Defense may be the key to making money in a quiet market

The most prudent way to capitalize on an uber-flat market may be to take defensive measures, in preparation for what could be an end of the low-volume, low-volatility environment.

"We are in a classically complacent market," said Gina Sanchez, CEO of Chantico Global, who also said this market is at once complacent, "upward-sloping and fairly overvalued."

Sanchez observed Wednesday on CNBC's "Trading Nation" that stocks are richly valued, investors are confident that the Fed is not going to raise rates anytime soon and sentiment is overall optimistic even as the presidential election approaches.

Sanchez believes in a time like this, the right move is to prepare for "when the sun stops shining," metaphorically speaking.

Though the S&P 500 has hit new highs this summer, the market has moved in a relatively narrow range over the last month; as of market close on Thursday, the index had not seen a 1 percent move higher or lower since July 8, when it rose 1.53 percent.

Thursday also marked the third-lowest-volume day of the year, as 5.52 billion shares were traded by the closing bell.

"We see multiple breakouts, time and time again," said Phillip Streible, senior analyst at RJO Futures, who does not see shorting the S&P right now as a "prudent" strategy as it's moved higher.

And gold could be a market that snaps back here, Streible said Wednesday on CNBC's "Trading Nation," something relatively inexpensive.

What would Streible recommend in this environment? Buying put options in this market right now does not make much sense to him, as investors would be paying a premium for not very much "action," given such low volatility.

Streible said the wisest move, in his eyes, would be to look at your current portfolio and "reallocate" assets.

"Maybe take a little bit off, step to the sidelines a bit, because all good things must come to an end," he said.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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