Ah, the benefits of CASH

I have to admit, I love cash nowadays. You can move in and out of volatile investments (Forex and Commodities) quickly, and then allocate it to my favorite (that's American, not Queen's English, mind you) investment vehicle, high quality IPOs. There have already been announcements of upcoming quality IPOs such as Felda MSM, Bumi Armada, and units of the MMC group - Gas Malaysia, Johor Port, and Malakoff. But what we need to do is to ensure that we have enough cash in hand to "play" while not over allocating, and losing out on "opportunity cost."

So I'll go for UOA Development's (that's United Overseas Australia, listed on ASX and SGX) large IPO (raising RM1.18 Billion, with 70 million shares reserved for small players like us), which is priced at RM2.90 a piece. They developed Bangsar South, and with Malaysian's love affair with property continuing unabated, this makes sense.

PS-Jim Grant, an extremely prescient investor, said in an Article in Yahoo! Finance that keeping cash, to take advantage of crashes is good, because recoveries now tend to be fast and furious....(Quote) "Perhaps one way to proceed is to hold cash at the opportunity cost of not much in Treasury bills. You make nothing, but you want to have this money when things are absolutely, not just relatively, cheap. This time of full or overvaluation shall pass. On recent form, it'll pass in a thunderclap and there will be a panic and it'll seem as if the world's ending. And that's when somebody who is nimble can get fully invested in a comfortable way."

PLAN YR TRADE, OR PLAN TO FAIL

PLAN YOUR TRADE, or YOU PLAN to FAIL

I always make it a habit to have a Trading Plan for the week - trade, demo trade, or
no trade. It helps set the right perspective - and when you find that you are right,
you ride the wave baby! So here's the plan next week:

1. Looking at the SPX above (darn, I forgot this last Friday and got killed on the Aussie after a long profitable run on the Euro... Silly me), it looks like we have to break above 1350 or below 1330 (tight range) to determine the next course of action. Support of SPX lies below at 1330, 1324, 1317. At the topside, resistance is at 1353, 1361, and 1385 (now that would really send us higher). The SPX chart above reveals the Inverse Head & Shoulders pattern. Was it a "fakeout" or a was it for real?
2. On the DOW, it's much more clearer, support is at 12,260-12,300
3. Since this is Options Expiration week, I expect Monday-Tuesday to follow the last friday's continuation trend down. But expect a whiplash on Wed - Friday, as expiration weeks are normally bullish (on the other note, just stay out if things are too volatile)
4. Silver ETF is a Six Flags Roller Coaster ride. I am long June 34 PUTS as I expect this thing to totally collapse to its January levels of $25 (it's now $34). But maybe since this Options Expirations week, I could sell some MAY Puts to offset my price, assuming they whack the buster up at the end of the week.
5. I am also looking at OIL - there's an interesting pattern there about filling the Gap.

We will execute either by going SHORT EURO (market breaks down) or LONG AUSSIE (market breaks up). So I expect it to be a tale of two halves - shorting EURO in the early half and riding the whiplash of the AUSSIE up on the rebound. Now I just have to wait for the fundamental news to pull the trigger.

Many people are still bullish on the market, with the DOW's target at 13,300 by end of Summer (who knows? Markets are thin in Summer, making it perfect to "climb the wall of worry". So let's focus on next week with that backdrop in mind.

TESTING TESTING

Just testing before I make my grand Comeback... :-)