we had the comments from the president saying it is ridiculous to talk about recession, but we have a persistent the idea the bond market is trying to handicap a global slowdown and the market hasn't escaped that story totally. i think they have to stop going down as an initial step and we'll see. >> we're in scary territory. >> a little bit. that does it for "closing bell." >> "fast money" begins right now. ♪ live from the nasdaq market site overlooking new york city's times square, this is foim i'm melissa lee. traders are tim seymour, cavkar finerman and guy adami why one market pro says we are in a tactical no man's land ahead of this speech from jay powell in jackson hole we are keeping an eye on shares. the homebuilder reporting the move after the results later the big beef over chicken. wendy's, popeye's and chick-fil-a in a wrestle over who has the best chicken

sandwich in the land we are here to settle the score. we begin with a monster day for retail where something happened check out shares of home depot, urban outfitters, kohl's, all beating on ets but mixing on revenue. the stocks had a mixed reaction today. urban outfitters the big after hours mover, so which is telling the story of the health of the american consumer. what do you say? >> it is a great question. the health of the american consumer, we can debate it the one that tells the story to me is home depot i will tell you if we had a conversation last night and you told me all of the numbers home depot would report and you said, where are the stocks going to go, stocks are down 3% the exact opposite happened. i guess the market is giving home depot a pass once again sales growth wasn't there yet their margin's improved. a mixed bag for home depot given their valuation, given the

take we saw today, the fact is stock is up today tells me the stock wants to continue going higher typically i would say take profits here i think we have to stay with it given what we saw going into it today. >> the stock is up 14%, so it is not super soft and here they are with a rally. >> right they're a premiere operator so they should trade at a good multiple they do trade at a really good multiple i agree with guy i was surprised with the strength they pulled out some of the things that caused the weakness, talking about the lumber price and it is not a huge deal for them i think it was expected. they telegraphed that earlier. i was a little -- i agree with guy. i thought it was going to be down, but then if we look at something like kohl's, you know, kohl's wasn't terrible i was surprised how much it was down it wasn't a disaster at all, and it is really not like kohl's was priced to perfection and they had to deliver it wasn't like that at all. >> yes, and i think that's a

difficult thing about the retail earnings this week, is, you know, where you thought there would be strength -- let's talk about tj maxx, everybody is talking about how well they're doing in this environment, retailers are not doing well but they have the deals and everybody will go there yet they didn't do well then the other companies come out and where you thought they would do bad, the stocks did fairly well. so i think it is more comment on the confusion that's going on in the market we're in this kind of period where we don't have a lot of clarity on a lot of different things, and it is just how people are trading it has less to do with what the u.s. consumer is doing and more to do with how stocks are trading at this point in time. >> so, i mean, look, the consumer is going to get a tail wind from the housing market they're going to get a benefit from lower interest rates, and as far as i'm concerned first of all in the broader picture consumer confidence, if you look at the correlation of consumer confidence in the housing bureau index, they're closely aligned until it breaks down, i think the consumer's in fine shape when you look at actually the

dynamics of lower interest rates and what it means for certain parts of the country, not all, that are doing much bet. for home depot, the trends for housing spent i think remain extraordinary. there was one off. whether it is lumber deflation, whether it is the fact that these guys are actually seeing other price input pressures, they have vendors with the ability to adjust their manufacturing to other places, unlike many other retailers. in terms of competition and in terms of the competitive landscape, right now i like lowe's too but they're so far ahead of lowe's and they have no other competition. and then the professional services is a chance where they're seeing some margin improvement. so the fact that they beat on the eps, some of that was a payroll tax -- sorry, a tax gain i will talk about payroll tax later, but i do think that these numbers were very good, and home depot is for the long haul. >> yes lowe's, some would argue it is a turnaround story if they are seeing positive trends at home depot, seeing plus, they have the booster of the new management team that has

