Cliff Diving: How Pros Navigate Fiscal Uncertainty

Stocks opened higher on Thursday but slumped in midday trading with investors seeing little reason to buy.

A disappointing outlook from Wal-Mart and rising tension in the Middle East triggered jitters in even the most bullish investors.

Also weekly jobs claims spiked last week.

And then there's the threat of the "fiscal cliff" – which seems to grow worse with each passing day as lawmakers appear more likely to dig in their heels than anything else.

Without a compromise, a series of mandated tax hikes and spending cuts will start to take effect early next year that could push the U.S. economy into a recession.

How can you possible trade in this treacherous and unpredictable environment such as this?

S&P 500

Strategy Session with the Fast Money trader

If you're nimble trader, Steve Grasso thinks technicals are on your side. "Around 1349, play the market for a bounce," said the director of institutional sales trading at Stuart Frankel in a live interview on Thursday's Halftime Report. "The next level of support is 1340."

However, he added that there are no long term catalysts in the market to suggest that gains would hold - in other words, be prepared to sell the bounce. Plan an exit strategy.

Trader Josh Brown, author of The Reformed Broker blog, largely agrees. "I watch trends and right now bears are in control." That means bounces will fade.

However he also suggests putting a list together and getting ready to pull the trigger. Brown believes once the "fiscal cliff" achieves some kind of resolution, stocks will rally.

Trader Stephanie Link, director of research at TheStreet, also subscribes to the same thesis. "I'd hold fewer positions – and I'd hold cash – but I also think investors should look at entry points for good names such as Coke and Verzion. I also like Starbucks after the deal they just inked with Teavanna. Read More: "Hate Coffee? Starbucks Will Get You Yet"

And unlike most years, trader Stephanie Link says don't look for a year end rally. The exception, she said, would be if chatter suggests lawmakers either reach a resolution or even kick the can down the road. "A can kick would be enough to trigger buying," she said.

Posted by CNBC's Lee Brodie

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Trader disclosure: On November 15, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long AAPL; Jon Najarian is long YHOO; Jon Najarian is long FB; Jon Najarian is long DLTR; Jon Najarian is long PETM; Jon Najarian is long LTD; Jon Najarian is long LRCX PUTS; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long STSI; Jon Najarian is long GLUU; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Stephanie Link is long DG; Stephanie Link is long AIG; Josh Brown is long AAPL; Josh Brown is long WFC; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long WMT; Josh Brown is long TGT; Mike Murphy is long AAPL; Mike Murphy is long TGT; Mike Murphy is long WFC

CNBC.com with wires.