right now on o.a., is the consumer rolling over after a strong start to the year are we finally starting to see some cracks in the strength of america's shoppers the names our traders are charged up about plus with another slate of earnings on deck, we're laying out the ways to play a soda giant, a streamer and a tech giant. later, looking back at a couple of trade we're hitting the financials and the transports this is "options action. a special appearance from the general himself, jeff mills. we start off with a deeper dive

tonight on the consumer after a strong start to the year for so many names tried to travel, leisure and shopping, this week the trade has started to roll over next week, on valentine's day, we get the cpi report and a number of earnings reports from names tied to the wallets of the consumer carter, what are the charts telling you? >> well, let's take a look start with the xrt it's a great etf it's about 95 stocks you could be foot locker or amazon, you get the same weight essentially. look how technical it is this is the august high. when it was declared the s&p was in a new bull market because we went up more than 20%. this is the high just of a week ago. they are the exact same level. talk about to the penny. $75.78 $75.79 that is known as a double top. we have a break in trend it hasn't happened yet, but that's my conclusion what we're really looking at is something along the lines of this that you're going to have a

minor head and shoulders so xrt to the downside let's look at a couple other sort of iterations within. this is the xly, which of course is dominated by amazon, home depot, and others. but similar sort of circumstances. a great run-up, and then here comes the trouble. so we've had our great run-up, and let's put in the red arrow i think here comes the trouble one area within consumer that's held up very well is casinos, gaming stocks. we have here the russell 3,000 casino and gambling index. 30, 40 stocks in it. what is incontestable, of course, down trend to the penny. down trend to the penny. where did it stop and hit its head to the penny i think at a minimum, we're in a check-back to the 150 day moving average. so seller of this area, which has held up, but i think it cracks the way the others have already cracked. >> for astute viewers of "fast money," we know where the

general stands on xrt because that was your final trade. >> i agree xrt to the downside just from a technical perspective. to lean on the fundamentals, we talked about this during "fast." i feel like pricing power is ultimately waning for companies. that's going to impact nominal rev revenues you see weakness in the labor market and that's going to transition into the behavior of the consumer one thing we've talked about is pricing power relative to that higher income demographic. if you look at the highest income core tile, they're seeing the biggestreduction in their net worth. i don't know if that's part of the argument anymore i'd be playing xrt to the downside as carter said. >> mike, where do you stand? it's interesting of course because consumers can be pressured by the employment picture and also by their available resources. what we're seeing is if you take a look at consumer revolving debt levels, which of course dipped during the pandemic people were spending less and getting some government checks as well. those are now back at all-time highs, and the interest rates on

those resolving balances is probably 200 basis points higher than it was a couple years ago as well. so you put those two things together i see probably $24 billion in incremental interest expense full year this year alone based on the current balances. that is of course going to weigh on their ability to spend. so you put all those things together, and that's a little bit problematic, combined with the fact we'd seen some valuations come back to reasonable levels but then they rebounded not as much. i think you put those two things together and that probably explains some of the activity we saw in the options market. in a butterfly, you're targeting that short strike, and that would basically take you right back it's probably carter's job to tell us whether that's an appropriate target over the course of the next several weeks. but it's 60 what the options market is targeting at this point.

>> let's turn to a couple of hospitality and travel names first up, airbnb carter, you're not expecting some great things from this one. >> it's had a bad day today. but as is so often the case, we can inform judgments by the chart. that's a down trend. that's incontestable a series of lower highs. of course it fails at the trend line at the trend line. at the trend line. got there literally this week. hit its head red arrow. probably earnings are going to be unhappy i'm a seller. >> mike, would you be a seller >> yeah, i am. here too what's also incontestable is the biggest trade in airbnb was also a bearish one. we don't make this up. we just take a look at what's actually trading the biggest trade in airbnb this week was a put trade now, with 600 contracts, it may not sound like a lot, but this is a relatively high volatility name $462 a contract when you factor in the multiplier.

