right now, breaking down the action in china ahead of the big u.s./beijing meetings and charting how to trade beijing's breakout moves this week just sell it is now time to get out of the sneaker trade? later, bellying up to the bar with shares of constellation, hitting the used car lot with carmax and adobe we're live from the nasdaq market sitele on the desk tonight, mike khouw, carter

worth, and brian stutland. the s&p breaking a six-day winning streak, but still notching its best streak since march. the move comes after the pause, leaving rates unchange after ten consecutive hikes but signaling there could be two later this year mike >> we got well telegraphed communications, i think, from the fed. they were signaling that there was a pause that was going to be possible they signalled hawkish activity on the back of that. that's what we got i think they're basically trying to navigate this in a ticklish way. when i was taking a look at the data before the results came out, the cpi numbers look okay the fed's preferred pressure is pce. the core inflation on the other side at 5.3 was a little bit high, and i think that's still

pretty ticklish. i think people shouldn't underestimate that sign they might give us some more rate hikes, despite the fact that i think a lot of people think this might be it. >> carter, what's interesting, too, is we continue to see the broadening out of this rally even as we see many big cap tech stocks notch record highs. >> we are obviously having issues with carter's audio i'll pose the same question to you, brian -- what do you make of it? >> this market is very interesting. when you look at the broadening of the market -- we talked about this a bunch of times. the mega names are leading the market that's where you want to be. you go into a recession, they're well protected, have strong cash flows. if we don't, we move higher, they're in the a.i. tech names all that to the upside certainly that's the place to play soon as we saw the s&p 500 push

through this 4320 strike, there was huge open options on interest that expired at the end of this month. when we saw the market push through there it took off. amount of calls bought between the s&p and amount of puts traded, we saw massive call buying as we got through this strike maybe there's room to go we're a bit extended given the amount of bullish sentiment if i get pullback in the market, i'm probably a buyer. >> got carter back apparently. what's your take on where we are in the s&p right now >> look, i have doubted this i ultimately think, of course, you're reaching levels that are borderline hystericalhysterical. weshld we shall see. what we do know is there's something called sequencing. even in collapses we get countertrend moves, big

ricochets. in the run yep you get countertrend moves, ie dips, corrections, and climbs. >> that was the sentiment of bank of america strategy gist michael hartnett mike, where would you stand on that >> speaking quickly to something brian was just talking about with the unusual call activity, there's a number of things that would potentially drive that you have people underexposed looking for leverage to the upside there are people that are performance chasing otherwise. and finally, for those that have actually seen some significant gains, it makes some sense to say, look, we had a very sharp rally off the bottom i can replace some equity exposure with calls. i can have further participation if the market continues to rally, but limit my downside exposure that's aid by implied volatility praise is relatively muted you put it back together, but

the flows make a lot of sense. i think the trades make sense, too. for those of you exposed on the long side, don't have real text disadvantages to exposing to underlying equities and can -- with calls at reasonable prices, i think that makes a lot of sense here to me this does feel a little extended there is a dichotomy going on. some of the high flying names, the valuation are not compelling anymore. >> let's look overseas the euro hitting a new high against the yen today, highest level since september 2008 but japan is in an inflection point compared to china, and it come as bill gates meets xi jinping and secretary of state antony blinkle plans to do the same carter >> very divergent messaging, or just reality performance in terms of the very important japanese stock market as measured by the nikkei

let's look at a comparei chart dive divergence this is a 2018 to 2023 let's look at other it rations now, the next one you'll see is a ten-year this is -- the hang seng and the nikkei they trade places. we see this. but right now, i think the real move is to take some profits out of very steep, uncorrected nikkei type names and deploy it into the hang seng it's the highest reading in the past ten years by comparison take a look at the hang seng. it's basically bottoming what i see is a pretty important head and shoulders bottom. i want to put money here, having taken some out of nikkei.

