Central banks take center stage with the ecb meeting in september. Then the biggie, the fed decision september 18th. Are we heading into a september to remember or a fall to forget . Guy. Cant it be both . Because i think people will remember september in the fall to forget. And want to forget it. Right in this case the answer to your question is both welcome to jeff mills. Look, it made sense to me that the market rallied this week end of the month, people wait for the long Holiday Weekend i get it we talked about it earlier in the week but i believe that the next couple of weeks will be as dicey a period for the market as weve seen in some time. I still think the market selloff will culminate with the vix around 31. The vix on a benign tape today, rallied on a friday which i find interesting. I think were in for serious headwinds. You could have the president over the weekend say, you know what, president xi and i had a beautiful conversation and were going to delay the tariffs and maybe on tuesday we get a bounce off the back of that in my opinion, the things that worry this market are not only the chinese tariffs but a laundry list of other things that that wont solve. Yes, so a delay of the tariffs, and we may get that we have seen a lot of that over the last year, some softer conversation but i think it is important to go back to august 1st when trump first tweeted that about the september 1st tariff, the s p was over 3,000 we are a couple percent, 2 , 3 below those levels if you are asking me whether we get like some softening into september on that sort of rhetoric, could the s p go back there . Of course it could i guess go back, i sound like a broken record, every new high in the s p has been a great opportunity to sell and have the opportunity to reload much lower. To make one other point. Quarter to date here, we are down you know, the s p, the dow, the nasdaq all down about 50 bips here heading into september, if you look at what was strong in august, it was verydefensive stuff, staples, utilities up almost 5 . Thats not particularly bullish from where im sitting. I do think thats what the playbook continues to look like. What worked over the past 12 to 18 months probably continues to work investors are going to go to tech for growth and theyre going to look to some of the defensive areas of the market because rates probably stay low. You have to be impressed a little bit about how well the market has actually held up in light of everything youre talking about. I mean thats been pretty bullish going forward, and i think a lot has to do with sentiment. If you look at Institutional Investor surveys as it relates to confidence, if you look at etf flows, still pretty aggressive on the way out. And the put call ratio on the Options Market, for example, pushing into the 95th percentile when scepticism is that high in the market, pretty strong. 4. 5 versus 1 for all oh. I think we could do okay pushing into the fall. Thats just it, it is just okay. I agree. It is just not working. You are not paid for the risk to embrace equities now for almost 18 months. The real recent changes is were starting to lose big, heavy names, twitter twillo, no good, zen, no good, microsoft starting to stall. We are losing software theres a couple of things not right. If we lose our leadership, the market cannot hold up under that. Thats interesting because just yesterday dan said microsoft was the best looking chart in the entire still is. Stick around during the next half hour during oa and we will talk about it i want to make an important point to me. Jeff, no doubt about it, the s p acts well. 2 , 3 off the all time highs. You know what also acts well u. S. Dollar. You know what else acts well u. S. Treasuries. To me it is a safety trade. What do you say when bank and industrials no, im saying the spx on a relative basis more on the bottom of 300 and top 15 im not telling you to go out and buy it because it is only down 3 , but im saying it is stuck up here, holding in here at a time when the dollar was new year highs and treasuries make highs every day. Where are you going to go i said it on the show before over the long term i hate that argument, low Interest Rates, were pulling forward returns. Now the equity risk premium still is really large, so investors will look tothe equity markets you have Institutional Investors, again, they need to meet the highreturn investments. Now you could see cpe expand to close the gap a little bit. Isnt that what Musical Chairs are all about, thats what crowding is, it is one of the dangerous things, what complacency is you might be right, and when it ends, it ends in fireworks every time. It is hard to argue complacency because of the sentiment indicators you havent seen a big rush into the market, so i agree, i understand what youre saying, but look at the action puts so i dont know how complacent the market is here. What we didnt mention is, again, you know, the chinese are massing troops at the border a lot of things could happen this weekend that are really bad. When the hong kong situation, as everybody has seemed to forget, it seems to get worse by the day. I dont think it is going to clean itself up any time soon. What happens if something bad happens there . Does it put pressure on the Trump Administration not to deal with the chinese there are