this is a decent outlay of premium on a bearish bet going into earnings. >> where are people losing jobs? it's techniology. they have severance packages that are probably going to roll over over the next six months. when i think about services, travel, i think that could end up being a weight on those areas over the next couple of quarters like so many stocks failed at that august high and for a stock like this trading at 40 times, if we see this increase in interest rates stick, i think it gets dragged lower. >> marriott reports on tuesday what do you see there? >> a much sort of calmer name if you will you have well defined tops at a common level, and the stock of course broke out but as so often the case, sometimes breakouts fail, and i think that's what's happening here we're going to pivot back to the breakout level i'm a seller if we were to clear all that, watch this

you have a break in trend. >> mike. >> the options market's implying about a 4.4% move. this thing is trading at 22 times. i don't know why you want to pay a premium in an area like this based at least on some of the bookings i've been making lately, i'm not sure the number is going to continue to go up and surpass those pre-pandemic levels as they have been more recently marriott's a higher end name as well it's the biggest operator. i think a way you could play this without outlaying too much premium if you're inclined to make a bearish bet is to look out to april at just over 5 bucks. you're risking just over 3% of the current stock price to make a bearish bet f. you're inclined to follow carter's technical view, this is a way you might consider doing it. >> a lot of what you said about airbnb might apply to marriott,

except marriott might have a little more business travel, a little more international exposure. >> i think maybe you do a little better with a stock like that because of where its revenue is exposed. at the same time, i look at a stock like this. it's basically been stuck in neutral for a number of quarters it's at the top end of that range now, so i'd be looking for a move closer to 140 before i would get involved with the stock. >> for everything "options action," check out our website and our newsletter there's much more "options action" right after this >> announcer: coming up, movies, soda, and network analytics? maybe it's not popcorn but paramount, coke, and cisco we have a feature on how to play them all sit back, relax, and enjoy the show plus, calling all "options action" fans reach into your pocket grabouphe d eeus yr onantwt your question @optionsaction if it's nice, we'll answer it

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welcome back to "options action." ee earnings season rolls on you got tech, travel, staples, travel, all gearing up to deliver results. let's lay out some trades. first up, paramount. carter, what does this chart look like to you >> well, this is what you'd call an unmitigated disaster. you're talking about a stock -- i think it was associated with that hedge fund that went under. then bearish to bullish reverse. i like the check back to support. >> i really thought it was going

in a different direction when you started. >> it either is going to make it or not i think it's going to make it. >> carter knows a lot more than i do about the charts. i'm seeing a 70% rally now back down below its fallen 200 day. when i think about the fundamentals here, this is a streaming story in a lot of cases. we've talked about this a number of times people looking to consolidate the number of subscriptions they have instead of four, they want three or two i think paramount ends up being a casualty here. thinking about the profitability of these streaming services, paramount is ramping up the content spin because they have to where disney, netflix, they're talking about reining that back. i think the market is going to be more friendly to a disney, to a netflix who is managing the streaming service in that way. so i would be more partial to those names versus paramount. >> do the other streamers, carter, do their charts look any better >> they're all struggling. this one, again, i think it's so

bad, it's good at this point. >> in terms of the environment, we were just talking on "fast money" about rising rates and sort of this risk-on is off rally at this point. >> yeah. >> so doesn't this all fall into that >> i mean it makes me nervous about a netflix, right i picked my netflix as my super bowl ad trade, but at the same time, i think you have to think about these things as multi-year stories because if you do get a risk-off trade, it's going to end up failing at resistance at 400, for example i do worry about these names near term, but the profitability story makes me feel better i think netflix is ramping up that free cash flow story. so it's cheap here if you have a three, four, five-year time horizon. >> we're going to mike now for the trade. he's on the phone. mike, what is the trade here on paramount? >> yeah. i mean paramount, i hear all the things that jeff's talking about. it is trading relatively cheap of course that makes sense their earnings are declining a large part of that is because their expenses have tripled over