>> mike, what's your take? >> yeah, i mean, i like this i was getting long in some of the china names earlier this year we actually mentioned on this show a couple times and, many of them have not performed well just from a valuation perspective, you know, it does seem like a more attractive place, to me at least, to deploy capital if we are starting to see technical support for that kind of positioning, because obviously getting in early was a painful thing to do, but now i think might be the time. >> brian, you've got a trade on all this >> i do. i thought about doing some options trade, but listening to what carter said, maybes sense take out of japan or the e ewj etf. i'd be looking to buy a call spread on the fxi. end of july, i can buy the 29 strike call and sell the 33

strike call. my prices on that side, look at the head and shoulders bottom. i think there's a very good opportunity get up to this $33 level. i can only spend 93 cents on this trade looking to make $3.05. great risk/reward trade, play to the upside when you look at the fundamentals on the fxi in china work see chain supply is very constrained. look at the -- it's very extreme. copper prices have all of a sudden started to rebound. you look add a company that ships iron ore to brazil some stimulus from china if we get the manufacturing stimulus upside play from china, that head and shoulders bottom carter pointed out looks very good to me take profit from rebounds in other parts of the market and put it in this little bucket.

all right, let's get to nike the retailer attempting to climb back from a recent drop. results are due out in about two weeks. mike, what do you see next here? >> nike's in kind of a difficult spot, i think. our valuation, we're getting to 35 times earnings. it has traded at higher valuations than that it did during the pandemicing but that was just a function of basically lower earnings at the time, where you certainly saw significant slowdown i think at this point one of the things somebody could take a look at doing if you own the stock is you could look at selling a covered call when you sell covered calls you want to keep them short dated. you want to sell calls that are unlikely to be a sign. i was looking out to july 21 it's a decent yielding but only a 20 delta call. 80% chance by the options mark on this one. further to that one other point, the recent highs that we saw were up around that level.

i think it got up to around 120 or so several months ago, so that's the other thing you're going to look for. when you're selling that call, there's less likelihood you're going to. >> charter, how do the charts look >> it's not a would you rather one is a chart with three drawings now, the bullish interpretation coming up you'll see is to call this a head and shoulders bottom that's sloppy. you can see that i think it's really a pair of 2s final chart. basically we have two converging trend lines that are very clear. we've bounced like a pinball machine off the upper and lower band i think we're going to say stuck in theapex for a lit longer. >> brian, what's your take on mike's trade >> we own nike for clients 35 times earning, is it really value? i don't know if i want to own this

selling a call, taking premium, fine probably too expensive a stock to own to carter's point, we stay at this apex. those are times when you want to sell option premium. >> mike, last word here. >> yeah, i mean, this is a company, it's interesting. i happened to go by the fifth avenue store just yesterday and noticed people were cueing up outside at 10:30 in the morning. store opened at 11:00. there clearly is still some demand when we're having such a strong run as we have had, getting to higher multiples, it feels like we're running into potential exhaustion this is a time to be patient, look to collect premium. it's not a trade we recommend that often, but this might be a good time for it. for everything "options action" check out our website and newsletter much more after this

welcome back to "options action." summer's here so it's time to crack open a cold one and chill out. that's at least what constellations brands is hoping for. the spirits brand up 7%, underperforming the broader mark, but mike is las vegas out a way to play the game if you

fear it could bubble can rt the charts, carter, how do they look >> constellation brandsmaking all-time highs seven months ago when the market was struggling, and now with the market beta trade on it's a struggling situation. let's look at the first range bound. that's that covid low, and basically doing nothing. the long-term chart is what's compelling one of the great winners of all time you'll see it here, and ultimately i think it gets up and out of this range, if you will i'm a buyer. >> mike, what's your trade >> yeah, 19 times earning, 6% top line growth. they now actually have in the united states at least the best selling beer, partially a function of bud light pulling back modelo especial used to be part of ib inbev but anti-trust required them to sell that that's constellation's brand they are a beneficiary of some

of the controversy going on in that area. one quick point, these type of stocks are not that volatile, but i'm going to look at a call spread we are selling options against the trade we're putting on the reason i'm doing that is we think about volatility two different ways one is options how expensive they are generally, but two, how the stocks move around i was looking at a 255/275 dual spread out to august that was going to cost $3.70 we're looking at 1.5% or so of the stock price to make a bullish bet. minimal downside if it doesn't work out while not expensive on a regular basis, expensive compared to how the stock moves around. >> what's your take, brian >> makes sense to use a spread rather than an outright options

