its own catalyst once we get toward october fourth quarter tends to be a little bit stronger. earnings are 4% higher for the third quarter estimates than we saw just a couple months ago that could be the quiet catalyst as it keeps going. >> sounds good that does it for "closing bell" today. have a good weekend, everyone. "fast money" begins right now. this is "fast money. i'm melissa lee. tonight's trader lineup. tonight on fast, the big miss. stocks shrug as today's job number disappoints we're breaking down what it means for this record rally. plus a big bank buzz kill. the financials fumbling to hand in its worst week in more than a year the name and the trades straight ahead. later, one of our traders is calling this the most important story on the market right now. we'll tell you what just happens overseas that really got their attention. we start off with a

blockbuster week for netflix the streaming stock seeming unstoppable. netflix shares were up 15 of the last 16 trading sessions and the chart master says this record rally is just getting started. let's get to carter. >> well, so if you think about it, obviously the last many days have been very positive, and yet the stock has made no progress in essentially a year. so those are two things that juxtaposed against one another, almost make no sense a sort of a multi-day rally and yet you made no progress in a year let's look at the charts before we get to netflix, i'm going to do a little before and after. so you see it often for diet ads, the before and after, or weather decking. here's the pre-deck and then here it is after we're going to do that right now. look at nvidia look at the setup. a big move a triple off the low 50 to 150. it rests for a year, and it breaks out you see that 150 level it's up 50% from the breakout.

the before and the after look at the next one, adobe. it's the exact same technical setup. it's called an ascending triangle you see it there a big move, a big rest, and a big breakout, right? the authority of that sort of 535 level, it's now up 25% since the breakout point one more before and after and let's get to netflix look at apple. not as robust a breakout more nascent, but it's the exact same setup a big advance, a big rest, and then you move above prior tops a textbook pro-te typical breakout well, netflix. here's the final chart what do we know? a big move off the pandemic low. got ahead of itself. got ahead of the market and is now basically backing and filling for almost a year. that high that you see where the line is drawn is back in january, and we are toying with the prospects of breaking out. the bet is that it does break out. there are few that are still left, amazon being one, netflix being one.

do all stocks that set up like this break out of course not, but you got to play the cards the way the cards are dealt. buy for the breakout. >> the fact that the stock as, quote, unquote, rested for about a year, does that make the breakout prospects stronger or the possible breakout perhaps bigger >> it does, and there are a lot of adages. the one that i learned when i was young is the more authority the level has, the more authoritative the resolution so we've been toying with the 600 level for the better part of a year that's 12 months that's a lot of authority at the 600 level. the breakout is likely to be authoritative, big. >> carter, thanks. we'll see you in "options action" shortly. brian, kelly, carter braxton worth is very, very persuasive he's got very convincing charge. are you buying into the story, though >> you know what i do actually. and it's for a couple different reasons. number one, even when you saw

that year-long sideways trend here in netflix, it didn't really go down that much in a sense. it was really just kind of a flat sideways trend, which tells me that people weren't really getting out of it. they were just biding their time you get a breakout like this in a market like this that is trading highly technical because of the retail order flow, this is the type of thing that's going to get people's attention. and i actually particularly like when something rests for a while. carter called it authoritative i think louise yamada calls it the bigger the base, the higher in space so this could go higher in space. >> yeah. it rhymes, so i tend to go with that one more. how are you feeling about netflix from a fundamental standpoint >> well, the real question -- >> i was going to say -- >> oh, sorry >> i was going to say, yeah, i tend not to fight trends i think that's rule number one,

and i'm very much in lock step with the bigger the base, the higher in space. i do think the fundamentals present a slightly more challenging backdrop, and there's always this tug-of-war between -- and sub growth. if you look at the last earnings release, anytime there's even the slightest of miss, you're going to see a little bit of volatility around the stock. thematically with the covid delta variant rearing its head, re-emerging, i think that speaks for the stay at home story and i think we've seen the stock perform well there the inflows back into tech show people have become increasingly more comfortable with valuations here as long as they provide the earnings to support it what i will say is it's approaching its 52-week high, so i'm not really sure how much upside is there. i do think you continue to ride the trend but i'm slightly more cautiously optimistic on my side. >> nadine, are you optimistic as

