Puzzling day for the markets stop staging their intraday reversal since march and the move came as reversed sharply off lows, this following tragic death of uk lawmakers some interpreted to mean decrease odds of brexit. Is brexit now off the table . How do the markets respond . Bk, you made the observation first. Its terrible that market is actually reacting to this type of thing and action. That did move the market, the pound move and the rest of the markets. I take this as saying its not necessarily off the table at all. But given the way the markets were trading, you had so many down days in a row, a lot of people shortterm shorts in it. It was probably a good place for people to cover and that accelerated itself. I would not necessarily buy into the rumor brexit is off the table. I think its still out there but there are other issues we have out there and thats the slowing of the Global Economy. If you believe its an option, on the table, you had market reaction, this could be a tradeable moment. Gives a glimpse of what may happen. A couple, look at gdx, 52week high, lows, big reversal not ready to call gold move over. Ardent bulls, i consider myself one of them, have to be dismayed, gold over 1500, that is the level and reversed lower. Something to watch. Again, im not ready to call it over but something to watch. Flip side, bonds, tlt, didnt hold entire bid but most of it. Again, yields going lower. I see whats going on with the dollar. Not ready to call the gold mood off but have to absolutely watch over the next few days how gdx reacts. This is range trade. Oversold, options expiration, a number of factors, relief on brexit, now bre main. You had the situation first of all yields can bounce. All these defensive trades you had around brexit, sell off of gold, gold is safety. I dont know. Again, i think gold is going higher so im not going to pile on that. I will say i think utilities are sell. Anything defensive, the place to run in the last couple of days bond market a dehydrated, 170, kudos to guy. I actually think, i dont know if i made this clear, no question yields lower, no question relative value around the world this is something. But my view, unlike these guys, i think its very equity positive. Doesnt mean we dont have enormous volatility ahead of us. At the end of the day, people negative yields i think it was equity positive. Im not sure still equity positive. To add to what tim said, you have rebalance. Net adds are going to be utility and energy. Those are the biggest net adds. Net sales Consumer Discretionary and industrials. There is rebounds with gold as well. I still think gdx is a buy. I think its a buy in any market. Last time they raised gdx sold off, then rallied. It was up 90 up until recently. Than it came back. There have been days it reversed. It seems as though the only they think you were buying that didnt turn its back on you were yield plays an gold. What were you doing specifically today . I took a little bit of profit in some gold and some tlt, such a run. I still think gold goes higher. I thought the most interesting thing with gold trade and dollar, they both sold off in tandem. Positively correlated. To me i take that to me safe haven assets. Hoarding of gold, hoarding of u. S. Dollars in this environment. They trade together, which is very different from what most people expect. I was talking to Chris Williams earlier today on power lunch. He was mentioning that you have the possibility of blrexit off the table, what if theres a delay, this was a rumor, he mentioned to me. That would be a brelay. Enough of that. Of the breferendum. Serious business. Not laughing at that. Continue. What kind of environment does that create, theres a delay. Everybody talks about waiting for certainty. They are never going to the it. All that does is add to uncertainty we already have. Theres going to be a vote at some point. My opinion, i think its a coin flip. I think cooler heads will prevail. I want to go back, i happen to think its the crux of this market. Yields are going lower we both agree. Bullish or bearish. One of the reasons money needs to find a home, i say its bearish because it signals something to me that the economy yields arent this low. I use that term a lot. I use it with oil. Gets to the place market takes why the stocks . Why go into stocks . Hold on a second. Lets talk about yields for a second. Guys talking about yields. Its stock positive. Yes, it is. In fact, theres no place to go. Dcf model, discount rate, everything lower, no place to go. You squeeze people out of the bond market. Absolutely equity positive. I want to go to the price is truth. I know exactly what tim is saying. When i say price is truth, this is what i mean. The only thing you have to base decisions off day to day is where things are trading and where things close. In that regard price is truth. If youre short of stock at 30 and trading 35, regardless whether or not you think its a 10 stock, 35 is your truth, the truth you need to make a decision. How about this run up in stocks that may be fueled by the fact theres no other place to put the money. Is that yes, it is. If youve been trying to play it from the short side all along, regardless of what you think should be happening youve been wrong, price is true. I want to say this about the bond market. Just because yields on the u. S. Are going to break for this 150 level at some point, it doesnt mean that the Global Economy is on its knees. It means Central Banks around the world are buying every bond they can. Central banks feds we did hear yesterday that yellins concerns were growth. I think that i agree with your first thesis, but it really hinges on Global Growth. Yes. The questions arent there because Global Growth is so bad. There is a point where the low yields are not good. We look at germany, japan, negative rates, those markets tanked. At some point that flips. I think it has flipped. For