing isn't going to decay as quickly once july expiration approaches as short dated options typically would. so it makes a lot of sense even though if you take a look at it on evaluation basis you say okay, maybe 12 times earnings it looks two times tangible book but i think this trade make as lot of sense here. >> it's not specific to goldman sachs. that is the trade we've got here. if you look at regional banks, if you look at other investment banks, they all -- if we look to the air pocket there that can be filled there's a minor head and shoulders top that's forming and the burden of proof is on the bull. even though they've outperformed from before the election, goldmann has underperformed since november 11th. it's gone down relative. >> would you apply this to the regional banks? >> i would. i guess what really got me going is the fact the stocks sold off 5%. that was a huge number on one

day after the q 1 earnings and i think if they put up another quarter that resembles q 1 i think they're going back quickly. >> and it's a nice bounce post the earnings. >> now to gold. the precious metal hitting its highest level in a month. what are you looking at? >> it does look pretty good. let's go look at these levels. we can figure it out together. i want to start out with something that is not about the trade. if you're sitting at home at any point this weekend or you get there on a monday or tuesday and anyone ever tells you it's not a good investment, i have picked nonrandom timeframes. this is gold versus the s&p mplts that is from november 11th, 2007, the prior absolute peak of the market and the winner is, gold. et lease go to the next timeframe. nonrandom timeframe. this is a longer term and what this is is from the absolute

peak march 24th of 2000. this is 17 years ago and this is gold versus the s&p. now, you would say okay, what stocks have dividends? okay. i have that. ready? this is with reinvested divid d dividends and what you see here, yes, we know that dividends are a big part of your total return. in fact, more than -- it's still a blowout. let's go on to gold now. just if anyone tells you gold is not an investment you tell them that. all right? here we go. how do you draw the line? this is a long-term chart. what my eyes sees is this. i think you have a nice -- well, call that tension. lower highs, higher lows, something's about to give. let's put this in a few more contexts. this is very important. same top chart but the bottom is relative performance to all commodities. so even as gold has been going down, gold's performance relative to all commodities whether it's tin or copper or

nickel, oil, natural gas, cocoa, pork bellies are up. that's very important. next chart. so here's the here and now. i think we have this. here are the lines. okay. we're going to draw them ourselves. here we go. oh, there's a computer. watch this. up arrow. thank you, computer. up and out. i want to be long gld. >> so how are you trading gold sf. >> i'm looking out to august. i think you can buy the 121, 127 call spread when i was looking at that earlier today those 121 calls were 265. you could sell it for a net of over a dollar 80. that's math that we happen to like and i want people to think about this. to carter's point as an investment, land can be an investment. doesn't necessarily generate income until you put a hotel or something like that on it so investments can be assets and i think that's what he's referring

to although i haven't been much of a gold bug myself. if you start seeing investment flows into emerging markets and away from here that would weaken the dollar, that would be bold for gold too. >> and we have seen that in the equity performance. but do you necessarily have to believe that the stock market in the u.s. is set for a pullback to be a believer in gold? >> well, i don't think so. you know, there was a really interesting occurrence this week and obviously coin got a lot of attention with the surge that it had, but the bit coin surpassed that of the gld and we know there's trillions of trillions of dollars of gold reserves out there but when we think about gld we think of the inverse relationship to equities and we think about traders using it as a way to position the decline. that got me thinking about gld the same way you're thinking about it. if there's some truth to this and if we are to have a rocky period this summer, owning that 127 call spread many the gld looks like an easy one

especially with how cheap options are. >> some people would obviously like to buy the equities because you get much more equity out of gdx. gold miners if there's going to be a move, either is going to work. >> got a question, send us a tweet to options action. check out our website. our newsletter makes for some great beach reading. here's what's coming up next. >> you want to see something really scary? >> check out shares of general motors. the charge point even more pain. we'll tell you how to profit. plus, here's what shares of amazon are doing and if you want to lock in gains, we'll show you how to do that for free when options action returns. >> futures now newsletter. you'll get the latest news and a sneak peek of our latest interviews. sign up now on cnbc.com/fewers

now e-mail. 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. see options data like never before. with thinkorswim only at td ameritrade.

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combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. 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. amazon hitting another all time high. reaching 9.99. be shares so close to 1,000 does it mean it's time for amazon to split its stock? >> hey, melissa. and that depends.

if amazon wants the glory of $1,000 stock that's a club that only has four members then it's just a few bucks away. but if amazon want the presteej invalidation of the dow it will have to split. amazon is nearly four times the price of the currently highest priced stock goldman sachs and it's 36 times the lowest priced one ge. amazon's sky high tag would throw the index all out of whack. amazon has only split its stock three times since its ipo and the last time was 18 years ago. just this week he had no plans for a split any time soon. additionally amazon might have to pay a cash dividend, something that it has never done. that's not a requirement but every name currently in the index does it. again though, this may also be unlikely for amazon considering they've never been shy about using cash to reinvest back into its business.

