The PMO Index quickly moved from the bottom of the range to the top of the range which means it is now a bit late to be deploying cash or to be buying aggressively... so it is yet another lesson. Note to self, take advantage of buying opportunities when they are presented. In such a strong market the window of opportunity closes so quickly.

What should we do now? This chart below shows that the market's upward climb continues very nicely, but the trend is extended which means there are profits that need to be taken at some point soon.

My usual plan is to trim my largest holdings into market strength and to sell off the stocks with the weakest relative strength. I have no choice but to trim the large holdings because the profits have to be realized, but I am not sure about selling the weaker stocks.

The problem with selling these weak holdings is that they are often the former growth stock leaders, and I see so many nice bases being carved out among these stocks. The relative strength might be weak, but the price pattern is strong. So, I am not sure what I am going to do.

The 10-day call/put ratio still favors the short-term uptrend. If we get a couple of red candles here it would help us time this market and indicate that we should raise some cash.

The number of new lows is not projecting any dire warning signs. This is bullish short-term and long-term.

Technology stocks are unstoppable in this market. This is the place where I want to have most of my holdings.

Outlook Summary

The long-term outlook is weak growth as of Oct. 5.  

The short-term trend is up as of Dec. 12. 

The medium-term trend for the price of bonds is down as of Oct.11 (prices lower, yields higher). 

Investing Themes:

Technology, Biotechnology, Health Care, Clean Energy, Infrastructure, Insurance, Brokers, Payment Processors, Home Construction, Consumer Goods, Water Resources

Strategy During a Bull Market:

• Buy large-cap stocks and ETFs at the lows of the medium or short-term market trends
• Buy small-cap growth stocks on breaks to new highs in the early stages of market trends
• Reduce buying when the market trend is at the top of the range
• Take partial profits when the market uptrend starts to struggle at the highs
• The cardinal rule is never invest based on personal politics because the stock market can do well regardless of which political party is in control