tv Fast Money CNBC February 5, 2010 8:00pm-8:30pm EST
the release. >> the timing is 457 on a friday night when there's three minutes to file it electronically left maybe. i'm not exactly sure how it works. but they're trying, in the middle of the worst pr, you know, nightmare. so this isn't. the jamie diamond also stock heavy. which he should be. >> tomorrow morning we won't hear from the newscasters of any public outrage over massive bonuses that should be clawed back in order to return the money to the taxpayers out th e there. >> why don't we try to be as smart as the people there and ramp up our game and instead of trying to whack them down, why don't we elevate instead of trying to knock down the top guy on the rung? that's what i say. put that on your headline tomorrow. >> this is clear some of the uncertainty, joe, when it comes to financials. >> i don't know it's necessarily that.
just to go back to a second to the market. i think you learned a lot about the market towards the end of the week. >> hold on, i think we're having mike problems with you, joe. so pete -- >> i've got to jump on something that we were talking in the green room. i don't know that it got out there, but karen had the guts and i mean guts and did what a lot of people do in the s&ps. volatility going through the roof. i'll tell you in the first hour before the market started to completely collapse, you looked at the volatility and all of a sudden you started to see it rise. and not only rising, but the volume and the spider options, the puts, two to one trading, half of all of yesterday's huge downfall, 900,000 options trading on the put side, we traded half of that in the first hour of trade. by the time we got to noon, traded over 1 million contracts on the put side, finished off the day at 2 million. but at 1:00 in the afternoon, volatility got up toward 29%, karen brought it up, when it
gets near 30%, it's time for me to go in there, close my eyes and sell. and that's exactly what we saw. karen was one of them. you look at the market, huge volume at the end of the day and the put sellers came in. it dropped 10%, folks, volatility dropped 10% in the final hour of the day. 29% to 26%, that was the sellers. >> you were a put seller yourself? >> yes, i was a put seller. of course i have longs against them that will go down in a long market. but when you own puts, this kind of movement in the last three weeks. that's why you own them. why own them if you're not going to sell them in that kind of run. >> you asked her what the thought of the price action. i agree with guy. i want to be buyer, i want to get overweight. i want to wait until monday and tuesday and make sure we are past -- the storm is past. we were clearly trying to identify what was the suspect of this selloff? i think you learned over the last couple of days the suspect of this sell-off has been the unwind of the carry trade.
the rally in the dollar and the effect on all the assets, commodities, copper, oil, gold afterwards. this has been an institutional selloff. and i think now you know that and i think that's critical. >> in order to verify whether today was the reversal, you have to see the price action on monday. we come down, the thing's down ten, and close it down 15, today was a nothing day. i told you yesterday the market's going to be flat after being down 260, but given the performance we saw, all of a sudden we're all sort of exuberant. monday will be the test. we'll see if mutual fund monday holds up 17 out of 20. >> and if you were looking for any other signs, that's an explosive day. and we got down to where i was pointing at the other day, we got to 1,044 on the low. that's where volumes really started to scream in. a lot of people covering. >> i want to head to headquarters. mary thompson has breaking news on gold. mary? >> we have more details about
the bonuses paid to other members of the goldman executive committee. it appears the company's president gary cohn as well as the cfo received restricted stock units with a value of $9 million. so they along with the ceo lloyd blankfein receiving the same bonus for 2005. these restricted stock units in three years and then the executives will have to hold them for two more years in addition to that. but the company's ceo, president, and cfo receiving $9 million worth of restricted stock units for 2009. melissa, back to you. >> we showed you the afterhours chart on goldman sachs. granted it is friday, after hours volume is pretty light, but we are seeing it go up a little bit. maybe this -- >> well, joe talked about it on wednesday when i was here, point of reference, that 148 to 149 level, tested it again. it seems to hold 150. so at least now, again, you have
