Question. No. Which stock will hit 1,000 first . Amazon or alphabet . And there are some clues in the Options Market. Well explain. The action begins right now. Lets get right to it. All three major indices hitting new record highs again today, rounding up another stellar week for stocks. At the center of it all, technology, the best year to date, up 6 and trading at an alltime high. The big question is, do you stick with tech . Your thoughts, dan . You probably do. Obviously apple playing a little catch up the past couple of weeks has helped a lot. A lot of games when f. A. N. G. Happened before the earnings, i know netflix was really the only one that you guys nailed that broke out after earnings, the rest of them got kind of stalled at the prior highs. To me, i think you have a setup here where none of the results were that bad. Facebook and amazon, were talking about spending. Those are the things they should be doing with stocks at alltime highs. The fact that those stocks have consolidated their gains near those highs is probably a bullish thing. If we dont have a rejection, you probably want to stick with tech. Alphabet too. I think the results were very, very solid, and that seemed to stall out. Other businesses would have said in the past if you have seen results like that, you would expect a much larger move to the upside. Its still a reasonable valuation. It is almost remarkable how similar the setup is. You have facebook, right to a prior high. It reports its number. Considered good. Cant move ahead. Amazon, similar. Nvidia, same thing. And then quite good. Ibm and so forth. The question is what to do with those few are left . They might have been in a information either fail at the breakout or break out. And youre looking at one in particular. Lets look at cisco. They are at 3 . Thats well below the four quarter average. The ten quarter average move after earnings is actually much higher. Bits 10. 5. A lot of complacency in the market. We know they have a massive commitment to capital return. The other thing really caught my eye a couple weeks ago, when they bought a Company Called app dynamics for 3. 7 billion on the eve of their iop. This was going to be the Biggest Technology ipo of the year. I suspect theyre doing it out of a position of strength. They want to diversify away from their legacy businesses. It is been a drag on the business. But then they have a situation where the ceo has a seat at the table. When theyre talking about some of the tax reform, deregulation, and infrastructure spending, heres a company that should benefit. So on the quarter next week, im not expecting a whole heck of a lot. But look at a name like this and play for a breakout. 32, that was the prior high. It could fail there next week. Im not playing for a breakout immediately. If you look at a longterm chart, there is just room as far as the eye can see to the upside, if it is able to consolidate gains and break out. Look out to june expiration, you will catch the next earnings report. When the strong was trading today at 31. 50, you could buy the june 32. 36 cal spread, paying a dollar for that. Thats your max risk. Break even 33. You can make money between 33 an 36. The reason for this trade structure, june, im not going to get a heck of a lot of decay on these options unless the stock goes down a lot. But 32. Thats the breakout point. This is a company that generates tremendous free cash flow. The stock repurchases over time, you are talking about earnings per share growth of 4. 5 and youre buying at 13 times earnings. Those are attractive multiples. Im surprised you didnt ask about selling such a cheap option. Because its june, so far out of the money. Youre buying one for 1. 15, youre selling one for 15 cents. If you ever had to move, you would probably role that at some point. Mike and i were talking about this, i have to get his technical take, the implied move is about the price of that june call spread. Next week. If you were going to play the binary event, you are basically risking about the same amount as you are for june call spread. The important thing is, dan is trying to do two things. One is technical. One is fundamental. He is hoping the overlay of the fundamentals wont have a failure at the high. Thats what you have bet on three times and have been right. You bet amazon would not break out, correct. Facebook would not, correct. In a pure sense, if you go with precedent, you do this again. You are hoping that you know something in addition to the chart that would impute a result up. Im going with the stats. I would suggest youll be right fourth time. My point is as long as it doesnt go down 10 i think the trade is okay. Its not a binary trade on the earnings event. Im looking out another few months. All right. Now to another group of stocks that have been surging. The miners, eight straight weeks of gains. The gdx is up more than 20 this year, and its part of a shining story in a commodity space. Metals have been on a tear in 2017. Silver, platinum, copper, all up double digits. Copper with its best quarter in a year. Gold not far behind. Even more gains to come. Lets go to the screen here and see if we can figure it out. A lot of leverage in equity versus a commodity. Just to put the context before we get to the name itself. What we know is you have this huge congestion. This is all raw industrial commodities. Things that melissa mentioned, nickel, steel, rebar, copper then you have this plunge. This epic recovery. Had so keeping in mind that setup, and weve recovered all the way back in raw commodities, now we have the same thing. Here. Freeport has not. Right . Either thats the opportunity or one could think it is not because it is not going to make it. It has exhausted itself. Lets draw a few lines and put it into context with the notion that weve gotten all the way back from the point which we plunged, wheres a that dwhereas case for a leading commodity like freeport. So one way to draw the lines. Weve broken above the down trend. Another way, a head and shoulders bottom. This was a 20 correction. I looks like nothing. It was a 20 correction. Weve reasserted ourselves again. Lets zero in on this time frame here this is a fiveyear chart. Lets go to the oneyear. Okay. How do you draw lines . How about like this . Take it away. Put it back. And now lets put on the long term chart. So we have our head and shoulders bottom. Weve got our break above the down trend line. I think well throw back, which would get us more in line with where the commodities in aggregate already are. What is your trade that would back this view . I would look back to the april call spread. 