no where to hide hard to say if we are there. >> i'll point out even if you put china to the side which we know has had a lot of easing nikkei, korea only down 5 or 6%. u.s. and europe. down 9, 10%. that does it for "closing bell." >> "fast money" begins right now. stocks rocked as the koerchds spreads the dow having the worst week begins the dips the of the financial crisis selling widespread pl all three averages in correction what should you be doing with your money following a day like today? our traders stand by to break it down for you a special edition of "fast money" starts right now. >> and welcome, everybody to a very special "fast money" as always live from the nasdaq market site. it was another history-making day and what has been a history-making week joining for us are for the entire hour

commercial free dan nathan tim seymour and. and the head of rbc capital markets. let us recap how this incredible day played out the dow just had the biggest point drop in history. falling 1190 points. a 4.4% drop. the dow index has now lost 3,200 points in week alone it's now down nearly 10% this year the s&p meantime falling 4.4% as well handing in the worst day since august of 2011 and this is the fastest correction, a 10% drop from highs in the entire history of the stock market lets focused on big names you know controlling the market, fangs tumbling as well and took the market with them you had apple down 6.5%. google 5.5 and microsoft a 7% drop wow. as stocks sold off buyers they flooded into bonds the 10-year yield at one point

trading at 109.24% ended at 1.26. the lowest at any time in american history for the ten years. bond traders expect a rate cut on march 18th. but there is chatter possibility of intrameeting cut between now and then all told, the fear on the street is very real so tim seymour, our audience is likely asking two questions. what do i do now and what comes next? >> thanks, brian if you think about first of all when markets really start to panic, policy makers start to act. i think that the policy response which we have seen so many times is certainly part of the evolution of where we go from here the problem is we've had the conversation for 18 months about what policy makers can really do four the economy we know what they can do for for markets short-term in terms of the news flo obviously we started to get bottom up forking things cut to

the bone things from companies over the last two weeks and going into crescendo 37 you have a case where i think the news flo -- look on the virus lets be clear. the news flo on the virus that trend significantly lower. and when you -- without getting too deep in the dynamics of the virus itself you actually have an incubation period with the virus where my guess is we constitutional have a lag time where that news flo should probably get worse but maybe more importantly in terms of communication from officials. this is officials around the world, that type of responds tends to come in a delayed response so for equity players by any definition we are oversold brian outlined that on the way down if you think about where we were on december 24th for the christmas eve low and looked at the relatively strength indicators for the s&p we were at a 12-9-day rsi relative strength in in measure of moment up we are there now a and certainly

as we pointed out put punctuation in terms what markets can do the problem right now for me, dan, that markets haven't taken out where we were before the highs of the precoronvirus dynamics where we were concerned about other things. >> it's funny a lot oaf people talking about the maga cap stocks never having the concentration in the s&p 500 by sew knew nims it's microsoft, apple, googlism amazon about a week and a half they made up $5 trillion of the s&p 500. 17, 18% or something if you thought they overshot on the upside the last few months and the sentiment got overly complacent relative to those, then you say to yourself, what is the level on thedownside where it's too oversold? and none of us know exactly. it's also important to remember this virus is unacquaintable what it mendez to supply chains, demand and companies there are a lot of arguments when will microsoft is in china

that toents matter when you think about the two companies that really rattled the u.s. stock market this week was it was apple and microsoft by pulling that q1 guidance when you think about the expectations for s&p earnings coming into 2020, a year after the s&p rallied 30% with no earnings growth it was high single digits. and people felt comfortable about that now you can throw that out the window the question is do you have 2019 and 2020 with multiple expansion if the market goes back up with mo no meaningful earnings growth. >> what comes next. >> dan is bringing up an important point. and i think we talked about it por months on the show most people said that's not the way it goes. but steve i got to ask you, coronvirus is the villain we know that. >> right. >> this is the fastest 10% drop in the history of the market i'm talking to people all day longitude saying that they're selling etfs, the qqq had triple daily average to raise collateral to raise crash and

the etf market make eshs are not putting the bids in. how much does the crowding dan talked about accelerate what would be selling. >> it's about positioning and leverage but my problem is when you said what comes next. >> tomorrow is friday ahead of the weekend news what's the news flow is it better or worse than it was today? it's going to be worse spot how do you bottom on a friday you don't. for me it's 2855, 100 handles lower in the s&p that's where i find support. then you can substantiately bounce from there. but that's a next week story for me >> yeah, i say for us something important happened today we breached the 10% drawdown 10% while it feels terrible. that's a garden variety pullback we put out a note say if we didn't hold at 3050 what's a growth score that's ha 14 to 20% drawdown and we had plenty sibs

since the financial crisis 2015, 2016, back in 2010, 2011, so that scenario for me is now in play. what i'm watching next is 2,900. i know it's kbok to quantify what's going on right now. wove taken a stab at it. our best guess at the moment tells us we can make the values argument after we get below 2,900. >> she brings up the level 3050, the 200-day moving average 3045 people looking at people are setting algorithms because they have no clue where the market is going. they set themfer moving averages you have to know the technical to be. >> they are selling down to the levels tim i texted you today said basically what the heck. >> what's going on, tim. >> you said, there was a technical attempt to recover today. we were only down 200. i only athat tongue in cheek before it failed why did we fail in. >> again, to me i think there is

