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Nasdaq's Hit-and-Run

Nasdaq stocks enjoy a spurt courtesy of a buy program.
Author:

Did anybody get the license plate on that

Nasdaq

buy program? Talk about a hit-and-run, that was unbelievable. How important are these programs? When you consider that such prominent tech names as

EMC

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(EMC)

,

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HWP)

were not up, you have to understand that they did not rally because they are not part of the Nasdaq and the program was Nasdaq oriented.

Let's go deeper. What might have happened here? Let me post a logical and educated guess. Nasdaq rallied 85% last year. A fund manager might have felt that such a repeat would be impossible. So that fund manager might have made a bet to short the whole Nasdaq.

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As the Nasdaq declined 10% this year (twice yet!) the fund manager might have wanted to take the profit. That means having to reverse the short, or buy the stocks in the index. That could have caused the rally we saw today, as it was limited to the Nasdaq, not the stocks on the

New York Stock Exchange

.

So EMC gets left out, and

Cisco

(CSCO) - Get Report

ramps!

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco and Hewlett-Packard. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.