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Trading Ahead of the Fed Meeting

Is volatility the new norm?

With the Dow Jones Industrial Average posting its fourth triple-digit move in a row Friday and the Nasdaq having its worst week in two months, investors are looking for signals out of the Federal Reserve as to where the market is headed next.

"Sell the Fed," Stuart Frankel's Steve Grasso said, adding that the S&P 500 would likely hold 1,600 before the Federal Open Market Committee on Wednesday, noting that it had bounced off that level twice this week.

What happens in Japan would be crucial going forward he added, and it's something that the Fed can't control.

"It used to be a case where the Fed could do something to stop the bleeding from Japan," he said. "I think they're totally out of bullets. I don't think it really matters what they say."

On CNBC's "Fast Money," Grasso said that he expected the Fed to "walk itself back from the notion that they'll taper anytime soon."

Dan Nathan of RiskReversal.com said that 1,600 was key ahead of the FOMC meeting.

(Read More: 'These Are Very Scary Times': Dennis Gartman)

"That's the line in the sand," he said. "But again, what has been going on? What has been coming out of the Fed since May 22? It's been a lot of language that's caused volatility across a lot of asset classes.

"So I don't expect a ton of clarity as far as the markets are concerned before Wednesday's press conference. If we break that after the meeting, I think we see 1,550 quickly."

(Read More: 'The Problem Is the Dollar,' FX Pro Says)

Josh Brown of Fusion Analytics said that big money provided an important tell.

"They called shenanigans on this idea that the Fed's going to come out and tell us that they're doing some kind of taper or cessation of buying back assets," he said.

(Read More: Don't Focus on Volatility, Pro Says)

Brown pointed out what bounced this week: Defensives, Utilities, Treasuries and real-estate investment trusts.

"When you think about what big money is doing, they're saying, 'OK, we got a little bit shock to the system, but the truth is we still need yield. We're coming back to the old playbook.'

"It was fascinating to see that in the concept of every other sector red from Monday through Friday."

Stock Monster's Guy Adami said Japan was paramount.

(Read More: QE's 'Ticking Time-Bomb': Larry McDonald)

"I think Japan is out of control," he added. "I don't think they can put the genie back in the bottle there, and as much as our Fed matters here, I think the Bank of Japan matters more."

Scott Migliori of Allianz Global Investors didn't buy the trial balloons from the Fed.

"I think the whole tapering discussion is a red herring," he said.

(Read More: 2 Taper-Proof Stock Sectors?)

Trader disclosure: On June 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: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Dan Nathan is short XLU June 38/36 put spread; Dan Nathan is long XLF short June 19 puts; Dan Nathan is long ZNGA; Dan Nathan is long INTC long July 24 puts; Dan Nathan is long XLE short June 80/77 put spread; Steve Grasso is funds long FDX; Steve Grasso is funds long SPY; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long GDX; 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.

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