right now on "o.a.," countdown to the fed how will next week's decision impact the market's new bull run. plus, charting the action in two red-hot stocks super move in tesla and smooth sailing of carnival. caravana was left for dead, but now a feeding frenzy as the stock has dom back to life we have the options coming up.

on the desk tonight, mike khouw, carter worth and brian stutland. fed meets next week for a highly anticipated decision on whether to take a breather from his rate hiking campaign while the markets rallied this week and volatility expelled before turning higher today some say a shift could accompany that decision. carter, kick it off. >> before we look at the charts, it's important to note of course that the real data point on the week was the inverse of every week for the last two or three months, which is to say the top 50 index, the top 50 s&p was down and then up but only slightly was the oex, the top 2,500 then the s&p 500, up 39 days points and you keep going the midcap was up 147, then the russell up almost 200. that's the exact reverse pattern we've seen week after week

the larger you are, the more you've outperformed some finally participation from laggards. the first chart we have is the s&p 500. what's so important is how precise today's high was relative to the august high. in fact, they're within pennies, as you can see, and we hit our head there and closed poorly, for all intents and purposes. second chart puts in a line to depict the circle do we press above the august high or check back towards that uptrend line i think checkback is what's likely finally, let's look at the vix what's important here is the vix is almost undone all of its excess associated with covid you can see that there, the line, horizontal line drawn on the bottom we're almost back to the level we were in the autumn of 2019 before this surge in the vix associated with the pandemic >> mike, what's your take on

these charts and the markets >> yeah, i mean, this is obviously going to be a really big week that we have coming up here you know, what the fed says, i think, is probably what everybody's going to be keeping their eye on because although we go get inflation data in the form of cpi and ppi, we know the fed's preferred measure is pce, and we know we're getting that towards the end of the month, and everybody is basically expecting they're going to pause but with a hawkish tone, and i actually would agree with that i'm hard pressed to understand how we would see this rally continue with any significant strength unless we dovish turn coming out of it a couple things to think about first of all, we're trading close to 25 times earnings now for the s&p, which if you look back over the course of the past 20 years and you exclude those periods when we were more expensive for obvious reasons -- in the gfc, there were massive

losses for some of these mega cap banks. we saw eps and s&p decline at that time and the p.e. was mush higher then during the pandemic period we saw a significant decline in earnings, so we saw a higher multiple then, too now we should be anticipating perhaps at least earnings to decline a little bit due to recessionary pressures, and that isn't priced in. for me i think we're getting to a challenging level here. >> brian, are you surprised that's vix is so low >> that's a million dollar question i keep getting that question from people, our wholesalers, individual clients the reason being, we talk a lot on the show about the divergence between the big market cap names and the rest of the marketdy verging. that makes the index as a whole not that volatile and gives a reason why volatility, speck index, being this low. option traders basically selling

options. so, there is some reason for it to be that low now, we did see today, though, the vix up on the day with the market up, and that basically tells me that either there's institutional -- coming out trying to buy s&p on the downside, or we saw upside call buying on vix july options some maybe there is this turning point to carter's point where you get that reject off this high back down to the bottom trend line either way, when this thing has happened, vix and market is up on the same day, what we have found is volatile moves over the next one to three months and we're talking about 4% moves up or down we can get very large moves. i have been using calls to express a long position in the market at this point let's turn to the electric move in tesla, shares up 4% this week that stock a whisper away from doubling in 2023 if you fear you missed it, have

to fear, mike has a play to play the ev maker for more gains. >> we have been talking about tesla since before earnings. before earnings we faded with a call spread. the earning were disappointing after we saw the declines, especially more recently after the news that ford was going to be adopting their charging standard, we actually took a bullish view on tesla and now we've got gm following suit. a lot of people who are watching, this is one of the most broadly held stocks, and we have just been talking a bit about how volatility is low. in a name like tesla which has been moving so much, it is not that low the implied volatility going out two, three months is 50% i was taking a look at that 3 3u7b hundred level. i think if you own the stock you could consider selling the july

