Flat but even with stocks near record highs as represented in this graphic by the happy scuba diver, theres warning signs lurking beneath the surface. It all boils down to this. Do the moves in these areas in the market make you nervous about this rally at what point could they break through that surface, pete quite honestly, i look at this market and think the rotation has been going on weve seen it time and time again in energy, something lags, whether its technology, financials, whatever if theres a concern right now of whats maybe lurgeking, wer completely blind to the fact that north korea is still out there, quantitative tightening is still out there there are catalysts that could push us to the downside. Were in a pause phase, it feels like to me mike from Morgan Stanley was here, he waited until last week and said, you know what, it feels like its a time for a refresh or pause it makes sense to me based upon what weve had and what are the catalysts . Weve had earnings, weve gone through the majority of the cycle of earnings, theyve been great, we hit record highs, and now we pause everybody assumes its a the pause that refreshes, and it has been ill tell you whats lurking out there is the twoyear note now at 170 its been slowly on a tear its up 35 since september. If you look at high yield, look at the jnk etf that is a scary look how big that shark is compared to that dinky scuba diver. The scuba diver looks a little bit like dan. The high yield hasnt traded below 200, momentum is dead since the First Quarter of 2016. Em closes on the lows. Transports are down 6. 5 iwm, small cap stocks. You get the picture. Anything thats cyclical has been under a lot of pressure this is lake placid on the surface but a lot of stocks are making new lows. 25 or so is telecom. The only thinking thats going to derail the market is seeing these mega cap names sell off or the Global Growth narratives short shift, which is not what were seeing. Theres no sharp to you no, the reverse im not being ultrabullish here so youre that skook aboutcur im that scuba diver. From midaugust to october 5th, weve seen the market rally. Since then its rallied 1 we havent seen a pullback for the buyers that want to buy the pullback to step in and sort of be there we sort of are grinding there a little bit trading sideways, if we start to rachet higher again, youll see people jump in and it could force kind of a springboard effect to the upside it could. And it could not the s p has had these ten handle rallies getting back to unchained, it feels like it was going to be that day where we have a 1 down day i think all of whatyou guys ar saying makes a lot of sense. Its important to make sure that were going into a holiday shortened week next week, then that period of time between christmas and new years should it be a run for the races . If everything is so good at this point with the s p up 15 , the nasdaq obviously up a lot more, the uncertainty that pete was talking about, you didnt even talk about debt ceiling, you didnt talk about tax, all this sort of stuff thats going on in washington. Its scandalridden. People are holding on for dear life two weeks ago bullish sentiment was at all time highs, dan. If you look at the bull indicators [ simultaneous speaking im not saying its reason to be bullish its actually fairly bullish action which speaks to what youre talking about, rotation this is a name that caught my eye today, t. J. Maxx their earnings and sales are growing, trading at below market multiples. Arent they kind of amazonproof, recessionproof . I look at those things under the surface that freak me out a little bit the russell, that one and the transport. The reflation trade is supposed to be alive and well. Copper is down 2 today. Look at energy stocks, oil has gone into cantanga, thats negative, thats bearish glencore, if you follow commodities, thats the mothership, theyre highly leveraged. That traded straight through the 50, through the hundred. Icahn disclosed he sold 7 million shares at the end of the june quarter which i think is bullish, by the way, that was months ago, got a big seller out of the way. And copper has rallied substantially since then its yesterdays news. Anything thats had its massive performance into the end of the year or thats had a year to date, who is going to sit there and take profits right now . The mutual funds, the way theyre investing right now, its a buy and hold strategy taxes, tax structure is going to change, possibly the hopes of that, why would you take that now, when there could be a lower tax rate next year . The broader markets not giving those opportunities but individual names are and i think any time you see names where we already know the facts about the companies, weve gotten through the earnings season when you see 10 pullbacks, those are the ones to buy. But we have not seen that in the market [ simultaneous speaking you liked them and you smartly said at some point momentum was broken. Can i ask this basic question before we bring in rich ross who is in the pantheon of analysts who come on the show, et cetera, et cetera. Who is at this point the scuba diver and who is the shark who believes there are things that are lurking beneath the surface and who believes the markets are okay shark, raise your hands. I see sharks. The fed is much more aggressive. Look at that twoyear note takes your shark you guys are the diver. Im comfortable, moving along, not worried about whats lurking. I dont see right now [ simultaneous speaking i make the argument that the losers get pressed harder because theyll sell the tax laws like crazy. 