something you can benchmark. remember, goldman sachs, was are $195 stock in october. that, you know, that we talked about the shadow bear market, think about that move from october to the other day, that's a pretty significant drop. the $150 level appears for now, at least, to be a place the stock likes. >> and pete, you were looking at levels on the last selloff very carefully. >> when you see that 14 level, we talked about those puts, yesterday we got underneath there, today underneath there again and then we start to rise up. then you look at goldman sachs and jpmorgan, broke that 200 day back on january 21st. huge volume, they broke. they've been trending underneath that level ever since. i like jpmorgan's getting closer to a level where i think you can enter. i know some of the folks have jumped in. i haven't yet. i'm looking at that very closely. and goldman sachs, again, it seems to have found 150, but we haven't been able to see the stock get through this 160 level. so you know there's some heavy resistance up there. you've got to watch for that too. >> karen, you stepped in and
bought jpmorgan, not the calls, but this stock. >> yes, i did. i bought the stock. i just think overdone and it's attractive. it probably will move very closely with bank of america. but i feel like, all right, i've got a lot of bank of america already. it's attractive here. the valuation is not so expensive even on this year's earnings and i think next year's earnings will be significantly higher. >> in terms of the thinking of pulling the trigger. is it part of it that the volcker plans is unraveling and all of this compensation stuff is rearview mirror. >> yes, it is. i feel like the political, you know, the noise is quieting. and so some of that clearly was affecting jpmorgan and all the others on the downside. and so if it goes away, well, i think we'll see a nice pop. >> let's get to the story of the day, a dramatic turn around late in the markets. let's bring in gary for some clarity on what may be the start of a turn around. you say you need to see three things. m & a activity, ipo and secondary stabilizing as well as
fed chatter about tightening. what have we got so far? >> let me get to that in a second. happy friday. first of all, let me give us a little kudos for those watching "fast money" on the halftime we said point-blank it was going to be a fraction of that ridiculous $100 million for goldman. so those that were watching "fast money" knew this news that if it's going to make a difference with goldman. they knew this on monday. let's give ourselves a little credit. >> let's get back on point. >> i'm just giving you credit, melissa. happy friday. >> actually, it was your call, gary. so kudos to you. let's get back on point, though. >> when i think about this week and i think about what we need to see here. there's three things to focus on. and that's m & a, we haven't seen a lot of industrial m & a, that is a sign of confidence. this airgas deal today is hopefully the start of the beginning of bankers convincing companies to have the confidence to go out and do deals. number two, we talked about the sloppy ipo market since january.
there's been many deals cancel. the deals that have come are priced terribly. and this week alone, there were two very sloppy secondaries in the massive limited partnership space which traded great through the melt of december 7th. when we start to see discussion of higher interest rate and the market absorbs that, then you can feel that we're ready for the next leg up. >> hey, gary, it's joe. real quick, i know the other day you think the highs are already in place for the year, i do not. i'm more convicted today that they are not. because i've got to push back on you. i think this week's sell-off was all about the unwind of the carry trade, which means it was a liquidation of a crowded trade. something that you highlighted at the beginning of the year. why do you see it differently? >> well, because joe, i continue to think that the dollar is going to move up. and i continue to think that there's too many people. we identify the short the dollar as one of the most overcrowded trades in november. and i think that the dollar will continue to move up because i think we are in a period right
now where we've got to convince people this is not your pad. we're not going to have a 0% interest rate policy forever. and i want the fed to talk about rising interest rate, the dollar move up and spots as we said back in the fall can move up in that environment. i just don't see it yet. i think guy is right. i think this was that nice bounceback for today. but this is not the beginning of another leg up. >> all right, gary. always great to speak with you. have a great weekend. gary kaminsky on the fast line. we do have a message -- >> from who? >> doug gi. he says these market fears are overblown. they must be put in perspective and there's signs of life in the labor market. >> doug's been spot on. he's market agnostic. when he thinks it's going up, he tells it as it is. >> the kicker is he thinks that this is an end to the market --