so many bad things out there. You forgot the pressure on the fed. It is interesting it should not. It should not, but ultimately. In my opinion it does. You read the oped and it was interesting stuff. You mentioned on the show, you do about seven a day which is yeomans work you said there are five countries whose entire yield curve is negative. Negative. Think about that. By definition it has to be somewhat negative. Again, u. S. china trade, i get everybody is talking about that, but there are so many other things to be concerned about. It is interesting the president had a tweet that i thought it was demeaning to manufacturers in the companies. Oh, the Weak Companies. He was talking about Weak Companies complaining about tariffs. I think it is a dangerous situation here we weaponize tariffs but were doing it in a manner that is hurting american citizens right now, it is hurting Global Growth when i think about, like, what we have to, you know, face in september with these deadlines, the fact we are going down to the wire on a tariff deadline over a Holiday Weekend makes no sense. It is a selfown, as they say, shooting yourself in the foot. If that thing is the thing that turns the market down in september. And also, but speaking if the market is okay or whatever, it can only go up or prosper, one of two things. We expect Earnings Growth to somehow recover and get and or multiple expansion or both what is the case for either of those scenarios . Expansion of the multiple, i mean if rates are where they are, frankly the multiple should be 35 on the s p where is where is the great move based on the dcf, based on the dividend discount model, based on however you want to play with the numbers, equity risk it all should be so cheap, whats the problem something is wrong. What would you say to that, jeff i still think because the fed probably cuts Interest Rates, yeah, maybe the multiples should be 35, but i still think theres room for the multiple to expand. If were not going into a recession what expands though i mean the price the price goes up faster than earnings you probably wont see earnings recover to the extent you are talking about. Okay. I think thats off the table. But you still have really low Interest Rates in an economy where i dont think were going immediately into a recession the strength of the consumer has been wellcovered. We could talk about that but if rates are being cut and were not going directly into a recession im not talking about multiples blowing up and us ratcheting up 30 here. The consumer being strong is an interesting argument because you have global weakness they dont hire as much and it hits the consumer, and jobless if we dont see a movement of jobless claims higher, then maybe were okay. But the minute we see that we havent we havent seen it yet jobless claims can be a noisy indicator. We actually looked at jobless claims, but we looked at longerrun moving averages so the sixmonth moving average versus the 24month moving average. When you see the sixmonth moving average cross over the 24, so the trend in jobless claims starts to go up, thats when returns start to struggle and we havent seen that yet, plus theyre at extremely low levels right now even if theres a crossover, jobless claims are still very low. I think you could say over the last 19 months they are strained we havent made incremental progress to carters point were seeing leader sht n leadership not participate i want to make one point on this desk, and we want you back as much as possible, were not going to ring a bell about the stock market calls when we get a rough session call thats not going to happen that will be way in the future the stock market is going to go down in front of that, right so what were trying to do is figure that out. So today i dont care about a recession call. That was close. Close could have been anything though. Thats just not how were going to play on fast money. Were always going to be long stocks. Yeah. Thats why i think positioning is important talking about some of the less risky parts of the market, the more defensive parts, i think so what are the charts saying as we head into one of the weakest months for stocks historically the chart master says, wake me up when september ends head over to the plasma. The charts reflect what you have been hearing. We have equilibrium which represents a standoff between those that like and those that dont like, meaning bears and bulls. It is not calm it is sharp indecision theres a huge debate going on, and all debates come to an end the more violent the debate, the more violent the resolution. It is just sort of how life works. Lets look at a few charts so we have this welldefined range, it is the month of august, but it is not a calm thing. It is highly volatile. So take a look at the following charts that follow we have had a succession of two and threesession drops, 4 , 4 , 3. 5. Then we had the opposite weve had quick recoveries of almost the same duration, up 4. 3, up 4, up 3. 