tv Fast Money CNBC March 18, 2016 5:00pm-5:31pm EDT
you to be comfortable with the oil chart which is up basically 35%, 40% in a month. >> like a shadow. still can't shake it one way or the other. guys, thanks so much for joining me. have a good weekend. that does it for us on "closing bell." "fast money" begins right now. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders are tim seymour, steve grasso, brian kelly and guy adami. tonight on "fast" apple is quietly doing something very interesting ahead of its major announcement monday. we'll tell you what it is and how you can profit from the big event. plus, valeant ceo has a simple message for his employees. we ain't broke. did he just break one of the oldest rules in the book? we'll explain and how would you like to buy shares of mcdonald's for less than a cost of a happy meal? how to do that, first markets and historic week for stocks, both the dow and s&p closing out in the green for 2016. on track for the biggest
comeback since fdr was president. >> whoa. >> but it appears as if most investors actually missed out. check this out. according to etf.com since hitting the february lows people have actually been pulling money out of the market, so who has been buying? does this mean that there's more room to run. what does this mean? >> i've clearly missed it. i thought it was going to stop 40 or 50 points going to the s&p and here we are. so what's next? if you're bullish, you know what, the transports keep chugging along. another percent up on the transports. that's a great sign. if you're bearish you take comfort in the fact that oil reversed for the first time in a long time. went up, closed lower and we'll see what happens next week. steve has talked about 2050 and the s&p being a level. we're right there now. listen, again, this has been an unprecedented month or so in the market. 240 handles in 18 trading days, give or take. i think it's too much too fast. >> guy, there seems to be a level that everybody says now is the level. on the way up are and we've been
doing this, doing this, 1930 was a very important level and i believe 2020, 2050, very important level. the problem for me is that the momentum and i would say the crowded trade, the consensus still is that this market has no place to go. we have a quarter end ten days away which a lot of people are underweight for. there's no macro news in the near term, and let's face it. i get that it, you know, earnings aren't that great and the market is kind of expensive, but have you nothing standing in the way of market and a lot of cash on the sidelines as mel was saying. a lot of people have missed this. the professional community is full of anxiety. >> the -- saving the cash on the sidelines, that assumes cash is going to come back in, and i'm not completely convinced cash is going to come back in. a lot of money is going into money market mutual funds and everybody is saying that's the cash on the sidelines. there's no guarantee that that comes back in, and after a 12% run this, whole game is about risk reward. >> what you did see is the cash coming into the energy space. that's what really threw this market on its heels because guys
were caught off guard because that money picked one spot, oil. >> perhaps. >> oil, equities, everything related, materials, industrials, all the lag yards were bought and that's what caught everyone off guard. >> no question, no question. this whole year has caught everybody off guard, right? january was the worst january that we've ever started with, and then we've had a massive rally coming up, so this is a highly, highly toll tile market and if you're buying u.s. stocks up 12% off the bottom, you have to be very comfortable with a lot of volatility. >> hold on a sec. i don't think this caught everyone off guard, and my point is that i think a lot of people who are playing through markets and playing with the medium to longer term perspective and investing in companies that necessarily didn't change at all in the first quarter, very good balance sheets. >> who hasn't it caught off guard? >> you tell me. i'm asking you. you posed the question. we were down 11% and up 13%, down 13% so i'm asking who has been caught off guard. >> let me reframe this
discussion. this rally, i feel like, is the most, i don't know, people -- >> it's the rodney dangerfield rally. >> it's a rally that nobody wanted to believe in and we see that because utilities, telecom, consumer staples and even to this day today. those sectors made new highs before backing off. a rally where everyone went defensive even though it went higher in our faces, right. >> >> no, no. this is the rally where everybody finally went into stocks that were so unloved last year and probably overly unlostds. in other words, sectors have worked and the market has been so bifurcated for so long. you're in a places -- look, the barbell trade is the high quality, the household goods, the personal consumption items, the coca-colas, and then emerging markets and commodities and things that were so unloved, but if you look at the market. >> now the question is -- >> will that continue? what's the next move? >> what do you do now? do you stay in the previously underloved names or do you rotate out? is what we saw today. today, as we saw, the sectors, defensive sectors make new highs and pull back. you know where we saw the most