more in market action, head of quantitative and derivative strategies at jpmorgan. Mar marco, good to see you a fierce debate on what the market level means. Whats your take on stocks now. I think tim is right. Stocks, we expect high volatility in stocks. High volatility typically not good for the level itself. If you look at the leverage in the market across various strategy its relatively high. Stocks are going to be more volatile. They may be range bond or down lower thats sort of a short view on stocks. Short view. The risk reward is really to the downside. Towards the downside. We had sort of a positive price action for the past several weeks, last few days a little bit of pullback. So if you look at hedge fund lempl, look at the lempl disparity, volatility strategies, retail investors, its relatively high. We are already at the high level. If you look at europe, europe pulled back significantly. U. S. Hasnt. I think we had a few in front of us, next week, next month. Risk to the downside on s p. How much downside, looking at yields earlier in todays session tenyear trading 2012. Highest level since february. We all know what happened in february. Gold screening higher in general, maybe just not today. What is commensurate with those kinds of signals in the other Asset Classes in terms of downside for stocks. For stocks. I think we could probably be looking at, you know, vix going to 20, 13. 5 to 20, that would be commensurate. We obviously s p did not react, vix reacted obviously last week a lot, last few days. Realize volatility did not react. Its really anticipation of risk, which, again, sort of we have next week potentially brexit, fed july, some seasonal weakness this time of the year. So investors are piling into hedges but market is not yet moving. So we were talking about the dollar and gold together. I notice you shaking your head that was an interesting move today. Youre looking at all these strategies, various hedge fund strategies, a lot are correlations between assets. How does that either change what youre looking at or how does that impact your view . Gold is driven by a few different relationary, dollar, risk where you mention today traded risk gone, dollar and gold sold off. I think with the fed last few days, it traded actually fairly inflationary with coming lower, dollar weakening, gold shooting up. It has these multiple faces. Thats an attractive feature of gold. If you look at Central Bank Balance sheets all time highs 10 trillion negative yielding bonds. As inflationary asset, i think it helps. Potentially if things turn for worse, its also going to pick up this risk of hedging. Where do you see the 10year yield going . 10year yields, near term i think 10year yields go lower. Thats spillover from booms and japanese going negative. That spills over and should yields go lower. Medium to longterm, i think its a potentially dangerous situation. I think clearly if you look at jgb, some evidence there, Central Bank Buying most new issuance, yields negative which i dont think makes a lot of sense. I think medium to longterm potential risk situation and sort of backfire. Shortterm, i think they tend to go lower. Momentum positive for bonds so yields go lower shortterm. Do we see one four. I wouldnt say targets. Okay. Marco, youre also quantitative, derivative guy. Ultimately you look at these relationships, as we said, between Asset Classes. Europe is so oversold relative to the u. S. Here. Dont you like european equities . Wouldnt a great trade short s p against long dax, because again, two, three standard deviation event, which is just empirically a raremont moment. If i had to go long equities, emerging markets or europe, down 27 from the high, s p close to the high. If theres sort of some of these risks ahead of us, we could see that convergence. Snap back could be bigger in europe than u. S. If i had to put some inequities i would there. If you had to. Sounds very hedge the way you put it. No. I think investors have to have equity exposure because you cannot know the future. Theres always probabilities. You might lean bearish over bullish, 70 30, 60 40. You cant just not have equities. Again, emerging market, europe, thats your best bet now. Marco, thank you. Good to see you. Jpmorgan. Would you be on marcos trade. On his team. Smart guy. As a trade. Different story. Team, yes. I like a lot listen, i skew negative in terms of s p shortterm. I understand what tim is saying threeterm standard deviation event. To me germany is rolling over. Does germany camp up to s p or does s p catch up to whats doing on in europe . I think its the latter. Again, thats what makes market. Ewg in my opinion failed. What are we talking about with flash gordon, a preemptive strike, remember we said be careful. It sold off since. Europe is leading, we need to follow at some point. European financial, Deutsche Bank with record lows. Credit suisse. I think you have to stay away from all financials at this point. I dont want to oversimplify this. All the yield plays seem to be the way whats working. Everyone wants to bet against them. To the correlation, the only correlation that matters is one thats stable. All those correlations have been on one day and off next day. The only correlation to me is s p and oil. You follow those two. Those have been in lock step. I think you stay with yield. Dont make this more difficult than the. Are you long germany or en versus short s p. Yes, im long a lot, hedge against certain parts. Tactically ive added remn. Before yellin i added some. When i look at ewg i look at reversal, last week saw reversal on the tenyear, i think this is a trading opportunity. I think european stocks are so oversold this is, if anything, again weaker currency is helping these guys again. Were going to hear about that. Up next curious thing happen in energy space. Oil tumbling but a number of Energy Stocks rallying. Whats behind the move. Oracle higher after hours on earnings. A call well under way. Hear the latest headlines. Later the news of the day. Sumner red stone removing five of viacom directors, including dauman. Much more fast money after this. S from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. See what the power of points can do for your business. Learn more at chase. Com ink see what the power of points can do for your business. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. No, youre not yogonna watch it tch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. Welcome back to fast money. Interesting divergence, crude oil hitting a five week low. Take a look at big integrated oil stocks. Exxon, valero, chevron, all clinging to gain despite the steep decline in oil. Whats going on . Clinging to gains, a high at 52. Trading for quite sometime. Tim talking about being long, energy names with great Balance Sheets thats proven to be correct. My problem here and its been that way a lot. These are rich stocks at 80 oil. So i think they are extraordinarily rich stocks at 50. Exxon closed at 52 times forward earnings. I cant answer whats going on, why people are moving in. Exacerbated downside, last couple days selloff is nothing to beware, crude going higher on the equity side. I think its all about yield. I think if you look at chevron, you have a 4 yield exxon, same type of things valero, all yielders. If you look at ep space you dont get yielders there, they were all down today. To guys point of valuation everyone reaching for yields, they bloated that multiple on them. Relative valuation as guy was saying they are cheap, relative to themselves, you get a yield. Again, youre taking a view on oil. Weve seen rate counts increase. Were now through the bulk of the big part of the summer driving season runup and youre seeing oil down quite a bit. In my view you see oil back in the 80s trade in this very wide range, certainly back to 20. It can trade back. Large names will be impacted a lot less than those other names that are in different area. I think youre making a good point on the yield in those names. Again, that chase for yield, we did a whole show on that. Its the guys that to be opportunistic and have operational leverage to be able to be buying assets, there will be another fire sell. I dont think oil is going to 30. Todays close below 47. 35, 50day is a bit of a concern. A fantastic reversal and brent didnt. When i look at the entire oil space, i think oil services are the ones most interesting here. Again, if you hold this view that weve actually taken a lot of supply out of the market and youre going to see a case where a lot of guys need to if anything amp up cap ex, halliburton had a big pullback, if anything id be sizing up for that one. As we head to break, oracle, rallying after earnings, call under way. Well hear from both ceos on the quarter and competition. Im melissa lee and youre watching fast money cnbc first in business worldwide. Meantime, here is what else is coming up on fast. Volatility picking up but stocks may have just flashed a secret buy sign. Well tell you what it is. Plus redstone pushes viacom ceo philip Philippe Dauman. Hes back with a bolder call. Hell review it when fast money returns. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Welcome back to fast money. Cnbc has the call under way. Josh. Well, melissa, on the call, beginning that call taking a bit of a victory lap. Lets listen to what she had to tell analysts. For most companies as their business grows, the growth rate goes down. In our case as the business grows, the growth rates are continuing to increase. In our fast business we reported 20 growth in fiscal year 2014. 34 in fiscal year 2015, and now 52 in fiscal year 2016. So in q 4 Software Business platform, 690 million, better than what the street expected. Also interesting to hear Larry Ellison talking about the companys infrastructure. There youre competing with amazon, microsoft. Ellison saying he believes oracle is highly competitive, lower cost, better liability. Clearly a shot at the bow at other rivals in the space. On the call, bring you guys more headlines as they come. Let us know, josh. Josh lipton from san francisco. Guy, whats your oracle. 14 times forward earnings. I dont think its particularly expensive. I think this is a good quarter margins improving. Get back to 45 level it come down from. Its got a couple of dollars, 8 to 10 . 1 1 2 dividend yield and growth. In this environment thats a name everybody will buy. 37 it bounced off of significantly. I usually dont buy after Earnings Release and a gap after hours but i think you could on this one. Is this oracle story or stocks in general. I think oracle story. Its been kind of a prove it to me again story. I think to the extent that these guys, i think, are making up for expectations that were overly lofty. Its a company that continues on every level. Everyone looking at cloud, obviously a transition story as tim said. Database being flat thats a positive. Cloud margins up, thats a positive. If you jump in you know my threeday rule, jump in, use todays low 38. 08 below moving ample. Up next, a story that continues to fascinate wall street and hollywood alike. Sumner redstone announcing five directors including none other than Philippe Dauman. Can he remain ceo. Tom freson back with Immediate Reaction to the news. Get this, an even bolder call to reveal right after this break. E working on a bust of reaction to the news. Get this, an even bolder call to reveal right after this break. A. Things really took off when i got my domain name headsofcheese. Com from godaddy and now theyre selling like hot cakes. Made of cheese. Got a crazy idea you think you can turn into a success . We know you can and weve got a domain for you. Go you. Godaddy. , the master of suspense and the macabre. I enjoy keeping people up at night. My Analysis Shows your stories are actually