certainly some algo dahms that presses on things. 3045, something in there, 200-day. we were in no person's land. but you had a case here -- i want to look at where was the market before the fed jumped in and supplied $400 billion of balance sheet? as a context -- this is what lori is doing too -- get back to 2855 which is what steve said. which is the level on october 3 of 2019, that low that we hit before we essentially got the fed to respond in the tune of qe 4 which are they are not saying it was but you have to drop in where was the market sentiment at that time that was the sentiment with the world without coronvirus, a world we dietinged the fact that the world was struggling with the trade war dynamic. but age willing pmi european pmis and the leading sbalkters in the united states that's the world we have to get back to and

address in my view that's not a terrible place. that's just a place that i think takes out a lot of that fed. even though we are getting more fed but that really looks you in the eye of where we stair at lower growth and earnings. >> it's not a great place to be when you think about it. i heard about the v reversal that's happening in china once this moves on given the monetary and fiscal stimulus people expect but markets can turn on a dime economies don't. and when you think about it i think there is another theme i hear about is the deglobalization. one of the themes of the trade war we have been in the last year 1/2 let me tell you this if you see u.s. multinationals moving out of china in a meaningful way and there are good reasons why they should i think you have to remember that china's economy ma has been a driving force in global growth, especially over the last decade when we see europe and the u.s. kind of weak, you know, and if you take all that business out there have what's happening to that emerging middle class that so many of our companies have been dying to get in for.

i don't think you see the global economy turn on a dime once this thing dissipates i'm not trying to tell a too dire of a story. but risk asset valuations have been inflated no doubt and we saw it last q4 or last half of 4r569 year after the fed go. >> i agree with you i don't think you see economies turn on a dime but the s&p and markets are always forward looking mechanism and always price out six to eight months sometimes a year ahead. you could see the market turn way before you see the economy turn and even when we still are in the death grasp of whatever we see going on in china. >> but do you think the risk of a couple percent slowdown this year, steve, for global economies lets call it china say they are flat the quarter. no growth, zero% our gdp hit half a% europe by 1%. >> does. >> mci started in this when you look at this we double-digit in growth in china then down to 6%,

8% growth in china and now you noent dough. know one believed the numbers at double digits. no one briefed mid-single. we do don't know where their growth is. >> does one case -- one case in brazil justify a 12% drop or whatever in their markets in a matter of days >> no, but i mean. >> no one know are where the other shoe drops, where there is a vaccine. you need a vaccine when people are taking a stab at this on trade wars you could guesstimate. you have no way to guess right now. you need a vazquez a vaccine that's it. >> brazil is affected by china when you think about commodities resources, who the ultimate buyer of what brazil produces, if you think about emerging markets when plenty of chance in this hour to get into the glikso implications so far you've had relative stability in terms of the currencies in em if you look at where we wereo

they were year to date against the dollar we've been spend time on you see current account defs in south africa abbrazil, some of the off 8%, 10% wau but back to where the market has to at least find a place where we are weigh what's inevitability a policy response versus a market challenging the fed to really stay out of the market and if you look at the long end of the curve the last couple days i know it seems dramatic and i know we talked about the yield compression in the united states but relative basis considering the equity moves, the long end of the curve is has not done a whole lot. we've been stuck around 125, 135 in the middle of the equity you know what storm. i think just think about the context of global yields, what thaelg that's telling but the world and what central banks can and can't do. >> i don't want to get to wonky and we'll talk about the fed and

technicals in a minute but how much of the violent drop is the simply people raising cash and collateral to meet requirements on the street it's a little technical. it's a little -- everybody i talk to says you got to raise cash you got to raise collateral. you sell what you can. and what are people selling, the big etfs, bill wig name. >> lori said when you look at the qqq, the nasdaq 100, the top four names we know 50% of ha the weight and other 95 are whatever you sell what you can. correlations go high there is a lot of sectors you could loot look at it consumerer staples got railed utilities nailed over the last week all the save havens. the only thing hald holding up, the save haven was the u.s. treasurys. that was it. just sell every rally in yields. and that's what's worked then obviously the dollar worked for a while thp. that's come in you think about it remember back in the day, when

were what were they doing in weaken the dollar. the whole notion of lowering rates and collar going up what was that was a double whamy. the fact it's eased off a bit is not horrible but after ten years of unur. p appear zurp. you will okay, the old blocks out the window what do central banks globally what to they have in their -- in the data -- >> from where we came -- back to tim's point we had an i mean incredible run in the marketplace sitting around the table i have to catch myself because last week you think about taking profits you go let me wait until they run out of momentum then it comes down with a crashing flo ro crashing blow appear say i don't want to sell now and other people don't want to buy i don't think there is enough of a discount everyone is stymied. >> i was getting data today. saying the average trade size is

