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.
â€œOver 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,â€ recalls Doc Severson, Trading Conceptsâ€™ Chief Options Trader and Mentor. â€œThere was the â€˜Fiscal Cliff,â€™ the â€˜Sequester,â€™ debt ceiling debates, as well as innumerable global crises.â€ Severson states that in most cases what happens is there is an initial â€œknee jerkâ€ reaction when the possible crisis is first reported, as it catches the market off-guard.
â€œBut to this point, weâ€™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,â€ Severson said. He adds, â€œAs we say, â€˜this will continue to work until it doesnâ€™t.â€™â€
â€œEventually 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,â€ Severson states. He warns, â€œSo 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.â€ In other words, have a plan.
According to MSNBC Mad Moneyâ€™s Jim Cramer, â€œThe Markets are not scared of a shutdown.â€ On Tuesday he gave several reasons for this along with a survival guide.
Severson sums it up this way, â€œItâ€™s not what you make when the musicâ€™s playing. What you get to keep after it stops is what counts.â€
To see the published press release, please go to http://www.prweb.com/releases/
Join Over 84,750 Traders Receiving Our FREE Daily Trading Videos