elsewhere because it would probably happen if there was a greater confidence that you are on an economic acceleration path and thing wills gos will go a lt better we are out of time have a lovely weekend. "fast money" starts now. i'm melissa lee. this is "fast money. tonight's trader line-up tim seymour, steve grasso, jeff mills. coming up on "fast" the chart master's big warning for big tech carter worth has five charts that show more pain ahead for the tech trade plus, a tiktok takedown, china drawing a line in the sand nikola fires back. ♪ >> what's up, everyone first of all, i never take any

belie [ bleep ]. >> more of his reaction straight ahead. we start off with the tech wreck, the nasdaq dropping for the fifth time in six sessions, down more than 10% from its record the index closing the week with its wbiggest loss since march apple, facebook, all the big names tumbling this week is this an ominous sign for the market jeff mills, what do you say? >> i think in the near term that it probably is ultimately, i don't think this is the rotation we've all been waiting for. near term, i do think there is more room to the downside. i think just focusing on the technicals right now is important, because these things clearly aren't trading on fundamentals it looks like a lot of these

stocks have breached that level. i do think there's more room to go this is what happens when share prices move in this way. it's this gain theory approach where people are buying these stocks because they think other people are biuying these stocks i pointed this out on twitter earlier in the week. even after tesla sold off 21%, it was still 80% above its 200-day moving average in terms of figuring out the magnitude of potential correction left, i think that is worth considering. in tech, the momentum started to wane long before this week at the beginning of the summer 85-90% of tech was trading above its 50-day moving average. that has decreased into the mid 50s right now. we're also not oversold. there's definitely more to go. >> we show some of the individual issues at the beginning of the show, apple

down 7.4% week today, amazon down 5.4%, microsoft down about 5% how do you respond to jeff who makes it seem like there's a bit of chase involved in these names? >> yeah. i would agree in the near term headwinds that we're going to see, in the long-term if you're a long-term investor, we're looking for better entry points. this might be a great time to start looking for that we're looking at 15% in some of these names. the story hasn't changed for a lot of them. if you're looking for a long-term perspective, i'm actually looking to buy into a little bit of this weakness, make sure we're looking at the long-term story and staying on fundamentals a lot of those things haven't changed but we're seeing pullback and profit taking we expected that we're looking for opportunities

to now pick at the bottom in certain situations. >> steve, you moved out of these names a while ago. what would it take for you to say, you know, what time to get back in? >> i think the pullback in the overall market, i'm looking for a 20% correction we have some wood to chop there. i'm looking at 2850, 2900 in the s&p as a level to sort of dip my toe back in. if you look at apple, the 200-day moving average is $83. i think that's where apple has to go. 83. >> to inflict the most amount of pain to everybody. if you are looking as a long-term holder, then maybe you want to nibble there all of these names have gained 30, 40, 50, 200% in some of these blowoff top names. where is the next 30-50% going to be made in the gains? jeff talked a little about it before chemical names, that's where i'm

at the cyclical names i don't like the banks necessarily, but they might get pulled in with an updraft. but tech a lot more ways to go to the downside, in my opinion. >> tim, how do you view the market of this pretty tough week >> i thought the volatility on the way was more painful than the volatility on the way down here although you saw the market effectively close in the lows slightly through the 50-day on the nasdaq or the triple qs, that means a little lower than 50 i think it's been well expressed here where we came from is a function of where we're going and i don't think we're done but i don't think that the foundation for what had a lot of liquidity chasing this market is going anywhere i can't wait to hear carter. to me, is it 5%, is it 10%

i think we started july around 240 after what had been a nice run but some sideways consolidation, then we went euphoric i think all of these names may go back and check those levels meanwhile, some of this is rotation transports have outperformed the s&p 6% in the last six days. i know chemicals and what not were just mentioned too by steve. how about bhp and glenn core we are getting inflation, hot ppi, hot cpi this week i think those trades stay hot. >> speaking of inflation, we have a fed meeting next week delano is that going to pose any trepidation to your view of the markets for next week? >> yeah. for next week i definitely want to be watching and see what's said in the meeting. we really want to stay focused

on our long-term story but in the near term, be careful. we're not going to chase things we may think may be stretching the valuation. >> is the fed going to throw any sort of monkey wrench into the works, steve, in your view >> no. they said they're not even thinking about thinking about thinking about raising rates they can't find any whiff of inflation. i know tim is thinking about that right now, because he could probably name ten spots where there's inflation, of course but the overall market, just think about the last leg up in the s&p and in tech. what did that stem from? it stemmed from the split in apple and tesla, created zero value for shareholders yet, a bunch of sheep chased the overall market for me, i think, yes, there's liquidity, the fed will always