now 138 shares these are mot mom and pop sellers who are callingtheir brokers and selling one stock. that's not who is doing that. >> sully, tesla is exhibit a, a robinhood stock. mania going on, all screaming and silence there. >> look through the prism- through the prism of that december fed debacle we were at 2350 in the s&p. and then we rallied to almost 3,400. when you have to -- when you look at retracement and technical -- >> i understand people -- >> mom and pop watch the show right now to your point trying to figure out what to do as long as you own good companies around in five years you stay the hours. >> like who. >> your apples, your microsoft, the googles, the amazon be, the problem that i have is that when you look for value and kelm snams appear energy those are done nothing but got got get

demolished you can't be there i own some but i don't think that's where you see the growth. >> i'll give you quick levels on names like that. microsoft literally consolidated last year between 140 and 150 for four and a half months broke out at 150 went to 190 become to 150. i know that sounds crazy it was at 190 a week 1/2 ago. it's at 150. jp morgan broke out in october at 120 it went as high as 140 you get back to support levels disney trading as high as 150. we know where it broke out in april at 120 it's below that. there are levels for the high-quality numbers where you can -- high-quality stocks where you can pick at. apple is out the door. i mean that thing went up a hundred% last year. >> put your finger up in the arron you think about it that's a company around for a while. >> one thing that we noticed and talked about the big media, tech, internet names getting smoked after ferociously run up

this year. we notice that the hedge fund community got spooked last wednesday. on wednesday all the brokers around the street, myself included put out our reports on what the 13 fs had shown, the run ones released valentine's day. and there was a chill through the community. what the lists tell su where the crowded position are and hedge funds are sensitive to the crowding risks we had seen them skew positioning defensively even while markets we want up auchld we whacked them over the head with the supercrowded stocks and started to see the passive systematic selling in the mechanic and now we are seeing real money going to 1:00 we saw the same thing in the second half of 2018 before the market peaked same last year july before the trade war debacle. people thought that was of oh the table. to me this smells like hedge fund reederisks right now that's one of the reasons it's moving quickly even though it feels

like some of the passive stuff may be employed played out. >> we'll find more pints opportunities in the carnage a jim cramer says the bull market everywhere at some point we talked about it a wit but diving in deeper technical seem to be a big part of the day to day. around mid-tai we were down 6 or 700 down near under 200 at one point. the buyer tried to fell oh off the lows only failing spectacularly again. joining us now is todd gordon of assent well not only to talk about what happened but more importantly where is is if anywhere that support may that put that floor under this. >> yeah, it's a very interesting conversation i think we have to realize this is a market -- we are not in modern portfolio theory. this is behavioral finance there is a lot of psychology that witho can be interpreted based on the squiggles in the chart. keep in mind we were sideways for two years. the market sentiment two years ago by largest head fund

managers bearish underinvested and short. we just recently broke higher. i think there is a general disdain for the market and this is the first opportunity post two-year consolidation that we have seen any selling. i think that sentiment carries over back to the charts bass as we clear it out this drop right now at the close was 12. 3% from the high in perspective calming down, looking at where we are and have been this is very much on pace to be eyakem to many of the declines oef the last two years when you start getting above a 16% decline, that becomes problematic. but again this is in the context of a major range from which we just broke out and we're recapturing some of the breakout there is a lot of hope at the 20 li 200-day moving average. at the bounce we gave that up. getting off the daily, this is the weekly chart i find moving averages only as relevant as the market wants to

respect. it's very algo driven. this is the weekly, the moving average calculated offer the last 50 weeks and 200 weeks. what i like about this level is the 50 week is around the 3030 on top of the 200-day. that's why you stage the rally today which ultimately failed. looking at the 200-week you can see it's amazing hoi well it held and unfortunately if we don't hold the cluster the next downside level is at 2620. that's just the markets tracing this out and showing us where support is if we don't hold that would be the meks level of support. now, i did see some promising signs with sort of that melt into the close here. a lot of the personal internal didn't dpifrm. but tick, trend, advance decline all didn't confirm with the new lo readings a they closed at the low. further back to the end of 2018 and 2019 this is the vix in

orange all we with he did was re-test the 359 level. the more fear there is -- on the back of a 20% decline in the s&p where we have only seen about a 12%. i think the market has gotten very fearful the internals we are following aren't confirming just the last push down. i'm not throwing in the towel yet. i'm still hopeful. >> todd gordon come and join us grasso what do you think >> i like the levels he is probably a bit more optimistic than i am ultimately where we actually bottom out in this when you look at -- i like following retracement levels when you look back to that 2350 left and the all-time high you come with the 618 retracement getting wonky where we close today. i don't think we bottomed today. we have another 100 handles lower in the s&p and we have we have a possibility of rallying next he can week. >> next week. >> next week because you have to let the whole new attention

cycle filter through with all the sunday morning shows if there is more cases, and what the cases are. there is not a lot of positive news news flo. >> lori we had a presidential press conference, roj elong ranging during the special and trump said we are going to be fine, not much going on we have a response and what happened today 1,100 point drop for the dow. >> it seemed this morning when the market was fighting back trying to find the bottom put it in the news flo was more favorable. my email was blowing up in the afternoon when things got weaker with various reports of things in california and the west coast. it seemed the news flo wasn't cooperating. it seemed there was a question of faith in the government's ability to fight this. that's not political i think that's true of anybody in office right now. but that lack of certainty about how this virus actually functions, i think resurfaced in a big way in people's minds today.

