Could spell more games ahead well tell you how to cash in. And alibaba is surging as amazon stalls out. One dog goes one way. The other dog goes the other way and this guy is saying, what do you want for me . We want to know which is the better buy the action begins right now. Lets get right to it. Car stocks have been on fire this week despite a mixed bag for august sales ford, General Motors both up 5 and avis is up a whopping 15 and hertz is up 22 . Is it too far too fast mike, what do you think . I think it is a little bit. Im not too sure maybe some optimism coming the fact of the matter is that the secular head winds for the rental Car Companies and for the maker auto manufacturers i think remains intact even now when stocks havent done well, the multiples tell you this i think they really do believe that we maybe hit the peak already. I always typically agree with mike and carter, theyre a lot smarter than i am. Ill say this. Look at Ford Motor Company over the last 3 1 2, 4 years. Lower lows and higher highs. Its been effectively straight up in an industry where they were selling cars at a record pace. If you want to be in the space, my opinion for a trade, we mentioned it yesterday, autonation is a place. Yeah, thats definitely going to see a short term boost for sure one quick thing. Texas is the leading place where pickup truck sales is the most profitable vehicle f150. You have half a million to maybe a million new cars sold. Thats going to translate to 35, 40,000 f150 400 million is the net effect versus 7 billion thats a onetime boost. Not something to trade on. There are moves that are enduring that could be the beginning of something that is longer lasting and there are moves that are impetuous. It put ford up and gm. It feels impetuous. There is an argument to be made for bringing them up. They say this is mother natures cash for klunkers program huge transfer of wealth from the insurers to the consumers and the car company. The secular head winds that oaksisted prior to the circ, theyre not going away they will abate, i guess, for a period of time you hate trading things on the back of a disaster like this this is going to be a one time, maybe one quarter, two quart at the phenomenon the head winds will exist. If you get a bounce, you sell them. This cash for klunkers represents at best 5 of new car sales annually in north america and 1 3 of a percent under the fleet under the best of circumstances. Theres a lot of that fleet. 11 poi 1 1 2 is the age for ca have lets get to the charts carter, why dont you show us. Look at exactly what they were talking about i want to start further back this is a chart that goes back as far as s p sector data goes the data before that is not the same sector setup that we have now. This is nothing short of outstanding, remarkable orie dick cue louse what we have here in orange is the s p 500 Consumer Discretionary sector one of the parts of the whole, the market and of course its bested the s p if you were to look at the s p, the s p obviously not as good now down here, these are positive numbers this is a joke you actually lost money since 1989 investing in ford that alone tells you theres something wrong. Lets go more immediately here and now. Just to put it in context, 10 grand. Numbers are pretty clear 10 grand, 84 grand 10 grand, the s p, 10 grand, youre down, down negative numbers. This is a joke is that about to get better with selfdriving cars and uber and all the other stuff . No way all right. Theres the longterm chart. I think you could draw the lines any way you want one thing that comes to mind is that not pretty all right. Lets go to the here and now one year chart of ford, no drawing, no lines, no judgments by me. Heres the line. Thats a pretty straight down trend. Failed off the line, failed off the line, failed off the line. Im going to make the bet its going to fail. Two year chart here comes the line. These are the same thing fails off the line, fails off the line, fails off the line im going to make the bet it will fail again. Pull it back even more put in the lines a welldefined series of lower lows so why are we going to bet anything other than with history . With precedence. Can i ask, carter, one of the questions . He is you know the way i feel of three. Using the top three. Top two whats that mean with all of the reds and the rock of mt. Rushmore i have a question. Im listening. The Broader Market has been remarkable if the Broader Market was to turn to the down side is there safety in owning ford or will that roll over as well no, in principle the things that do the worst in a very bad market are two things, things that have never really rallied with the market, then they fall out and the opposite, things that have been very extended which people rush to take profits. Heres also this maybe the dividends can help for thes cut its did he have dent several times in the history of the company and the dividend is only as good as the next six 3407b9s that is pretty optically clear, isnt it yeah. I dont think you could be any more clear than you have been. Tell me how you feel about this. Mike, whats your trade selling the october call spread this could collect more than the price i was looking for it sell the october 11 call for 50 cents, buy the 12s against it for a dime collecting 40 to 45 drents for this this is with the stock below 11. 