been replaced over the last year or so, then that's why you would be in lowe's over home depot. >> i think so. people want to make the comparison they're two different. you have been in both. i am a home depot type of guy. >> i have actually never been in a lowe's, only a home depot. >> no lowe's around here. >> home depot, you go in there -- >> where are you getting your flex seal tape >> home depot and i might walk out with a drill or hammer just because. you know, i say it in jest but it happens to be true. quickly back to kohl's, i mean karen brings up a great point. it was a disastrous quarter. it was a $75 stock in april, valuation is not ridiculous. i get it they have no earnings growth, but the fact they leaned on this stock today on the back of that -- on the back of that quarter, you know what it tells me it means the shorts are going to lean into the retailers that just come in okay and the good ones will continue to get a pass that's what you are seeing now so kohl's with a 12% short interest, you know what? they're going to lean in on it again tomorrow. >> the commentary actually was positive when it came to tariffs. there wasn't much they could

pass on to the consumers at this point because they worked it out with their supply chain. that's positive. >> but we don't know going forward -- also they plan on doing a big, i think 300 to $400 million buy back there was a lot to not hate for sure and yet people seem to hate it one other thing though, tomorrow we will see lowe's will report and target will report we will see how lowe's does versus home depot. remember, lowe's had trouble with pricing before the tariff stuff got going, so we will see how they do there. target, we'll see. are they going to be like walmart and continue to really leverage on their online business hopefully long, i hope they are. this will be interesting to see. the department store thing though, it seems like you're going to be hated no matter what you do this was not a terrible release. >> nordstrom, which we're expecting later this week. >> right. >> i don't think there's anything we will get out of nordstrom in terms of a change in their business. they will talk about things around the edges where there will be cost savings we occasionally talk about the chance for them to go private

but, look, it is hard to understand where they're supposed to trade right now. i don't think we've found thrige but always, and even with kohl's, you'ren kohl's every one of the retailers, especially the big box guys which are not home depot, because home depot is not competing with amazon as far as i'm concerned for most of the stuff people go to buy. >> you're going to return your stuff from amazon to kohl's. >> right tim mentioned the payroll tax, the possibility of one let a let's get to what could be the pocket of a payroll tax, president trump talking about it a short time ago eamon javers at the white house with the details confusing out of the white house, eamon. >> reporter: you're telling me. >> i don't know where anything stands. >> reporter: we are following the bouncing ball on this. yesterday "the washington post" reported they were discussing the idea of a new payroll tax cut at the white house the white house team put out a statement from a white house official later in the day saying, no, no, no, that's not

under discussion at this time. down playing the story well, the president today clearly decided he wanted to up play the story and talked about it at the oval office. also talking about the idea of indexing capital gains, which is something that's been kicked around for a while, but the president says he's into that idea as well none of this, he says, is because of fear of recession these are just ideas that they think are good ideas and want to move forward on. here is what the president said today as we follow this story. >> a lot of people have been talking about indexing for many years, and it is something that i am certainly thinking about. i can say that a majority of the people in the white house at the level that does this kind of thing, they like indexing. so it is something i'm thinking about. payroll taxes, i've been thinking about payroll taxes for a long time, whether or not we do it now or not is -- it is not being done because of recession. >> so the president saying he is considering payroll tax cut, but

maybe not right now. he's also -- he likes the idea of indexing as you heard there interestingly, the president also, melissa, said he believes he can do an indexing change unilaterally, that is without congress he said that he believes he can do it on his own, indexing capital gain tax rates to inflation. that's something that conservative anti-tax activists have wanted for a long time. that's a controversial idea. a lot of folks in washington are skeptical you can do it without congress i just got off the phone with grover nordquist, the powerful anti-tax activist here in town he said he believes -- and he has been evangelizing at the white house -- that the president can simply order the treasury secretary to tell the irs to change the definition of cost in its regulation, and if they do that they can have this change done overnight. it would be a huge, sweeping change to tax law and very controversial on capitol hill i'm sure. >> he can do that on his own with presidential powers, but for a payroll tax change it would have to go through congress it is interesting because the president argues there's no recession but a need to do this.

