S&P500 Index forming a 9 month base

On a short and medium term the market is in an uptrend. On a long term time frame the S&P500 index is forming a 9 month base. If it breaks out of the base it will indicate an uptrend in the long term also. S&P500 (SPY) is showing more strength than the Nasdaq Index (QQQ). This is because the energy stocks which are part of the S&P500 index have moved up in the last few weeks. There are no energy stocks in the QQQ ETF.

How should an investor allocate their assets in the current environment?

A prudent approach is to put 70% of the assets in stock ETFs (value and growth) and 30% in cash. On a short to medium time frame the market does look extended, that is the reason to have some cash in hand. The earning season is also starting and depending on how the company earnings come out, will guide us on what to do with the cash component of the assets.