A much overdue look at the cyclical rally and the reopening story in general the v rally that a lot of people have been hoping for has been inverted theres an inverted v thats actually been happening. Lets start with Energy Stocks marathon, mro. Marathon was 6 at the start of the month. It goes to 9 and back to 6. This is essentially an inverted v. Hess looks the same way. If you look at general electric, it goes from 6 to 9, i believe, and goes back down again to essentially 6 and change, same situation, a v there caterpillar looks the same way united airlines, we watched with our mouth open it goes from 30 to 50 and back into the 30 range, all of this in a few weeks the market cap of citi group goes to 60 and back essentially to 48 thats what im talking about these inverted vs travel and les yoisure, 30 to. Youd think bond proxies would do well in this environment, but not today. They had a modest rise about 10 in the last few weeks, but even they werent safe. The market has voted its frothy. Reopening story, its not a v. What exactly is it we dont quite know. The stimulus story is still there. The fed is still supportive. Treatment and vaccine progress, we heard a lot of stories today. Id say two of the four definitely under some attack today. Joe, back to you. Lets bring in tonights trader lineup guy adam mee, similar seymour, Karen Finerman and steve grasso. Steve is following safety guidelines and is required to wear a mask while on the trading floor. Karen coming to us from field of dreams i see a baseball diamond, i believe, and ray liotta. I can barely make him out. Actually its a very serious day, no time for levity. Guy, tell us about todays selloff. Joe, thanks its a long day for you. Thanks for being here, joe todays selloff, weve been here before i was thinking Something Like this would happen, a few hundred s p points ago in my world, being early is being wrong. For context, i think if youre bullish, you want to see a day like today now, some of the things that are somewhat disconcerting is the fact that the vix has a 40 handle, which is remarkable given where we were just a few days ago the volatility were seeing in the bond market, i mean, yields are back to where we were seemingly in terms of volatility back in march. You go from 60 basis points almost to 1 , back down to 65 basis points in percentage point moves, that is extreme in anybodys camp thats a little worrisome. You had a guest on the other day on your great morning show i think boeing was trading on or about 230 at the time and you had 175 price target. Here we are seemingly two days later. I think youre looking for opportunities to buy these names. Specifically boeing, you take the march low which is 89 to recent high and if you could buy this stock at 161 or thereabouts which isnt that far from where we are now, thats sort of a 50 retracement. You have to look at things through that lens. It was ron epstein of bank of america and it was 160 i was needling him a little bit about you got a 160 price target were well above 200 before you came on today, why didnt you up your price target . Hes not looking too bad at 170. Guy, short, sharp, scary corrections normally arent the kind of thing that is i mean, this was awful today watching it is sort of sickening. But it gets us back to still above 3,000 on the s p suddenly weve engenders a lot of fear again and wrung out some complacency. Here we are above 3,000 but were scared to death again this could get out of hand with the second wave or something. Here we are may 29th. Yes, its a scary thing. I dont think its the bad thing because the way the market was moving unabated over the last couple weeks was scary. What gave us pause was the fact that back in march we saw indiscriminate selling a couple days ago we saw that in reverse. We also mentioned that on a pretty big up day the vix was also higher and that gave us some concern maybe its all sort of coming out in the wash. To your point, i dont think this is necessarily a bad thing. It was not fun to watch and wave all that week that was so amazing up like 7 is gone im going counter clockwise. Going down to karen. Is it a short, sharp correction in an ongoing up trend or is it the beginning of reckoning for the disconnect between all this scary stuff happening in the world and the market which was soaring . Well, first, were going to say thanks for pinch hitting you can come out to the field of dreams here any time you want. A little wet today im always long, so i like these sharp down lately ive been finding its harder to find things to buy, lately being like last tuesday the reversal since then is kind of extraordinary but were only back to where we were the beginning of last week i kind of like days like this as painful as they are and as much money as i lose on a day like today, i find it sort of a nice washout to look for things to buy again. This move in the vix, that was a 50 move today from 27 to 40 thats an interesting indicator. You talked about are people really getting scared. I think they are i think its wort noh noting th morning that Steve Mnuchin said we are not going to close the economy again even if there is a second wave. That was interesting to me im looking for things to buy, not the Airlines Even though theyve come down a lot. Im looking to buy things that i already own some of like a fedex. Im looking to buy some banks. Friday i wouldnt be surprised if the market trades down again and ill probably look to buy over the weekend i think this was good. This was healthy and long overdue. Steve, you would think that the discussion would be that we really cant see that well, but it was all about the sweater with the people in my air and very preppy. Looks like youre back in tappa kega brew. That was your