the course of the last five years. there's a little bit of a backstop in berkshire's large holdings they own about 15% of the company. i think if you want to make a bullish bet in paramount, betting that there is a little bit of a backstop with berkshire. they had a good story with the "top gun: maverick" movie. you could look out to may, the 22 1/2 call at $1.90 as a percentage of the stock price. i realize those probably seem relatively expensive, but we need to kbbear in mind that this is a company that has a less than $15 billion market cap but more than $17 billion in debt. there's a little bit of leverage embedded in the equity that's why you're going to see those higher options premiums. i think their justified. >> let's get to a tech name now. cisco reporting wednesday after the bell after some wild moves, the name is virtually flat so far this year

mike, what's your trade? >> i mean cisco, this is sort of like paramount this is a name that actually isn't all that expensive there is some enterprise spend numbers that look relatively decent here, too, i think you can keep it very, very simple i was just looking out to april. the 50 strike calls. those just cost a buck so we're looking at about 2% of the strike to make a bullish bet give you some decent time to expiration not everything is as cheap as it was. but this is a name that still looks pretty inexpensive to me. >> you like cisco, jeff? >> i sort of like boring tech. i went back and looked you would think it underperforms during recessions. it doesn't it's outperformed the s&p during every recession back to 1990 so that was a surprise to me i think now as its revenue mix as evolved, it's 43% or so subscription at the same time, i think the revenues are actually more insulated than it was in the past i think you could play this to the upside the valuation is fair and it has a decent dividend, so maybe some

downside protection there. >> you concur with these guys? >> i concur. it is sort of boring, low beta relative to some of the more exciting things. but it has all the elements of a bottom, a bearish to bullish reversal buy. >> finally, coca-cola. the stock down more than 6% so far this year. the traders think the name may not be bubbling up anytime soon. khouw on co. what are you seeing? >> despite the fact it bears my name in a sense, i guess, i'm not really on board with this one. i haven't been on board with a lot of staples we've talked a little about this the valuation for a lot of these hasn't been that compelling. that's part of the problem we're also seeing significant, you know, secular shifts within the space. once upon a time, i think this was, being in the soft drink business in particular was a good place to be they have tried to acquire some of the things that are attracting more business now but i still think this isn't the place you want to be really in this environment

i think, you know, the good news is because it's a low volatility name as many of the staples-type stocks are, you could just go out at the april 57 1/2 put, a buck and a quarter for those you're not risking a lot to make a bearish bet in case we see a pullback. >> carter. >> coke has a structural issue if you just look at its relative performance to the consumer staples sector, it peaked you're talking about almost 20 years ago. the stock here has all the elements of a rollover or a bullish to bearish reversal. sell. >> would you sell? >> i would if you're looking for exposure here, i think pepsi is far more interesting. i've been saying for a couple of weeks now, you know, i think the valuation is expensive but at the same time, investors are going to start to look for that kind of exposure again. pepsi is clinging to that up trend where coke has completely rolled over. if you're picking one or the other, pepsi looks a lot more attractive. >> in terms of the chart, would

you rather pepsi or coke >> i don't like pepsi either but it did have a nice pop on its earnings i think that will be short-lived. we shall see. >> mike, what would get you to change your thesis on coke >> boy, i guess it would take a couple of things. >> nothing, i guess. >> i mean it's going to take a much cheaper valuation to begin with, i think. i would like to see rates come in a little bit to better justify the multiple where we're at i would sort of like to see some stabilization in their core businesses you sort of need all three of those, i think, to justify it. >> all right up next, we're taking a look back on a couple of past trades. what to do and how to do it. "options action" back in two >> announcer: "options action" is sponsored by think or swim by td ameritrade.

