The Market is in Uptrend

The general market is in an uptrend. We have a BUY signal from a number of indicators.

The BUY signal from the Market Breadth ratios looks better than the previous two buy signals. This time we had more than 500 in the “4% Up” column, when we got the signal. If within the next 2 weeks we get a few more 500 plus reading in this column, it will confirm a very strong uptrend.

 

What is working very well in the stock market is: Big Cap Dividend paying stocks. Here the downside “acc of trend” is nearly zero and the “speed of trend” is more than -10. These readings indicate that the price momentum is changing and turning upwards.

What is not working that well in the stock market is: Growth Momentum Leaders stocks. Here the downside “acceleration of trend”  is -2.2 and the “speed of trend” is less than -10 (it is -11). These readings indicate that the price momentum has not yet changed to the upside.

Since the Growth Momentum Leaders stocks did not participate to the level expected, we should Buy/invest only 20% of the portfolio in these types of stocks. If your portfolio rises by 2%, then BUY another 40% of the portfolio. If it goes up another 2% be fully invested.

Sometimes the growth stocks participate a little later in the Buy-to-Sell cycle. Once the Big Cap Dividend paying value stocks have played out, the growth leaders start to participate.

For a list of Growth Momentum Leaders, look at the “Sector Leaders” list in Investor’s Business Daily.

For a list of Big Cap Dividend paying stocks, I like the following:

CVX

DD

GE

JNJ

KFT

MRK

PFE

PG

T

VZ