7, each lasting two to three sessions. So theres violent debate. Theres an adage from the 1930s that says sharp indecision is resolved sharply, meaning theres a big debate and it is going to be good either theres a trade resolution and up it goes or there isnt and down it goes the levels to watch, 2945, 2825. It is basically about 100plus point range. In fact you see it here. 120 points now, were we to break to the down side, thats my thesis, what you have is a measured move you take the width of the range and you project down so 120 points down, ive got the arrow here which you can see, and 120 point down would take you to essentially 2705 level. What is that level slightly below where we were in june so the june 1st low, just to put this in context, right, is 2728. It is not random that all of this consolidation is happening under the line, were stuck here so you break, you consolidate, and, again, the bull would say it is going to break back above. My premise is you get the second break in the direction of the prime break and basically we will approach and violate the june low carter, why dont you come back on over as we digest this. What choice does he have . We could just keep him there. You know, carter is a lot of things, mel, but hes not an American Idiot dan, did you catch that . Yeah, wake me up when september ends i like a lot of things that he said. You know, we get criticized a lot, youre always so negative but we try to point out the things that can go wrong i got to tell you that the warning signs are all there right now. The fact that the market goes higher, it is what it is, but it doesnt mean it should be going higher again, the warning signs are in place. Quickly about the american consumer, i know what jeff is saying i say this a lot, im not suggesting im right, but dont confuse the health of the u. S. Consumer with the strength of the u. S. Consumer because theyre entirely Different Things the u. S. Consumer will spend money into oblivion as long as they feel good about things, and they feel good about things when the stock market goes up every single day. Yes, and we are seeing a trade down, dollar general, walmart, target, thats fantastic. You know what wasnt great tiffany, williamssonoma, capri, tapestry, home sales are topping out. Those are the focus on the u. S. Consumer. It is highly defensive. Dollar general, walmart, thats paychecktopaycheck stuff things that ashould be prosperig are not. Plus, a new set of tariffs go into effect sunday at midnight and jane weldon is on the front line to break it down. Hey, jane. Reporter hey, melissa. Im still going through the list of stuff that will be tariffed starting sunday. Walruses, emus, interfudal i dont know if theyre front hiading those, but sometng they are front loading, which is telling about what is going on when fast money returns. You should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Welcome back to fast money the countdown is on, one day, six hours, 43 pints, 13 seconds, for the next round of tariffs kicking in on china. Some retailers have gotten ahead of the trade war for now lets get to jane wells at the port of los angeles where the clock is ticking to the deadline jane. Reporter oh, my god. Well, melissa, these tariffs are going to hit a lot of things that consumers buy, so it basically has been a red alert, no pun intended, to get things here before sunday, even if it costs more to get them here. So let me give you a specific example. Take those black friday tvs. Steven ferreira says those tvs dont arrive at the port until the end of september, but after the president announced the new tariffs august 1st, he says tvs became the singlelargest socalled bulk move between august 15th and the 26th from china into this port 30 to 50 containers on average per ship from china were filled with tvs of course, the president later delayed the tv tariff to december, but by the tame he had already said that those ships had set sail say that now i want to show you something about how supply chains are changing okay this is an image i took from the marine traffic app from right now showing the ships right around me, the like green squares are container ships. In the area around me there are 19 six of that 19 are from china. So less than a third in a port where usually 60 of the traffic is coming from china. So six though is still more than anybody else, but south korea comes in second with three then you have two ships each from japan let me see, taiwan and canada followed by vietnam, theres a ship from thailand and one container ship from france back to you. Wow jane wiles in san pedro, california, as i learned this morning. It is not san pedro. Joe said san pedro and he was excoriated. And hes from here. He should know better. Isnt jane the best. He should know. How could jane not be on the show on a weekly basis. Every day. Ill sign up for that right now. Oh, gosh, enough. Stop. Have a great weekend, jane. Thank you. Jane wiles in san pedro, california we saw this with the threat of the border tax, we saw retailers pull in goods before christmas to try to make up, and that caused for a lot of lumpiness. I mean in terms of the economic data, and then all of a sudden we didnt know what the impact was for a while. It is one of the reason one gdp print everybody got excited about was probably a function of everybody pulling things forward. It is great if you pull things forward if theres demand on the back end im not certain there will be demand on the back end, which is really what sets us up for some dicey times over the next couple of months. So, again, there are more things going on than just u. S. china right now and i think youhave