I Want to Believe! Someone Mix Me Up a New Batch of Kool-Aid!

I can't think of any other time I have had such a high percentage of my trading account in cash. I just can't seem to be willing to hold on to really any stock longer than for a swing trade. I do hold TNP. I am happy with the company and management. They pay out about a 6% dividend, currently. They are in a tough industry at the moment, though. That said, they comprised about 7% of my portfolio and I have no desire to increase that. I also still hold small positions in WAMPQ/WAHUQ comprising an additional 7% of my portfolio. That leaves roughly 85% cash.

I badly wanted to hold my GLD options until I hit my target of $1450 or so. I just had to sell. I was compelled to sell. The problem? What if the market does correct? Funds will get margin and redemption calls. Funds will sell off their positions that are outperforming to raise cash. GLD is one of those and I think they will sell in the short-term to increase their cash positions. Cash positions at the major funds are at their lowest in a long time. They have very little buffer. So I love gold long-term. However, I can see a case for a drop short-term and there isn't much upside for the rest of this month for me to hold.

Everyone hates the USD, at the moment. There are many catalysts that could catapult the USD into short-term popularity. If they enact another amnesty repatriation of overseas corporate profits for a small tax rates(5% or less), that would explode the demand for funding in USD temporarily. Anytime the USD index pops, it puts a lot of pressure on the broader indexes. Another one is the EUR falling out of favor, again. Greece is back in major trouble, Portugal is starting to reach the edge and Ireland could still cause an uproar and deny the banker bailout. If Portugal or Spain should become the next Greece/Ireland, watch out for the USD to skyrocket again(like last year). Keep in mind that Portugal/Spain/Italy have vast gold reserves. I've heard zero talk of them using those. However, if they did they could really drop their funding rates by possibly posting them as collateral or selling to raise liquidity. China would gladly purchase every last speck, in a heartbeat.

Obviously, everything is once again starting to focus on the next possible QE debate. My guess is they go for another QE-lite to buy some time(basically, a continuation of QE2 on a month-to-month basis).

I do have a big trade in mind(one that will last longer than one day). However, I am being patient before I set it up. When I do, I plan on explaining my rationale behind the trade and my targets. Still probably a few weeks off.

So in the mean-time I am looking for:

-Direction in the S&P. Will it hit a down channel for longer than a day?

-The USD index. Will it shoot higher from some catalyst, such as a new Euro-zone crisis.

Happy trading. This really feels like the calm before a storm.