fraternity, wasnt it first, lets address the sweater. Only because theres about 20 pr of the people normally on the floor of the exchange, its freezing on the floor. Im going to get a pass on the sweater. I think its about 58 degrees on the floor. Come on. Im going to wear a turtle neck tomorrow. At least hes got an excuse, tim, for that thing. When you look at the overall market, i think this is constructive from where we came from when i look at the chart, 2200 is where we came from, joe you know better than anybody to have that rally of 47 off the bottom, this is a win. You have the fed, the fed buying corporate junk bonds so i dont think we can get back to 2200 again. Having said that, were back to the 200 Day Moving Average if you want to be constructive, thats where you start from. If you want to look at the overall market, powell yesterday said that Interest Rates are going to be stuck here so you understand why value had to back up again you understand why the economy not starting up that quickly is negative for the overall market. But i think this is just a back pedal, maybe a little bit longer but i would think that, to karens point, get your Shopping List ready were not going back down to 2200 in the s p. This looks like a little bit of a backup and a biuying opportunity in the macro sense. Certainly gets your attention, 7 in a day you dont want to string four or five of those together, obviously. No you dont. Apple is still up 8 over the last five days, boeing still up 18 over the last five days. Before yesterday, the previous two weeks we had had, the market had done 10 in nine days. Were reminded through jobless claims effectively 21 Million People continued to file for claims we know theres been some resurgence in covid and the economy is not opening quite as quickly. You have to take this all in the context of where we came from. Remember the violence of the move on the way down, some of that was because of the unabashed blowoff top going into this its a scary day but i dont think things have changed that much day over day. I think weve digested the fed the fed reminded the markets sometimes that bad news can be bad news. Hes got to live but what he says because hes the head of equity strategy for Wells Fargo Securities chris harvey, do you echo what youre hearing from us here or what do you think . I do echo a fair amount of what im hearing i think it is a healthy correction i think it was long overdue. Theres been a lot of talk about a second wave. I dont think thats what it was. Ithink it was very much fed related. The fed is telling you were going to keep rates low for longer and longer. Two things are going to happen one, that negative Interest Rate narrative or commentary is going to come back thats not good for risk product or sentiment or the economy. The second thing its going to do, its going to flatten the yield curve. Same thing there, bad for risk product, bad for the economy, bad for sentiment. But i really do think this is more of a 10 pullback than anything else because the underlying fundamentals are slowly improving the credit markets are wide open credit is widely available we just went too far too fast. I think things probably traded sloppy up until the fed stress test or maybe q2 earnings eventually theyll start to work themselves out because i think the commentary that the numbers will be very difficult in q2 will be constructive may was better than april, june was better than may and jewel not so ba july not so bad. Youve ascribed it more to the fed than worries about the pandemic i asked jim grant this morning whether ever comes the day where the fed is actually part of the problem for whats happening instead of the solution. We all think the fed has done a great job. But guys like jim grant think were never getting out of this, that the size of the Balance Sheet at this point and the Central Banks around the world, the negative rates and beggar thy neighbor and everything else, he actually thinks the fed is part of the problem, not the solution do you think that . So the fed did a great job back in march and they did a great job with a lot of the facilities, especially the credit facilities. But i will point out that to the best of my knowledge the fed hasnt purchased a single Corporate Bond the issue i have with the fed is they keep saying or thinking that lower rates are the solution and thats not the solution anymore. I think what the fed did for many years is that provided too much liquidity, too much capacity we never had pricing power, we didnt have inflation. They were part of the problem. I take the good with the bad theyve done some really great things, but some of the things theyre doing, i think they need to work on some of their communication and i think they need to really understand better what theyre communicating to the bond market, to the yield curve and to investors, because lower rates are not always a solution and i dont think thats the solution right here right now. There is a vocal group of people that you see on the internet and elsewhere about Central Banks and the fed and everything else. Everybody is saying, yeah, the fed did it today but they did it just because of their economic take on whats happening chris, thank you guy, what do you think on what chris said and just on the notion that there could be, i dont know when, i mean inflation doesnt seem bad, but there could be a day of reckoning someday for the fed . Yeah. Its interesting i mean, i sort of come down on the other side on the jim grant side where i think the fed is more part of the problem if youre just looking through the prism of the market, the feds been unbelievable for the market broader looking, i think the fed has gone down a rabbit hole that theyre never going to be able