1619. You could sell it for 42 cents. The company is about half dead, half equity. That elevates options premiums. Plus the commodities have had sharp moves. You do need to look to spreads to offset some of that decay. Bear in mind youre dealing with a spread thats about 20 of the current stock price. So youre giving yourself some room to run. For a stock thats up 300 in the last year, you almost have to spread it. If you get one in the shortterm and moves wrong, those options will be cut in half quickly. The idea of paying 90 cents to make 2. 10 and make a move back up to that resistance level, that makes sense. I cant get behind the fundament fundamentals. Of copper . We were talking about chesapeake last night. Looking for a check back to a certain level here. People are reaching for these things. These things are moving better it had a 20 check back just four months ago. Works off the overbought condition. 70 of your revenues of copper which are up 40 , oil, gold, 10 respectively. Also up sharply. Dollar, probably running out of a little gas here. Which would have been one of the bigger headwinds. So all of those might be why you make bullish bet. If it pulls back, the thing you want to do then, i always look at the 14 level. Maybe it gets down there. Maybe that was some level of support. Then you look at some puts to offset. This has a beta of 2. Whatever is going to happen in the equity market this is an accelerant either way. Its idiosyncratic as well. How correlated is it to crude . You see the long term chart. The identical chart. And then the supply issues. There are strikes at mines. That sent copper higher today. And then on top of potential supply issues if you happen to be subscribing to a thesis of continued Economic Growth that helps the demand side. Its a levered play. Options are the way to press the bullish bet on this one. Got a question out there . Send us a tweet. Check out our website and sign up for our super cool news letter. More than 100,000 of you have been so far. What are you waiting for . Heres whats coming up next. Snoe its the race to 1,000 between amazon and alphabet. Theres a clue in the Options Market that could help you call the race. Plus sailing quietly, one group of stocks have hit new highs. And the charts suggest there are even more gains to come. Well tell you what they are when options action returns. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at Td Ameritrade. What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at Td Ameritrade. Welcome back to options action. Two tech titans are locked in an amazing race. Amazon and alphabet are less than 200 away from hitting 1,000 a share. The big question now is who will get there first . We have the story from san francisco. Hi. Hey, melissa. Well, if we go by what the street thinks, alphabet will get there first. Price toorgts both stocks have been creeping toward 1,000 mark. The momentum has been with googles Parent Company over the last few months. The median target on amazon has stagnated around 932. While alphabets has climbed to 990. Breaking it out further, you see that amazon has 38 buy ratings. Within this number, three analysts have put their targets above 1,000. Looking at alphabet, you will see 43 buys. Thats more than 90 of total calls like amazon. But heres the difference, 19 analysts within this number have targets of 1,000 or more. If past performance is any hint as who will get there first, consider that amazon shares have returned more than triple that of alphabet over the past three months. Of course stock split for either stock if that would happen would reset the race. If and when amazon or alphabet hit the 1k mark, would it join the exclusive mark has only four members. Priceline, nvr, Seaboard Corp and berkshire hathaway. Back over to you. Thank you. So where do the Options Markets stand in the alphabet versus amazon the race to 1,000 . Lets get to mike for a special call to action. Mike . So, when youre looking at the Options Markets, theres two things we wanted to consider. The first is is the Options Market expecting a really big implied move in the near future, the other is, is the flow bullish or bearish . Well look at both of these. So, amazon right now, the threemonth stat is trading around 7 to the current price versus 6 for alphabet. That is telling us the Options Market expects amazon to move more sharply than alphabet. However, when we look at what that flow is looking like, we actually see that bullish bets outnumber bearish ones by about 10 in alphabet, whereas bearish bets are outnumbering the bullish ones in amazon by 10 . The flow is more bullish in google. When we take a look here, were trying to target 1,000. You know whats interesting is options are pretty cheap in here. So the trade, i think you might want to consider making, is buying the april 840 calls for 22. 50 per contract. 