Kaminsky's Call: Key Questions for June

It's a tired cliché: "Sell in May, and go away."

But last month it worked out quite well. Seemingly in an instant, four months of gains were wiped out by an 8.2 percent drop in the S&P 500. But past is prologue, and it's the future where money is made.

So my call to action today: Stay small. Don't be afraid of cash—and here's why.

By my estimate, there are four key questions that need to be answered before the market can go higher:

  1. Will Goldman Sachs settle with the Securities and Exchange Commission (SEC)?
  2. Will we see the return of strategic M&A that signals confidence in business forecasts?
  3. Will high yield markets pick up again? (remember, this is key to deal-making and debt issuance)
  4. Which will be the first major company to take down guidance and miss second quarter numbers due to the European dilemma, and how many will follow?

With so much uncertainty in the markets, now is not the time to be the investment equivalent of a soccer goalkeeper. Don't try and randomly anticipate where the ball might be kicked. Leave that to the World Cup that commences this month.

At the beginning of May, I also recommended keeping a greater percentage of your portfolio in cash. Today, I'm even more convinced this is the right move.

If you don't want to stay completely on the sidelines, there are moves worth making. Utilize pair trades, volatility hedges with the VXX, and put buying where appropriate. But keep in mind "cash" is not a four-letter word. Once we answer our questions, it may come in handy.

Programming note: "The Strategy Session" begins Monday, June 7 at Noon ET on CNBC.

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