welcome to the first "optionin "options action" of 2021 let's get right to it. it is not just the major indices, everything that goes into everything. commodities are going right along with them. just because everyone or everything is doing it, doesn't mean you should, too carter, what are you looking at?

>> an extraordinary period for all things macro, the dollar, equity rates we thought we would zoom in on the dollar and move to commodities. this is the chart and it's in a free-fall. to put this in context, only nine instances in history where the u.s. dollar index has not had a counter trend back towards its 150-day moving average, this long nine months. that is 0.08%. the next chart we are down on the u.s.dollar right to those lows of late 2017, 2018 you can see it on the chart with the circle based on how rare it is to go this far without some sort of

counter trend move that's what we are thinking. third chart. what we are thinking at a minimum is the down trend line in effect since the peak that we throw back, kick back to that down trend line. now that would be a 3 to 4% move in the dollar up but commodities which have been on a tear will suffer a bit. next chart this is the old crb. it has everything. we know copper is up 90% corn is up almost 70%. it is virtually a straight line, but it is the reciprocal of the dollar the next chart, i have done the opposite of a dollar i have drawn the trend line off of the march low and the march high at a minimum i think we check back to trend.

keep that chart right there in your mind's eye and look at the final chart, john deere. it's identical, literally identical. john deere was 100 in march and 300 now. we think it checks back. one or two statistics to change, trading above 40% its moving average, highest ever recorded going back to the 1970s. of the 21 analysts that cover it, the prois target is 283. we are sellers of commodities and john deere >> mike, what is the trade on deere then >> basically it's been a perfect setup for deere so far coming through to these highs that we find ourselves in right now.

as carter was pointing out, it is good for the average sector and good for industrialmakers like cat and so on they get their business from that but we have very low rates these type of goods are often financed so this is an attractive time for farmers to invest in equipment. those are positives as well. one other thing, oil has recovered sharply. we are far from the all time highs there. the reason we are doing well, it is isn't just the inverse of the dollar, we have a good setup exports per week are well above the five-year average. if we look at deere or look at the enterprise value, a host of metrics, what we are seeing is it is approaching the all-time highs you get. these stocks tend to be

cyclical does this mean i think deere is in big trouble it doesn't mean any of those things but it means that further gains will be harder to come by. we do see slightly elevated options. looking at a diagonal foot spread, if a stock trades sideways or goes up slightly or drifts lowers, there will be degrees of profit. i was looking at the mar to april. i would be selling at 7.25 net-net, the idea is the shorter dated option will be more rapid than the longer dated one. and the diagonal

the money spent is less than the distance between the strikes you cannot be so right that it's wrong. if it really rolls over, it will be profitable no matter how low the deere goes i am not expecting it to fall out of bed >> tony? >> i like the structure of the trade. the business is still fairly strong here. john deere generated almost $7 billion in cash flow and it weathered covid pretty well. carter is right on the charts. by any stretch, if you look at this, it's overextended, overbought and has classic signs of exhaustion. if you look at the weekly rsi, it is above 80 so for all of those reasons i like the business, but i do expect there is a bit of a pullback here and mike's

pullback is more of a neutral play than bearish trade. if you look at things like corn and soybeans, i don't think these agricultural commodities will pull back i think they can move higher, but i like this neutral play risking only about 2 1/2% of the stock's price. >> so many of the trades are predicated on a weaker dollar. how much of a bounce would you anticipate in the dollar index >> hard to know, but it is the principles of the behavior of money. think about things that are in big uptrends they have givebacks. there are throwbacks counter trend moves are a natural and normal part of how money behaves. so whether it's a 2% pop --

currency doesn't move very much. or whether it's 3, but it's likely to do something along those lines rather than just sink to think it has only happened nine other times going back to 1970, that's extreme >> another good encaps lags, airlines, one stock to have heart. tony, what are you looking at? >> i love luv, southwest airlines i think that is the airline that will weather the covid storm the best if we look at the chart. southwest recently broke out above a $44 resistance level on the pfizer and moderna level and has been able to hold that level. i think there is a base forming

here above the $44 level and that could be what it needs to break out of the brace. and what is interesting compared to the big four, during covid southwest which traditionally has been number four has now moved up to number two so that is a pretty big move considering the fact they are focused on domest domest domestic leisure travel which is the only travel that has seen any gains since the start of the pandemics. and it's fairly different than the other big three. it has a negative debt position. i thinkinvesting in this fairl uncertain time i prefer safety versus riskier assets like american airlines or united.

and they are the only airlines expanding rather than pulling back i think southwest will emerge out of all of this as a stronger airline. if you look at the trade structure. southwest has a relatively low volatility there are earnings in two weeks. that's an event where it could move higher. i am going out to march and buying the call. spending $4.40, and paying about $3.45. it is quite expensive, but i am choosing that in the money call option to reduce the time that i am paying for this >> i am a quick question before.