10 to 12 is where weve been consistently you can protect a position there. From that perspective, i like the opportunity, even if there is a shark in the water. Im talking about still the individual names when you look at these numbers, when weve gone through the earnings numbers, absolutely incredible numbers for the most part across the board, those are the opportunities. If they get sold off, those are the opportunities. Whats the catalyst between now and the end of the year . Im with you, theres a lack of catalyst. The week of december 8th through the 13th, we have the budget we forecaget what its like whe the fed raises its rates to me, i dont see the catalysts. I like mike wilson, hes saying, i think the best thing for bulls would be an uber bull would be to say, the sec back at 2500 then you have some sort of reset and you can see how some of these huge gainers act on a 3 to 4 pullback. Lets go off the charts with rich ross, hi, rich. Hi, melissa i like to go back to a place i know im loved and theres no better place than the face were looking at, facebook here. Textbook bullish is sending triangle weve already emerged from that pattern here and importantly, as weve seen that volatility tick up, facebook tests and holds that key break point, that tells me that facebook is ready to get another leg up here, and the next chart, were going to go back to law school here, were going to take a look at jd. Com this stock is fresh off a victory in singles day, thats like black friday. 25 billion in sales in china, these guys are the amazon of china or at least one of them. You can see the neckline of a potential head and shoulders top. But lets not get ahead of ourselves because when the head and shoulders fails to break down, what happens is we get a commensurate move in the opposite direction and this neckline is a springboard to higher prices. By jd on the pull back finally, a real battleground stock here this is tesla. Ive brought up the weekly chart to sort of mute the volatility and easy the pain of the long since the stock has come down from 380 to 300. Look at this, youve got this big multiyear base of support in the stock. Youre testing and holding for the time being the magenta line, your 50week moving average, and that neckline of support, 280, 290. You want to buy that pullback because with 21 short interest, if that neckline holds and i think it will, youll get a sharp move in the opposite direction which in this case is higher theres three great ways to play a compelling longer term bullish setup. Since rich sits in the pantheon, he definitely comes to sit, arielle will bring the chair in i want to be clear here on tesla, they have a big event coming up which could be a major catalyst for the struck, the semi truck unveil that happens on thursday. Youre saying wait until 280 is tested no, for traders i would use that as your protective stock. With a stock in and around lets call it 308, 310, youre saying, great, 10 stock, but this is a highly volatile stock. Below 280, youre a seller i think it can break out to new highs and see 400 in the first half of next year. I like your facebook trade. I agree with it 100 tesla, i do agree with it as well i think its a little bit more risky. I would stick with the facebook setup there. From a fundamental perspective its lined up as well as the technicals interesting going with jg. Cojg. Co jd. Com, its the little brother to alibaba these guys are antiapparel. Just got a downgrade. And theyve will some guys upgrading. Weve gotten a lot of numbers out of the way people are more concerned about the big brother effect and alibaba pushing them around. Theyre doing that, pressuring merchants. Chinese consumption should be bought youre an avid viewer of fast, we started this show off with the notion of the shark and the scuba diver. Do you think technically the markets are okay or do you look at whats lurking and say theres some caution would you like to be swimming in that menttal cage are you a shark or a diver . These dangers have been lurking all year the surge in twoyear yields keep in mind the curve flattened throughout both of the last two secular bull markets in the u. S. From 94 to 2000 and from 2002 to 2007. Of course those moves ended badly but it always ends badly, thats what an ending is you have still have two basis points to play with. As weve talked about before, the banks, the jpmorgans, citibank of america, theyre trading off twoyear yields, not tenyear yields. Its taking those banks higher what was up today . Bkx. Banks are doing well the banks have come off 5 if you look at jp morgan, bank of america. Citigroup especially, back towards those recent breakout levels is that a level where you get back in and reload on those things i think thats exactly it, the bkx pulls back and tests and holds the 50day the high end of that welldefined trading range, jpmorgan these are stocks that are poised to test and hold and move higher again. Thats exactly where were set up to be rich, thanks. Pete, what did you do today . Hes not nervous. I can tell absolutely not nervous i only had one big trade today i actually didnt do as much as i normally would it was an interesting day. I brought something in the reit space. Its in senior living. Because we saw some incredible, unusual activity in there. That brought me into brookdale i sold some halliburton today. Ive been constructive on the energy center, halliburton is well positioned. Weve had a massive run in energy weve got perfection priced into opec vienna, november 30th, nothing wrong with taking some profits here shorting foot locker, these are stocks that are going to continue to trend lower. We saw dicks trade lower today. Foot locker reported on friday, not a pretty quarter that stock will go lower i could see the stock trading a couple of bucks. Every once in a while i get a trade idea from you guys what does that mean it hasnt done well so pete and john are in agreement about the Consumer Staples im looking at that nice little bounce, 52 to almost 55. Thats a short entry there you go, giddyup. Well see coming up, General Electric getting crushed again today, even after some reassuring words from Ceo John Flannery traders are betting its about to get a lot worse, well explain. Plus home depot crushing earnings today will other big box retailers following suit tim has a new stock set for t pter breakout, well step up tohela later this hour much more fast money after this for your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Welcome back to fast money. Cocacola pops to a fresh alltime high. Wells fargo updated the price to 51 a share, coke may move into the booze system