‘Smart money’ hints at JCP, AMR action

The bond market appears to be signaling where J.C. Penney stock is headed and whether the American Airlines-US Airways merger will happen, Angela Deering of Seaport Securities said Wednesday.

"The bonds have definitely calmed down," she said, referring to J.C. Penney. "This is something we're looking for in the bond market, stability."

Called the "smart money" because it often leads stocks, the bond market can provide a read on what equities will do.

On CNBC's "Fast Money," Deering noted that JCP bonds had come off their lows and have stabilized following the departure of activist investor Bill Ackman from its board of directors.

(Read more: Will Ackman's exit be enough to save JC Penney?

"It's not like we jumped 10 points or anything," she said. "We did only jump about 3 points."

Deering said she was looking forward to the foundering retailer's quarterly earnings report, expected Aug. 20.

The bond market also provided clues on the proposed merger between US Airways and American Airlines, a move that would create the world's largest carrier.

The move was challenged by the U.S. Department of Justice this week, along with several state attorneys general.

(Read more: American, US Air will fight government on merger)

"This is a huge story for the bond market, a behemoth story," Deering said. "It's over $15 billion in securities that are affected, debt securities, between US Airways and American Airlines."

The biggest news has been in the action in securities of American Airlines' parent company, she added.

"Everybody in our market is definitely watching the AAMRQ equity," Deering said, adding that the convertible bond was down 48 points. "That's huge volatility."

For odds-making on the merger deal, Deering was looking at the trade claim market, which she said was "pricing in a less-than-40 percent chance that the merger is going to go through.

"So, from a sophisticated investor perspective, and sort of under the radar that our investors at home might not be seeing, there's much less of a chance."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

— CNBC's Torrey Kleinman contributed research to this report.

Trader disclosure: On Aug. 14, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is funds long FCX; Steve Grasso is funds long MU; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long SPY; Karen Finerman is long MDY PUTS; Dan Nathan is long FB; Dan Nathan is long JCP; Dan Nathan is long WFM; Dan Nathan is long XCO; Dan Nathan is long VIX; Dan Nathan is short IWM; Brian Kelly is long US dollar; Brian Kelly is short Yen T-Notes.