Somebody Up There (At The Fed) Hates Wayne Angel
Somebody up there (at the Fed)
hates Wayne Angel. The former Federal Reserve governor (and now Bear Stearns
talking head) had no sooner stated that the likelihood of a Fed cut had been
erased by the industrial production numbers, when the Fed got together by phone
and announced a half-point rate cut. Not quarter-point. A surprise half-point interest
rate cut. All five Fed governors voted for the cut, apparently after they had
checked the status of their retirement accounts and paid their taxes (GULP!).
The governors cited “rising
uncertainty about the business outlook” as the cause that threatened to
keep economic activity “unacceptably weak." Lastly, but nearly as
importantly, the Fed didn’t change its stance from interest rate reduction
mode.
Now I can’t confirm whether he dated and dumped Greenspan’s sister, or
whether he once threatened to run naked down Pennsylvania Avenue if Greenspan
didn’t let him ride shotgun in the Fed limo, but I have to assume that
whatever Mr. Angel says he thinks the Fed will do, THEY WILL NOT! The
only bad news for the bulls was that upon hearing reports of the Fed’s cut
(while visiting clients, or former clients, in Japan), Mr. Angel said he sees
the possibility of another cut at the May Fed meeting. PUT THIS IN STONE, THE
FED WILL NOT REDUCE FURTHER AT THE MAY MEETING. However, I hear Comedy
Central is looking for a foil for Jon Stewart, so maybe Mr. Angel will get a job
more fitting his talents.
You can imagine there was widespread panic when the Fed made its announcement
this morning. Archipelago, a stock trading platform widely used by professional
traders and market makers was down for much of the move. Market makers
scrambling to buy stock as a hedge against option sales were caught in the no-man’s land of not knowing whether their orders were still active, or canceled.
That contributed to the market panic as traders overbought to insure they could
get hedged against the tidal wave of call option buying.
The Nasdaq 100
(
QQQ |
Quote |
Chart |
News |
PowerRating) should obliterate
volume records as the Nasdaq tracking stock has already traded over 370,000
contracts before noon Chicago time. April options dominated heavy turnover in
the QQQ, as the bulls feasted on the remains of stubborn bears.
Lastly, our third-biggest Nasdaq percentage mover is Rational Software
(
RATL |
Quote |
Chart |
News |
PowerRating). You may recall that on April 4 we initiated the July
15 — 22 ½ bull call spread for $2 ¼. With RATL trading up $5.33 to $22.83,
that call spread has doubled our money, trading for $4 ½. I’m showing the
50-day MA at 28.71, which may offer the strongest upside resistance. As with
Siebel Systems
(
SEBL |
Quote |
Chart |
News |
PowerRating) yesterday, we’re taking half the
position off at or about these levels. You know what they say on Wall Street,
“Pigs get fat, but hogs get slaughtered!â€
Strong $ Weighted Call vs. Put Money
Flows, especially in Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating).
| Symbol color:black”>
|
Call
Volume PutVolume $WCall Vol $WPut Vol | MSFT color:black”>
|
color:black”>63,763 color:black”>49,276 color:black”>269,785 color:black”>71,274 | RIMM color:black”>
|
color:black”>4,312 color:black”>1,439 color:black”>32,918 color:black”>3,744 | CSCO color:black”>
|
color:black”>62,153 color:black”>11,420 color:black”>239,860 color:black”>21,354 | NT color:black”>
|
color:black”>25,212 color:black”>3,117 color:black”>62,512 color:black”>5,455 | AMD color:black”>
|
color:black”>19,797 color:black”>4,040 color:black”>73,034 color:black”>3,299 | INTC color:black”>
|
color:black”>112,015 color:black”>52,777 color:black”>464,231 color:black”>80,654(1010WallStreet.com |