Our market trend signals for the S&P 500 and Wilshire 5000 turned positive this week. These signals are conservative and while these indexes can still move down in the short term, we expect that the long term trend is now firmly in place.

The change in trend for these indexes is now consistent with the underlying mood of investors which is that the worst is behind us and that the seeds of a recovery are in place. This is evidenced by increasing volume as a result of money coming in from the sidelines and pushing prices higher. The five major indexes we track all set new highs for the year this week. The positive mood was reinforced on Friday when a surprise downturn in the unemployment rate stoked a strong rally.

While our large cap trend indicators are conservative, our NASDAQ trend signal picked the rally quite early. The NASDAQ signal turned positive on March 25 and has risen 34% since then.

Breakouts showed particular strength this week as the table below shows. Almost half of the breakouts for the week gained more than 5% with several showing truly outstanding gains.

How to Use our Site if You Cannot Monitor the Market in Real Time

Living in Hawaii, we would have to get up at 3:30 to monitor the markets in real time and take advantage of our alerts. We hate to do that so we developed our Tradewatch service to tell us which stocks to buy at next day's open (the 'Buy at Open' list, or set a buy order that would be executed during the day (the 'Buy on Breakout' list.

To see how these two watchlists have performed, you can use our Tradewatch simulation tool

Using the default parameters for the simulation since March 25, 2009 you can see that using the Buy on Breakout list together with our Sell Assistant would have returned 33.7%.