right now on oa, consumer concerns to retail to restaurants to housing what the charts are say about the consumer and what it means for the markets. plus, tech's party like it's 1999 or maybe 2000 we'll go inside the numbers. later, while the oil scheid of the energy trade has hit the skids, could natural gas be the way to heat up your portfolio?

stick around the find out. we're live at the nasdaq market site on the desk tonight, carter worth, mike khouw, and brian stutland two reads from the consumer from the rise in restaurant and housing to new lows in the retail trade, the chart master she has lows and highs are a cause for concern. carter, what do you mean here? >> if you think about the circumstance of what vulnerability is there's two types. it's vulnerable weak, someone that's ill or a political campaign that's on the ropes or a hedge fund that has too many shorts people go after and exploit vulnerability. vulnerable extended is the opposite you're the champion, everyone's come for you, you're the most popular kid on the class and people turn on you the sporting season that can't end. we have a circumstances where certain areas are vulnerable extended, restaurants, home builders being all time highs. and yet you have retailer at

all-time lows. the three lines tell the tale. home builder up and to the right. xrt almost making 52-week lows let's remove the sector and look at two on their own. you see this bifurcation typically what happens the ones that are expensive succumb to selling pressure be the ones that are weak get worse. foot locker wasn't doing well. we had big reports from ross, walmart, and none of it was good this is not a good setup we don't like consumer in general because either it's too expensive or cheap. >> the commentary from foot locker, which saw a 27% decline today, brian, was not good if you think about them giving guidance in march and saying things changed between them and now for them to dramatically reduce guidance, that really speaks to not just a foot locker problem probably but a broader

trend problem. >> certainly does. i didn't see anything good from foot locker, home depot, target. some were okay, some were not great -- foot locker being terrible i think it's trending in the same direction of consumer discretionary spending is tapped out. they went on a spending spree after covid. now we're back in a lull and the consumer need prices to come down there's tons of things on sale this is why we laid out a trade last week to put a put spread on the xrt, the retail etf, and one i think i would continue to play to the downside. i'm going to continue to hold this put spread here, play it, and i think that $55 target, i think we need things not to just go on sale, but also for the socks themselves to go on a bit of an on sale pace here to the downside, so there's probably a little more to go. >> would you also press that, mike, in terms of being directionally short the consumer >> it's tough.

obviously carter can speak to this a whole lot better than i can. it feels to me like we're sort of at a critical juncture. close in some ways to breaking out. there's so much worry out there, the short trade is the crowded side, and the market tends to punish the crowd, especially on the short side, in my experience that said, what we are seeing in these consumer names and their weakness has a lot behind it you know, first of all, we had a lot of transfer payments that encouraged consumer spending that has obviously ended we have higher levels -- and we see declining consummer confidence it's very difficult in my view to see the consumer really come to the rescue here in the face of all of those things collectively now, the employment picture remains very strong, but these are going to be lagging indicators and, i have a feeling if people start to sense weakness in basically the jobs

market that that is going to continue them to be more cautious when opening up their wallets, so to me i think we're in a really dangerous spot i think people who think the retail trade, some of these names are really cheap, it's a risky place to play in my view, and i am quite skeptical the market can continue this strength through the summer. >> i want to zero in on one sector of discretionary builders mike, what's your trake? how are you trading this >> of course over the last ten years we have seen home starts have not kept pace with home creation, so we're probably lagging by about 2.5 million units over the last decade or so that's over the last decade or so highest mortgage rates that hurts affordability median prices -- ultimately it's

not whether there's demand for h homes. i think that that is ultimately going to be what sort of caps the big housing trade in here. now, of course as i just pointed out, we are at sort of this critical juncture, so leaning on the short side is now the way we played, but one of the things that's interesting is we have seen a decline in options premium, especially as we come out of the earnings season i think the way to play this is using a put spread on itb. we often talk about xhb when we're talking about home builders but that include a lot of affiliated and closely associated businesses with lowe's and home depot. this is a pure play. i was looking out to july put spread that's a way the lean into the short side while not risking too much again, i'm going to leave this

to the technicians to describe, because it feels like we're eat the critical juncture, but i'd be inclined to get short home builders >> would you concur, carter? >> i would we're back to a former high. if you think about how charts work -- they are not infallible, if you're coiling at a high, tension builds and then you exceed it. but if you stretch and get to the high, typically you back and fill and back away look at the itb chart. we've gone straight up and rang a bellt top. double bell. what you've got is something that is likely at a minimum to stop going up. can it ultimate will i break out? sure, but that's tomorrow's lunch. right now a better sale than a buy. >> brian, mike underscored an important difference between xhb and itb. i'm wondering from your vantage point which would you rather put a pet spread on? >> i think you're okay maybe

