Fed Will Deliver, But Stocks Need To Follow Suit To Make Investors Believe
Here
are the facts the FOMC is weighing ahead of its announcement about interest
rates and future monetary policy: 1) They’ve already made five cuts, but the
Dow is still down 3% and the Nasdaq is down 16%; 2) We’re at six-year lows for
economic growth; 3) The job cuts keep a-comin’, as evidenced by Lucent
(
LU |
Quote |
Chart |
News |
PowerRating) and their proposed layoff of another 10,000 and 3Com
(
COMS |
Quote |
Chart |
News |
PowerRating) laying off 4,300.
The good news is that the economy is showing signs of a recovery. Yesterday’s
durable goods orders, consumer confidence and new home sales figures all were
above Street estimates and thus, signaled a rebound. Now, given that the patient
was flatlining for three quarters, we’re happy to get a pulse back, but few
of us are dancing a jig or high-fiving down here in the pits. The bottom line is
the bottom line and few — damn few — companies aren’t feeling the heat and fewer
still are willing to say that the future looks brighter.
From what we’re seeing here on the trading floor, the money is still flowing
into banks and homebuilders, with precious little finding a home elsewhere. One
of those elsewheres is a stock that we profiled yesterday, Siebel
Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating). Our option moneyflow shows institutional paper
that jumped into SEBL yesterday is still buying today. This morning, 9500 more July 37
1/2 calls
and 1700 Aug 30 calls were bought. These are expensive calls, not
speculative shots. The August calls trade for just over $15, so someone thinks
they know something good about the software maker.
Likewise, but on a smaller scale, Veritas
(
VERT |
Quote |
Chart |
News |
PowerRating)
is also getting some smart-money buyers. The July 60 calls are trading for about
$8, again, not exactly a cheap shot taken by less sophisticated, or less
informed, players.
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| SEBL
|
16,876
|
3,261
|
124,273
|
13,753
|
| HON
|
36,494
|
2,368
|
80,055
|
5,366
|
| VRTS
|
7,868
|
1,020
|
47,860
|
3,369
|
| MSFT
|
12,248
|
1,639
|
56,304
|
3,324
|
| SGP
|
1,606
|
569
|
14,602
|
1,695
|
(1010WallStreet.com has licensed
the use of Hamzei Analytics proprietary options analytics)
Most
of the bearish action in Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating)
has been market makers flipping put options to get short stock interest.
Primarily, they’ve been buying and selling (flipping) July 30 puts vs. the
January 60, 62 1/2, 65 and 70 puts.
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| CSCO
|
10,671
|
18,377
|
15,094
|
481,470
|
| CIEN
|
3,276
|
1,683
|
11,507
|
44,851
|
| SII
|
1,430
|
6,141
|
999
|
41,973
|
| TXN
|
966
|
3,292
|
1,281
|
28,791
|
(1010WallStreet.com has licensed
the use of Hamzei Analytics proprietary options analytics)