Was That A Quake Or A Quack?
Yesterday, the Fed Chairman had the opportunity to give the market his help and
instead gave the market a slap in the face. Alan Greenspan calls this a
retrenchment instead of a recession. Guess what Al, if it looks like a duck,
waddles like a duck, and quacks like a duck, it is a duck! Traders in the pits
know the likelihood of a helping hand from the Federal Reserve is probably weeks
off and they are heading for the exits as fast as their feet will carry them!
Our work says we should be close to a bottom in the Nasdaq, but the environment
is anything but positive out there. This morning’s National Association of
Purchasing Management (NAPM) numbers showed the nation’s manufacturing activity
shrank for the seventh straight month in February. QUACK! How thick is this guy?
Maybe he’s seeing something else in his crystal ball, but I can’t imagine
what that might be. From Gateway
(
GTW |
Quote |
Chart |
News |
PowerRating),
to 3Com Corp.
(
COMS |
Quote |
Chart |
News |
PowerRating), to WorldCom
(
WCOM |
Quote |
Chart |
News |
PowerRating), I’m seeing evidence that the patient needs resuscitation, not
rhetoric. Waiting until March 20 only means the positive effect of the cut
will be pushed out further into the future. If you’re looking for a bright
spot among all this gloom, the Fed’s delay should insure a tax cut closer to
President Bush’s numbers than those of the Democrats.
Earlier this morning, we saw 3000 Check Point
(
CHKP |
Quote |
Chart |
News |
PowerRating)
March 70 – 75 put spreads traded at about 9:35 am CST. An institutional buyer
who was obviously betting on a further collapse of the enterprise networking
solutions software designer purchased the spread. The in-the-money $5 spread
traded for 3 1/2 on the PCX. Prices were 15 5/8 and 12 1/8.
Real-Time Volatility Matrix (11:30 am CST):
| Symbol
|
Volatility
|
Prev.
|
Last
|
| SOX
|
87.99
|
77.35
|
78.65
|
| HHH
|
82.38
|
74.05
|
73.10
|
| SMH
|
81.80
|
71.10
|
72.40
|
| QQQ
|
77.61
|
67.30
|
69.95
|
| MNX
|
75.90
|
64.15
|
68.30
|
| NDX
|
74.91
|
65.15
|
66.80
|
| BBH
|
60.01
|
48.85
|
50.90
|
| OSX
|
53.09
|
46.00
|
46.05
|
| BKX
|
38.87
|
31.95
|
33.90
|
| RUT
|
36.43
|
27.50
|
32.05
|
| OEX
|
33.56
|
27.40
|
29.35
|
| SPX
|
30.70
|
25.45
|
27.20
|
(1010WallStreet.com
has licensed the use of Hamzei Analytics LLC proprietary options analytics)