Wall Street ends near 5-month high before Europe test – RSI makes good gains today & three new picks

Stocks held firm near recent five-month highs on Wednesday as investors awaited key bond market tests for Europe in the next two days that could determine the direction of the euro zone crisis.

U.S. equities have been performing better in the face of turmoil from Europe's sovereign debt problems. This is a major change from four months ago and comes as investors have taken improving U.S. economic data to heart and an optimistic view about corporate earnings.

The benchmark S&P 500 index recovered to close little changed to continue the recent decoupling of U.S. stocks and the movement of the embattled euro.

The Dow Jones industrial average .DJI slipped 13.02 points, or 0.10 percent, to 12,449.45. The Standard & Poor's 500 Index .SPX.INX gained 0.40 point, or 0.03 percent, to 1,292.48. The Nasdaq Composite Index .IXIC gained 8.26 points, or 0.31 percent, to 2,710.76. (commentary & photo courtesy of Reuters)

******************************************************************The RSI portfolio outstripped the market averages with a gain of +0.71%, helped by strong showing in ZROZ, XHB, TLT and IYR. Losses were tiny compared to the big winners.

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After the market close RSI produced three buy recommendations:

• Buy 108 shares iShares S&P SmallCap 600 Index (IJR); Stop = -$9.21 Target = +$27.64 Volatility = 5.21%
• Buy 236 shares iShares Russell 3000 Growth (IWZ); Stop = -$4.23 Target = +$12.70 Volatility = 3.49%
• Buy 189 shares Vanguard Large-Cap ETF (VV); Stop = -$5.27 Target = +$15.81 Volatility = 3.59%

All these are risk-on positions. Of the three picks, I favor the first one. It is exhibiting stronger money flow of the three. If you need more portfolio exposure to small cap this may be what you need. With that said, the other two may fit your need in the growth and large cap sectors.

Catch you later.