Bet. Weve got the four stocks you need to avoid and first start off with the markets closing at twomonth highs with the s p closing just a hair above 2,000, what a week, s p posting gains of 7. 2 and this might be the reason why. Oil, its best week since august, a stunning 10 move this week alone. So where do we go from here and as we even look out to the ecb and chinas National Congress next week, is oil still the key to this market in. Guy. I think it is, it started on february 6th and we talked about the ovx and its been down ever since and traded 50 today, so is oil the key . Absolutely. One of the things weve been saying for a while now, 2025 in the s p. Last night we said on the jobs number, no matter what it comes out, the market should rally, should fade, not really what happened. I think now were long in the tooth in terms of the move from s p from 1810 to 2000ish. Thats almost a 200point real in the s p in about 15 trading days. Yeah. And we still have quite a few big news events to come up. You mentioned we have the ecb, the bank of japan and also have the fed. Those are all coming up in the next couple of weeks. Not only that. We have all the Economic News coming out and sentiment clearly has changed. From my view fundamentally i dont see anything thats changed and thats what is markets do. At these levels i dont think you should be buying. If anything, you should be fading. And thats the reason why we did rally. Its the ecb and china National Congress and saudis told us there was going to be no production cut. They said a freeze possibly and no production cut. Theres no reason for all of this to take place except people are covering shorts. Thats it. I dont agree at all. I think were in a place where oil is rallying because whether the saudis are cut or not theres been a bunch of the Oil Producers that have blinked and in a case where theres enough cap x cuts and technicals. Look, the Double Bottom at 26. Theres powerful stuff going on. 38 bucks on brent. Yeah, you take a pause. No reason to see this go straight to 50 and everyone expecting the world to fall apart is seeing a couple of things. First of all, sentiment got way too bearish, people waiting for a credit event and equities are the ones that typically miss. Whats your time line on that . Waiting for a credit event. Its not two weeks, thats for sure. These are big picture things. China has not improved and havent deleveraged or cut their debt. We still have oil at a level where most companies arent really making any money in the 30s. They are probably losing some money so we still have big things out there. Still have the fed who has made a mistake and the bank of japan has made a policy mistake, so we still have all of these big pictures. And thats the whole point. Can you stay in shorts or can you stay in positions . This last three weeks has been so violent. Sure. Im not sure. Im not sure. 20 move in oil, emerging markets, brazil gapped up 6 , are people really staying in the short positions . No, they are not. Actually covering. I dont know whether theres funds going out of business. I dont know whether someone is pressed to cover these shorts, but it seems really weird the way people jumped in and started covering these shorts. Not when you consider where sentiment was. Sentiment was so, so bad. I guess what you are saying. You would use that as a reason why the inventory numbers were extremely bearish and why oil still ran. Thats why oil rallied. Ran. So for me i look at it as china, people are so worried rights now that theres going to be something stabilizing their market, the unknown, the fear of that unknown. But in ten days, if nothing changes, the shorts get put right back. If you think thats a Short Covering rally that got us to the twomonth highs, whats the next stop then . Is it lower or do we grind . Well talk about it more with the chart, but i think right now its lower. Okay, and you . Highest in flows into oil yield ever. Tells you that we have credit issues but not happening in all parts of the credit curve and wont happen overnight and as an Equity Investor when youre waiting for a credit crisis, look for a move straight up. I sold some jc pen and put more puts out there and ultimately its a case where markets are eventually sideways and central bank events, no reason to play them and the lack of headlines will continue into the ecb. I think thats not inconsistent with this. Coming tat from a much different place and thats what it comes down that, and thats whats interesting about it. Tim has been pretty steadfast on this for a while and hes been right, and i think tim would agree with this. I think this move is a little long on the tooth. I think i think it goes higher. And he thinks it goes higher. Well see. 2025 when we fail and i think he thinks we blow through. I dont know if that number was did you see the number today, the jobs number as bullish. Index of aggregate . Its worked. They were lower. The wages were lower, and it was mostly parttime jobs. So the Household Survey was 489,000 were parttime jobs. Comps out exactly to what tim was saying, that sentiment flip, down to 1810, the