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reversal here. carter >> that's right. so the thinking was at the time it was a little too far, too fast bad week for transports, down more than 3% i suspect there's more downside to go. >> and way back, way back in december, mike laid out a way to fade the financials that expire next friday. mike, the xlf is about 5% higher since that trade how are you managing this one? >> one of the reasons we use options trade of course is to limit our risk this is a perfect example of that the interesting thing here, of course s that relative to some other sectors, it actually has been holding up okay we just highlighted areas of the consumer we don't want to own. we're highlighting some areas of industrials we don't want to own. but i don't really mind owning the thinks that are outperforming. i'm inclined to let this one roll off, and i'm not going to re-engage. >> what do you think of financials at this point, jeff >> i feel like they got caught up in the soft landing narrative. that's why they've done a lot

better than i expected i don't want to own financials when you have an inverted yield curve, when economic indicators are falling. they continue to tighten standards. i don't think it's a place where you want to be for outperformance this year. >> how does that chart look, and are there any financials in particular that look worse or better than others >> there are things that aregode there are certain asset managers that look better but morgan stanley for instance. but the big heavy, it's too sensitive. jpmorgan itself is way overdone. i would expect a big giveback there. >> are there other financials that are god-like? >> progressive might be the most -- i mean -- >> the most god-like >> you can attest to that. this is one of the steadiest, most orderly charts. i don't think there's any insurance stock that's close to that. >> mike? >> yeah. i mean one of the things about xlf is this is a composite of

financials that includes all of those insurers as carter was just talking about other big financial companies we don't necessarily think of them that way include berkshire the insurers have been doing exceptionally well, and that's one of the reasons why if you're looking at xlf, you're carrying some of those winners, or i shh say those winners are carrying many of the losers around. but if you are looking at the banks, then that could be regionals or the money sensors all of the points jeff was making hold valid, and i would target that area specifically. up next, your tweets and the final call is more than a trading platform. it's an entire trading experience. >> announcer: "options action" is sponsored by think or swim by td ameritrade. and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever.

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good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. welcome back to "options action." time to take some tweets our first fan asks, what do you think about macy's how would you play this?

well, jeff, how would you play macy's >> i think macy's was a sell for one of my final trades a couple of weeks ago too i do not like the stock here at all. if you look at a two-year chart, for example, that $25 level is clearly key. it failed almost exactly at that level, heading lower i think it probably continues in that direction again, the fundamentals relative to the consumer, the labor market okay now. i'm not sure it's going to be okay later. >> do you approve of jeff's analysis >> it fell to the penny. >> you approve, i guess. our next tweet asks, the vix settles above 21 what's the trade on volatility what's your take on what the vix is doing, carter >> the vix is due for a bounce, a little bit of a bounce this week but i think more to come. vxx would be the etf to use to play on the long side. >> theat's deep end of the pool kind of stuff for most people. mike, what's your take on volatility and how to trade it

>> i mean another way to play volatility, of course, is to say that it's anti-correlated to the market so puts on iwm as a way to hedge or place bearish bets is another proxy to that. >> this one asks, google looks good at these prices what play would you suggest? calls about three months out or sell some puts around $90? mike, what do you say? >> i do like google, and i would prefer buying calls to selling puts for the reason we were just talking about, which is if you think volatility is going to go up or you're going to see downward pressure on equity, calls are a hitched way to be long and they are very reasonably priced at the current left. >> time for the final call carter braxton worth, what do you say? >> you want to be oil long and nat gas long both. >> jeff. >> i'd just reiterate my caution around the consumer, whether

it's xrt, whether it's macy's. there are so many names failing at those august highs. i think that probably continues. >> nice to have you on o.a. >> nice to be here. >> mike khouw. >> it sounds very negative but i kind of like cisco going into earnings and i think calls is a way to make that bullish bet. >> us. have a great super bowl weekend. mad money starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. mad money starts now hey, i'm cramer. welcome to mad money i'm just trying to make you a little money my job is not just to entertain but to teach you call me. or tweet me at jim cramer. it happened again. a week i have been hearing that the bull is dead