well, cautiously optimistic? >> there's a graveyard full of netflix short sellers. i think you have to be really careful betting against this one. we always hear about slowing user growth, about limited monetization what you've seen is they've had pricing power and they're coming up with a huge slate of new content. so while i wouldn't go putting on a huge position here, our trading range is about 545 to 607. it's in a bullish formation and there's significant option protection on this name. i think it can go higher as people take off that protection and see some of the fundamental drivers continue to be positive. >> grasso, is the context of the markets in terms of what is in vogue sector-wise -- does that matter to the story, or is this an individual story in your view in other words, do we have to believe that we're in a sort of slower growth environment which favors -- tends to favor big cap tech in order to believe that netflix goes higher? >> i think -- i think it's an

individual story, but i think the macro does help the low rate environment is going to help large cap tech but to just pull it back a little bit, carter brought up two charts, nvidia and netflix if i look at the netflix chart, i get an ekg on my screen. and what comes with an ekg you get peaks. you get troughs. you get this bouncing around in the stock price. so i'm somewhere between bonnawny and extremely negative on the name. so having said that -- i shouldn't say that i'm not extremely negative i think the stock can trade down 10% and revisit its 50-day moving average, and i think it's a rising 50 day, i think everyone will consider that a win. but that's a 10% move lower. so i would be -- i would be waiting to buy netflix 10% lower than where it is now, and that would be a great buy >> but going between bon awin

and 10% lower seems like a big range, grasso. would you play for the 10% lower, or would you play for the bounce off the 10% lower is the question >> yes, i would play -- i would be a seller of the stock here, and i would be a buyer of the stock 10% lower and looking for that bounce as it's done so many times over the period that carter looked at first of all, the stock is only up 9%, and it's already overbought it's got an rsi of 81. look at nvidia it's up 75% and is not overbought so if i had to pick one of those charts to buy, believe it or not, i'd rather buy the stock that's up 75% and not overbought currently. >> oh. that sounds like a would you rather to me that sounds like the perfect opportunity for would you rather brian kelly, i'll toss it to you. nvidia or netflix here >> you know what

nvidia has been one of my favorites, so i am going to go with nvidia because this is a real big momentum type of market that's not to discount netflix you know, when we talk about the fundamentals, these breakouts have a funny way of changing people's perception of fundamentals so, you know, i like nvidia better just because it has the momentum >> all right let's get now to today's big miss the u.s. economy adding just 235,000 jobs in august that is less than a third of the number expected. stocks taking the news in stride the nasdaq even closing at a new record so, bon awin, what did you make of the action today in stocks? >> you know, i mean, man, i was surprised that the market responded the way it did i do feel like there's a little bit of reverse engineering here where the news is extremely positive, people want to buy into it, or with thenews is less positive or negative, people essentially say, well, all this means now is that the

fed is going to continue to have to be a bit more conciliatory and supportive of the market so i was left scratching my head there. i will say i do think it paints chairman powell in a relatively shining light here i think there was a lot of criticism around his hesitancy to move forward more aggressively, and he's pointed time and time again to the job market and said, we're going to be deliberate. we're going to look at data, and we're going to look and keep a pulse on what's going on in the job market i think today definitely shed some light on what the delta variant may be doing to the job market, the prospects for growth and hiring so while i continue to think that the taper will happen over a protracted period of time, i do think people should pump the brakes in terms of rate hikes in the near term. >> nadine, if i had called you this morning shortly before -- or after, i should say, the jobs number crossed, would you have said the markets should go

higher what was your sort of -- it just -- as bon awin said, i was sort of scratching my head at the reaction in the markets myself >> well, on the show a couple days ago, i said i didn't think it was going to be a big deal. but because it's in an inflationary environment and there's a point here about unemployment, while unemployment got better for overall, i think it was 4.8, down to 4.5. for african-americans, it went up, 8.2 to 8.8 so one of powell's key points, which is fairness, right are we going to see employment improve for everybody? it didn't happen it's mega tech it's mega cap. that's who does well that's what we saw today so tech is up. spy was just flat to slightly down you saw russell go down harder for me it wasn't that surprising given what we thought was going to happen with infliegation and

