Tempus Fugit or time flies as they say – September whipped by in next to no time but there is always one thing to look forward to and that is being paid in dividends. This month was pretty good, although nothing like the monster month of August. September’s tally came in at $683.04. This is almost a 2x increase of the same month last year so i’m pretty happy with that performance. I am well on my way of hitting my end of year target of $8000 in dividend payments – it is very likely i maybe closer to $9000 so we’ll see how things wrap up soon.
I increased positions this month in many crushed emerging market stocks ( this is super risky but i have a multi-year horizon on these ). Also added to BP, VOD, BEP, PBR and a few others.
In terms of investment funds left, i am near the tail end for this year as i pretty much funnelled every spare $$ i could to wrap up my remaining contribution room in my RRSP. The rebate from this in 2015 will be significant and i’ll roll those funds back in.
I also opened up several options on long term positions in case the bounce is significant, these are great for leverage but the risk is high so not recommended usually ;).
Let’s see if market stabilizes soon and rallies into March 2015.
In the meantime, let’s look at the facts on the /ES Dec futures contract
As you can clearly see, 1900 is super critical support, a rising 200 sma coinciding with a low volume node makes for an interesting possible entry and/or re-assessment of current positions. The volatility clearly expanded last month and i’m expecting this to continue as bull and bears fight into 2015. Notice how the volatility has coincided with the fed pulling out of the market, the complete opposite to what happened while they were buying like mad. This is a test now on whether the market can stand on it’s own feet properly, earnings season is here soon and it needs to deliver to justify the current levels.
The fall from 2010 down to approximately 1930 was ~4% sell-off, this may not be sufficient to satisfy the ‘correction-nists’. If we are looking at ~10% then we are looking close to 1800 which is certainly achievable. Just going to take one step a time.
Here is another chart, much more simplified chart of the SPY etf, you can clearly see how the market rallied right back to the 50sma which leaves it at a very interesting inflection point.
If we can take and hold that 50sma then we should be good for a rally into the end of the year in my eyes, if we can’t, well, time to put the helmet on and wait for more sales to come through. There were some great bargains to be had last week so never panic about the market ever. Sure, it is uncomfortable while you see your portfolio going down and sell-offs are ALWAYS more aggressive than the ride up but 2+ years from now, things will have moved on, good companies will have increased their earnings power, the freak out crowd will still be crowing about the next big thing to mess everything up and you will have another 2+ years of solid dividend income under your belt.
Have a great weekend