Our strict criteria

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Growth Stocks take it up a notch but still need to prove themselves.

Twenty-three new highs from stocks meeting our top fundamental requirements is more than we’ve seen in a long time.

We’ll maintain our cautious Yellow Flag bias, but are ready to shift to a stronger Bullish or Bearish stance when more evidence weighs in.

As earnings season picks up it is still unclear what trend will take shape.

The market, so far, is reacting well to further carnage in financial stocks like Citibank (C), Washington Mutual (WM), Wachovia (WB) and Merrill Lynch (MER).

Good earnings from top tech names like Intel (INTC) and Google (GOOG) is refreshing.

So is action from our recent buys in MasterCard (MA) and Rio Tinto (RIO) are holding up nicely.

We’ve added three stocks to our Buy Radar: (for paid subsribers)

Both meet our strict criteria.

But we are still cautious about rushing into the market.

Traders with higher risk tolerance and flexibility should consider the new buys. Those looking to build slowly should wait for further action to play out on what they already own.

Buyers In Big Picture

Thursday’s accumulation day bodes well for the market’s upside potential.

It’s just one more sign that buyers are outnumbering sellers.

After Wednesday’s distribution on the Nasdaq, and key sell-offs in Transportation and Retail, it looked for a moment like it was all about to unravel.

But successful speculation comes by patiently taking in the big picture as new data constantly changes the landscape.

We’ve been cautiously bullish for a couple of weeks, but are on guard to change our bias in the event present conditions deteriorate.

Where institutions are placing their bets

Evidence has mounted to the Bull’s favor.

After the S&P 500 put in a Follow Through Day with its massive upside move Tuesday, odds will favor the long positions until proven otherwise.

Quiet price-action the last couple days bodes well for Bulls as indication sellers have less conviction.

What we need to watch carefully for is Leadership, which will tell us where institutions are placing their bets for us to follow.

More on this in the weekly report.