>> aha! we'll see. time will tell, doug. he's been right. >> he has been right. >> kudos to my friend. i was in vegas with doug, by the way, we played a little. a while ago. >> the next thing from doug we've got to get, what area's the best? he's been right. talking about selling it, talked about buying it today, in fact, i was reading him and going back and forth with him. but what sectors? i know he's talking about the quad qs and all of that, but is there a specific area of the market he pinpoints as the most explosive? >> and at that point, the high beta names, those are the names next week monday and tuesday, you take it, look at those names, freeport mac, i'm against going that name short. i'm looking to buy a name like that. the energy, technology names, those are the names. >> i love those commodity names, but right now, because again we're talking about charts being broken, those charts have been broken. i jumped into calls the other day and letter x, u.s. steel, it
took one day, all of one day, those things got cut in half. got out of it. but i just wonder, when is freeport a buy? i look over at china, i know the new year and all of the rest of it going on right now. but when will those become a buy? and i'm looking at freeport at 0 70 that's in no man's land. >> but your face looks pretty good. handsome as ever. handsome as ever, pedro. but yes, the technicals have broken down in a lot of these comfort assets of 2009. however, the fundamentals of these assets -- the fundamentals of these names, they're strong enough to hold them and you find support. and you do not see a complete rollover into a bear market. >> i don't disagree, but i will say that freeport broke down -- >> freeport traded well. >> there was an analyst note on freeport specifically saying the stock is discounting 250 a pound copper and we're above that. it's already factoring in further decline in copper. so we could see some support here. >> that copper -- that's one of
the most dramatic moves, i think we've ever seen in a month. extraordinary. >> absolutely. and again, it's about the carry trade. i know the folks have a little bit of a chart how the carry trade affected copper, gold, and oil. you saw heavy institutional selling on wednesday in copper. that was the first thing they sold. the second thing was gold on thursday. and the last thing they sold today was oil. and if you think about it, institutionally, what's the last thing that you want to sell? you want to hold on to that resource of oil and energy. it's a geopolitical tool. you don't want to get rid of it. today it got liquidated, sold off to 69 1/2. guy talks about this huge volume and closed $2 higher. >> coming up next, more to come on this crumbling stock market. how to protect yourself, how to find value, and how to trade without fear. stay tuned. i've been growing algae for 35 years.
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all right. the blowout in greek credit started looking like bear stearns all over there week. star options trader mike is here to tell us how he's protecting himself. what are you looking at here? >> one of this things i'm looking at is gold. we saw the commodities move around a whole lot this week. obviously joe's been talking about that. we talked about it on the show on tuesday when we were looking at the gold minors. today what i'm looking at, actually, for those people who are concerned about the gold in metal itself, gld. one of the things that happens -- it was something you guys were talking about is when fear goes up, so does volatility. the implied volatility, the cost of options. one of the ways you can help put a trade on. when that happens is to put on a spread.
so what i'm looking to do here is in april i'm looking at the 195 put spread. i would be buying the 100 puts, paying $3 and selling the 95s for $1.50. and this way volatility comes in, i'm going to be offsetting that risk by being short that 95. and because gld did rally a bit in the close today i think this finished a bit cheaper. probably looking at $1.30 per spread that could potentially be worth $5 if this thing falls out. >> would you stay away from gld entirely? >> i think if you just feel like you've got to be in there, why not? i think this is the way you can get in there and protect yourself. you still have exposure. and whenever you've got these put spreads, it's a way you can defense against the higher volatility that we're all basically not as excited to buy into, of course, but by offsetting, this makes total sense, mike. >> right. are there other safe havens. we wanted to play gold, pete
makes a good point. in terms of other areas of the market, are there other safe havens you guys are looking at whether it be inside stocks or outside stocks, joe? >> i think it's all about the dollar. that's been the pure play. we've talked on the show. using that etf. and i think certainly that's the vehicle right now given that you're seeing the euro decline significantly and the unwind at this carry trade. >> pete? >> well, some of these things got beat up, i don't think deservedly, pete saw interesting stuff going on with gilliad. >> well, they had their very heavy activity, the february 47 call, february 9 calls, a call spread being done here, not just bye-bye, but they're buying 47s to sell the 49s. you limit your risk to the downside, your full exposure is 50 cents. they're talking about an area of biotech as guy points out. this used to be 30 pe. average stock 30 pe, now trading in the teens.
