Trading Concepts Expert Offers Market Analysis in Response to Reports of Potential Government Shutdown

Is the potential government shutdown a serious threat to the markets? Trading Concepts offers insight and advice.

According to MyFoxDetroit.com, if the house and senate cannot agree on a budget, the government will run out of money next week. Their experts state this would have a negative effect on our economy and our wallets, but this does not cause Trading Concepts Doc Severson to make any quick moves in the markets.

“Over the past two years, the market has seen many of these “land mines” regarding standoffs between political opponents, all being heavily covered and hyped by the media,” recalls Doc Severson, Trading Concepts’ Chief Options Trader and Mentor. “There was the ‘Fiscal Cliff,’ the ‘Sequester,’ debt ceiling debates, as well as innumerable global crises.” Severson states that in most cases what happens is there is an initial “knee jerk” reaction when the possible crisis is first reported, as it catches the market off-guard.

“But to this point, we’ve seen markets press higher into the event, as traders discount the possibility of a positive resolution. In all of those cases, the market has gone much higher as the short interest gets unwound to the delight of Bulls,” Severson said. He adds, “As we say, ‘this will continue to work until it doesn’t.’”

“Eventually one of these events will be discounted to resolve and will not do so; the downside reaction will be one where no one can hide from the effects, similar to the August 2011 downdraft,” Severson states. He warns, “So while the music continues to play, keep circling the chairs but all the while understand well ahead of time exactly what you will do should the music stop playing and a known risk event arrives.” In other words, have a plan.

According to MSNBC Mad Money’s Jim Cramer, “The Markets are not scared of a shutdown.” On Tuesday he gave several reasons for this along with a survival guide.

Severson sums it up this way, “It’s not what you make when the music’s playing. What you get to keep after it stops is what counts.”

To see the published press release, please go to http://www.prweb.com/releases/government/trading/prweb11162953.htm

About the Author Amy Noon

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