be there to backstop but i think people are starting to scratch their heads and say risk/reward right now, let me take some chips off the table and place some bets on names that have not performed and are starting to actually catch bids. if you thought this week was tough for technology, buckle up because the charts are showing even more pain ahead for this sector carter, what are you looking at? >> before we get to the charts, it's important to say that equities are not annuities givebacks, dips, selloffs, corrections, declines, they're a part of investing. so it's always hard to figure out how far the decline will go. a couple charts. the first one you see here, it's going back to the early 1990s. on the top you see the nasdaq composite. obviously it's well above its dotcom peak in 2000. what's really interesting,

ironic and telling, the bottom panel, the nasdaq even with all of this has not recouped its relative losses to the s&p since the dotcom peaked. that bottom panel with that circle i've drawn, you still haven't made relative highs, which shows how treacherous it is to buy into the top of a bubble in any convenienany event, let'e next chart now we're looking at a chart of the nasdaq what you can see is a clear break in trend i've simply drawn the trend line what we know is we have broken trend. this is the first break of the well-defined trend line that's been in effect since the march low. so where to? take a look at the next chart. we know and this is now the percentage decline, we're down 11.5% for the nasdaq index overall. once you've broken trend, what is your reference point? could it go down 15? of course it could

the next reference point, the next chart is the january/february peak from which the market broke out we know the s&p has already gone back to its january and february peak so were the market to simply go back to the peak of the pre-pandemic high, final chart, what it would be is not an 11.5% decline, which is what we've seen so far, but now we're looking at something in the order of about 18. is that a possibility? you bet. it is a pretty good testament to first loss/best loss if something does crack hard, it's usually right to try to take some measures as jeff said, we are not oversold >> okay. so this specifically, carter, for the nasdaq for the s&p 500, which you said breached that pre-pandemic level. is it smoother sailing or because of the tech leadership we're also going to see a decline that mirrors this but may not be as deep

>> that's right. so then it's a question about the market's construction. we know top five stocks are 25%. we know that, interestingly, just before this crack, the top 15 stocks as a weight just finally exceeded the dotcom peak in '99 the question is the nasdaq composite down 11.5% is there more to go? if the parts comprise the whole, the whole surpriscomprises the . the presumption is that the s&p has more to go. >> jeff mills, do you agree with carter in this call for a decline of 18% on the nasdaq from the recent peak >> i do. i think the levels he points out are really clear in that you have the pre-pandemic peak but you also have the upward sleeping 200-day moving average if you look at the triple qs for

example. that would be a really natural resting point for this particular correction. i do worry about the overall market given the weight of some of these names because i think the rotation and the cyclicality isn't necessarily primed to take off, that may not carry the day in terms of the broad market. i think in order for that rotation to happen, you need to see things like consumer confidence, the labor market continuing to heal we had this divergence between the labor market and how consumers were behaving because of this income replacement that is now gone the uncertainty needs to heal a lot more >> steve, in carter's world in which this decline happens, do your cyclical stocks do better than tech? >> i would have agreed with mr. mills a couple of weeks ago that all of them get pulled down at the same rate and velocity but the issue i'm looking at now is that i am seeing, if you

chart chemicals right now, chemicals don't look so bad on their etf, while tech does to answer your question, chemicals and cyclicals will rally even with the s&p falling out of bed. >> let's move onto a story we have been following closely here on "fast money." reuters reporting that china would rather see tiktok's u.s. operations close down than see a forced sale. this comes as the clock ticks toward a looming deadline put in place by president trump for tiktok to sell u.s. operations walmart, microsoft, oracle all moving lower on that news. we saw a little bit of that in yesterday's session as well. tim, there's a couple ways you can view this piece of news. that is that china is taking a much harder stance and would rather see this thing shut down than actually be sold. that's china/u.s. relations. but there's also the stock specific stories behind this >> and it makes you wonder what

exactly these companies might be buying i think that's part of the value and it's just driving down the value. it's why bytedance really wants find a proper sale that's why i actually think the company is pushing for a sale. whether that happens or not, i think these headlines are ones that, yes, we've had the sense that china is pushing hard and playing their part of the hand or attaching export restrictions on the technology. if you look at walmart, it's down almost 9% in the last six days it's absolutely given up its tiktok buzz and it's trading back to where we got the sense of some other dotcom story for walmart and the walmart plus business which is about their same-day delivery and utilizing some of that infrastructure to compete directly with amazon i think for microsoft, first of all, microsoft and walmart as long-term partners here, have been partners, i think this makes a lot of sense i think walmart clearly is

getting more of the gain that is still considered to be the pole position. i think at this point the market has taken a lot of that buzz out of these two stocks. >> we should note that bytedance said the chinese government specifically did not ask it to shut down the u.s. operations of tiktok at all. that's that company's response to this report delano, you're in microsoft. as tim mentioned, a lot of the buzz is taken out, but how much do you think should have been accorded to this given that this was a very ambiguous deal to begin with >> it was ambiguous. i do agree with tim that walmart would see the lion's share of the gain as you mentioned, the market was excited for this you know, the holder in microsoft being long, i was excited for this

it's going to be a lot of regulatory waters to wade through. i don't know if they can actually get this deone, so i think you will see sort of a pullback as the optimism dies down there's still time i'm still long in the name and i still believe in the other avenues for a company like microsoft. coming up, nikola shares hitting the skids as the company's founder comes out swinging against fraud allegations. our retirement plan with voya gives us confidence... ...we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. i'm good at my condo. well planned, well invested, well protected. voya. be confident to and through retirement. to deliver your packages. and the peace of mind of knowing that important things like your prescriptions,