the democrats will say the economy is okay, we don't want to do this, even though obama did it a few years ago for a period of two years, lowered the payroll tax to four-plus percent. >> and president obama did it for a stimulus in a recession. >> exactly what are the chances of getting congressional approval >> zero. there's no way that the house ways and means committee who writes tax law, they're not going to give the president a big win on anything going into 2020 so i think the chances of that happening are probably zero or south of zero, if you can be south of zero. i think on the other front, this argument that the president can unilaterally change the capital gains rate by indexing to inflation, this is an argument that grover nordquist has been making publicly and been making inside the white house to a lot -- he told me he has spoken to everybody at the white house except the president of the united states about this he has gotten a lot of good feedback and he feels like it is

something the white house the about to do any day now. that's going to be controversial. there are people in town who argue that's just not possible under the law. >> all right eamon, thank you eamon javers covering the white house for us what would be a bigger boost? if you could have either, what would be the bigger boost to the economy in your view >> clarity, that's what would be the bigger boost. >> would you rather have clarity or clarity >> are we getting a payroll tax, are we indexing capital gains, what do i do what is going on my takeaway from this is that the trump administration is looking for ways to have the tariff and the trade war go on longer than most people are anticipating as guy has said for over a year now. these are ways to offset it so you don't have a recession going into the election. i think that's the only takeaway other than that, i don't know how you make a decision on this type of chaos. >> how does it change your current decision not knowing the clarity between a payroll tax reduction and nixing capital gains? >> what if we don't get a

payroll tax deduction? >> i understand the point of uncertainty and wanting clarity, but in terms of making investment decisions. >> it is just posturing. if this is all we have, it is very, very flimsy. it is not going to do anything payroll taxes coming from saved, not spent income as far as i'm concerned. it is going to drive some kind of spending and it didn't work for obama. the best thing to do is get rid of the tariffs that to me is what we have to do if we don't like huawei and vte, let's go after them. but it is not what this is about. payroll taxes to me, again, for an administration telling us how strong the economy is over and over again makes zero sense. >> we are hardly out of the retail woods more big names are reporting results later this week, so what names need to be on your chart chris verrone over at the plasma, take it away. >> when we look at retail here i think we need to remember how bifurcated this group is this is the xrt. i think tactically you are likely washed out enough right near the very big 38 level that's been support over the last couple of years you have some oversold readings

on rsi we have seen that in the past. i think it is not unreasonable to think you can get some type of a bounce here, maybe 40, 41 i think we need to remember the trend of this chart, and thed td is still down, 50 is below the 200. 250, both downward sloping when we take a step back and look at the longer term picture here, this is the ten-year xrt chart, we still see one big top formation that's taking shape. so when you're rallying into a top, you still want to be a seller of strength or at least be very, very selective of what you own and what you don't own i will give you one long and one short. on the long side, reports tomorrow, target it is one of the better-looking names here i mean this is a stock that has largely been basing for the better part of the last four or five years it is pushing right up against that very critical 90 level. i think ultimately it breaks out above that one of the reasons we get there, if you look at target relative

to the s&p, it is actually quietly starting to outperform here so you are getting paid to wait before this breaks out i think ultimately, higher here is the call then on the short side, foot locker, fl just a definition of a top failed failed lower high broke a couple of weeks ago. moving average is all downward sloping. i think it is a name that reports friday you can be sure into the number. the takeaway is that it is a very, very diverse group we are skeptical enough where you have to be selective of what you own. target, good foot locker is a short. >> come on over, chris john will bring the chair in thank you, john. >> i love the new music. it is very carol burnett-like. >> are there any -- i know you said you have to be careful what you own, but are there broader trends do, for instance, a lot of the department store charts look

terrible and the walmart and the targets of the world look better >> yes, i think what is so striking is how it cuts along two very different lines we know department stores are bad, but they've been bad for years and years and year walmart is emerging strength here target is emerging strength here every name in this group is not a loser. when you look at the xrt, there's such a diversity of stocks in there. there are things like carana it is a great picture. i don't know if you have seen it high short interest starting to break out here walmart is starting to outperform amazon as well. when you look for dynamic changes underway, it is happening at the stock level, not the group level. i think it is very important. >> so i'm actually long foot locker i know they report on friday i mean to me, i don't look at the charts i look at the fundamental valuation and where it has been, and it has maybe not never but almost never been at a valuation like this. that doesn't matter to you at all, is that right >> you know, i certainly respect the fundamentals, and this is kind of trying to marry what you see and what i see

what troubles me a little bit about the group is when you look at kind of best of breed in the footwear space, nike, that also is starting to deteriorate a little bit you have to kind of wonder if there's a change starting to play out in that group that leaves me at least a little troubled being too long into the foot locker number on friday >> chris, i'm glad you brought up nike, because we know what is going on people are going direct to consumer nike is making this big direct-to-consumer push. are there actual companies like -- maybe not nike but other names that you like out there that are direct-to-consumer plays so they can be retail but they're actually selling a product? >> carvana is interesting on the car side we don't want to extrapolate too much about the health of the consumer these have been bad charts for a long time. there's another story here that maybe the consumer is better than people think. >> chris, thanks >> thank you jw nordstrom, i know it is crazy but 27%.