action. health care. do we start rotating into some of the unloved sectors? >> this year has been incredibly volatile and now we go back to the other side of the equation where you don't necessarily buy in. maybe you want to get defensive, i'm not sure, but i would say that you don't want to buy in at these levels. >> you want to sell? >> absolutely. i mean -- >> you want to short? >> yeah, if you want to be aggressive, short it, absolutely. that's a whole different game, but i think particularly here you've got a great risk/reward. use this week's high as a stopout, call it 2050. a good short opportunity. >> i want to know what i can buy. >> what can you buy? >> reversing the mean trades that are still in the early d days. i think a lot of commodity trades are still happening in emerging markets. i would not be necessarily jumping in tomorrow so this does get into the tactical and if you look at things, there's been a tonal change and when i say tonal, first of all, i think emfx is in a very different place. i think a lot of things are starting to turn and commodities production is taken offline so
the trades that are working, like last year, are the trades that are going to continue to work. >> well, you know, our own grasso here has been sounding the alarm on this rally. take a listen to what he had to say. >> it's the worst time to buy right now. the maximum we can rally is to 2000. this is your sell zone. 1964, up to 2000. not your buy zone. p lightening up on positions right here. >> stocks are up 5% since then. so grasso, have you changed your tune? what do you do now? >> this is what's so confusing about this, and this is to my point of how it's caught so many people off guard so if you look at this chart right here, you have your highs, right? with the exception of this pair right there you've got lower highs coming into the marketplace. right here. this was your down 11%. this was your up 13%. back down again, basically 13%,
back up again 13%, and so by my tally you've got bulls two, bears two so there's been enough of a win for people, enough of a loss for people. people have been right and wrong. what happens now? so where i had said, 1963, up to let's call it 1999. that was your sell zone. that's a little slope. that was your sell zone. here's the problem. always go by my three-day rule so we basically have run from about this section up here. if you're going with the three-day rule, one day we're at 2009. three days later we're at 1969. so if i had said buy the market there, we traded right back down. a considerable amount of space. we've only missed this rally basically for let's call it 2% to 4%, even though the market has rallied 5%, i can make the case bulls have only lost 2%, so right here, if you're buying the
market, short, stock, keep the bull on a short leash. you have to call it 2040. if you're willing to have a little bit of a risk to the downside then ghoul with your 200-day moving average. there's the stop loss. 200-day moving average, currently 2017. so if you're going to get long this market, depending on your risk tolerance, 2040, basically flat on year, or your 200 day on average. upside potential. you're looking at right now. here's the first stop and above that you've got -- you've got to make a new high right here. >> steve, so i -- i'm confused why now. >> so am i. >> and i appreciate the fact that you've driven levels and if the market travels down here what could happen and sounds like you're saying stop yourself for 200 and play for a long move. is that sglekt. >> i would say play for a long move. i could long some names and stayed long some names and apple i saw a 50% profit there as well, so for me, yes.
i'm long but i'm keeping, it i'm probably going to stay with this level, but i think to be prudent people have to eyeball this level. now certainly cover shorts, certainly cover shorts. >> just trying to understand. is this a technical call though, something that's fundamentally changed because that last video clip shows you saying you thought market was a sell. i want you to understand the difference. >> i'm going off the technicals and you sell 506 those in the balance zones. 50 to the 618 so if you know your levels that's where you want to be a seller so you miss it for 2% to the upside and that's your risk to catch 10% to the downside. right now if we hold though, bullish. >> aside from discussing grasso's work on that board. what do you think of these -- of these levels? >> you can take them or leave them but i think he's been spot on in a lot of ways. the points he makes are strong and valid points and if we can
continue to close above this 2050 level, there's an excellent chance we trade back to the may high. there's an options expiration about a lot of funky things going on the last couple of days without question. central banks in your corner. you wonder now if central fwhanks are in your corner will take a misstep. my point is this. the move we've seen has been pretty ridiculous. to see it move to the downside 5% i don't think is that ridiculous just to expect after the last 20 days that we've seen a 2040-point rally in the s&p. >> don't look now but shares of apple are on a major tear and could a key report on monday sense investors heading to the hills. >> reporter:? and the one trade that's sparking interest of traders and that's domino's. what's the recipe for success? guy adami goes to get the latest answers. much more "fast money" right after this.