this one's trading around 13 pe. you're talking about unbelievable valuations with amgen and gilliad. it's not a safe haven, but they're a little bit exposed to the global markets. >> a quick point i would make about these biotechs and when we're talking about option spreads. there may be no better place than those names. because we're talking right now about elevated volatility in the market. but biotech, almost always elevated. that's a great place. >> with gilead there is an event. there's going to be a meeting about an hiv drug, and that should give clarity on the pipeline. >> and there's a conference on tuesday, they're going to be speaking at that, as well. there's plenty of different catalysts and the cystic fibrosis drug, as well, in front of the panel. >> always great to see you. you can see mike as well as myself tonight 8:30 p.m. eastern time on "options action." a little snowstorm, a little "options action." >> can't think of a better friday night. can't think of a better friday night. all right.
it's a strong super bowl an early signal as an early comeback for the consumer and media stocks. joining us now david bank. how have the ad rates been? and are all of the ads sold? >> we kind of consider the super bowl as a little bit of a microcosm for overall advertising. they sold it out at the ask price which is about $3 million a spot, but they kind of had to take some advertising that they probably wouldn't normal have, like the tebow ad, focus on the family. if the market had been that little stronger, probably more mainstream advertisers. and i think that's reflective of the overall advertising economy. it's good, it's made a lot of progress, probably still some more upside to go. we saw that reflected in news core results. what you look for, everybody is looking for the team match-ups on the way to the super bowl, we're looking for the sellout ratios on the advertising
inventory. and the closer you get with no sellouts, they start dropping the price, and we didn't see that this year. >> how about pepsi? now they're going more online? was that a major effect as far as the adds? >> i think there's a lot of reasons people are moving in and out of the super bowl. remember, there's still a little bit of -- remember the impact last year, you didn't necessarily want to be on the super bowl, right? it was kind of conspicuous spending. i think they are experimenting with more online -- i don't think that had a real impact on the ability to sell things out. and i think, again, scatter pricing which is the current environment for advertising, pricing up 10% to 15% over the upfronts last year. all building on a self-fulfilling prophesy. you know, it looks really good. >> david, you've got a very busy week in terms of earnings. which stock do you like the best? >> viacom most going into earnings. >> you would buy ahead of earnings? >> we absolutely would buy ahead of earnings. >> thanks. thank you very much for joining
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final trade. flash gordon, what's your final trade for tonight? >> you know, i think this trade is going for the nimble traders. maybe go long the spiders at monday morning open, stop a little low. there's a 108 target and then a gap close up around 110, it's only with clearly defined risk. >> all right, thanks for working that desk for us tonight. >> try and go a little more simple. buy monday's close if it's above today's close. >> i like what he was just saying, i like cable vision in the space, cvc. >> karen? >> i like cvs reporting on monday. >> you've got to like that direction, and as far as the super bowl, who that? keep an eye on those saints. >> oh, really? >> yep, they can do it. >> all right. >> that does it for us, thanks for watching. coming up next, "options action." i worried what would happen if i didn't...
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friday night in time square and all the action you need is right here at the nasdaq market site. the world's third largest options exchange. i'm melissa lee, these are the traders. in a late-day rally calling on that big fat greek nightmare and may be setting us up for a rally. tonight, tired of losing on vegas? dan's got a strategy that could beat the odds. plus, how would you like to turn $60 into $140? mike's got a strategy that can do just that on intel. and why were all of the options traders betting?
scott is here with the set-up. and dan, that late-day bound seems like that is very good news for stocks. >> well, good news in a week that saw a whole heck of a lot of stuff going on. and one of the things i was scratching my head is i can't remember the last time southern european countries caused so much excitement. that said, you know, there was some reason to be concerned if some of this contagion had kind of moved over to other parts of europe and possibly over to our financial system. that sort of thing. that said, the rally at the end of the day was pretty powerful, you know, and in a week that closed unchanged. >> and we still have very, very heavy put buying at the beginning of today's session, didn't look so good at the end. >> but fortunately it got turned around there at about the middle of the day, which was kind of a surprise. and we talked about the vix. to bring it back to options, we talked about the vix. and the level of option prices, remember, the vix measures the prices on the