Oil Falling Over the Weekend, But is it Enough?

We highly recommend remaining in a cash position at least through Monday as we wait to see how the market reacts after Rita and how it continues to price in events from Katrina. Oil futures are taking a hit this weekend, but anything could happen on Monday. Major trendline damage has occured on both the S&P and Nasdaq indices and we are not yet convinced that falling oil prices will be enough to repair the damage incurred. When we just don't know what will transpire it is just better to wait for a clear opening before throwing money back into the market.