there's a journal article yesterday saying nordstrom has done everything right but the stock has been suffering, now 30% of their sales are ecommerce. if they just say something remotely decent you will have a huge short covering rally. we have seen it before. >> coming up, toll brothers reporting. we will tell you what has the stock coming off highs in the after hours session. plus, we are gearing up for jay powell's speech on friday. live from towns square in new york city, mucmo "st ne rhtfter this. ens in golf and in life. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.

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♪ welcome back to "fast money" we have an earnings alert for you. check out shares of toll brothers, on the move after reporting earnings let's get to rahel solomon at headquarters for more on the story. rahel. >> reporter: hi, melissa the company saw a nice bounce right after reporting, a beat on the top and bottom lines, but trading lower as we see in after hours. one reason is even though the pennsylvania-based homebuilder beat expectations, things are down quite a bit from a year ago. the ceo acknowledged that contracts were down, but also said that low mortgage rates, a limited supply of new and existing homes, and a strong employment pick turn are providing tail winds the lower mortgage rates, one reason homebuilders have had a

good year, up 30% year-to-date we will hear more tomorrow morning on the conference call one thing specifically that investors will be listening for, any sign of a lowdown in the luxury real estate market and any potential pressure on construction costs due to tariffs. back to you. >> thank you guy adami. >> $35 is what you buy this against. since april the stock has been trending slightly lower. it is not a big deal people say valuation is compelling, the quarter was good a lot of the metrics in the quarter were good but the stock can't get out of its own way you want to buy it, get long and stock up around 35 >> what i was going to ask you before you jumped out of the gate -- >> wow. >> yeah. >> slow down there. >> a false start >> false start. >> what's that guy's name? usain bolt. >> i asked yesterday, depot or builders. >> that's right. and said depot, if you recall. >> said depot.

given the quarter -- we thought based on the numbers depot wouldn't trade up so strong. >> a day later, right. >> same question tim seymour. >> i have to be consistent definitely depot you have an interesting valuation at a time when i think there are tail winds for the core business. there are challenges they are trying to witch out to get into more entry level dynamics and that could be the next catalyst for the company. but in the short term, i think home depot is a strong story that was -- i'll pass it to karen. >> i like the -- you know, the depot story. i like the consumer element. i have been confounded i can't understand why homebuilders don't trade better, right? >> yeah. >> it doesn't get any better people are employed, right >> right. >> rates are low. >> it doesn't make sense to me and yet they never trade better. so you sort of feel like, oh, i haven't missed anything. >> what environment would they trade higher what else do you want, right given those two, you have to go with home depot but it is only because to me toll brothers is a

bond trade i would rather be long bond than figure out what is going on. >> can you explain it for us >> sure. toll brothers should do better and homebuilders should do better with lower rates. if you happen to have a view you will have lower rates, why not buy bonds to get the lower rates and worry about toll brothers, is there going to be tariff impact, what is the construction going on you know, all of these different things that go into it, when the core of the thesis is low rates. so just be long bond. >> i thought he meant toll brothers bond. >> no. >> really quickly though, if you look at the chart on toll brothers and take it back ten-plus years, you can see in the blow-off top we hit for markets in january 24th of 2018, toll brothers came within 6% of a double top ee sentualventuall had the housing market in the country that was dangerous you can't tell me it hasn't come back to the former glory and trading around here is where it probably belongs. >> we are just getting started on "fast money". here is what else is coming up on the show.