why did you pick southwest when all of the reasons you like it are long-term that you are bullish. >> i have been a put seller because i like the stock but because of the earnings announcement, i think that is the catalyst that it will break out of the range it is trading in but i still do have a long-term position i would look to move higher if it rolls out higher. if earnings comes out fairly poor, i am reducing my risk by a fair amount by using the option strategy rather than long-term investment >> what do you think of this trade in particular? >> i like southwest relative to the other airlines pent up demand i think business travel might be slower to recover than leisure travel which would be bullish

for southwest airlines which caters to individual travels they have a strong balance sheet, net cash. as of their last reported quarter they had like $13 billion and change very comfortable position. the other thing i like about his trade is that although it's true that implied volatility in southwest has fallen back, it's about double from a year ago that's the reason why using this in the money call spread makes sense. he is trying to minimize the extrinsic volume, the amount of decay by having a minimum. so i think the trade structure makes sense. and when you are using verticals like this one, you want to keep

the data relatively short so if it runs up to your short strike, that you get most of the strike in terms of value. >> carter, what do you think of this airline >> this is the quality name, largest, best balance sheet and also it has done the best in terms of working off of its march low. to think that luv was as high as 58-60 before the pandemic and now it's just at its november moderna news day spike it's the best of the bunch and i think tony has it right. i think it will work higher. >> we still have open trades to adjust more cents to the dollar and trades that are almost beyond comprehension. bse.t forget to check out our weit we're carvana, the company

who invented car vending machines and buying a car 100% online. now we've created a brand-new way for you to sell your car. whether it's a year old or a few years old. we wanna buy your car. so go to carvana and enter your license plate answer a few questions. and our techno wizardry calculates your car's value and gives you a real offer in seconds. when you're ready, we'll come to you, pay you on the spot and pick up your car, that's it. so ditch the old way of selling your car,

and say hello to the new way at carvana. ♪ ♪

♪ ♪ ♪ the green back bouncing off its lowest rally in years. is this bounce just a blip on the radar of a dollar headed just lower or might it have legs let's go to mike with a call to action >> one of the things we have to think about -- a lot of people have been struggling to figure out what is going on in this

market we had unprecedented things take place. we went from the lowest unemployment, 3 1/2% and the response to the pandemic as it broke out. risk assets are essentially all trading at all time highs. what caused this and what is the impact on things like the dollar some of the things we talk about a lot, but let's throw some numbers on it. we have talked about very aggressive monetary policy the feds balance sheet increased by 3.2 trillion from the beginning of 2020 until the end. that is remarkable long-term rates fell essentially to zero. in the midst of all of that we had an unprecedented fiscal response as well if you look what the cbo was predicting, it was 1.1 trillion.

the actual number for the year, both on and off budget items, 4.4 trillion, an increase of 3.2 trillion over the forecast number but those two together and think about the net impact on things like risk asset. that's an increase of 4.6 million. we have a lot of trades. we made bullish trades in things like gold and silver for those lucky enough to get on the train, they bought bitcoin or webbiequities but there are other countries facing similar problems. now we may have a situation where on a relative basis our currency will be priced off theirs as well so we don't just operate in a vacuum so we have some bearish trades

we have puts, we rolled that in december, for those watching, you will remember that we are thinking that maybe now is the time to take profits on those types of bears trades and play for a little bit of a balance. some of the other things we are starting to see is rising rates. if you have an improving economy and rising rates, that can support local currency and other central banks are doing many of the same things ours have been doing so they will be facing the same pressures ours have had. march 24, strike calls those were trading about 50 cents. this is the way you could play for a short-term bounce. as carter pointed out, currencies tend not to trade that much. you can buy at the money

calls -- typically that's what you would want to do, buy close to or at the money and give yourself time to play out. >> there are a plethora of trades tied to the dollar weakening. i'm wondering where you think the most vulnerability may be at this point >> well, that was the hope at the top of the hour, to do the commodities trade in the sense that we had a big bet, mike and i, to short the dollar even if it was going to do what it has happily done, which is collapse. it has been such a long period of time with a counter move, we think we take the road less traveled, take a bet for a dollar bounce. in principle, the most immediate thing would be a giveback in commodities. >> we have breaking news out of

washington we are just getting a statement from house speaker nancy pelosi supporting a move by her members to present articles of impeachment next week i am going to read the statement in full -- it says today there was an hours long caucus that was sad, moving and patriotic, it followed an action unlike any other. it is the hope of members the president will immediately resign if not, i have instructed the rules committee to move forward with the 25th amendment legislation and a motion for impeachment. the house will pursue every option including an amendment option, 25th amendment or impeachment. so they are looking for him to

be removed noticeably absence is whether she received blessing from president-elect biden. certainly she had been weighing her own issue earlier today. but the fact she is putting out this signal means they are ready to proceed >> timeline is tight so is this a marker to say this is where we stand on this issue with this president? >> perhaps it is some of the draft articles of impeachment circulated today were short in nature citing the events at the capitol and the conversation with georgia. it is a tight timeline, but they are reporting it will be presented next week. they want to make a statement and put on the record how they

feel about the actions of this president. whether they could actually complete these proceedings and whether or not they could actually get a changed outcome in the senate this time around is unclear but this evening there is an explosive interview from a republican senator lisa murkowski. knowing how the president responds to things like this, it's uikhenlely would do so >> thank you options action will be right back stay tuned totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect thnow this is what i'ms you'talking about.in. yeah, it'll free up more time for your... uh, true crime shows?

british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim. ♪

it's time you make the rules. so join the 2 million people who have switched to xfinity mobile. you can choose from the latest phones or bring your own device and choose the amount of data that's right for you to save even more. and you'll get nationwide 5g at no extra cost. all on the most reliable network. so choose a data option that's right for you. get nationwide 5g included and save up to $300 a year on the network rated #1 in customer satisfaction. it's your wireless. your rules. only with xfinity mobile.

oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila! maybe a couple throw pillows would help. get a strategy gut check from our trade desk. ♪ another check on the record rally on wall street all three closing at all new highs. options action back right after this

oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's my streaming. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

visit tdameritrade.com/learn ♪ ♪

final call carter >> john deere, too far too fast. sell >> tony? >> love luv, buy call spread >> mike? >> diagona there is always a bull market some where, i promise to help you find it "mad money" starts now hey, i am cramer, welcome to cramer-america i am trying to make friends but trying to make you some money. my job is not only to entertain you but to teach you, call me at 1-800-743-cnbc or tweet me