world was falling apart and then all of a sudden it flips and now were back at these levels and my point is dont get too caught up in the euphoria. High yield is positive for the yield and spoke to had a high yield expert today on power lunch and she essentially said the stability we saw in oil is allowing people to get back into the high yield, had to sell what they didnt necessarily want to sell within a high yield and now they want to get back in. Are you still short . I do not have a short position but its at a level that i would think about putting short on. After a 7 , 8 rally, lets look at whats going on here. In terms of the fed, they are almost backed into a corner where they may have to raise rates sooner than the market thinks. That will get the dollar going. That will get the whole thing to start turning around again, so i would be very careful buying high yield here. Just quickly in the run to 2025 or whatever level, 200day moving average on the s p 500, do Energy Stocks draw up 5 or so this week, what do they do . Whats interesting as great as a week it was for energy, a name likes exxon didnt perform. Probably makes sense because people went to that as a safe haven and probably peeled out and tried to get into more beta names. Is that more towards the end of the move or more towards the beginning . More towards the end and, again, thats what makes markets. Last week as you recall, steve grasso said that was the worst time to buy stocks, so does this weeks action change steves mind . Steve . Yeah. Lets look at the charts. Talked about a couple of these levels and get a little deeper into the court work and into the numbers that were looking at right now. So guy had said its basically a 2 move in pretty short order so why dont we just look at this. Heres where we came from, the obvious, and right here we spoke about it last week. It was the bounce levels, the sellable bounce level zone. 1963 to 2,000. Where did we close today . 1999 to make everything real, really difficult for the home gamers and for the professionals out there. Would you rather be a buyer here or a seller lightening up, and i were say youre better off being a seller lightening up because even if we can get a little momentum above this level, look at the wall of resistance that you are running into. You have 100week moving average, 2011, 2023, the 200day. Guy spoke about that the last couple of days and then you have the 50week moving average here, 2034. Theres no way you want to be a buyer into this mess. You want to be a several or lightening up. Let the market prove itself. If you miss it for a 1 or a 2 and then you catch this, well, here. You catch this, down 10 , youre going to be much happier. Grasso has very nice penmanship, by the way. What gets in your view, tim, what gets us through those walls . I dont know, but i think timing the market is almost impossible, all right, so, i mean, weve seen that over the last six weeks, so sentiment is going up, down, sideways and actually people have been very wrong at the turns, so i think people were lulled into third week first week of january, oh, my goodness, what do i do, so ultimately they sell into the crescendo shorts which is the inter day lows and all rallies have marked off, but to say its one thing or another. This is the bipolarity that i think you have to be very careful about. I think credit is not as bad as people think and Credit Conditions are tightening globally. I think we can squeeze into the fomc and we agree the fed suddenly has to give you rhetoric that says at least think about the fed, people, because that injects volatility. Heres the thing that tim and i absolutely agree on. This market is a professional. This is like expert deep end of the pool. When you can have sentiments switch like that without much fundamental change in either direction, good or bad, thats a very difficult market to trade, so how do you stay in these positions . You either use options as the show coming up i think in a couple of minutes . Guys favor show. Learn how to use options but you have to be very careful or take smaller positions but dont get caught up in the euphoria up here and dont get caught up in the negativity either, just maintain stability. Coming up, the only analyst on the street who correctly called the collapse in valeant is here. You wont believe what he has to say about the stock right now and the gold rally that cannot be stopped, the rally closing 20 off the lows right into the bull market. Is the move too far too far and house of card season debut giving netflix a boost after a rough start to the year and one trader thinks theres more pain to come. Hell explain much later this hour. Much more you have money still ahead. With so much confusion in the markets, fast is going to the old country to seek the counsel of wall streets godfathers, the wisest investors on the street to find you the best trades. Im going to make him an offer he cant refuse. Thats all next week on fast money. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. Man 1 i came as fast as i man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Welcome back to fast money. Check out stunning rally in gold. Its surging more than 20 off december lows and put it into bull market territory. In fact, we saw the largest fourweek inflow into gold in seven years, so we ask is this peak gold, b. K. . Well, it could be peak in the very short term. Im long gold and have been for a bit and i put some hedges on in case we get a pullback. Whats interesting about today is you saw the Blackrock Ishares trust and stopped issuing new shares in the etf and whats interesting is about the way they hold the gold. Have a serial number for every bar they told as opposed to other places. Point being, you could have a short skweeds going on here in gold. Theres a lot of gold out there. A lot of gold and derivative contracts that are short the physical and the very fundamental reason for owning gold is no longer is the carrying cost a problem. Gold costs you 25 basis points to hold. Buy gold and silver. Guy used to trade gold once upon a time, way, way, way, way back then. Remember that . Rucksacks, great word, a rucksack. You know, gold should have sold off hard over the last couple of weeks. It hasnt done it, but newmont today 52week high. Thats not encouraging so maybe were in for a breather. I hear what b. K. Is saying but the price action in newmont gave me some reason. What about the dollar . You have to believe gold is going a lot higher if the dollar is stuck here. Next up, valeant continuing to fall as Company Undergoes an s. E. C. Investigation but the major fall in the stock comes as a surprise to our next guest who was the only one with a sell rating before the call, a call he reiterated ten different times before the stock took off. The man behind the call joins us tonight from toronto. Great to have you with us. Great to be here. The stock was as 122 and change in july 2014 and the stock is trading about half that at this point. What back then did you see in valeant that caused you to put a sell rating on the stock . Yeah. Well, this is really a continuation of the work that we did back in the day on nortel and biovale when we were concerned with their accounting and closure and cash flow ability and we put a sell rating on them at the time when their valuation was approaching peaks, so in valeant the intention was the massive disconnect between their gap and longgap earnings. We saw what we believed to be inconsistencies in management disclosure where we believe that the disclosure and reporting didnt really reflect the fundamentals of the business so, for example, when we wrote our salary report in 2015 we were concerned about organic earnings with iterations at the time that organic were declining at 5 to 6 . We were concerned with companys disclosures about one of their largest acquisitions being medicines, there were some inconsistencies in how that was described in the growth and inconsistent to the disclosures and Management Discussion analysis. Right. We were concerned with the internal rate of return that management was saying was generated on their acquisitions. So a lot of this had to do with their strategy, with their early Business Model which was by companies. Dont spend money on the earned. You acquire companies and actually wrote in november 2015 recent results would look to the future if and when acquisitions stop. Were sort of at that point right now. When you take a look at valeant stock today and a look at the company, what do you think the business mod sell now because that music has stopped . Well, thats a great point. Right now the business is in transition where essentially away from what valeant was doing in the past, that is, reducing their debt and firing people and relocating assets into offshore jurisdictions to reduce the tax rate and now the company also lost its specialty Distribution Channel which apparently drove organic growth and valeant was limited in its ability to take price increases which, again, was one of the key factors behind the growth and now its a whole different game and theres a substantial amount of uncertainty how the company will be able to manage this important transition where they move fundamentally away from the past Business Model and on top that you have take the security and Exchange Commission which we predict its likely in our past reports, as far back as october last year, and and management now withdrew its guidance which we were concerned about back in our report in december as well as in february, so there is substantial uncertainty. We do have very little time left, unfortunately, but at this point youre sticking with your sell rating even with the stocks decline and the price target is higher than where the stock is trading. What do you actually see 12 months from now from valeant . We all need to have a crystal ball to see what will happen 12 months from now. Right now the stock is not investable because theres enormous concerns about valeants reporting and obviously statements and management in the past and they were standing by their accounting, and disclosure and revenue recognition hand now we know that thats actually not the case, so i think at this time theres too many