game on in the streaming wars apple upping the ante in a big way. we'll break down who will take the crown in the streaming race. and later, calling foul. it is a full-blown food fight over who has the best chicken sandwich we'll settle the score in a good, old-fashioned "fast money" taste test don't fly the coop asmoy"s ckig aer"ft ne iba rhtft this

welcome back to "fast money" it is a huge week ahead for the fed. tomorrow we get minutes from the fed's last meeting, and then fed chairman speaks on friday from jackson hole our next guest says we are in no man's land

tony, great to see you >> great to be back. >> until the fed chief speaks, meaning friday or the next fed meeting? >> you get the fomc minutes on wednesday so you will hear what the two dissenters in the last rate cut meeting had to say. rose and grant already talked a little bit for the life of me i don't get it, about how we don't need to cut rates when the ten-year is at 150 and the lower of the fed bonds is 2%. i love to remind clients that the market has a bit better of a track record in calling recessions than the fed. so, you know, we think that the fed needs to get aggressively more accommodative, and this is going to be counter intuitive so let me explain it. the more aggressive the fed gets in cutting rates, the quicker the long-term rates will go up remember, when the fed's accommodative it kickstarts economic activity. that creates long-term inflation. so that's how you know when the fed is ahead of the market it isn't when they cut rates that's already discounted. it is when they cut it enough that the ten-year bond yield starts to go up in yield.

>> up meaning a 50-basis point cut? >> 50 base i.-basis point cut o 25-basis point cut with a monster accommodative framework i don't know about right now, but they need to get ahead of the market what happened here is, yes, the market forecast a 25-basis point cut, but it was such a poor effort on the press conference, the market wasn't convinced they're serious and the long bond kept going down in yield. >> let me just play devil's advocate for a intereminute if you think -- i think it is not the fed, it is the trade situation that's problematic so if the fed -- about trade and it does nothing to the market, where does it leave the fed? >> the fed -- the fed is clearly trying not to be japan and like europe, right? so what is happening right now it is becoming like japan and europe because long-term bonds keep coming down toward negative rates. i would suggest you are right.

it is also the tariff situation. what you want to do is incent lenders to lend. how do you do that you have a steeper yield curve, right? you get your money short you lend it long you have to have a spread between what they get their money at and what they use it for, whether it is investing in the curve or lending the money so our opinion is, yes, the trade deficit has kind of created this angst situation, but think about what lower rates have done. see, our whole bull story, karen, is not that the economy is a diss assaster and the fed o cut rates. it is an acceleration on what the markets have done. i talked to two people in the last 15 minutes. one saved $1,200 on mayor mortgage, one saved $400 a month by refinancing their mortgage. you know you are in a recession when you could have rates go down to zero and banks won't give you the money right? my broker, my mortgage broker said he's going bananas.

the amount of volume coming in to him and being executed both on a re-fi and origination is off the charts in a recession that doesn't happen rates come down and they don't want to give you the money because you're a risk. that's not the situation it may become the situation, but, again, it comes down to the yield curve, karen thae they've really got to resteepen the yield curve and they could do it by a long cut and big tone where the long end believes them and trades higher. you don't need a massive rate cut. you need an accommodative stance that convinces the long end you won't become like japan and europe. >> tony, you talked about the yield curve and how you don't get a recession until the yield curve is inverted and there's no lending, but also when it starts to resteepen. >> correct. >> let's say the fed is successful with this, they resteepen the yield curve. how long until the recession >> historically in the last three cycles and in cycles similar to now, versus the '70s, you get a 30% upside in the s&p

500 in a median 22 months with a recession fully two years away if you look at all of the last seven cycles, you get 21% upside from the initial date of inversion, over 18 months with recession 19 months away so it would be almost historically unique, bk, to have the economy magically go into a recession this year when we -- so many people are re-fiing. what happens when you re-fi? i have somebody that re-fied, not only did they re-fi their mortgage but took their home equity line and 12ustuffed it i the mortgage >> lowered the cash burn. >> right and what do we do with that? we spend it. we take out more debt and spend the money. as long as the interest expense doesn't go up relative to income we're good. >> thank you, tony >> thanks, mel tony was talking about the fed getting ahead of the markets. with this point with the ecb in play, with another rate cut, what is going on in europe, can the fed actually get ahead to the degree it needs to given what other central banks are doing at this point? >> yes, i think it will be

