Being Prudent Here and Keeping Position Sizing In-Check is the Key
The overriding theme since last week is as energy prices go, so will the market go. Now there’s Russia in the picture, bank balance sheets around the world potentially exposed to loans pegged at $80 oil, along with tomorrows Fed announcement. Yellen’s policy has been to “manage volatility” and had the world’s markets been quiet the past few weeks, there was little doubt the Fed would gradually raise rates. Now with volatility increasing throughout the world, any surprises could potentially trigger a large global sell-off. If her goal is to manage volatility, then policy at least for the next few months will be to allow the markets to absorb oil and Russia, and settle in appropriately.
It’s obvious that just about everything is oversold and due for a bounce. But being prudent here and keeping position sizing in-check is the key, especially with so many moving pieces occurring at the same time.
Today’s Potential Opportunities on Further Pullbacks: