For Clients:
The market is dealing with a big plunge in oil prices. From CNBC:
“Oil prices plunged 30% in early trading after OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production, leading to fears of an all-out price war.”
Game plan will be the same as last Friday. Will see where we stand versus the data after the open Monday, and more importantly, where we stand near the close. Market can look significantly different at 9:30 am ET vs. 4:00 pm ET.
The S&P 500 closed Friday at 2,972. As noted in this weekend’s video, history says even if the market can find a bottom in the coming weeks, it would not be shocking for the S&P 500 to drop to 2,820-ish. To reach 2,820, the S&P 500 would have to drop 152 points on Monday. Our concerns would increase with an extended stay below 2,820.
Heading into Monday’s session, our allocation to cash, bonds, and gold account for the ongoing uncertainty. If the data calls for additional action, we will make the necessary adjustments. We are not making any assumptions about how Monday’s session will play out. More information about historical risk and reward from similar market profiles can be found in last Friday’s video.