concerned here that i don't think the fed can get ahead of this i think we've talked about the preemptive fed is usually equity positive, but we're in a market right now where i think rates need to stabilize. i think some of this -- i agree with karen you know, the policy is really what's dictating where we are. in the same way i think, by the way, policy with the tax cuts we got, which were a sugar high, pushed the fed more aggressively into the picture the fed is chasing policy in general which i think has been sporadic. >> bull market continues to rally in the face of a dollar that seems to continue to rally. something's going on in the global market. i will say it again, and i'm not one of the tinfoil wearing, i'm not. but gold market goes higher. >> he's what >> tinfoil-hat wearing people. you ever see those things -- >> have you ever worn -- no, that's good. >> years ago i think the gold minors are where you want to be

i think they will continue to grind higher from here it is what it lead to in my opinion. >> coming up, apple looking to take the crown in the streaming wars we will tell you what the bet on the content means for the space. plus, popeye's, mcdonald's and wendy's and chick-fil-a embroiled in a fight over whose chicken is better. we will settle the score. >> chicken dance sweet. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

welcome back to "fast money" the streaming war is kicking into high gears as apple pours more than $6 billion into star-studded programming into the apple streaming service. apple going head-to-head with disney which plans to launch a streaming service this fall. the space is crowded, players like hulu, netflix and hbo will apple take a bite out of the streaming space? >> it will i'm not sure it will do anything for apple in the short run on the services side they are part of the overall bigger picture, but it has everything to do with what you don't want to invest in in netflix. look how netflix hasp speaker performed since disney made the disney plus announcement they're coming for you and

coming hard and the zero valuatizero -- valuation makes zero sense at this point. >> i understand it is a pittance compared to the cash cow that they have, but, still, as a shareholder -- >> it doesn't move the needle for me really, part of the story. obviously they talk about services, that does move the needle. >> sure. >> i agree with tim, that they -- how do you have an apple valuation and a disney valuation, time warner valuation -- i know they're not the cleanest because they have other things -- and then a netflix valuation way up there that doesn't make sense. >> how does it get adjusted? one comes down apple goes up? >> disney has come up. >> disney has come up. >> it has, and it should. >> yes. >> this is the do-or-die moment for netflix. tim talked about it for a long time once competition comes in there, they no longer have the moat around their business. it is spending a ton of money. now you are up against companies with massive balance sheets. apple and disney to throw at it.

i would be short probably of netflix. i think that's the trade here, and maybe long on some hollywood real estate because people in hollywood are going to get paid. >> you were a "grey's anatomy" fan, right >> what do you mean was? >> watched all 85 seasons of it. the powerhouse went to netflix. >> and you would think it would help. >> exactly. >> it is interesting good for tim, by the way he stood his guns with netflix and it is panning out in a meaningful way there's another company in the netflix world we talked about from time to time, reported on august 8th, maybe you know them, part of the roku that's been an absolute monster. so you talk about valuations not mattering, well, clearly it doesn't matter there but people say in terms of over-the-top they're the pioneers they're getting it done. a lot of people think -- >> at whose expense? >> and you wonder. maybe it is netflix. maybe roku out of the names we mentioned, maybe that's the one that's eye merging.

>> would you rather, rather, rather. >> they are the pure play of what netflix used to be. >> exactly. >> netflix at one point was the port hole, it was the pipe, the final mile, whatever cliche you want to throw at it. >> you would rather have the pipe. >> yes. >> and the final mile as opposed to a pipe plus content >> netflix heroically has moved from being the pipe to producing some real content and competing and being way ahead of everybody else but at this point the guys with the real content and the guys that don't really have content in apple are coming for 'em at a time when the pure play people can appreciate the pure play the pure play works with apple roku loves disney. roku loves apple that's the call here. >> still ahead, salesforce gearing up to report earnings this week. we will tell you how options traders are betting on the cloud stock ahead of the money first the fast food chicken challenge. who has the best chicken we will put it to a taste test when "fast money" returns.