unknowns. Substantial risks. There is price benefit managers who could retaliate at vealeant and they are essentially paying their bills. Right. And what else dont we know about the company. So stay away. Thanks so much for joining us. We appreciate it. My pleasure, thanks, melissa. That was a great call, still saying stay away. Interesting. I mean, the guy is obviously doing his work and was looking at changes in the Business Model. To me this is not about the Business Model but about the accounting and what you can truly understand and trust in terms of information on the company. On its Business Model i think the stock is attractive on valuation. I think weve more than priced in philidor and priced in potential price pressures. By the way, dmitry is an accountant by training. And the business the core business, you heard what he said, uninvestable and i agreement think it still goes lower from here. One of the most important indicators in the market is saying now is the time to buy. What that is and if you should jump on the bandwagon. Thats later this hour. Im melissa lee, youre watching fast money on cnbc. In the meantime, heres whales is coming up on fast. Should you be buying the most popular stocks on the street . Because i want to fit in. Or could the most incrowd stocks be some of the most dangerous trades in is weve got the names and what everyone could be missing. Plus, house of cards debuts on netflix today. But the stock is still in a bear market, and it could have even further to fall. Well tell you just how low it could go later this hour. Welcome back to fast money. Facebook cracking the top 20 of the most widely held stocks by Institutional Investors joining the names of apple, alphabet and Johnson Johnson and many others. Which of the popular names would you buy and which are a bad bet . Tim, kick it off. Buyer be world dutch shell. This is not tethered only to a p. Standing out from the rest of the guys. Oil has absolutely bottomed and well see it at 48 before we see it at 30. I think in terms of selling microsoft this is a case sorry . Yeah. This is a case where a company thats clearly absolutely nine. Also pays a nice dividend, but i think valuation actually looks a little expensive if you think that they are transitioning as fast as they are, maybe you buy it. I dont, and i think these guys have a couple years ahead of them. Grass . I go with verizon as the stock to buy. Its got a great yield on it and its up 12 year to date and with the recipients that have costco deal american express. My sell would be cisco. Every place they want to be is cutting their margin and even if they get to where their strategy is, their margins will be compressed and ill be a buyer of cisco and buyer of verizon. B. K. S . I want to go with safety names on the buy side, cvs has done very well in a strong dollar environment because its confined to the u. S. Here. Now, on the sell side i want to be i want to be selling jpmorgan and i want to be selling the financials as we go into this huge volatility and financials are a sell. So pfizer sold off from 30. 5 to where it is now. I think a lot of this has to do with the political rhetoric. I think the allergen deal gets done. Ill take the other side of tim. Which side of tim . Royal dutch shell. Got to be clear because im trying to talk fast. Hes a buyer rdsa. If hes right about oil, it will explode and i think oil will fade. Look at a chart since the middle of 2014 weve had bounces like this in royal dutch shell. I think thats what it is. One of the best Balance Sheets in the space. And if oil is going lower it can handle lower oil and proven to be defensive. Gone from 80 down to 36, the bounce to 45. Time for the final trades. Lets go around the horn . Tim . Bhp, looking at iron ore, more than a bounce, bhp is clearly tethered to this and moring to in the mining space. Steve . First time i dont think i gave one, oh, i did, dupont. I was waiting for that. Dupont. You see that competitive bid. I think it goes higher and been long it forever, thank god. B. K. . So on this rally and going into an ecb that may do more even more negativer rates, Short Deutsche Bank here. Guy . Take profits marathon oil, big profits report. Big, big, big. Do not move, options action starts right after this break. Stay tuned. Stay tuned. Cl are when youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Hey there, were live at the Nasdaq Market site and look who is joining us tonight. Thats right. One and only b. K. The guys are getting ready and heres whats coming up on the show. And the butchery begins. You got that right, frank, because were looking at some of the most hated stocks on wall street and telling you which ones you should trade or fade. Plus, one of the markets leading indicators just did something remarkable. Highfiving a million angels. But could things be just a little too good to be true . Well explain why you might want to stay out of the rally. And, well, that pretty much sums up the move in emerging markets lately. Why some traders are betting big bucks the space could continue to take off in a
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