purchase or options sale that makes sense to use a call spread to play the upside. to carter's point, i think constellation brands can move higher when you look the a portfolio, we like to own consumer staple stocks to go with tech/growth way plays. that barbell has played out well constellation is one of those consumer staples i like owning in this situation. i can use a call spread to add to consumer staples and hold on to tech stocks and have that barbell approach and do it using a call spread. let's move to a name reporting earnings next week that would be carmax doubling gains of the broader market, up more than 30% will the drive higher continue in results next friday mike, what's your trade? >> speaking of barbells, obviously not the exact same thing as taking more of a look at staples and beer seller versus tech, but carmax is

operating in a discretionary space. i think we're in an interesting spot right now car prices remain high valuation on car max remains relatively low but this higher interest rate environment we're in basically remains one of those things where i'm looking to upcoming earnings to see what the truth is i think you want to take a hedged long debt using one similar. not only because the options are expensive relative, but just expensive in a general case. we're looking at an $80 stock here that is also going to cost about $3 $3.50. this is a way -- and you're going to expect a much larger move out of earnings we have had quite a run here that doesn't mean you can't continue to press long, but you want to do it the way that risks

less to the downside. >> brian, you like this trade? >> well, it's not only just risking less, melissa. i do like the trade and i like it because when you look at earnings, i look at the last 15 quarters after earnings, and the stock's been off only three times. a bunch of times it got crush after earnings makes sense touse a call spread i would not want to own a spread outright i would not want to be taking leverage or excessive risk on this stock, but i look and say, look, the trend so to the upside the industry, autos, we've seen tesla move higher. maybe carmax is another one that goes with everything can i play it to the upside? yeah, but i got to do it in a call spread. >> brian likes the trade carter, do the charts agree? >> well, they do just to point out, this is beta if you ever saw it wi we know the stock market dropped 25% peak to trough

the oes and qqq more like 30%. this one is 70%. let's look at the charts, two of them all the hallmark of a triple bottom, bearish to bullish reversal second it ration, we've moved. 67% decline. all the makings of a turn, i think you do it, you get involved. >> all right, up next, we are bringing to you a trade update on adobe how to play the immediate move higher wn 'rba itwhewee ckn o.

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call now to get started.

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." last week brian laid out a way to play adobe ahead of earnings. that stock popped. brian, your trade is near maximum green with a ton of time left until expiration, so what do you do? >> would have been nice if it

moved slower but there's style time yes, they beat their earnings estimates, they weet the revenue estimates. got it higher but it wasn't guidance where they blew it off the cover to the upside. i think the stock probably sits still here if i get called away on this trade -- i was buy one call, selling two upside calls but wanted to do that with long stock division if i get called away on the 510 level, i'm still okay with that. i'll probably be a little patience, but by the time it works itself out mid july may be i'll start thinking at -- because it did pretty well for me now you've got to start to manage it and sort of watch it. >> carter, what's your take at adobe? >> this is when i think there's two ways to deal with great winners. you let it ride, cut it in half, or take it all off

my inclination is to take it all off. this is a heck of a move the price is where it wlongs, the stock is where it belongs and now overdone too steep. imll a right, up next, 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.

you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire 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 first fan asks, how do we feel about the spar bucks 105 calls nor july 21st. seem to be a gap the a bounce. brian, what dugout >> maybe it will fill the gap, but the gap downing in earns before may i don't love the stock i think there are lots of other options. >> next tweet asks, the xle two-year chart, does it look like it might be low on fuel >> it is a little low on fuel. sort of lipping along.

my hunch is to be contrarian, though, and reduce those that are most steeped and loves and crowded and find laggards like this. >> time for one more tweet this one asks, i sold covered call on nvidia with a $3.20 tropical price. given the current price, when the best time to roll out the position >> often when they goat 60 delta and it doesn't get too far away from you this one has, but that's how i would look at it going forward. >> carter, what's your take on this chart too steep, huh >> i think so, but that's what makes it fun either that's incredibly astute or really dumb >> time now for the final call, on that note. >> carter, back over to you. >> well, nikkei, too steep, and take some money off and put it into laggard like the hang sks eng. >> brian stutland.

>> if you're going to buy hang seng, xfi the one to do. >> mike khouw. >> beer over coffee. i like constellation brands. >> that does it for us happy father's day, everybody. have a great long weekend. we're back here next friday, 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 hi, i'm cramer welcome to "mad money. welcome to cramerica i'm just trying to save you a little bit of money. my job, educate, teach, put into context. call me. tweet me what a run we've had almost too good to be true even as it fizzled, dow only