welcome back to "fast money" check out shares of beyond meat, soaring today after jp morgan coming out with a juicy note on the stock. it is our call of the day. in fact, upgrading on the stock overweight saying with another guidance raised potentially in the stock, about 40% off the highs we think the stock is

appealing once again beyond meat has cratered off the highs after the company asecondary offering back in july is beyond meat looking more tasty at this price? >> for me, no. let me say this. when it was $100 and we talked about people taking half their position off and riding the rest, i thought it was overdone there. it is hard for me -- you know, in terms of just being diligent and being frorgt rigort right, r to wrap hi hands around the story. if we get a rally and it can stay above the secondary price for a few days or so i'll take another look at it here, no, i can't get my arms around it at all. >> jp mortgage gan setting the possibility of getting more commercial food contracts. >> i think that's the play here. i like it here i'm not talking about valuation, not talking about any of that. all i know is there's tremendous demand for their product the stock has traded down into support area let's call it the 136-140 level.

it is not without risk but you have a price to shoot against and you have the potential for more wins on the commercial side i think it is worth a shot. >> karen >> i don't -- i mean they have to guide higher and they have to sign up more partnerships if they have any shot of supporting this valuation so that should already be baked in to. me, you know, 45% short interest how do you -- how do you play that game? it seems so risky. i believe in the concept, absolutely for sure, but also i believe in competitors coming in i couldn't own it here. >> tim >> remember the chip witch guy, this is the chip witch of today. everybody made a chip witch within a year. i think the fact it is going and you are getting the food service contracts means all -- how about sisco getting involved, not the tech company but the one with an "s", you have the die snynamicsh the major food players, why do they own the space there's no way they do

the valuation is insane and it will be comical. i bet it is $80 before $200. >> to a real big beef on twitter. drama turning into an all-out chicken fight between the three fast food giants in the flame war over who has the best chicken sandwich it started when popeye's launched theirs. it ruffled the feathers of chick fi filet. the battle was on. wendy's entered the trade, tweeting y'all out here fighting over which has the second bas chicken sandwich that got popeye's clucking mad sounds like someone ate one of our biscuits because y'all looking thirsty. several tweets and a ton of social media later, the fight raged on we thought we would settle the score for ourselves. it is the "fast money" chicken challenge. guy will decide which reigned

supreme once and for all guy will put the blindfold on. >> please make sure that i don't have -- i'm visually impaired here >> okay. >> your pass is my pass. jonah, why don't you bring in the chicken. >> mel, you might -- you're my eyes, mel. as i said before you have to help me. >> okay. we're going to start in no particular order. >> the smell is wafting now. >> it is aromatic. >> what are the rules of the game what am i going to tell you? >> the very best chicken sandwich. >> okay. >> very straightforward. >> here you go. >> you gave me the actual dish. >> do you want me to hand you the sandwich >> no, no, no. you got the dish there >> yes. >> that's a good sandwich. >> okay. there's a hint of may naonnaise which means it is not chick-fil-a, but i'll come back to that. >> you like the mayonnaise for the moistness. sandwich not two >> i don't need the sound

effects in my ear. that's a feeble attempt at a sandwich. >> a feeble? >> yes. >> oh, my word and the third one. >> this is substantial >> it is a big sandwich. >> oh. >> ready >> the third one was chick-fil-a, one of my all-time favorites. the first one was clearly wendy's, which has a hint of the mayonnaise, much like their burger the second one was, what, popeye's >> wrong >> what do you mean wrong? >> the first one was right, chick-fil-a, but you reversed the second two wendy's what was you called the feeble sandwich. >> it is not getting it done i'm telling you now, people, at wendys. >> you can take the blindfold off unless you want it on the rest of the show completely up to you. >> the chick-fil-a i'm surprised at wendy's

i'm surprised at wendy's that popeye's sandwich was an excellent sandwich. >> it is a large sandwich. >> wendy's, i mean you folks over there at wendy's, you have to ramp up your game because it is a feeble chicken sandwich. >> so they lost. >> clearly the loser there i'm going to take my chick-fil-a back to the desk if that's okay for the remainder of the show. >> okay. that's good. based on this, anybody have any recommendation bk >> you got to sell wendy's on that if the guy doesn't like it, you don't need that. you sell wendy's on that you can't really buy chick-fil-a but you can get their sandwich. >> wendy's is up 32%, by the way, guy, on the back of that feeble sandwich. >> he is a pacemaker. >> sorry. >> coming up, how the options market is betting the stock could go sky high. we will break down the action after this break

welcome back to "fast money" check out shares of salesforce, up 6% this year. the software giant has been on a shopping spree this summer, buying tableau software and click software for just over a billion dollars. the options market thinks those