probably employment. >> i thought the moves would be a little more magnified, that the move in tech would have been a little bit more than barely flat to higher i thought thatwe would have a more pronounced reaction thinking that taper would be pushed off >> yeah. well, i think that the issue is we already know that chairman powell has already made the difference between taper and tightening so i think the market is just digesting this and maybe they're not getting shocked, which is a great thing. and it gives -- it gets back to what bon awin started off with bad economic news is good news for the marketplace, which we probably shouldn't scratch our heads anymore. that's been what we've seen, and i think it's very healthy that we didn't see the market get shocked to the point where mega cap tech screams higher. but i think we all collectively

can look at this and say, maybe this still is the sweet spot moving forward but i will tell you that i'm starting to get a little bit hesitant on the market myself. i feel like it's a little bit long in the tooth and going into september, october, i think we could be in for, you know -- and it sounds stupid even saying it, saying a 5% to 7% drawdown because we've had that in the day, right so it doesn't really make a whole hell of a lot of difference i think you stay the course with the market, but i think the reaction, as you put it, was a little bit muted today, which means to me that people are getting a little complacent, which means that markets could be selling off. >> i mean muscle memory, for market participants, brian kelly, is that september and october -- they're volatile months, and they're historically bad months for the markets so how are we positioned going into this historically difficult period for the markets >> yeah.

i've been hearing that difficult september/october for the last couple weeks now, which makes me think it can't be right if everybody thinks it. so i would discount that a bit, number one number two, when i look at the market today, it actually made a fair amount of sense to me because a weaker jobs number means we're going to get more stimulus it puts the odds of a bigger or a stimulus package getting passed, increases those odds but what held it back was the bond market. and so yields went up a little bit, right so if you're thinking about kind of your cross-asset allocation and you see yields go up, that makes the stock market a tiny bit less attractive. that's probably why there was a lid on the rally today. coming up, the most important story in the market may be coming from overseas, and it's flying under the radar probably why b.k. believes investors need to wake up. plus a banking buzz kill this financial stock just had its worst week in more than 14

months we'll go behind the trade when "fast money" returns (vo) this is a place for ambition. a forge of progress.w. a fresh start. a blank canvas. a second act. a renewed company culture. a temple for ideas. and a place to make your mark. loopnet. the most popular place to find a space.

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well, what we've just heard is that he's coming forward and clapping competitor lyft on the back for the actions that it's taking in texas and saying it's going to match that. here's what happened lyft came forward and said they were going to start a legal defense fund for any of the drivers who got accused under this new texas abortion law or anti-abortion law of assisting women receive now illegal abortions in the state of texas. lyft would set up a legal defense fund to defend those drivers. and just a short time ago, dara had tweeted out that he felt that that was the right decision on lyft's part, and they were planning to have uber make the same move. so uber now also will cover legal fees for drivers in the same way, and there's dara saying thanks for the push, logan green, that drivers should not be put at risk for getting people where they want to go.

>> basically the premise is that even rideshare drivers who take women to these appointments are seen as aiding these women in an illegal abortion at this point and could be fined so at that point the companies will step in and cover the legal fees >> you got it. >> thank you contessa brewer. let's check out the rally overnight in japan stocks soaring to a more than 30 year high. the move comes as japan's prime minister announces he is stepping down at the end of this month. b.k., you're calling this the most important story in the market right now why is that? >> yeah. well, listen, i know it sounds a bit like hyperbole, but think about what's happened over the last 30 years. there has been this giant trade, what's called the carey trade. you borrow japanese yen. you use it to get u.s. dollars, and then you buy u.s. assets that's why the u.s. dollar/japanese yen is highly correlated to the s&p 500. every bank in japan, every company in japan is taking money from japan and putting it into the u.s. markets because they