2250 for a contract might seem expensive, but bear in mind, 100 shares of stock will cost you almost 84,000. Something else, only 3 to the upside is what it will take for this trade to make any money. If it went down 3 , thats all you will be taking here. Up 3 in two months time, i think this is the way to make your bullish bet. Do you agree with mike on which one will make it first . Second, i get its a small cost in relationship to the stock price, 22 bucks seems like a lot. A thousand dollars. If we had this conversation that said first one to a trillion mark, we could have a conversation. When i look at google and the profitable they have versus amazon who is expected to have 165 in sales this year with not a whole lot of profitability on that, to me, i would have to go with google. So, heres the thing. I think thats a tough game to play. As far as mikes trade, its not different than what we were talking about in cisco. Options are so cheap, if you want to replace stock, do a stock alternative, have a downside stop. It makes sense. You also want to target the next earnings event. I dont think goingal ogle is t squeezy at the moment. What we know is that on a longterm basis, amazon has handedly outperformed google since the google ipo in 04. I would go with google. Aside from just the race between these two companies, one of the things that cheap options are affording you now is the able to continue to press bullish bets after the market continues to hit records. We have any kind of a market setback, its likely these companies. The same ones that guided us up here, they will take us back down. A 5 or 10 decline in the market, thats what you expect to see in stocks like these. By only risking 3 , thats the risk youre offsetting. It makes sense. Despite the headlines that this is the best performing sector of the year, take october 1 to present, big tech is still well behind the market. This is a catch up trade having swooned so badly in the november and december period after the election. Do you agree if the market declines 5 , these stocks will go down about the same . Amazon with a 400 market cap, its so off the charts right now. It is a great product. Theyll have a lot to of things. Ai services that you can rent for pennies on the dollar. Amazing things, but theres been no sanity in the valuation of that name, theres a whole heck of a lot more in google. Im an aws client, but they dont own that space exclusively. Alphabet is also competing in it ibm, microsoft certainly attempting to. There is pricing pressure in the cloud space right now. So it is not all going to be a straight shot to the moon from here. Coming up, its been smooth sailing for crude stocks in the last year an our chart master says theres more gains to come. Well tell you why when options action returns. 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 and the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. So we know how to cover almost alanything. Ything, even a truckcicle. [second man] how you doing . [ice cracking] [second man] ah,ah, ah. Oh no [first man] saves us some drilling. [burke] and we covered it, february fourteenth, twentyfifteen. Talk to farmers. We know a thing or two because weve seen a thing or two. We are farmers. Bumpadum, bumbumbumbum hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at Td Ameritrade. Welcome back. Time for total recall, where we look back on some of our open trading, last month colin saw smooth sailing for carnival. When it was here in 05, it was a p. E. Of 25. Now it is 15. I think it breaks out. It acts right relative. It has the longterm opportunity of being an underperformer. I think the way to play this is to look to april. I was looking a at the april 4, 55, 57. 50 call reversal. It sounds like mouthful. The stock is up more than 3 since then so carter, do you still like the chart . Thats. That sounds p paltry, 3 . Yeah, it has had a nice pop in the earnings. Mike . I do. It is run through the 55 long strike. This is a trade you can stick with. Theyre decaying about the same rate the option was long. So it is a good position. Now to disney last week, mike made a bullish bet on the mouse house ahead of earnings. Specifically im looking at the february to march 1. 15 call spreads. You can buy them for 1. 25, sell them for 65 cents. The first leg of this trade i peers next year. What do you do . Theres not going to be a big catalyst before march expires. I was looking at selling the 1. 05 or 100 strike puts if it shows weakness here and offset the remaining premium. Thats also a good position to be in. Would you do that . As far as the trade, i dont know if you go and add more risk. You had the right idea. You didnt get the move. It didnt kill you one way or another. This thing feels like steep. Feels steep and out of steam and a lot of news. Up next, your tweets and the final call from the options pits. [pony neighing] what . Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on 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 time for tweets. James asks whats the best way to get vix exposure . Calls, puts, or straddle on the s. P. Y. . If youre looking for Long Exposure on the vix, puts on s. P. Y. Right now it is quite cheap. I think thats the way you want to play it. Next up, dan, given your conviction on cisco, why not buy a risk reversal . Thats a good question. We starteded that whole segment talking about how cheap options are. I dont want to sell cheap down side options. I would rather define my risk and make a bet out of a few months rather than a binary event. All right. And heres one last one. Heres the one that we actually get kind of often. Why doesnt carter worth have twitter . Well, you want to add more work to my workday, it sounds like. I know its effective, stock is not doing too swell, though. So, he doesnt want to be associated with a badly performing stock. Yeah, you know. Stock you guys can follow him at google plus. Were talking right now. Right. Time for the final call. I like freeport. I think you can play on the long side, nice gains ahead. Mike . I would use call spreads on free port. One of the few places where options premiums are elevated. Dan . In an earnings trade, look at the price right before the event. Looks like our time has expired. Im melissa lee. Thank you very much for watching. Well see you back here next friday for more options action. Mad money with jim cramer starts right now. Announcer the following is a paid presentation for the nutribullet, brought to you by nutribullet llc. Hi. Im david wolfe. And for 25 years, ive been teaching people, to get the most out of your life, you need to get the most out of your food. All this food is loaded with nutrition, and you dont just need some of it. You need all of it. And the nutribullet is the machine that can get all of it. For a limited time, nutribullet has an incredible offer. When you order today, we will upgre