the other reason for amazon to hold out is the so-called curse of the dow when they underperform their replacements at first. apple shares were approaching 1,000 bucks it did a 7 for 1 split and then fell 17% over the next 12 months and it took nearly two years for shares to hit another record high. alternatively at&t popped about 17% when it exited the dow. now, by letting its stock run up though amazon is becoming less and less accessible to younger and mom and pop investors. >> all right. thank you very much. so if you made profits in amazon we've got a way to help you protect those gains. dan is over at the plaza with this call to action. >> it's trading at all time highs it's about to ring the register. a lot of retail investors are focused on that. how do i use options to protect my gains in a stock that i own. finding puts can do a huge drag

in performance. one strategy would be to buy a caller. you're using the proceeds of that money to buy an out of the money put. you're interesting in protecting gains but you're looking to do it for a minimum premium outlay and you want to do that often times for no premium whatsoever. but here's the big thing about when you're buying a collar. you have to be willing to give up some potential upside to have that potential downside so let's go through what a cashless collar would look like. i want to make a quick point about amazon. back to 2011 to 2013 it was all about north american retail sales. when it doubled again it was about aws. about their cloud services. now the thing has just gone par bollic and people are just talking about a lot of other things that are going to happen in the future. the way they use data, so let's move forward. this could be one reason why you want to protect the stock here. i look at this breakout level at

850 from earlier in year as something that could be in the cards if the stock were to go down. so versus let's say 100 shares of stock at 992.50 you could sell in august expiration 1045 strike call at $26. you could use the proceed to buy an august expiration. 950 put. that would cost you nothing because each option costs 26 bucks. you're buying the put for 26. you would have gains in the stock up to 25 but that's where your gains are kept. you have losses down to 9 oo, protection below that that's what you would use a cashless collar far. >> what do you think about dan's trade? >> i really like this. normally with collars what you'll see is you have to buy a put that's further out on the money than the call that you sell and what ends up happening is you have less potential upside than downside risk. that's not true here. at the current stock price this is a favorable risk reward and i have a hard time imagining why

if you own the stock you wouldn't be considering a trade like this. it's very much like a extrinsic premium free call spread and i really do like the trade. >> let's start out with the thousand dollar, i think that's a completely arbitrary thing. management couldn't careless. but let's talk about the prospects of it going higher. we know amazon has two major draw downs in the last 24 months. the lows in 2016 it was on 28%. twice the market and we know preelection it was down 17. this is about where that kind of thing can happen again, so having a defensive play and what you're doing is it makes a lot of sense. >> what happens if the stock actually moves up to that? >> that's a great question and one of the things i would say -- let's say you owned it coming into the year. if the stock went up a little above that you're basically again, this is one of those major bullet points. you're willing to give up some upside for protection in the downside and the way i see it

below that 950 strike, you do have an air pocket down to that pocket of 850. and that's one of the reasons why i chose august expiration. it's going to catch that earnings and possibly some excitement over the course of the summer. >> energy stocks having one of their worst weeks. he'll tell you why you should keep betting against energy when we come right back. [pony neighing] what? 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.

steve, other than making me move stuff, i'm here at the td ameritrade trader offices. 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. welcome back. it's time to take a look back at some of our open trades. crude's comeback was short lived. >> it's just this and we are just in that -- i just don't want it. i want to be short energy. >> i'm looking out to september. the 67 and a half, 60 put spread you could spend $3.16. sell this against it for 85 cents. >> crude and the energy sector plunging on disappointing news so carter, what do you do now? >> i think the plunging is the

operative word. s&p 500 energy has made a basic 14-year relative low to equities. maybe just going to get worse and worse. stay away. >> mike? >> yeah, i think we stick with this as trade runs out to september. it's now starting to get in the money and we've got plenty of time and plenty of room for this to drop further. >> is there something to be said for buying laggers? >> i think these guys are right. you keep pressing weakness. >> it was also time to hit the brea brakes on auto. >> gm 10% down, i'm looking for a move to these lows at 30. sell. >> i'm looking at the june 33.30 put spread. that's a small fraction of the current stock price. it takes us all the way out to june. >> jgm is down over the past

months. what do you think next? >> although the stock still looks weak we need more time and we can actually sell this put spread for about what we paid for it. 80 cents. i would just roll further out in time. i don't think all of the damage has been done yet. >> and that's the key thing. it's not just general motors. auto zone, o'reilly, the whole thing is under severe pressure. >> up next, the final call from the options pits. 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. mmm, blueberry?

tap into the knowledge of other traders on thinkorswim. only at td ameritrade.

neighing] what? 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 options actions. time to take your tweets. thoughts on selling a july 21/24 call spread on snap? >> it really doesn't matter. i mean, this stock was just up 5% yesterday in a straight line. to me i think this stock is going to fill in that earnings

gap back to 24 so i wouldn't be selling that call spread. >> farmer john would you rather a gld call spread or the s&p put spread. >> i like that trade but right now with options premiums this low and the s&p trading at highs i think a put spread on spy is a pretty good trade too. >> i think they're both good ideas. i think you want to be cautious on equities but i think you want some gold. >> there you have it. time now for the final call. >> gld. buy some. >> mike? >> i like the gold call spread and farmer john's put spread, so -- >> mike, i hope you get back from vegas at some point. he's been there for a week. >> he sounds roughed up, i've got to tell you. i don't know what's been going on out there, he sounds roughed up. >> the stock is right about the point where it was when it

reported its q 1 earnings. it hasn't bounced a whole lot. i think we look at july put spreads. >> thanks so much for watching. for more option actions check out the website. happy memorial day, everybody. have a safe holiday. we'll see you back here on tuesday. mad money is next. >> the following is a paid presentation, brought to you by beachbody, but filmed by me on my iphone and directly from my heart. >> hold up. i want to ask you a question. how do you feel when you look at yourself in the mirror? not so good. like, "ugh. gross." who is this person? like, you know you have to do something, but it's so confusing! there's fad diets, extreme workouts, and it's working for other people, but it is not working for you. you just want a system, a program that actually works -- hello! -- that doesn't feel like punishment. girl, i got you.