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CNBC had a problem with their feed from Washington around announcement time
so I'm not sure if their rate change announcement was timely or not.
However, about 5 min prior to the announcement on CNBC I had a sell signal
and was astounded to see the S&P tank with no announcement. Other odd thing
was the volatility in the S&P right up to the announcement - I had expected
it to gradually flatline until the announcement was made. My best guess
regarding the drop and recovery is that the traders got the hell out when
the rate cut was .25 and while the quant models went more bullish on the
rate cut. Will be interesting to see how they keep the quant models afloat
as earnings decline.
Earl
-----Original Message-----
From: Jeff Caplan <jeffwcbs@xxxxxxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Wednesday, September 30, 1998 3:36 AM
Subject: Bond action 9/29
>Hi...
>
>Since I'm a lot less pit-savvy than many of the people who post on this
>list, could someone explain what the hell was going on in the bond pit
>yesterday afternoon around 2 o'clock?
>
>If the tick chart reflects reality, word out of the Fed took the bottom out
>of the market. A instant 20-tick drop. A few short trades later, the
>market rose a full point. And a few ticks later ..back to even.
>
>Possibilities.. I can figure
>
>1) In the confusion caused by Greenspan-speak, there was irrational
>exuberance
> on one end of the pit, and stark-cold-fear at the other end of the pit
> simultaneously. Prices from both sides of the pit printed.
>
>2) I'm looking at bad tick data.
>
>3) Everything stopped while the Fed story got out, except for one nervous
> trader ready to hit any ole bid. Then dump out at any price.
>
>Insight would really be appreciated. Because looking at a chart, I'm
>trying to figure out if this situation would have...
>
>a) Crushed me if I was in.
>b) Made me money if I got in
>
>Somehow, I doubt either would have been possible.
>
>Your insights are greatly appreciated..
>
>Jeff
>
> ( ( * ) )
> |
> |X|
> |X|
> |X| Jeff Caplan WCBS Newsradio 88, New York
> |X| http://www.newsradio88.com/behindmic/jeffpat.html
>
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