295 calls for $6.35 a contract against. that in this case you're going to be getting well over 2% yield on that, in much less than two months here. i wouldn't think of this so much as a hedge, but a lot of people who own and appreciate the stock might want to sell it. i think it's unlikely to get above the 2999, 300 level at any point in the near future and you have upside if you hold the stock and do that. this is a way you can take advantage of collecting premium, even in most cases we'd advise buying it. >> you did chart, carter, the tesla chart for "fast money," but i'll ask you to do it again. and also, what do you think of mike's 300 level >> let's do it again and we'll do it quickly since it's a redo. retraced half of the move. weaver halfway back. there's not necessarily magic to

that, but it does annotate how far we've come and of course we're up against a trend line the 300 level is right i mean, today's high, of course, is 250 and change. we faded i think 300 is the level that makes sense in term of the strategy set up. >> all right, let's turn now to one of the hottest names this week carnival, that's up more than 7% the move has our traders thinking about the rest of the travel space airline stocks going up. can the tail winds zblooirchlts continue carter, what do the tebls tell you? >> right so obviously there is a difference between he tole space between the travel sites, expaid ya so forth, and then cruise license. but if we were to look at the airlines, j.e.t.s., the charts would say there's a jubn upside

this is one way to draw the lines. importantly you can see the plunge associated with covid second way to draw the lines and third and final way. basically, converging trend lines and we've moved to the upside my hunch is to play this long. >> mike, what's your trade >> yeah, we were just talking about volatility being high in tesla. it is low in j.e.t.s it hit a three year low today. i think you want to use a long option strategy. i was looking to the july 28th. >> brian, what's your take >> interesting, because autos and tesla, consumer discretionary may be starting to turn we have been bearish but tesla is an indicator maybe the consumer, maybe some of the other companies worked off the inventory, and now there could

be upside participation. looks like carnival is one rod to turn. i love buying this call spread it's a cheap way to buy the upside there's a sense of consumer discretionary getting stronger in the back half of this year. maybe carnival follows along. >> all right, do not sleep on the end of earnings season we've got two plays that could tell us about the economy, and for everything "options action," check out our website and newsletter there's much more "options action" straight ahead

relatively small amount. right now, the options market is imploying a move of 4 hadn't 8% or so by the end of the week after they report.

i think a simple way to hedge this, i was looking out to july, the 110/105 put spread that was going to cost me 1% of the current stock price. less than 5% or so, i'm okay with that for the position what i'm more concerned about is that outside kind of event and, the truth is, even if we get that, the likelihood of a move much below that 105 strike between now and the next couple of weeks is quite slim this is a way you can put out a small amount of premium, putting out tail risk going into a big week. >> carter, how does the chart look >> fight back to a former high, and that is in principle the setup for a break out or failure. you can say, great, just a coin toss my hunch is it pushes higher but it's a muted thing you can see it, we're right at the former high. you can contend with the high before you exceed it

the group, itb, you'll see that on the second chart, which picks up home builders and other related companies -- i expect this will get there but not exceed it. >> let's slide into a software reporting next week, and that's adobe. brian's photo shopping a trade. >> value play. it's a stock i still will probably own after earnings, but i think a lot of people are stuck. these tech names had such a huge run. one way to do that is use options playing and use the facts that the earns are out and options premiums are elevated. i'm looking at an option trade in august where i'm looking to buy the $4.80 call while selling two of the five ten calls in august what i do is i use this basically if i'm long stock at $5.10. not only am i called on the

first call but call position i collect $2 net premium on this trade. what it allows me to do is if i want to buy a put, i have that extra -- available in case the stock continues to unup into earnings they're projecting 8% sales growth the they beat that i think the stock continues to move higher and, i think they double up on the way up and try to play catch up on tech value names that have had a huge run i don't think the downside is huge i'll continue to own the stock this is a press your luck kind of play to the upside i would use in a long stock position >> if they mention a.i. it could be off to the races. mike, what's your take on adobe? >> an also own adobe what i like about the strategy sur trying to squeeze as much juice as you can about whatever's remaining if you're long tech names such

