Mid-Summer Market Doldrums

Well, I hope everyone is having a nice summer. The volatile markets are very frustrating these days, especially with the correction recently that presented a good buying opportunity for the brave (I am not always brave, especially after 2008).

I am still following the moving average graphs and I am pretty heavily invested right now, given the market instability - I am about 75% in stocks right now, with the remainder in cash (although I am looking to buy more this coming week).

Earnings have been looking pretty steady so far, and the worries in Europe seem to have subsided for the most part. Also, China seems to be back buying commodities again (just look at potash companies last week) so that is a good sign as well. With more positive earnings this week (I think that about 25% of the S&P reports this week), hopefully the strong markets continue.

Currently, I am in AGU, ARE, BCE, CCO, CNQ, CP, FM, FTT, HSE, RCI.B, RUS, SC, SNC, TRP, X, WJA, BTE.UN, and YLO.UN. All of these securities are in the 'hold' range (current price above the 40-day moving average) except for YLO.UN which I am keeping for the exceptional yield.

I am looking at picking up some more securities this coming week that only moved into buy territory late last week. These include HQU (Nasdaq ETF), HSU (US S&P ETF), EXE.UN (Extendicare), PWF (Power Financial), S (Sherritt), and SU (Suncor). As I mentioned in a previous post, I now wait until the SECOND day that a security is in the buy territory before I buy, to try to cut down on false buys (quick stock turnarounds). There are other stocks in their first day of buying (BBD.B, LIF.UN, and more) but I will wait for confirmation to buy them.

In any case, I am heavily invested right now so I don't have too many more stocks to buy anyway. I already own 18 individual securities and I don't want to go above 25 or so, so I will either leave the remaining funds in cash or I will purchase more of something I already own.

Year-to-date, I am at 3.5% return (not my high of the year, but close), which is not too bad given the overall market returns so far this year. I am well ahead of the .5% or so that I would have received in even the highest money market funds and I don't wish to lock in my money into anything longer just to get an extra percent or two in return.

Here's to a continuing strong earnings season, and let's hope we get a nice summer rally before all the traders get back in September so we can really make some gains in the last 4 months of the year.