5 you can have the opportunity to make a small profit. A profit if it declines. Protecting the 12 just in case by some miracle it happens to break that downward trend line we just identified. Does the trend look the same for gm well, gm also rallied hard this week. Gm hasnt been quite as structurally broken over the consistent fiveyear program theres something wrong there. Gm has been sideways, slightly lower ford has been a Straight Line down they both have issues. The worst stock is ford. Not that theres any safety in either right now what would cause you concern about this trade anything unlikely that were going to see anything fundamental thats going to emerge. If anything would concern me its about every bearish debt ive made this year, which we can identify, caterpillar certainly among them and many others, situations where i think there are probably times where a stock should hit a stop or rollover or seeking continuing drown trends zblr shifting gears here gold, the metal having its best week since february. Some options traders arent going along. Seema mody is in the newsroom. Precious med tall is 50 versus 11 gold rally has been fuelled by a weaker dollar. Despite the safety amid geopolitical concerns. The options 345rk9 does not appear to be as bullish. Occ data on the gld options is up 10 this month, but the majority of that increases on the put side in fact, bets on puts have grown 18 while call interest has only seen a 6 gain this month. If gold were to hold his ear, if would be the First Time Since 2011 gold has grown. Seema mody, that wouldnt be bad. Would you buy into that though i do think theres something going on in gold we had a great discussion with Steve Liesman yesterday. We asked him, are you concerned that this administration talks about the dollar as much as they do we had a great conversation. I am its clear that President Trump wants a weaker u. S. Dollar weaker u. S. Dollar will be good for gold the dollar index is pushing up i think theres a stout rally going on in gold. It sounds like its not because of geopolitical risks. Thats just the cheri on top. The geopolitical risk yes swreep seen the numbers out that we are seeing premiums go up this is not unsurprising, oftentimes when commodities start to rally, they start to anticipate higher amounts going forward. It certainly has the ability to move and probably more sharply than it has. Randomly this is the anniversary. The peak in gold was in 2011, it was september 2nd. Here we are friday, september 1st, 2017, and weve came down a lot, right, 1877 all the way to 1129 now were back up to 1330. Its got momentum to it. Whether its because theyre never going to raise rates again or the miss sieriles are going fly, whatever. Its got momentum. Its got powerful forces both on the way down and up. Master likes the gold. I like it. Its poetic. I am a pentameter. Not quite gold miners or gold . Generally speaking the miners do have a little bit of leverage, but probably rather than metal here, if we start to see weakness into the equities market got a question out there, send us a tweet t to optionsaction. If its nice, well answer it on the show check out our website options actio action. Cnbc. Com check out our super cool newsletter in the meantime, heres whats coming up next. Alibaba shares have doubled, but if you missed the move, relax. Well show you how to buy it for less than 5 ds plus, calling all options actions fans. Reach into your pocket, not your phone, and tweet us your question at options action. If its nice, well have your tweet on air when options action returns. Logical our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. Steve, other than making me move stuff, im here at the Td Ameritrade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Welcome back to options action. If you think amazons had a good year, check out alibaba. Catching up to its counterpart lets get to deidre bosa. Amazon has had a good year returning 30 . Alibabas had even a better one. The shares nearly doubling that puts it within striking distance of dethroning amazon. It puts both companies into a race to half a trillion dollars in market cap. Alibaba has had the edge since august 1st on the back of an Earnings Report that blew past estimates. Amazons rally has halted altogether this month. Its shares falling nearly 1 and down about 100 bucks from its recent peek. From analysts alibaba gets slightly more love not a single one has a sell rating on facts that if mean target price is 197. 51, 51 higher than where shares stay. Amazon has one sell rating of the 44 Analysts Covering it and its 17 from its mean target price. Both dominate ecome 34ers and both are expanding into new businesses like groceries, original content and cloud one of the major differences is that alibaba has the much larger and faster growing Chinese Market and of course the middle class. Some investors see alibaba as a proxy for that growth. Thats part of the reason alibaba has returned more than three times what amazon has. It continues to dominate ecommerce and cloud growth some analysts say that uncertainty over the whole foods integration may be giving investors some pause these days. Thanks deidre bosa, thank you. If you missed babas run, fear not mike koo has a way to buy more. A call spread this is a play youre going to make when youre bullish this is what you do when options premiums are slightly elevated this is a trade that helps you minimize down side risk. We can see obviously what she was talking about. Phenomenal performance from alibaba. Notice something though, in here were starting to see a little bit more volatility. Could be a warning sign. Could be a good thing, could be a bad thing. So specifically am looking at the january and im looking at the 180200 call spread. Remember, she was identifying 197 and change we can spend 5 point 30i 5. 