Terranova: Market May be Paralyzed Until Sept. 1st

Stocks ended slightly higher on Monday after four weeks of losses as investors hesitated to take big risks without a catalyst for buying.

The S&P 500 has dropped 12.7 percent so far in August on fears of another recession and the ongoing financial crisis in Europe.

Now what?

Instant Insights with the Fast Money traders

Joe Terranova thinks traders are paralyzed right now not knowing if the economy is slowing or sliding back into recession. He reminds that the latest data from the Philly Fed suggested the nation was entering a recessionary environment.

Going forward he expects traders to focus on ISM due September 1^st and the jobs reports out the next day. How the market behaves in the wake of that data, should be telling.

”I think you have to be more concerned about the next 3 weeks, than the next 3 months,” he says.

Trader Tim Seymour expects the market to remain very focused on developments in Europe. He's hearing that pros are worried  the financial crisis could blossom into something as serious as the 2008 crisis and even lead to demise of the euro.

Trader Guy Adami is watching technicals. “The fact that the S&P closed unchanged isn’t very good. If we slip below 1100 I think 1020 level is absolutely key. It’s the 50% retracement of the March 2009,” he says. “That’s where we bounced from in July of last year.”

We'll have to see what happens.

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Trader disclosure: On Aug 22, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymours own (BAC); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Finerman and Finerman’s firm own (AAPL); Finerman owns (BAC) and Finerman’s firm own (BAC) leaps; Finerman’s firm owns (HPQ) puts and Finerman owns (HPQ); Finerman owns (JPM) and Finerman’s firm owns (JPM) stock and (JPM) leaps; Finerman's Firm Is Short (IWR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (XRT); Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts; Terranova owns (XOM); Terranova owns (IBM); Terranova owns (VRTS); Terranova owns (AAPL); Nations is long (SPY); Nations is long (TLT)

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