being in both areas long a put spread, because you look at the itb, it has a more industrial play you look at the names that fall in the industrial sector of that home builder etf, some of those names are up almost 100% on the year so itb i think is a little more susceptible to the downside. that's the first place i start lieic what mike's doing with the put spread here. you turn and look at the consumer discretionary part of the market, and this is a sub sector, one that really outperformed the rest of the retailers, and there's something going on where one is going to have to give to the other and be back in the middle buying the put spread here, i could go either way. i like itb, but i like mike's trade a lot, too. >> all right, for everything "options action," check out our web side and newsletter. more "options action" after this

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recouping losses from the great dot come bubble burst. where do we go from here carter >> it's a testament to the unfortunate event where you pay too much for something it take a long time to get to hole now, we have a lot of stocks that are driving the market. just talk about concentration. if you look back over the last 35, 40 years they're typically 25% concentration, so it's not a rare thing we're off the reservation, and nvidia being one of them let's look at the charts if you were to look at -- here's a comparative chart, nvidia versus amd you see one taking off it's now triple the performance. i think you play for convergence here let's look at the maps on their own. nvidia, steep, uncorrected, almost back to a former high

stock falls or gives me money, small shorts amd, something lagged that has making the turn. you have all the elements of a bearish to bullish reversal in the amd chart. so sometimes sequencing calls for mean reversion i think you'll see that in these two highly related names. >> so, what do we do here, brian? how do you play tech from here pairs trade here, in nvidia, but also -- brian? >> when you look at nvidia, this is one stock where if we were constructing a portfolio, give me the best 25 stocks out of the nasdaq, nvidia sits at number 3 and it's waiting just behind microsoft and apple. well, half the weighting of those two, but still number three. i still want to own nvidia still room to the upside to go

tech run is going to keep going. nvidia you probably still want to be in i was just in indianapolis watching trial run of indycar, we're having the 500 coming up here when you look at cars, indy car's going to be heading 240 miles per hour at the end of a straight away. the average speed is a lot lower because he hit the turn, need to slow down. if i'm getting into turn three, the crowd's back there partying and nvidia is on lap 25, is the driver going to be able to hold on and make the turn we have earnings coming next week, earning for nvidia i've got to know i can slow down and navigate i'm going to use a put spread to navigate the turn and protect the long put position. i'm going to stay put dated. if the stock sells off 4% or 5%, i think it continues to hang in there and move higher. anywhere below that, this is

where my protection is going to kick in. i'm only spending $3.10, and it's going to give me $6.90 of protection, max on put spread, which is enough for me to say i can get long nvidia again. this is a protective put spread i'm looking to put on, and i think i can continue to hold, but also watch out for that turn coming up. >> mike, what do you think >> you know, i think nvidia is clearly the leader in their space. anyone who's a consumer of pcs probably cares a lot about the kinds of graphics processors they have in it. i certainly do the machines that i have over to my right, both have nvidia gpus in them. and that's great, and i think it's going to grow they definitely have a tail wind, but the problem we have is that this thing is trading way over 20 times sales. they really need to grow into their value, i think, at this point.

and so it's really tough to chase it now, i can understand that often times, you know, we are inclined to basically buy a company and know that they're going to grow into it. but at over $7 billion market cap, this feel a bit stretched, so i would encourage those who are in it -- i understand why you don't want to sell your winners like it, not a good trade. >> you said it's so good it's bad. >> right, we talked about that, meaning -- again, not to keep relying on one word, but sequencing is important. think about any endeavor too much of the library, eyes get tired too much of the gym, heart attack you have to have pauses and rests, and nvidia's got a long way without one. >> mike, you have the second part of our pairs trade with a play on meta. >> yeah, it's kind of interesting here, because if you actually take a look at the two charts together, meta and

nvidia, what you're going to see is remarkable out performance relative to the market over the last six to eight months or so but a very different situation in term of valuation first of all in their most recent earnings we did get a revenue beat we got an ad impressions beat. they are focusing on free cash flow i think those things are all positives. this thing is not trading at a premium to the market, so all of these would encourage somebody who's been long to potentially stay long. on the flip side, we do have on the reality labs side continuous losses there everyone though they do seem to be managing that with head count cuts and so on and they do continue to face some head winds on the growth side, so that might be a reason why you don't see a whole lot more in it i think one way you could play this on the long side essentially is also to use a debit spread i was looking at using a call spread here. this is the same die nam you can that's setting up both in the