>> i wanted to ask todd about the charts when you think about 2018 we in the early unrupp in the beginning of the year and flushed 10% or so and took a long time. wasn't until october getting back to new highs but flushed against 20% are we setting up for a similar thing here with the unknowns here and the likelihood of new highs any time soon what do you think the chapss of new highs are. >> i think they are probably. >> really. >> i just think this is such a negative sentiment some so of the largest hedge funds impairinger were bearish if not short the last two years and just flipped i think there is a lot to cash up on the upside unwinding the bearish sentiment driving the mechanic s in a pullback. we have ranged bound we have a half back. very expected from a move. >> the fastest 10% down move in the history of the the maximum. >> but also they didn't let anybody in on the down range

we only saw the 2.5% correction post october 19 break from that high it was easy come, easy go. i think there will be people once we stabilize who missed on this entry looking to get on the bid. >> and look, ray 18% from october to those highs zbloop and tech was like 35 li 30%. >> i'm not telling you that's the most ferocious upside in markets but that was right there. it really was after a year where we had a couple of the moves flaskt if you take the low off dec 24, 2019 to that high we moved 44% on the s&p again i'm picking the high and low. but that's pretty extraordinary. when i think about what the market's ton -- brian, you emphasize the clear here which is important this reminds me of december 11th, the first eight days of august, december 2011.

i'll remember remind you when the u.s. lost the triple a we had the moment where no one knew what it meant certainly didn't have economic impact and not a credit follow-through but a case where you had enormous uncertainty around the world. slightly different tools time for sovereign bonds it was before drogy asserted himself and the ecu had autonomy and if you remember we actually had a pretty ferocious rally as we got back up into september. a lot of folks that were worried about year-end sfufr and missing out. but ultimately set you us up for daerpgs october. >> here is the question for todd, know. >> yeah. >> i go by a three-day rule and sometimes i don't dmeer to it myself and always regret that i don't. the three-day rule is whatever the stock bottoms or market bottoms you wait three days and see if it holds on the 13 day you're ox to dip in i'm okay missing a couple much days of

upside shot. how do you know for people sitting at home. >> yeah. >> when you can start why buying a market when it finds a base that it's a real base european. >> i don't think you want to put the seat belt op as the plane is about to crash i switched and work for a welt management team. we have a list of stocks we want this needs to be part of your plan you can't know when the bottom is you absolutely can't know. but you need to to be properly allocated stocks you like. you know, i -- there is no hard and fast way i just think you look at the technology i'm shocked how much sentiment has shifted. we had a tech led led semi led rally a plont ago. people talking about the new age of quantum computing driverless cars and aufrld we throw that out because of a virus i'm saying lets back up a bit. lets calm ourselves a bit. >> back it up a bit we have

enough brain power on market experience oh this desk to light new york city. about but our audience wants simple speculations what happened and i'm sure we're getting emails and texts from family and friends do i sell now? buy now? should people buy more stocks now, todd. >> okay. i have to put in delicately because again i assumed a new position at a welt management term i have investor capital right now on the sidelines i am lightly buying on the way down and completely confident it's part of the plan. you need a plan. in the highly volatile market like this this is the first opportunity we have seen on a pullback post two-year consolidation hugely hated stock market market goes higher this is the first opportunity everyone calm down lets look at where technical support is we don't know which holds. but you have to layer in you have to nibble on the way down you have to do it in solid stocks we feel we have portfolios of fundamentally strong stocks with

good balance sheets. should dampen the volatility this is -- this is an opportunity. i don't think -- >> that's sound advice i will tell you my patients texting me have sat through two times in the last 20 years where the s&p 500 was cut in half. in the beginning of nacelleoff it has both times in could you 2000 came from the all-time high, a period of euphoria then unforeseen events don't think for a secondpy by the time we got to 9/112001 that was the gut punch. that thiso had nothing to do with the dot come bubble exploding. and we et went through the financial kriez and we lived through 2008 and nothing was the one taking us down 50% until the summer of 2008 and all hell

broke loose and no one had control over anything. i mean, to me i just think. >> how far could we drop. >> just quickly, in 2018 in q1o q4 we thought we would have a garden variety vargs went down 20% in a straight line and waents until the fed made a massive pivot we didn't break out until the fed corrected the yield curve and lowered three times. >> at the end of december. >> we have to move on. >> i i want i wanted to talk about what todd and dan are talking about in terms of allocation and how retail investors respond. if you lived through 2008 you act differently in the market. doesn't mean you act emotionally. you have to sleeve sleep every night noying you can sleeve with the portfolio you're comfortable with if you are uncomfortable with the risk tlg there is nothing wrong a program sell of 5 or 10% of the assets. don't stick processic the stocks down the least

