(Video: Market coach Doug Hirschhorn, PhD, discusses why he believes traders are risk averse right now.)
Here are 3 reasons I believe this week’s trader temperature is risk averse:
The data is already baked in the markets Despite a bullish outlook based on recent Fed statements, the feeling is that most of upside move is already baked into the markets. That means a slow and steady climb until the year's end. While that may be good for long-term investors, it's not so good for shorter-term traders.
Pay day preoccuption Traders have families and need to lock in paychecks (they get paid at year end).
Lack of New Catalysts A lot of the uncertainty we had before isn't so uncertain anymore. As a result, the risk/reward profile is not nearly as compelling.
In short, staying patient right now is the best trade.
Think better, invest smarter.