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nikola shares tumbling today as the company's founder goes on the defensive, trevor milton firing back at a short seller's allegation of fraud in an instagram story. >> i want you to know first and foremost that i'm pissed and i understand that you guys are too. every single thing in there was [ bleep ]. i have all the rebuttals done. it drives me nuts that i can't send them out to you guys. look, i want you to know that it sucks, it hurts, i know. i'm super mad and there's nothing i can do about it for a little bit, okay give me some time. it's not in my hands it's in the hands on thf the attorneys and the sec. >> all this comes after

hindenberg research accused nikola of being an intricate fraud. i don't even know where to go with this, jeff mills. obviously general motors is involved because of the 11% stake it now has in nikola what's your take >> yeah, i don't really know where to go with it either, quite frankly. at this juncture it's a he said/she said sort of situation. i try to look to the market for some wisdom. you brought up gm. i thought the trading in gm and nikola was very interesting today in the sense that gm was up a percent and nikola was down about 14 or 15%. i would have expected given that $2 billion stake gm has in nikola, the two stocks would have traded more similarly to one another. perhaps it's a situation where the more steady hand is in gm. they're taking a longer term view about how this is likely to

turn out, versus nikola where there's obviously more speculation in the stock i just thought that's interesting to point occupy. i don't know exactly what to make of it but the divergence was there. you had that big blowoff top in nikola, traded up to 80. it was back down to 30 and it actually had some support there a couple of times. we're back down to that 30 level. i would look for that as near term support >> i mean, the response on the part of the company may seem very convincing to average investors, tim i mean, we've hired a law firm, we're engaging with the sec. i worked all night on this rebuttal report which i can't release because of the lawyers now. it seems convincing, at least. >> i give trevor milton credit for standing in the pocket as it collapsed around him he's been on our show.

he's answered difficult questions and he's heard the business plan accusation before. whether the business plan accusation is fraud is a very different question what i just heard doesn't tell me anything. just a guy who has communicated directly with shareholders and the market and it's part of the charisma and momentum behind the stock frankly. i do think this gm deal risks the class 8 initiative we'll see. let the lawyers and the sec decide coming up, claiming victory. the stock scoring a big win for investors. why one of our traders says this is a teflona yn meou should be in

♪ come on in, we're open. ♪

all we do is hand you the bag. simple. done. we adapt and we change. you know, you just figure it out. we've just been finding a way to keep on pushing. ♪ welcome back to "fast money. check out shares of nike topping the tape today, jumping nearly 3%, hitting a new all-time high. tim, you are calling this a bulletproof stock. why? >> well, it's been bulletproof because, first of all, there's some things for nike that have

historically been sensitivities. they actually had some significant markdown numbers they had thrown into to be conservative on their last couple quarters based on covid this is a company that has gross margin progression the athleisure and essentially the comfort dynamic in two halves of 20 is going to be as strong as it was in the first half nike is one of those iconic brands out there nothing is teflon. it's up 23% in 26 trading sessions and looks a lot like a nasdaq chart i will say i think you're going to see earnings revisions and i do think this story remains very resilient. >> raising the price target specifically on the notion that its competitors were losing already in their trajectory before the and, are lopandemic e

losing even more where do you stand on nike >> i agree with tim's last statement. the chart is overbought and looks like a tech company. it's surprising, nike was the first to report and include all of the pandemic basically. it was the first one out to give you any indication sales were down. the stores were much lower than online sales were. i'd be a seller of nike. time for the final trade now. jeff mills, what do you say? >> i think ibb looks timely here it's down 10% from july highs, back to 2015 highs which also happens to be the upward sloping 200-day. i think you get a rally here. >> delano? >> i like netflix here they pulled back around 8-9% from the highs i'm looking to see investors continue to buy that dip >> steve grasso? >> i'm going to give you a double the final trade is planet fitness. i'd be a seller of peloton

against it >> tim seymour >> i mentioned nike. i'd rather point out this is a sad day in our country's history. let's not forget let's remember the utyndni a resolve of 19 years ago. god bless america. >> amen. that does it for us. "options action" up next so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

happy friday we've got an exciting show for you today. here's what's coming up. >> like in the musical "oklahoma" home construction stocks should be singing everything's going my way. >> how clever. >> that doesn't mean the curtain won't fall at any moment carter worth takes the stage to explain. then gm got quite a shock after teaming up with nikola >> i really like this particular stock. >> but headlines aside