market generally we've seen a lot of stocks options are not elevated i was looking at the 265 call spread this was at or slightly in the money. this was a way to basically take a long play, even though this thing has had quite a run here, or you could also use this as a stock substitute if you were lucky enough to own this before the 100% rally, you could look to lighten up equity position and use this as a substitute so you still had participation. >> carter, how does the chart look >> we returned to the scene of the crime. february, it traded $50 billion in value meta collapse. and it was the beginning of that collapse, long slide we're just back to that level. ultimately we'll recoup the losses initiated with that i like it. coming up, bonus energy trade.

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with best-in-class education resources that match your preferred style of learning. learn your way. not theirs. td ameritrade. where smart investors get smarter℠. welcome back to "options action." nat gas rising above the rest of the energy space crude and brent both struggle. carter, what do the charts say >> there is an expression called the widow maker. this is dangerous stuff, especially if you're using leverage in the futures. when you get these violent rallies -- let's take a look at the charts first is the front month this is the second 35% rally in just a matter of six months. but if you look at the continuous contract, which deals with the ongoing roll, you see it in the next chart, it has the elements of a bottom it's not an officially a bearish to bullish reversal, but it

looks to be something that's sort of playing. so ung of course is the etf, and you'll see that here it's something to speculate on the long side. >> brian, your take? >> yeah, it does really look like there's a squeeze or some sort going on in ung's space, and to the upside and carter's point, i think there's more room to go. do i want to get long? using futures, using leverage, which ung is tracking can be dangerous, especially if those guy decide to get out of the trade. you got to be careful. that's why i think if we had a trade where we're using options, to me that makes sense might use a long debit spread to play the upside. >> mike, you've got a bonus trade for us lay it out. >> ung, i think if you're playing for this -- i know we're at the upper end of the five-year range in term of storage, but we just bounced off

that five-year low as well i was looking out to the july the 7 call spread. that's in the money as of too's close. you could buy that for 70 cents. that's a way to minimize risk and have participation to the upside if you think this will continue. >> we have an american airlines reaction statement to the doj ruling on the northeast airline alliance phil lebeau's got that. >> echoes what we heard from jet blue an hour ago basically they say they believe this decision is wrong and they are considering their next steps. they say there was no evidence that the northeast alliance harmed the consumer. in fact, they believe it had many benefits to the consumer. nonetheless, the doj won sets up the question, what's next american and jet blue say they're looking at their options. i would not be surprised if we see an appeal of this decision by both airlines. >> all right, phil, thanks up next, your tweets and the nacafil ll

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welcome back to "options action." time to take some tweets our first fan asks, thoughts on the 20-year bond treasury etf. should i buy long calls? brian, what do you say >> no, i'd say away from that. two to three-year duration bond i'm buying, by want to keep it there. not playing the long end of the curve and long calls would do that so i'd stay away from that. >> our next tweet, is there a rule of thumb for selling covered all against equities you own long-term. mike, what do you say? >> i've got two thumbs, so the first is avoid catalysts such at earnings and, choose strikes where you're comfortable selling. comfortable selling the underlying. >> brian, thought on this, too >> yeah, that makes sense.

that's exactly right you can pick a level that you want to get out of, sell the call there but we're in an environment where "options action" are very cheap right now, so i'm looking to buy options. >> our next fan asks, what are your thoughts on paypal sold 18%. is it a good guy carter >> i don't want it at all. >> you guys are so to the point tonight. >> new york just dropped in gap. down 80% look like it's getting worse just not participating not good. >> is it a short is this. >> i'd be short. >> okay. time for the final -- i love when you guys are direct and giving viewers pointed advice. final call time. carter worth, what do you say? >> consumer. generally speaking you want to be underweight stay away. >> brian stutland? >> back against nvidia earnings next week by buying a put spread. >> michael khouw we have a cheap options -- if

you want tleen on the short side, buy put spreads. >> that does it for us on "options action" this friday we'll see you back here next friday at 5:30 p.m. eastern time meantime, do not go anywhere, because "mad money with jim cramer" start right now. have a great weekend. my mission is simple, to make you money and the level the playing field for all investors. mad money starts now. new view welcome to mad money. call me or tweet