you look at your iwm. they have been range bounds, i wms in particular, russ em, bounced off that 200 day moving average two weeks ago. it's been a straight shot up. >> it's interesting, today, yesterdays, you saw a lot of emerging trends, the xrts start to come back in place, retail sectors are coming back. iwm was bought. i thought today it was going to be a one-hit wonder. the fact that you see a little follow-through today makes me a little more positive, bullish, you will see people buying the iwm. that's probably a big switch. >> anybody surprised that the market was up today in the face of a payroll number that was below expectations? and yields going lower? >> it depends on how you look at it. we had a decent ism, the workweek hours and the wages were okay. even though this was, this number looked particularly bad relative to the adp the day before, which i was doing cartwheels over. i don't know how you can say, though, suddenly, we have to break out on trades that are trapped. especially, look ae

carter >> long iwm small cap stocks for a presumptive breakout. >> mike?think buying september calls is the way to play that. >> mr. agitated. >> next week we have the events, the fed meeting. i think the xlf sets up to be short. >> looks like our time has expired. thank you so much for watching i'm melissa lee. check out optionsaction.cnbc.com "mad money" starts now >> announcer: the following is a paid presentation from worx. [ dramatic music plays ] nothing offends these members of the mount parnassus garden club like a neglected lawn. and they're here to do something about it. [ clicks ] their weapon of choice -- the all-new worx gt 2.0... the next-generation lithium-battery-powered two-in-one trimmer and edger that means business.

think you have a better bet here than in the extended supercap names and i think you want to be long iwm when you see this action in the small caps, carter, and you have this expectation for it to go higher, does that necessarily mean anything for the rest of the market or other sectors within the market? >> now, to be fair, easy pushback to this is to say if the market's in trouble, generally, small caps typically underperform, because then you get into the big, heavy utilities and things like proctor and safe, steady names so, that is something that has to be sort of known, but i think for now, we're not in any kind of crash shape for the market. i'd rather be here than s&p. >> all right so, you heard the man. mike, what's your trade? >> you know, we were talking about this earlier, options premiums are low looking to september, you can buy the 1.43 calls for $3, less than 3% where it's currently trading. i want everybody to ask themselves a question, which is, do you think that the small cap index could move 3% one way or the other between now and september? and i think the clear answ

. >> and iwm you are right. >> isn't that a much better bet that you need to make. to go after the intex, to go out to energy stocks at a time when university seemed almost resigned to the fact that oil from u.s. production is going to stay below $10 bucks >> i have been a bear in crude you can start to see the xle ramally off here when you look at the iwm, it's up the s&p is up 3% if you are going to make you're year, survive this year as a fund, you won't chase fang to survive. >> the way i look at this, yes, we can over simplify, people are going back into true over growth a lot of the stills have a decent growth profile. when you think of what is not happening right now. interest rates have not gone to the moon. >> we haven't gotten off the grounds. >> i know, where did they go on a relative basis i would make arguments they went to the moon. by the end of november, early december, we were at 265 on the tenure, 135 on the yield curve what people are forgetting about the course of people saying the fed could push us into recession. think about the growth and cycl

got a better bet here than you do with the extended super cap names and i think you want to be long iwm>> you see this action in the small caps, carter, and have you this expectation for it to go higher. does that necessarily mean anything for the rest of the market or any other sectors within the market? >> now, to be fair, the easy pushback to this is say if the markets under perform. then you get into the big heavy utilities and things look proctor and safe steady names. >> that is something that has to be sort of known. but i think for now without any kind of crash for the market, i'd rather be here than s&p. >> all right. you we heard the man. whiek am, what's your trade? >> i'm looking at the september. can you buy the 143 call for $4. that's less than 3% from where it's currently trading. i want to ask everybody the question, which is, do you think that the small cap index could move 3%, one way or the other between now and september? and i think the clear answer, anybody would provide is, it could easily move that much. it's very likely to move that much. and this is effectively

we talked about it the last week with iwm. small caps. small cap was basically flattened year-to-date performance. amid a backdrop up 8% or. so you see guys that need performance. we're june, a couple handful days in. here the back half. you get it with iwm. you get it with xle and you want to get wit xlf. if you look at interday performance, you start to see algorithms start to engage each other. have you this inverse correlation. when it starts to come you a, you see the machines go crazy. they go ballistic over it. goldman sax talked about it. people got complacent. we all talked about the five or six stocks that have ruled the market. i do think it's rotation. i don't know if it's trailer trade now. >> i would argue it was constructive. i would argue today felt violent. you looked up. apple close to 5 amazon 4.5. i agree with steve, it felt heavial go-related. there is a lot of -- heavy algo-related. this was absolutely overblown sectors. people taking tech and as goldman pointed out, multiple house versus pointed out, today and in th

the s&p up 8% or so, can you see energy, industrials the iwm rally and play catch up. >> sorry.hen was the last time you had even said, small caps rallying, transports rallying, the sectors that have lagged now, if they start picking up steam, that's good for the rally. >> the ones that have lagged, they were doing extraordinarily well. big caps, google, down the last couple of days. that's done extraordinarily well, this year. i like banks, i'm with guy, i like going into this last i don't know month or two of sad performance, but i don't think the statements two days or yesterday about oh, we're going to see trade revenues down season matter. those are lumpy things, anyway. >> if you want to get low, growth, flatping yield curve, none of those are good for the banks, which you would buy a big bank here and now? >> i own three, the citi, j.p. morgan, bank of america, we seen the flag a long time. i think they are in a new paradigm month. they don't trade a giant discount. i think they are out of the doghouse. that's a goods thing for them. i think we are going to see loan growt

>> well, last week, they had a kouchl days, i believe two back-to-back days where the iwm outperformed in a significant way. >> they're going to ask you that because if soc gen is right, hedge funds and this data, they're wrong. right? >> small caps -- >> so, however you don't know what they're, what that short is against. you just don't know. you don't know where they're long exposure, so that's just a small part of the story. if they had been long large caps like large cap health care and short small caps in the russell, which are bio tech, then they've done quite well, so you need to know more of the story. if you need long markets, which is their way of shorting u.s. market potentially. >> base case. okay. the market has shown incredible resill yiency in the face of d. noise. uncertainty around inside the white house in many respects. >> sure. >> maybe they're right. the economy is picking up. earnings are getting better. market doesn't seem to give a you know what about almost anything. >> they're base case -- on the desk, not going say just jon's case, but many of us have said th