to be aware. It is a great weekend to go and think about what is going on in the world and ask yourself, is that a Good Environment for stocks. But you think that actually the consumer is going to deteriorate that much between today and, say, black friday or today and christmas . I think it is so hard to know because we are at this crossroads if you look at the Consumer Confidence data, definitely rolling over but still somewhat elevated which way is it going to break probably depends a lot on what happens with trade i know it is going to be dicey i know this is going to drag on for a long time, but i still find it hard to believe that the president is going to try to torpedo the economy orator pe to the market heading into an election year. He knows president s that are not reelected it is because economies are not doing well maybe im being over optimistic, but maybe it is enough to keep confidence levels where they are. It gets down to this. We know theres no Consumer Discretionary sector it is 62 stocks, 10 , 11 of the s p and yet five names are half the way. You know the names amazon, 21 , home depot, starbucks, nike, mcdonalds. You get rid of the influence of names and it is making relative lows compared to the actual sector it is back to 2010 relative to the s p. It is sorting out the winners and losers all of the things that will end up closing their stores, closing their doors, it is a few names and those names were getting back to, theyre all expensive. For more on how businesses are preparing for this weekends tariffs, head to our website cnbc. Com im million. You are watching fast money. Here is what is coming up next still ahead, we are checking in on the hotels. Do you know if the hotel is pager friendly why the Options Market has serious reservations about one icwiknown hotel chain stk th us. Fast money will be right back. Pharmacistrecommended e memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Bell come back to fast. Programming note, high risk, high reward cannabis ichk find out why experts are sounding the alarm on this booming industry thats wednesday, 6 00 p. M. On cnbc from high times to buzz kill, check out cisco, the stock down 17 in august. Guy. And we talked about this when they reported earnings we said it wasnt so much the quarter, it was the commentary the commentary from cisco chang changed in basically a month and a half, two months, in a huge way, total 180 again, not that cisco is the entire market, it is not, but i have to tell you that it is definitely a bellwether name you can sea, cisco, throw it out, but you can do it on the other side as well i think cisco is trying to tell the story of what is going on in the world. You have to pay attention. If you choose not to, thats all right as well. I see the market is within a 3 of alltime high but it is not telling the truth, which cisco is. What it failed to do was get back to the alltime high. It almost got there in the mid 60s and it rolled over. What i think is troubling is that the company or the stock in particular was rewarded in may when they reported and they had commentary about how they shifted to avoid tariffs thats the change guy is talking about. To me it is troubling. Again, it is a cheap stock it will benefit on a substantive trade deal but on not on one that focuses on trade deficit. It has to be about, you know, tech and i will pile on really quickly. Theyve done a lot of buy backs and that probably decelerates over the next couple of quarters from a technical perspective you may lose a bit of a bid there too. Time for the final trades ahead of the Labor Day Weekend around the horns, carter. Homebuilders should be acting better given where rates are, and sell itb. Jeff mills. Stick with emerging markets i think for longterm investor this is still a good play. I think the Global Manufacturing sector starts to bottom towards the end of the year. The dollar may weaken there and it could be a catalyst for em going into 2020. Dan. It seems we spent a lot of time talking about u. S. Treasury and yield curve inversion there. Stay tuned were going to talk about highyield corporate debt. I have a cheap way to play it to the down side. Is he allowed to do that. Final trade and teams roll up in one. You got twothirds, actually threequarters of the oa team right here jeff and i will be leaving. What can i say. I want to point out twitter trades well. Dont be surprised if it makes a move to last julys high of 47. Jeff, great to have you with us that does it for us here on fast. Dont go anywhere. Xtptions action is mi u obep ne plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. You know you make me want to shout throw my hands back and shout come on, dont forget to say you will dont forget to say yeah, yeah, yeah hey there, it is 5 30 here at the nasdaq and that can only mean one thing it is time for options action. Here is what is coming up on the big show breakout your flannel and pumpkinspiced lattes because fall is around the corner. But if you think a september swoon is on the way, dan has one really cheap way to play it. He will layout his trade then i would like a room, please. Why do mike and carter say it is time to check out of this major hotel stock . Theyll explain. And later were racing the rope on the Home Improvement trade thats simply nailing it. It is time to risk