can't get a return over there. but with the prime minister resigning and the potential for more stimulus in japan, fiscal stimulus, not the kind of central bank money that they have had for a long time going, which has not worked just like it hasn't worked here in the u.s., but now you're putting money in people's pockets. now you've got a stock market breaking out of a 30-year base you talk about a big base. that is one big base it should go higher in space so the reason why this is so important is because all of those flows that have happened over the last several decades have the potential to reverse. and it hits every asset class, not just currency, but it hits equities and japan has been one of the largest buyers of u.s. treasuries so they've actually filled the hole that china left when they stopped buying treasuries. this hits every asset class. if you get that continued rally, which it looks like we're going to get, everything that you knew about the last decade could be upended. >> i have a question, brian

kelly, because i know nadine is hot on this as well. you guys are like peas in a pod when it comes to this japan story. but suga is stepping down as the head of the party and therefore he is stepping down as prime minister what if his party continues to hold the prime ministry? does that change your thesis >> no. in fact, it doesn't because no matter what party is in there, they are likely going to have to do some fiscal stimulus, right that will be the way that they win the election in fact, if the ldp does win, it might kind of reduce any political concern or political risk that you have even though they have a new leader so i don't think this would change my view at all. it is all about how much money is going to be pumped into that economy, and are these massive capital flows going to reverse >> so the question, nadine, that i have at this point is if you believe this, then do you position yourself right now, and how do you do that >> it's a good question, and i

think b.k. eloquently put a lot of complexity into simple terms here so to answer your question, mel, there's the ewj. that's the japanese etf. that's one easy way to do it, and it benefits from some of the currency movements that b.k. was talking about. so that's one way. if you're into japanese stocks, there's a ton. we went over some of the green ones a few days ago. but industrials are good there you could look at service businesses we have real estate positions, some financial institutions there. so there's lots of different ways to play this stimulus that could happen as well as just an overall support of the market. there's been a lot of esg trends as well occurring, better compliance, obviously less cross-holdings of companies. so a lot of things to look forward to, but this was a big deal and b.k. was spot-on on that. >> brian kelly, the last question i have for you in terms of the impact on other asset classes, does the u.s. bond

market lose a major support, and does that make the yield curve become steeper >> yes in fact, i think it might have had a little bit to do with today potentially. but, yes remember, china was the biggest buyer of treasury bonds, and they stopped doing that, and japan filled that hole now if that reverses and you don't have that buyer, who's left except for the federal reserve? >> all right this is something we'll be watching for sure. coming up, tractor traction. one of our options trader is betting on a big breakout for deere. how you can aypl this name for some serious upside. we'll be back right after this gold. agile and liquid. a proven protector. an ever-evolving enabler of bold decisions. an asset more relevant than ever before. gold.

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don't just sell it. ten-x it. we've got some news. a new addition to the s&p 500.

contessa brewer is back with the details. >> the s&p is adding three new companies to the index we have match coming in. that's a $41 billion market cap. and look at how the stock price moves on that in extended trading up almost 8% ceridian is up almost a percent. it will be added to the s&p. and brown & brown, an old insurance company added here as well that stock up 2% but match really popping on the news to be added to the s&p, melissa. >> thank you very much, contessa brewer. time for the final trade let's go around the horn steve grasso, what do you say? >> it's been a name of mine, and it has not performed at all, and i'm still on the name. still have conviction. paysafe, number one in i-gaming. it's got a crypto wallet it's everywhere you want to be >> nadine. >> looking at european financials ticker eufn. you've got great earnings growth we're going to see some

surprises. good loan growth, and a potential catalyst with the german elections >> bonawyn eison >> speaking of financials, i proceed with caution with wells fargo. the regulatory overhang still too much gray area there wells fargo. >> brian kelly >> b.k. is going to put his money where his mouth is, and he's going to pile on with nadine in the ewj. stock exposure >> that does it for us on "fast money. do not go anywhere a jam-packed "options action" is up next. ♪ music playing. ♪ there's an america we build and one that's forever wild

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it is friday, so welcome to "options action. this morning's surprisingly disappointing jobs report putting macro forces into focus. could the best way to prepare be with a pair trade? carter worth and mike khouw guide you through that one how to construct a mechanical advantage. plus we're having a follow-up meeting about our recent zoom trade and taking your tweets it's time to risk less to make more in the board game monopoly, you usually buy real estate and sell utilities. but in real life, carter worth thinks you should do the exact oppo