those are companies best of breed or companies maybe defensive because they have some positive exposure to you will a of this. but the key is you have to be able to act in a rational yet come from a rational place and doing a program sell of raising a little cash at this level because you have gotten a threshold of risk you can't tolerate isn't the worst thing in the world it's definitely not the time to jump out the window. >> he when you look at your parents all you're parents, lee look at the numbers of the dow in the 80s and if you stayed the course you made a ton of money if you haven't -- what happened with human nature and psychology is we want to sell the bottoms we always want to sell. >> fear. >> right the fear is. >> sure. >> we want to sell tomorrow. i don't think you should be a wello seller. >> don't sell into this. >> it depends -- it depends on what you own but you started off talking about triple qs. i think the average person to

diversify what i do for kids is buy etfs, six etfs global represented i'm not reliant on a single stock reliant on the i the ndice. >> todd thank you very much good advice stay tuned for the commercial free coverage of the coverage of the markets continuing markets in turmoil, of course tonight at 7 378 eastern time we are commercial free on "fast money." well it's just past 5:30 "p" at the nasdaq if you are just joining us lets recap the major selloff on wall street. the dow having the worst point drop in history. falling 1190 points. all three major averages now in correction off 10% or more from the recent highs more with bob pisani at the nyse. >> brian this is a takedown of the global stock market this is not about tech versus industrial or growth versus value or china exposure versus u.s.

this is a takedown of the global stock market you can see in the stock market today. particularly in the dow industrials. in the dow consumer names for example, you see nike, mcdonald's, proctor and gamble, everything down three to five percent. we saw it with industrials as well it's the same situation. you see united technologists, bogey down 4%, 5%. look at the banks too, the goldman sachs and jp morgan. it's down as well. some tech names apple for example, and microsoft down a bit more but remember they were not down as much of the rest of the market going into trading today. they are playing a bit of catch up everything down 12, 13% with everybody else invitation it's the same elsewhere we have seen a big expansion of new lows, particularly on the transports just been terrible here. united, delta, all of the transports ch robinson united parcel.

fedex. crazy. i'll give you an idea how crazy. southwest airlines hit a 52-week high less than two weeks ago it was $58 it had a 52-week low today 52-week high to 52-week low down 20% in two weeks that gives you a sense of the volatility everything is essentially 12%, 13% off the highs. it doesn't meat matter where you are, the global stock market hong kong down shanghai down about 10%. japan down 10% u.s. now down 12%. the markets saying this is truly a global phenomenon, brian back to you. >> bob pisani thank you very much it truly is. by the way, folks we will be taking you live to hong kong for an update on how their markets are going to be opening after hour biggest point drop in the history of the dow jones industrial average lets talk now more about what happened today and more importantly what you need to do about it. julian emmanuel calling from

btig and joins us now by tone. julian thank you for calling in on this historic day obviously we didn't get the bounce that many expected the last couple of days. we ended on our exact lows which dan and i talked before the program is not a good sign what do you expect tomorrow? what do you expect next week >> i think the difference between today and lets say monday when we were on with you in the evening, is that you actually saw disorderly price action and fear in the market. okay very palpable. the way the market traded intraday certainly the last 20 minutes or so. to us when you think about it -- and we said this and continue to say this, is that as an investor you need rewarded by being a why buyer down 10%, 15% consistently throughout the cycle we don't yet see the conditions that would cause that be any different and when you have this

kind of fear we're not saying today is the bottom. and if you look at it futures closed at a discount so likely going to see more selling pressure tomorrow at the opening. this is the time to start carefully adding to positions. >> to what by the way, julian, if you say that we are ended on our lows which we did, futures ened on a gap which they did, which none of those things por tends well for tomorrow friday's this year michael santoli noted have tended to be -- the worst day of the week so far people don't want to be long going into the weekend why start now? why not wait a little bit see how it shakes out? >> because when the volatility is this high, 39 in the vix, timing the market is an incredibly difficult thing to do it's normally very, very difficult. you know, for us it basically is -- the difference -- think

about it be, right, the 200-day moving average was at 3042, that was a support level that basically looked like it was going to hold until the last hour of the day. and now we are thinking -- a lot are thinking that you can go substantially below 3,000. the point being that you need to step away and have a plan for a disciplined approach and, you know, put a little bit in. the market moves lower you buy a bit more and really to the point where you need to take emotion out of the equation by being disciplined. >> julian, it's tim. i tend to agree. and i think we are giving a few stocks throughout the evening that we would do that. but i'm curious as you say nibble back in, do you take a sector approach, holist being market approach, indexed approach to a portfolio or do you find sectors that have been

most beaten either due to the direct impact of the coronvirus in ferms of arrearage regional truns or trade influence or transport influence? how do you leg back in and again, can you pick a sector or would you rather put the allocation across the portfolio? >> sure, i think for a lot of people there is a bit of shock in terms of the moves the of the last week or so. you know, you want to try and quickly figure out where your observe portfolio is overweight and underweight. basically from talking to clients we think a lot of people are overweight tech. we think that is probably an area that isn't likely to bounce given that it had been the leader prior but what we would say is, you know, the first decision is to add to exposure. if it's pure index, that's fine. we happen to believe that health care which has been very, very attractive on a relative basis