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welcome back to "fast money." let's kick off the top trades with, of course, the biggest one out of them which is apple and all eyes on apple ahead of the big trade on monday and take a look at the setup for the stock ahead of the big event where maybe they unveil new hardware and maybe even an iphone. take a look at what's happened since january 28th which has been the low in 2016 for apple stock. gone up by 14%, a very healthy move from recent bottoms that we've seen. all that have has added $66 billion, thereabouts, in market cap to apple stocks so, again, a big bump higher just in market value since those lows but it may not be over because the average analyst target price on wall street according to fact set is 133 bucks a share for apple, 25%, 26% higher than where we currently are right now and, of course, we mentioned the
iphones before. take a look at average analyst target price. that's the green dotted line and then the actual price of the stock which is in the white line. analysts have generally always been bullish on apple stock and check out the green circles here. that's when the last two iphones were released. we'll have to see this time around if they do release some kind of hardware if it will have that same kind of effect. makes up the bulk of their sales and profits and apple instead of going in there, the bullish case still resounds for some investors given the way it sounds. back over to you, melissa. >> thanks, dom. let's trade apple on the desk. monday is going to be a big deal. tim, do you think it's a big deal? >> a big deal because it's not going to be a big deal. the expectations for this media event are not that high. people are look at the company. probably going to have a 4-inch iphone and smaller ipad and probably now watchbands so, again, a smaller package but
possibly more power for the iphone. good news. a lot more iphones to sell and i think ultimately this company is still transitioning but in the meantime there's plenty to do. >> what do you think, grasso? >> i'll still long. >> i'm going to leave tim's analysis separate because i think they have a future in the health care space. i'm long the name as well. >> give us longer, longer, way beyond money. >> real quick. same way with the s&p, the bounce levels for apple are 106-109, the sell zone and that's where you should be a seller. i've stayed long the name and i'm going to stay long the name because i do have a longer time horizon. >> grasso brought up the zones here and what's kind of interesting is where it closed today, right? so january 2015, the low was 105.99. august 2015, the low was 105.90ish. that's where we close today. to me this had nothing about apple and everything about risk/reward is a very tough
place to be buying apple because it's just in this no-man's-land technically and then have you this thing coming on monday. it could be the catalyst to get us higher. here's the thing. if it is a catalyst to get us higher, a great brand new product you'll have plenty of time to buy apple and now risk/reward is not on apple's side. >> looking at b.k.'s chart over his shoulder. >> you draw a line. >> like the use. crayon. >> get a camera back here. off of that real quick. look at the performance in intel today up a couple percent and qualcomm up, not nearly as much and qualcomm is rolling over. i think intel is break out to the upside so if you want to play the downstream, i think you get long intel and short call couple. >> you said it's hard to buy. the context of the market. >> you never -- you were never positive on apple. >> you're negative on the market. >> right. >> exactly. >> so -- here's what i will say. i think there's a good risk/reward to short apple
because i know exactly where my stop is. my stop is basically going to be 106, maybe 106.50, so i have half a point risk for some downside and in termsch risk/reward i would short apple. >> we've got a crew here. >> can we see. >> i draw lines and when you draw lines it means you know a lot of things. >> i'm glad you doingled away from the youtube channel you're watching. >> apple has actually diverged nicely from being a total market beta play which is good, a company that's proven there's a valuation story and a transition. the other part of it is i think the china story is nowhere near what people were poo-pooing and a weaker dollar much, much better for apple. >> dominoes is up more than 600% in the past five years and our own guy adami would try to figure out what their secret sauce was. we'll tell you after the break. i'm melissa lee and you're watching cnbc first in business worldwide.
here what else is coming up on "fast." >> got to have a lot of money. >> not if you're looking to buy mcdonald's. a way to get long shares for the golden arches for less than 10 bucks and one global market is up 22% this month. here's a hint ♪ my name is rio >> why the rally in brazil just might be getting started when "fast money" returns.