tim, have a coke and a smile at one point i made the comparison to whats going on in mcdonalds you have new leadership after languishing on their reputation, it could be a positive event at their earnings call. A weaker dollar has been great for their core business. Are you more bullish or less bullish if coke gets into the booze business i want to see what the results are. The expense to build that business, i want to see that before i jump in to buy, for that reason alone. It may not be positive, they may not talk up things, they may talk down guidance that would be a relief for the stock. Not up the way it is, trading at 25 times earnings, not a relief the xlp, the consumer staple conversation we had last fight that youre short now when you think about the top five holdings, coke, pepsi, these stocks are all trading at 22, 25 times earnings. You have 2 or 3 Earnings Growth youre lunch them all together coke is not facing the same headwinds. Theyre totally different stories. Coke has got a lot of exciting catalysts. Im just telling you i dont see why these stocks deserve to trade 25 times next up, home depot blowing past wall streets earnings expectations as repairs from recent devastating hurricanes and wildfires help boost sales is it good news for target and walmart . Target has been missing the mark, stock down 17 home depot and walmart are both up more than 25 , fresh off alltime high. Can target catch up . You said last night home depot is your choice right, i own home depot, and coke and pepsi, by the way whats running cocacola, theyre moving away from carbonation and are making incredible acquisitions. Its phenomenal. The big box space, walmart has done a great job obviously their transition to the online world has been great. Home depot, again, 20 online, 23 last quarter any continue to crush it there but they continue to crush it everywhere, they raised their full year guidance target concerns me because i think theyve been late to this whole game because of that, i think theyre at least one or two quarters away before we start to see target become more like whats happening with walmart i love that you talk about big box retailers. You went to coke because you wanted to rub it in dans face youre wrong on coke and youre wrong on pepsi. Pepsi has the mix. Cocacola wants to get away from carbonation. Smoke and mirrors, it is absolutely priced to perfection. And i think that mark laurie, theres no question he is talking up the game from the ecommerce perspective, trying to get almost, you know, an internet type bid. Because theyre compared with amazon, when you talk about valuation, arent those i think the problem the people are missing is cost the cost to get to that next level is to get to scale their cost to get there is theyve got 4600 Stores Across the United States maybe you werent paying attention last night probably not. Amazon to go for retail sales at very low margins. Walmart has 500 billion in expected sales this year, almost all of it is in retail, very low margins. Amazon obviously has had [ simultaneous speaking so walmart can compete with anybody on margins but the bottom line is its a losing game theres so much competition and too much floor space target over walmart ahead, roku taking investors for a wild ride, the stock still up more than 100 in the past week and massing a major milestone. Im melissa lee, youre watching fast money on cnbc, first in business worldorldwide meantime heres what else is coming up on fast. Heres whats happening to ge shares something just happened that suggests it could go a lot lower. Well explain. Plus tims bringing the heat pitching one bank stock thats up 30 this year and he says the rally is just begun. The name when fast money returns. Were on to you, diabetes. Times up, insufficient prenatal care. And administrative paperwork, your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you too. At optum, were partnering across the Health System to tackle its biggest challenges. The workings of the committee are a bit mysterious its clear theres no price limit because you drop below a certain price. At t was 33 when it was removed to 2015. Alcoa was eight. Bank of america was 14 hewlettpackard was 22 kraft was 39 when it was removed. Citigroup had dropped to 3 when it was thrown out in 2009. Gm was 27 cents. Theres no pattern here. Its clear theres not any cutoff price that will get a Company Kicked out of the dow. The price relationship with other stocks may be more important because the dow is price weighted david blitzer, the chairman of the index committee, says he prefers the ratio of high toast lowest price stocks to be less than ten to one. By that standard ge is definitely a candidate to be thrown out, its about 18 the highest priced stock in the dow, boeing, is nearly 15 times the price of ge. Another way to look at this is not the price but where the committee is at. The committee dropped alcoa in 2013 raw Material Companies werent as important as they used to be. But the best parallel maybe hewlettpackard. It was dropped from the dow in 2013 because it was a former tech giant that had fallen on hard times the companys board of directors struggled and the company seemed unsure of where it should be going and what it should be doing next melissa, does that sound familiar at all . It certainly does are there regular meetings dates of this committee, bob yes, they meet fairly regularly. But obviously they dont meet they dont make any decisions they make decisions very irregularly on when things should be thrown out its been a couple of years since any of this happened thank you, bob pisani at the new york stock exchange. I mean, given the ratio that currently has, the price weighting in the dow its kicking itself out yes you made this comment yesterday. If you look at the price action today, the question mel posed yesterday was, was this a tipping point. Can a ppitulatiocapitulation capitulation. You had a stock that traded 3 off the lows to finish respectably down 4. 5 or 5 did we get more news i still think people are concerned that flannery has not been straightforward about the management sheet