is something to look at. we like it, think it outperforms on the way back up and financials, i think part of the maybe unexpected part of the last few days is that yielded curve has actually been steepening that bodes well in a sector ha that has been beaten down extensively and we see value there fl from a valuation perspective. >> julian just to piggyback the questions, when you look at chemical names which i talked about earlieren a energy names, are you getting pushback from clients? is it environmental and social concerns what is troubling the names? if you look at dow down 24% year to date or a handful of other names -- and obviously everyone knows energy has not performed well for five years, what is going on with the chemical names? is there something bigger? because looking at the yields you have stock yielding 7% in

some cases it's not just about value and growth there is a bigger thing going on here and have you spoken to your cliental about that. >> we definitely have. obviously the push to esg has been a headwind for those stocks in those sectors but it's also part of the whole passive investment move. if you think about it as a portfolio manager. benchmarking against the s&p 500 you are not overly punished by being underweight areas like materials and energy, weight whose waelgting in the index dropped precipitously the the last couple years. basically the trade has been lets continue underweight because it's not going to hurt from our point of view if the last sort of year to date has proven anything, is that you can have straight line moves you certainly had one to the

upside and having one to the downside now but those don't continue forever. from our point of view, material stocks, energy stocks are pricing in recession that we just -- we don't see as a base case in 2020. >> julian, it's dan. question on china. a lot of china bears have just mentioned the fact i guess time and time again since the u.s. financial crisis and how it rolled into europe that obviously china has a massive debt issue does in issue with the quarantines and basically the lock down of a lot of business there, does it raise the question that finally this bubble in china, this credit bubble could burst and if it did burst that the government couldn't contain, does it have the likelihood to roll back to europe and the u.s.? is that something that maybe that's what u.s. treasurys are kind of so suppressed, maybe that's the thing it's a very fair question. i think, you know, the china

story becoming unraveled has been around for five or six years. we always wonder whethers this the moment it's hard to say it isn't based on what we know. but what would say is you look at 3 trillion in terms of fx reserves there is a lot china can do to stimulate the economy. they may not work now because of the quarantine situation but once that easts up and that seems to be the case, the reported cases have leveled off. is that there is enough potential for stimulus that we don't think this is the bursting of the situation yet. >> all right julian emmanuel btig, thank you very much. saying you might want to buy on the way down tim tim seymour dwik on iron, to the iron fist rather than velvet glove approach to stimulus that mchas. could china equities be a better place than u.s. stocks right now. >> we have seen at different

times -- again we're looking at the relative algory. but em always bottoms first and fall first in fact em fell aggressively into the move because this was the epicenter of the coronvirus. china has a lot of fiscal policy tools at their disposal. chinese equities -- interesting -- alibaba is an interesting example because it's a stock that's a proxy play for em, proxy play for trade, and china, but it's an online retailer at the core and able alibaba has been defensive of the last couple days but your question is can chinese or maybe -- chinese stocks or other places where the central banks have fiscal -- or the government has fiscal the central banks have the pblt ability to use policy, the answer is we have seen it before i do think china is throwing everything they can at the problem. i think that's a beneficiary for some of the regional trade

by the way we have big trade data come out of south korea on march 1st. we have taiwanese trade numbers coming out four or five days later and march 14th we have the trade data come out. >> truly bizarre, the epicenter, the fx mcetf up 1.5% while our s&p 500 is down. >> that's the easiest for them to do. >> buy stocks direct. >> zblily. >> ant fxi is bank heavy and by the way, the valuations in those banks are crazy cheap if you believe that the centrally bank support them. >> moving on the wall street sell off pushing oil deeper in bear mechanic. crude and brent crude overseas bowing down more than 20% this year at 47 and change and oil energy stocks daily story hit more than any other. every major oil stock in

correction if they are lucky or full-on bear mechanic chevron and exxon down 13% and 15% this week the big oil and gas etf xop down 37% this year. continental resources lost 15% today. and names like holley frontier or refinisher down 10% marathon, value row. one ok all down. >> lori you are not an individual stock person how about this chevron 5.5% is there a reason to own oil and gas even if you hate the sector, esg investor but looking for dividend yield. >> i'm not a fan of the energy sector as a whole. but there are things i like about it one of the things i love about it is davide yield and shareholder friendliness of the sector one of the things we look at, a stat blowing my mind is that the dividend yield on the energy sector has been higher than financials we know a lot of investors

moving into equities in the last frankly since the financial crisis have been coming into the market to get yield. that may not be the top priority at the moment while people derisk once out of it that's a huge theme for equities again and should best the names with huge yield i don't love the broader energy sector is because it's part of the esg concerns regardless what you think of esg some clients hate it some love it but they are getting flows it's a great growing party of the asset management industry. >> the climate concerns are real. >> i called it the three-headed dog. first off cornera and global oversupply esg and a world where there is so much debt that if you just sold every oil and gas stock that has the highest net debt to earnings ratio and sold it short