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welcome back toe "fast mone money". shares of domino's pizza up 17% in the last month alone. we september our own italian stallion, guy adami, to check out what's got investors coming back for second. take a look. >> hey, it's guy. domino's beats yeah, the stock has been unbelievable, so i came out to queens to find out what makes domino's so hot. ♪ >> all good pizza makers have to learn how to stretch the dough so that's what we'll start with. the next is the stretch. there you go. the most important part is the spin. >> a-ha. >> by now we should be about the same size. >> yeah. well, easy for you to say. >> this is called a spoodle, half spoon, half ladle and half
in, half out and then applying the cheese. >> making it rain. >> rain harder. >> big thunderstorm, not sprinkle. >> now where we going? >> what topping would you like? >> i'm a sausage guy. >> that's look good. just set it in. >> set it and forget it. >> my first domino's pizza. >> made your first domino's pie. i've been teaching pizza-makers for 30 years, and you're a natural. what do you think? that's outstanding. this was excellent, excellent, mel lee, eat your heart out. >> wait a minute. where did guy go? >> i'm over here. >> wiseguy. >> pizza guy. >> are you going to bring it over? >> i was waiting for you to ask me to bring it over. >> the pizza -- i made that this morning. >> all that work. >> all right. let's take a look at this. >> looks nice.
>> let's trade domino's. >> did you throw it around in the cab on the way over? >> on the domino's train for a long time. >> i'm bullish on domino's and i love patrick doyle. think he runs a great company and made tremendous leaps in efficiency, all about the digital platform for them, up 117% and at the 1 $130 mark i need to see more base before i'd jump in but it's been an outstanding year. >> how do you get guy adami off your front porech? >> paying for your pizza. >> trade? >> dri, if we're in the fast space a company those growing slowly, applebee's is a rock to this business, darden will get you done. >> with guy's pizza foray, we're thinking guy has done a lot of weird jobs for us. he has quite the resume, ups delivery man, virtual reality tester, even member of the delorean club. >> yeah, no kidding.
>> look at that. >> a driver. >> personal shopper as well. >> what was your favorite job? >> sorry. we want to know what you guys out there should think guy should do next? tweet us. >> guy's next job. >> at cnbc "fast money" using the #guy'snextjob. >> coal miner. i'm so down with that job. >> think you should be a fit model for the gap. >> funny you should say it between the summer of '85 and '86. >> bet you were with the torso line. >> sorry about that. a very good looking torso. >> what do you want to do next? >> a railroad engineer, locomotive. >> interesting. >> i will go in a coal mine. i'll go in a gold mine. >> wow. >> gold mine, i like that. that would be nice. >> polo. >> instead. final trade today we're going to go around the horn and get trades that you can devour. trades you can devour.
tim already -- >> let me just finish. darden also has a 3.3% dividend yield, and i think this is partially what you need in this environment. steve? >> grasso. >> mcdonald's has had tremendous performance as well, by think eps goes to about 7 bucks a share and 22 times multiple on it. i think you get to 155. you throwy in the dividend, 155, 160, last sale 124 got tremendous upside? >> b.k.? >> going with dying equity, buy it closer and that's because i like the rooty duty fresh and fruity. >> guy? >> thanks to kristen, great job producing, that you, and thanks to the folks out in greens and j.m. smuckers, that stock, pulled back a little bit. decent valuation, great name. that's my trade. >> all right. before we say good-bye we like to give a shutout to our own b.k. who is running. new york city half marathon this sunday and raising money for a great cause, the lead the way fund, so b.k., wish you the best. >> break a leg. >> hopefully it won't be too
cold. >> it won't be too cold and lead the way fund, fantastic fund helping out our army rangers. >> that does it for us. catch more "fast money" on monday at 5:00. don't go anywhere. meanwhile, options action" starts right after this break. pass the pizza. the championship game ball? that was sebastian diaz. good guy. and all i had to do was ask for their money and pretend i was investing it. their life savings is now my lifestyle. female announcer: don't let someone else live the life you're saving for. find out if you're dealing with a registered investment professional at investor.gov. it's a great first step toward protecting your money. before you invest, investor.gov. with extraordinary offersmance on the exhilarating is... the thrilling gs... and the powerful rc coupe. ♪ this is the pursuit of perfection.
hey there. we're live at the nasdaq market site and look who decided to get his gamma on tonight. the one and only guy adami. must being a big expiration tonight. he and the crew are getting ready. here's what's coming upch. >> honestly, we're out of gas. >> that's what some traders are saying about the run in energy stocks, and we'll tell you what it is that has oil bears growling. >> plus -- >> look for the boys from brazil. >> that's because they are on fire and we've got a way you can make even more money. we'll break it down. and -- >> you know what they call a quarter pounder with cheese in paris? >> yes, it's a royale with cheese. it's all about the metric