60 fs thats a little over a quarter of the distance between the strikes. Gives us a little bit of time also for this to play out. As you can tell, 5 on a 182, 200 stock not much to risk when youre considering making a bullish bet. What is the down side how does this trade go awry . It goes awry for sure if the stock goes down. Actually, its not going to do so hot if the stock simply trades sideways. I think thats not likely. Were probably going to see moves at least of the magnitude that we saw for the first portion of this year until the years end this will profit him if the move goes upwards. Which looks better, which chart . The one is better in terms of how its acting in the sense that amazon has endured selling for some kind. 13, 14 under pressure, whereas baba has been interrupted. What cuts the other way and makes baba ready is its weakness breakout from the 120 level in june which got you above the november 13 high that was 2000. Stretched, they both have risks. These are not cheap the Chinese Market is growing faster it would seem therefore that babas opportunity is at least as big as amazons is. This is a momentum trade obviously mitigating our down side risk for that reason. The performance indicative of where fang could go . We know apple has been unto itself microso microsoft, while not in fang, super cap. Google and amazon have been on their own. Theyve stalled for three months and in that, quote, fang group, its strigle iing. Up next, caterpillar is on a tear thats bad news for one of mikes trades. Got a question for one of our traders or a special guest today, guy adami tweet us options action. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. Welcome back to options action. Ko and carter said caterpillar had surged too far too fast. Either theyre sort of miracle or theyre going the same way i bet you theyre going the same way. Pretty simple. Im inclined to go along with carter im going to buy a put spread. The october 115 put spread spend 4. 25 sell the 100s against it spending 3. 65 for that pu spret. The cat has scratched their back the stock rallied 4 since then. Mike, what do you do we have until october for this and obviously the value of the trade has declined in the meantime on caterpillars recent strength my thesis, the fundamental thesis i had remains intact. This is one of the situations where we used to have Big Industrial names like this talking about it earlier cyclicals you would see the pes drop they have not dropped. It always trades at a market multiple it is not earning the money it used to. The principle being of this fairly uncorrected advance over such a long period of time leaving a difficult level. We want to stay with this. We have lots of time this is so asymmetrical. Can it eke out gains yes. But can it collapse . Yes. If you go back five or six years youre setting up potential for a major double top. Valuation in my opinion is extraordinarily expensive. Not nearly the company it was ten years or so ago. If you think cat is going higher for here, ive said it for a while, youve got to believe that every hole that is dug over the next year is going to have one of those big old cat tractors with one of the hooks on the back of it. Aint happening, sister. Back to you. Industrials as a whole up 8 this year. Take a look at General Electric just this week, just today, in fact, up 2. 4 . That happens when youre slipping going on a fiveyear slightly ford. Ge is a disaster, right in it peaked at 33 the stock is a 24 stock the losers popped their head up. We have a new ceo reuters report says theyre going to cut staff, slim down. A lot of step up the Options Market made a big bearish bet. Using it as an opportunity to sell. Up next, final call from the options pits im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade welcome back to options action. Time to take your tweets if youre confident and want to buy calls, deep in the money or at the money mike, what do you want to say . At the money. Paying a little bit more money but deep in the call money are buys. Time for the final call. Last word from the options pits. Carter 11. 35 i bet its going lower preharvey nkts mike . I would say if you are bullish in baba its a better play to buy the january 180200 call spread than to buy the stock. Guy. Honor whos dan whos dan . Just kidding just kidding hi, dan. Energy stocks next week if they dont turn next week they aint turning. It looks like our time is expired. Im melissa lee for options action. Have a great long labor day weekend. Dont go anywhere. Mad money starts right now rtit for the shark powered liftaway speed with duoclean technology, presented by sharkninja. One of the biggest problems with traditional vacuums furniture can get in the way. To get your home truly clean, you had to move the furniture. 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