as adobe this is a way you can get juice out without taking more capital out and taking risk to the downside. my guess is you're closer to the end of the tech rally we've seen than we are to the beginning of it using strategies like this one where you don't take risk but give yourself juice for the upside moves will allow you to essentially get a little extra education poesexposure here. >> carter, how does tech look and ivg in general >> ivg looks similar to adobe. but it's to the point of laggard. cisco a week or two another in the same light these two have legs relative to the most extended names. >> all right, coming up, some carvana enlightenment. why options traders are kicking the tires on this trade. we are shining a light on people inspiring america in a

network special. jane goodall is still traveling the globe with a message of inspiration and hope for a whole new generation. >> we watched her evolve from an intrepid female pioneer discovering the world of chimpanzees -- >> no one was doing anything like that -- >> to a global icon for preservation. >> reporter: now jane goodall is focused on a new generation. her organization roots and shoots gives young people resources, support, and tools to work on conservation issues in their own communities. >> they're so full of energy and enthusiasm, determination. >> reporter: at 89, so is she. goodall still spends roughly 300 days per year on the road, speaking out for the environment and against animal cruelty. >> each day that we live, we make some impact on the planet

earth. you have a choice what kind of impact we're going to make

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts...

saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities™. bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime. you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah!

it's time to take control of your investing education. cut through the noise 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." another big week for carvana the once left for dead used car dealer up 20%. the move keeping this stock in overdrive. shares are up more than 300% this year. but it's still a long way from its former glory the stock down 67% from highs over the past year mike, this week's move had options traders piling in. what were they doing >> we had a lot of folks sitting there buying some of the very short dated -- we're talking about the ones that expired today, end of june regular expiration, which is a week from today. maybe some july calls. i think it's important to remember that we see these big

price swings going on in the equity, but this company is mostly debt. if you go back to the tail end of the last reported quarter, the market capitalization of the company was $900 million and they had around $9 million in debt the the value of the company went up by a mere 10%, the value of the equity was going to double i think it's also important to remember that if we go back just a couple quarters, they had about $400 million in cash and anticipated negative free cash flow of the following quarter of $7 billion and didn't have free cash flow. there was significant doubt about whether they were going to be needed to raise the significant capital. traders built off the leverage in the equity, the fact that there's a big short interest, but also important to remember once they get enough momentum, if the equity gets up to this level where you've got

$3 billion, $5 billion, they can do a secondary and use those proceeds to keep themselves afloat if they can keep that free cash flow situation under control, who knows, they might actually live to see another couple years. >> that is not the reply i thought i'd get, that there's hope out there i think we lost brian. carter, what do you see in the meantime >> they might live to see a couple more years. meaning it wasn't the prognosis of postponing the debt there's something to be said about a stock that loses 99% of its value. the record shows when you lose 90% of your value, the great majority don't make it this has bounced, it's tremendous, but today's action is poor. gave back almost the entire move of yesterday's surge it's a gambling chip the debt is serious. the question is, is this just a bounce on the way ultimately lower? if you've got profits i would

take them. >> brian, quick thoughts here. >> implied volatilely levels are enormous that's why you're seeing 20% swings if you look to 2025 options, which i like to do, whether there's implied bankruptcy or not -- maybe they do issue some debt and create liquidity. watch that level it's got the hold there. we crash below there then implied vols explode more and bankruptcy become as real concern. up next, your tweets and the final call thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts 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. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

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, thought on the put credit spread in the s&p retail etf, 61/55 with a

september 15th expiration. do we adjust, hold, or take profits. i believe he's referring to the june 15th expiration what's your take, brian? >> i think retails are starting to get poised to turn around amazon and nike are the two names i like tesla breaking out, carnival breaking out maybe the retailers are next i'd like to see one more earnings cycle, push through maybe the back half of the year is when i do get long. that's why i would take this put spread off, play through july earnings and see how they play out, those kind of names and see if you want to get back in on selling put spreads. >> next fan asks, what are your thoughts on gold carter, do you still like gold >> gold, yes, but the ticker, gold, not so much.

you want to have exposure and i'd do it through etfogld. time for the final call. tip it off with brian. >> trim your -- >> put spreads. >> mike, adobe. >> all right, we'll my mission is simple, to make you money. i'm here to level the playing field for all investors. i promise to help you find it. mad money starts now. >> hey. welcome to mack mad money. i'm trying to help you make some money. call me or tweet me. not like complacency