you'd be a rich person right now. >> you talked about yield. and exxonmobil dividend yield is 7% the stock down 29% year to date. so when you look at the emp side of it, i think we're in an oversupplied world and heading towards an underdemanded world for the commodity itself. >> sure. >> eog is an emp company down 28%. >> they're one of six with a high credit rating. >> right. >> and look at -- these are where you should in theory put your money now look at who benefits from at lower price in oil it's the refiners. valero is 28% there is no place to put your money. looking at crude, 42 could 43. on a chart where it bottomed in 2016, 2017, 2018 so it must hold that level, 42.50 up to 43.5 for three years

prior. the problem is it doesn't show any signs of having that ability to what lori said with esg investing -- you would think the stocks cause cancer. the way people are treating them. >> well, you know, some people might say they do. all right. listen generally when oil stocks fall and prices fall airlines do well not today. airlines because of koerchds, travel worries hit hard on the sell off to phil low bow with that side. >> fresh news for you a few minutes ago. american airlines out with its own travel waiver now joining united and delta in terms of saying if you have a trip that was booked for northern italy -- talking about millin, venice, well they are going to waive it. now you have united through june 30th to millin. blowing that and venice. delta through march 15th all of italy the big concern brian, we talked

about it, the big concern is that you see pockets of coronvirus potentially pop up in other areas around europe which would prompt other waivers because the airlines are realizing they see it in realtime in terms of whether or not there is demand for someplace either issuing waivers or potentially having to could could you tell cut back on flights which is what they have done with south korea. they cancelled them for china. that's the concern the trans-atlantic exposure. remember going into a period of time, the second quarter when the airlines, the big three we are talking about delta, american and united, they alling have a higher percentage of seats going across the atlantic over to europe you've got them now with 17 or 20% of the seats in the second quarter. that's the concern and that's one reason added pressure on these guys today. >> phil low bow, thank you very much around the horn here. the best performing airline stock this month is down 13% the best performing major name, united

you have american airlines group down 23% hawaiians holding down 20 per% one thing with he know about the consumer when things like this end we tend to bounce back quickly. are these oversold. >> airlines are fallout getting the sales back but if you look at a jet blue that doepts have that trans-atlantic exposure when then you say it was at 22 after reportings earnings a plont ago in our at 16.25. 6.5 times. literally bottomed at the exact 52-week low it's been trading -- that's the low of the last five years. that's one i expect to see come back quickly i think consumers in the u.s. are likely to start traveling again in the u.s. before they go overseas i would stick with the domestic guy like jet blue. >> i talked about delta a lot. and this would be a name we talked about names you should pick the spots on. first of all delta airlines created brand premium and relative value multiple premium to the seconder they have financial stability, a

forward-thinking management team they've been very interesting on how they have hedged some costs appear jet fuel hedging and have been prudent on capacity but also shown free cash flow here 24% if five days five days that's just extraordinary. by any measure and it's not to say that you won't see a challenging number but this is -- united decided they were pulling 2020 guide okay delta may do the same bottom line this is a company trading for recession and subrecession look it's a name i liked going into this. he we know at some point in dynamic ends and the this is the stock that i think will see a massive pop why not begin to nibble on this when you know the balance sheet. >> delta hit -- hit a level around $45 that going back a couple of years has been support in the name. if you look at these i'm i'm long expert to the same theme dan talked about it has no european exposure.

it had no max jet exposure jet blue had no max jet exposure either but delta on a chart back a couple of years -- and i encourage people to do this at home look at the charts and find support on the levels not just for the last year. they're for the last two to three years and they bounce considerably off the levels if you know what level to look at. >> lori, buy the transports? i would say on the airlines specifically this is one that just a bit too volatile for me in general and frankly there is other stuff within industrial higheren oh on the shopping list right now. >> like the what. >> machinery stock. >> what's a machinery stock stoo you're not recommending individual names give us a hint what does it rhyme with. >> companies that -- what do they. >> what do they do. >> not dogs. >> hogs. >> cat tractor. >> those types of names. >> companies building stuff around the word with china

exposure get dirty. >> things our kids like to play with when they're 4 anyway. >> there we go. >> i have more faith that that cycle. i'll tell you honestly i was seeing clients the past week and this week i was talking to people scared to get on a plane because of the their oernl safety investors and i have some questions personally about how long it's going to take for travel demand to recover based on what i heard this week. >> but if you believe -- if you believe to tim's point that the chinese government is going to do everything in its mighty fiscal and monetary power to bounce the economy back some of that could be buying a lot of industrial machinery buying a lot of the heavy industry goods for the united states. >> yeah, and look, i think we haven't talked about the 2020 election at all. we talked about the virus. i think the election has been having some impact on what's been going on recently and one of the things we no he is that some of the progressive candidates want to do

infrastructure spending. which so i can saturate of see reasons outside of this virus narrative why i might want to pick up other stuff that's just as cheap. >> all right thank you lori do another reset right now it's 5:52 eastern time. commercial free here on "fast money. and if you are just joining us for some reason and missed the market day, it was a day to remember truly was irrelevancic the dow falling more than it's fallen on a point basis. 11907 points, all marriage averages down more than 4% the selling hard, fast and indiscriminate and if you are out there believing that things will get worse before they get better, we have a very simple way to protect your portfolio using options where you don't have to sell your stocks options play chief strategist tony zhang at the plasma to break town the simple trade you can do at home. >> so brian like you said markets are down over 4% today after back-to-back 3% declines usually in this environment

