Welcome to summer! The breezes are warm, the water is cool, the mountains of western North Carolina are spectacular and the financial markets aren't certain which way they want to go. Yet another summer of market discontent.

But the good news is, there are signs of economic recovery. Our financial system remains intact, if not functioning normally; the Leading Economic Indicators (LEI) are showing signs of life; and the stock market is virtually unchanged this year, after being down 40% from the 2007 highs, but up almost 30% from the March 6 lows. We've endured an economic-financial sector stock-market roller-coaster ride that would make any summer theme park proud - and participants dizzy.

While I believe we remain in recession, and that the full impact of the banking and financial crisis has yet to be felt, the question remains: Do we sell this May and go away, or do we stay and play? The answer, as always, depends upon your individual time frame, investment objectives and investment style.

Many readers recall in November 2008 -- following several 300-500 (even 900) point swings in the Dow Industrials -- I cautioned it wasn't a stock market for the “retail” investor. As I explained, this was the message the professionals on the trading desks were advocating for all but the most nimble and experienced traders.

I believe their advice was timely, and ultimately set up an excellent buying opportunity for investors like myself with a longer-term time horizon and the patience to allow the better buying opportunities to develop. And develop they did, as the market tried to recover into the beginning of the year. This allowed us an opportunity to book profits into the beginning of the year before a vicious sell-off took us to new market-cycle lows on March 6 and new buying opportunities.

We now find ourselves almost back where the year began and in a trading range I've documented repeatedly since the V-ish move and small consolidations off the S&P 500 March 6 lows and the early April breakout above 850. As I stated in the Yachtsman Market Update and on Minyanville.com on May 12:

“The cash S&P 500 daily chart below illustrates the trend channel I've followed since the mid-March move, correcting the straight V bottom move from March 6. The daily news flow and fundamental indicators have created a channel for the S&P 500 which currently runs between 950 on the top end and 875 on the low."