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The market’s rally off the August lows was impressive, and the market’s big picture outlook remains bullish. But growth stocks never quite kicked into gear, which is why we retained a good chunk of cash on the sideline. Now we see the sellers showing up this week, which we see as a key test--if the market and growth stocks can rally from here, this could be a needed shakeout that paves the way to higher prices ... but if not, more time and consolidation may be needed in the traditionally tricky September/October time frame.

In the meantime, we’re taking things on a stock-by-stock basis, giving our names (most of which are acting fine) a chance to rest and set up--but we’re also willing to dump things that flash abnormal action. Recently one of our stocks has done that, so we’re taking our small profit and holding the cash tonight.

Growth stocks have taken a series of small, positive baby steps during the past three weeks, which, given where things were at early last month, we’ll take. It’s been enough for us to put some money to work.

That said, the environment has a lot of room for improvement; we’re going slow, but will be happy to put more money to work if we see further progress. In the Model Portfolio, we’re averaging up in one of our stocks tonight, but that will still leave us with around 57% in cash.

This week’s Friday Update includes comments on our companies. There were no ratings changes or earnings reports.

Two stocks have rating changes today.

Identifying the best IRA investments is less a matter of asset performance and more a matter of asset type and tax considerations.

The Chinese company Renren (RENN), tagged with the catchy “Facebook of China” label, came public yesterday.

This holiday-shortened week was relatively light on news, as investors digested signs of a weakening economy in front of what likely will be a fascinating earnings season.

Next Friday, Wells Fargo (WFC) kicks off our earnings season, likely providing at least some insights, along with those provided by several other major banks that report that day, into the banking industry’s current stresses. Our other banks report later, with First Horizon (FHN) on April 18 and Capital One Financial (COF) on April 27.

While the market’s fireworks around the CPI data overshadowed most everything else this week, a few of our companies provided noteworthy updates, noted below and in our podcast.

It’s not 1999 out there, but the Model Portfolio has been doing OK despite the choppy, challenging, crosscurrent-filled market of late, partially thanks to an interesting dynamic—while the top-down evidence really hasn’t changed much in recent weeks (if anything, it’s probably worsened a bit, especially when it comes to growth funds and our Aggression Index), we are definitely seeing more individual stocks perk up, both within AI and in cyclical areas.

We do have two or three moves we’re close to making—while we’re not eager to be heavily invested given the evidence, we have a lot of cash and are likely to put some to work soon. But, tonight, we’ll stand pat and see if opportunities arise in the next few days—while also seeing if the Nasdaq’s test of its recent low holds. Bottom line, stand pat here, but we’ll be in touch with any changes in the days ahead.

If you are a commodities or small-cap investor, you’d probably be heavily invested right now -- but, for growth stocks, the environment remains challenging, with lots of ups and downs but no real progress, and with most growth funds (including the Nasdaq) under performing even defensive stocks. The odds favor the next major move being up, but until that starts, we’re staying relatively close to shore and waiting for more stocks to get going, possibly during earnings season.