acquisitions could be a focal point when salesforce reports earnings on thursday mike khouw with the action hey there. >> hi. when salesforce reports earnings, over the long term it has moved a decent bit, a little over 6%. over the last eight quarters the moves average about 3% right now the options market is implying a move of about 5%. one of the trades we saw was a buyer of the 1550/155 call spread that's somebody who is making a bullish bet that the stock will be higher by end of the week that trade breaks even, up 3.6%, but will play three-to-one if the stock rises 6% or more that wasn't actually the only interesting trade we saw in salesforce today one of the other interesting things we saw was a sale of 1200 of the november 1, '20/175 strangles selling the put and the call and using the proceeds to help finance the purchase of

a january 20211 130 put the buyer of the trade spent about $1 million to buy what i think is probably a hedge against a long-term stock holding and using basically the low we saw late last year and this year's high of 170 basically as the goalpost to where they think the stock will be in the short term, but basically being concerned there could be some risk in the longer term just in case the market turns south. >> guy, are you -- >> i have been bullish since salesforce -- listen, 20 out of the last 20 quarters they have beaten revenue, eps hasbeaten 18 out of the last 20 quarters and billings have beaten consensus 17 out of the last 20 quarters. i think last quarter was up 10% and in this environment i think valuation matters. although i'm bullish in salesforce you have to wait and see what they say post earnings. >> yes, i actually think both of these trades are interesting because if you look at how the stock has traded, between 140 and 170 effectively, 160 is kind

of your resistance point that makes sense that you might want to sell something against that i like the idea of having protection against the portfolio or against salesforce in this particular case, because i think in this environment it is very difficult to tell how the stock is going to trade whether the earnings are good or bad. >> i think if you look at the chart, it reminds me of other charts like different businesses but in terms of leadership and price regrowth, whether it was nvidia, whether it was netflix these are charts that look like you have seen the best days, at least for this cycle, probably 18 months ago. salesforce in terms of new products, there's a lot of competition out there. the move into cloud is something that we're seeing a number of other players. obviously oracle is competing, obviously there are other folks in the space so the valuation is what this comes down to. the company is obviously executing. people swear by the company. benioff, there's no question it is a great story. >> mike, have you seen a lot of options activity in sort of the related read-through plays >> yeah, i mean we've actually been seeing quite a lot of options activity i think over

the course of the last ten trading days or so obviously when volatility picks up, and i think tim was making a good point, when you look at names like this one where the multiples are a little higher people get a little more nervous about what the stocks can do but, you know, another thing i would point to is just take a look where stocks like this one have come from just recently this thing was just shy of 160, not that long ago. i think options traders in this case where the options prices are not that elevated going into an important catalyst like this one are trying to take advantage of that fact and are basically getting the three-to-one pay-offs if it moves a relatively modest amount, 6% for a stock like this in this environment i don't think is a lot to ask either one way or the other frankly. >> all right, mike thanks for that. mike chokhouw in san francisco for now "options action", be sure to tune in to our show 5:30 friday up next, final trade "options action" is sponsored by -

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♪ laughing. >> zeppelin coming in. >> check out shares of toll brothers stock hitting after hours session down by more than 2%. we should note the company's

conference call is tomorrow. it did beat analysts estimates conference call, again, tomorrow we have a quick -- >> we have a communication breakdown. >> we want to be transparent about this we picked up a wendy's sandwich. it ended up being the dollar menu version of the sandwich so it might not be as good -- >> as robust at the higher end i want to cut wendy's some slack. i apologize if it is off i am big enough to say that. >> we want to make sure the viewers have the information. >> that was not a substantial meal for swb somebody of my size. >> maybe we'll taste the other one tomorrow final trade. >> we talked about apple and content. it is not a reason to buy this company. certainly the follow through we are seeing from the company in terms of service offering in which content is one is something to be excited. >> you know, you make hey when the sun buys, protect yourself here. >> karen.

>> deep in the heart of retail earnings i like target for tomorrow. >> guy. >> junior gold miners, melissa lee. that comes out gdxj. >> that does it for us see you back here tomorrow at 5:00 "mad money" with 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 and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you some money my job is to entertain teach, and help you call me or tweet me @jimcramer if you want to know the true state of the economy, stop fretting about the