Moves for next week - Cash is King

We are sitting on $94,008 in cash. I don't see a reason to invest it yet.

I see too many negatives this week
OIL
Iran is causing trouble in several ways this week (Israel/Lebanon & UN Security Council). I discount Iran's conciliatory moves today that they are finally ready to talk. They will play tough brinksmanship on down the line. I expect the Israel/Lebanon conflict to escalate - Hizbullah will be backed like a rat into a corner and will start to lash out with some bigger toys.

Frankly, I suspect that this is all part of the run-up to dealing with Iran. The Iranian threat to unleash the dogs of war has been realized - Hamas and Hizbollah are unleashed. Israel upped the ante (they went all in, to use Poker parlance) and Hizbollah, Iran and Syria have blinked. Israel has the backing of the West and even of many Arab states (and that only happens if there is something important at stake - like defanging Iran's nuclear capability). The end game is that Hizbollah will end up defanged, and Hamas really doesn't matter. This makes Iran more isolated and vulnerable. After playing defense against Iran, I expect some offense to start picking up. I wouldn't be surprised to see some sudden and mysterious accidents happen in Iran sometime near the end of the year.

But, beyond this conspiracy theorizing, it boils down to a very rattled market this week.

I also note that high oil prices are not dampening consumer oil usage in the US. That and tight supplies make oil prices tend to stay high.

This is absolutely fabulous for drilling related companies (GRP, DO, ESV, TTI). For example, last quarter, prices for oil rigs were ~$100K per day. As of May, prices are up to $200K per day. That is because of serious shortages in oil rig availability, massive profitability of oil, and utilization rates. ESV is 99% utilized and is able to sign contracts that lock them in for 2 year deals at 2X last quarter's prices. The market is hysterical, but it may not be done being hysterical. I would love to pick up many of these stocks cheaper.

HOUSING
This is a big week for housing - the Q2 numbers get released. I expect terrible news. This is bad for more than housing and related stocks.
I thin that the broader market will see deeper price drops than they expected to see. This will fuel the fears that consumer spending will drop. Nevermind that falling housing prices can benefit everyone by relaxing inflationary pressures and by letting even more people buy houses.

HIGH TECH EARNINGS (DELL, CSCO, MOT, QCOM, IBM, APPLE and BROADCOM)
There are 3 markets here: telecoms, PC and Cell phones.
Telecoms I can't comment on due to my role at Cisco. Obviously Lucent is having a tough time. The PC market is slowing. It's very likely that Apple may buck this trend, but expectations are low for the iPod.
Cell phones are not new and improved. Back in January I was very excited about mobile entertainment shifting to the cell phone. Still nothing after 7 months. At this point, only form and not features is driving folks to buy new phones.
None of this sounds good for semiconductors.

I am excited by the Fall - new gadgets, new gametoys, Microsoft's Vista buzz. But for now, sad news.

INFLATION NEWS
CPI/PPI releases, and it will show more inflation. I suspect some employment easing in the construction areas (many homebuilders are firing thousands of construction workers).

In essence, a lot of negative news is coming out this week that will push healthy stocks down. I want to wait for even more panic selling to buy in.

We know the stocks to buy - it's just timing. I am also loading up on Puts as I outlined earlier this week.