environment or i rook for long opportunities. but i think things can get worse. i want to lay out the options trade to show you how to protect the portfolio going into this type of sell off first lets zoom out a little here is a one-year chart of the s&p 500. last week a 10% to the 200 day moving average i'll point out technical levels the breakout around 302 we're below the level. 200 day moving average 304 below that level these are bearish opportunities even though typically i look for long opportunities in this particular type of market. now if we look at a 10-day chart we have seen that this line here at 304 is where the markets enter correction territory and today we close at 299. below that level even though intraday we got above it i think this market can continue to move lower. now there is a lot of metrics to look at whetherville volatility or measurement up you go something after the declines you should seek long opportunities but the one thing i want to

point to this chart. that's the coronvirus viruss outside of china while the corneaa contained in china the markets were stable. but the raft four days the chart went parabolic and the acceleration causes this panic currently settling in this market now this is a -- a source by john hopkins publish every day it's a clarity i want to watch and until this chart starts to plateau i think that markets continue moving lower. the trade i want to i lay out using options is using a put spread because options are extremely expensive to try to brey buy protection. i'm going out to april looking to buy the 300 put spending $10.35 selling the 275 puts against that collecting 4.5 net-net paying about $$6.20 for a 25-dollar debit spread the risk reward ratio on in trade is three to one if the stock -- if the markets move down to 275. and the reason i expect select

275 is because that's when the market enter bear market territory. if we exceed that level you need to to look at other strategies beyond just an options strategy like this. >> okay but that's one tony thank you. dan your take. >> he talks about probabilities, defining risk and i think that makes sense especially after a move like this i will say this tony has been on the spot he has been on the program the last couple months delts detailing how cheap spy options have been as it worked higher. now they're expensive. and if you use a tool like options to help protect individuals names or a portfolio it doesn't matter where the price of options are trading you have to do -- this is i think a theme of the show that makes you comfortable about what you own and how you can sleep at night. >> yeah, okay good stuff thank you dan. because this has been a global selloff lets do something a bit different on "fast money" and go global because the asian markets are opening up for friday. lets get the setup now emily tan live in hong kong good morning to you emily.

>> and good evening to you, brian. we are bracing for losses here in asia following that plunge on wall street. global markets on edge as the number of coronvirus infections outside of china reported in one day surpassing those inside the country for the first time the who saying south korea italy and iran at a decisive point globally now there is 82,000 confirmed cases more than 2,800 deaths with the dow entering corrections joining the hang sang index in hong kong. the jpen nikkei and korea kospi sitting on the fence down 9% from the 52-week highs today's expected losses should take it to correction. now following the massive plunge on the dow today nikkei futures are pointing south off something like 3o 4.5% australia the next market to open at the top of the hour spy futures down 3%. one market already in action this friday morning is new zealand trading close to two hours now and the n zed x 50 is

down 2% thp np the latest from asia back to you. >> emily tan in hong kong it could be another nasty day there as well. lets do something to wrapping up the program. around the horn and lets talk about real world ideas what do you speck tomorrow, tim? what's the set up people are zard losing money on paper this week what do you expect from tomorrow and what shall we do. >> i want to mention apple arguably the most important stock in the market people at home own it. looking at the chart on that talking about the fundamentals in saekd 260 is a level certainly looking like we are head to and the next level below that of some sort is around 220 when the stock got to 22 times forward multiple because of services and exciting parts of the business that allowed the re-rating people were comfortable paying that. you're now looking at a stock about 17 times multiple. this is a name i think has free cash flow. look at relativeo active value within the market. s&p over triple qs if you look

at the charts. >> i would mention on apple this one to me obviously massively outperformed at every sort of expectation last year didn't grow earnings sales, iphones but stot stock up 85% that one has room to thedownside. microsoft a stock which mentioned before, i want to be in names that have the massive secular shifts, tails, microsoft is one that but i say to myself four or five months ago the stock stuck at 150 that's where i want it. >> all right. >> we're telling people to stick to the long-term strategy and three of the things we were buying coming into this are three of the things we are still buying today small caps at a historic valuation opportunity relative to large caps and thung hung in pretty well today. >> okay steve. >> looking at the stocks easy if you have to mind find. everyone should know the 200-day moving average on the index and what it is on their stocks in particular so if you look at the overall market, 2855 we mentioned that level in the s&p, watcher that level.

that's a must hold level for the overall market and for individual names as well >> good stuff guys appreciate it commercial-free hour ending on our as you called it the dead lows of the day could be a wild day tomorrow thank you for watching on "fast money. on cnbc a big and important "mad money" with jim cramer is going to begin right now we'll see you tomorrow ♪ 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 save you some money. my job not just to educate but to teach, put in perspective call me at 1-800-743-cnbc or tweet me @jimcramer. what bounces best? that's what you must be thinking