to extricate themselves from, which is problematic i dont know when thats problematic. I think again to chriss point theyve put in a bit of a buffer where the credit markets are not going to have that exogenous event like we saw in march i think thats positive. Theyve moved so quickly the banks, for example, and i think dan nathan has done a really good job with these jp morgan, for example, got to 115. We talked about 115 just in t m terms of the metric. Now i think again and i think karen would agree with this, youre looking for levels to get back in to these names well talk more about that. Karen, i would have gone to you or tim im just reading it said guy, ask guy what he thinks i dont know who made guy king no, thats fine. Thats a beautiful backdrop he is king. He is king. King guy were just Getting Started here on fast money. Up next, the collapse in crude oil tanking in the selloff today. Were drilling down on the big move lower later the ultimate safety play were going to tell you where option traders are taking cover. Need better sleep . 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Welcome back to fast money. Crude oil getting crushes. Wti falling nearly 9 . Energy was the worst performing sector today thats no small feat to be the worst sector today with some of those extended airlines and travel related stocks. How are you trading these names and what happened . Well, im trading at least one or two of them from the long side im trading them in the context of something that is down 22 in three days b what they gave you coming out of their First Quarter earnings was not only a dividend cut, a look into a business realignment strategy that indicates some divestments. I think oil technology, i think the oil sector and Energy Independence and i think these guys have been very prudent in how theyve looked at the Balance Sheets the Energy Sector has the highest beta of any sector in the s p right now because of where its come from you know, you can make an argument that the fundamentals are still very poor, but as we like to say you make the most money when things go from terrible to just bad some of the headwinds for energy and oil in particular over the last few days is were getting some sense that drilling activity in the basins has increased significantly. Weve also got some sense that theres more of a backstop on the debt of some of these less Stable Companies thats great for the companies and investors, but its not necessarily good for the sector to be overproducing and keeping poor Companies Alive this is kind of the crossharris now. Its a longer term holding and certainly one that we think when we see oil prices normalize, its a name im going to be very happy owning. They all went down by not wildly different amounts it was across the board risk off. I own other things that are down equally as much as if they were an oil name. Anybody in the market probably had that experience today. Were going to take another break and then well be back coming up, much more on todays big selloff how would you manage your winning trades and you get caught up in todays slide were headed to trade school, next there it was welcome back to fast money. I there was a major selloff on wall street, the dow dropping nearly 7 . When youre up in the high 20s, that can be a big number, almost 1900 points. Its worst day since march 16th todays big slide the first real test for a flood of new investors who have recently piled into the market into some, i guess, speculative names at least. Lets get to leslie picker. Welcome to the stock market, lots of increased interest from Retail Investors who have been partially responsible for some of those wild swings in bankrupt or near bankrupt companies over the last week that weve seen. Its left the socalled smart money kind of dumbfounded. The laws of finance say that equity holders rarely recover money in bankruptcy because bondholders in order of seniority get paid first when shares of companies in chapter 11 began soaring last week, it defied all logic. That was at the expense of some sophisticated hedge funds on the other side of that trade the Hedge Fund Strategy is called capital structure a arbitrage. This involves shorting the equity while going long with bonds to capture missed pricings up and down the capital structu structure. Over the last wheeng day traders started bidding up shares of bankrupt companies, it caused a short squeeze, sending stocks higher as hedge funds were forced to cover. When you look at the number of shares shorted in names like hertz, jc penney and whiting paro petroleum those are way down over the last month. Karen, whats your take on this this isnt the first time in speculative, somewhat speculative times that you see stocks like this behave in ways may not make a lot of sense when its all said and done. Yeah. It makes no sense. You look at the capital structure. The bonds are trading in the high 30s for some of the mid level bonds. The equity is ridiculous its worse than the internet bubble in that i think the internet bubble you could buy the story of a dream, i guess. Here, it seemed to me so much of the volume has no idea how bankruptcy works and is sort of just choosing to ignore it, hoping that the greater fool is out there. I wouldnt touch any of this stuff. Lets talk more about the day trading boom and one stock newbie investors have been betting on is Carnival Cruise lines. Its one of the most activity traded stocks on the robinhood app and it fell 15 today. If youre in this name and youre wondering how to get out, youre in luck its time for trade school steve grasso take it away. Usually when you trade a stock like this, if youre lucky enough to pick it at the bottom, so it came in today but its up over 200 off the low. Youre