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Two Ways to Play: Is Cash King?

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Strengthen your portfolio in good times and bad.

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All About the Benjamins

Cash is piling up, and more of it is on the sidelines than at any time in almost 20 years. Federal Reserve data compiled by Bloomberg shows there's currently about $8.85 trillion held in cash, bank deposits and money market funds - an amount equal to almost 75% of the market value of US companies. It marks the highest ratio since 1990. Some are viewing this as a major buying opportunity.

The S&P 500 rose an average of 24% in 6 months in the previous 8 instances when cash peaked relative to the market's capitalization. See Minyan Peter's take in Don't Believe the Hype.

From the Bull Pen: The better longer-term play could be in gold and bulls can look to the ETF (GLD) with a sell stop in the near term around $83.

From the Bear Cave: We must still be conscious that we're in a secular bear market. A rally in United Technologies (UTX) to near $55 could represent a better downside opportunity. If and when.


Quick Check Around the World

Asian trading closed with the Hang Seng +1.02%, Nikkei +0.09%, Sensex +2.19%, Taiwan -0.20% and Shanghai -0.06%.

A quick check across the pond finds the CAC +1.10%, DAX +2.08%, FTSE +2.29%

As of 8:30 a.m. EST, S&P futures are trading +1 to 869.60, and Nasdaq futures are +2 to 1190.


A Look At Commodities

Crude oil is trading +2.45 to 40.16. Gold is +13.5 to 884.70. Silver is +0.37 to 10.900, and copper is +.6500 to 131.00.

The dollar index is -0.811 to 80.081.

No events on the radar today.

Good luck and have a great day!

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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