Well, it's about time. After banging on the table for weeks that this was a buying dip and that the recent six-day pullback was merely temporary, given all the evidence of strength (impressive breadth, stable commodity prices, and lack of panic in the options market), the bulls have reengaged.

The major averages gapped higher Friday morning on an inline Chinese GDP report, decent JPMorgan (JPM) earnings and the lingering aftereffects of a surge of central bank actions earlier in the week. By all indications, prices are headed even higher. Here's how I'm playing the rise.

Really, the positive momentum started midday Thursday as stocks rebounded from deep intraday losses after the sellers burned themselves out. They were simply holding back the tide, given all the factors I discussed in my previous post.

Those factors included extreme positions by smaller traders in the futures market against the euro, for the dollar and for U.S. Treasury bonds. At the same time, big commercial traders (who tend to be proved right in the end) were taking the opposite sides of these trades. We've also been seeing very strong breadth numbers as more stocks participate in up days and fewer in down days.

And let's not forget the attention smaller, riskier stocks -- such as those in the Russell 2000 small-cap index -- have been receiving while larger, safer stocks are underperforming, as shown in the chart above. That's a sign traders are seeking out high-beta positions to get maximum exposure to the uptrend.

Finally, while the economy is far from great -- with big unresolved structural issues like long-term unemployment and the debt/deficit problem -- there are some short-term positives that have yet to be appreciated by the market. I discussed those in my column "A new US recession? Not yet" earlier this week.

So what should investors do?

The more conservative should focus as much as they can on small-cap stocks via an ETF like the iShares Russell 2000 (IWM) or even the leveraged Ultra Russell 2000 (UWM), which I've recommended to my newsletter subscribers as a way to get overall exposure to the upswing.

For those looking for more specific, faster-moving ideas, smaller regional banks are an area I'm focusing on now. I'm adding Columbia Banking System (COLB) to my Edge Letter Sample Portfolio as shares break up and out of a five-month downtrend. If that's too risky for you, consider the KBW Regional Banking SPDR (KRE).

I found COLB with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)

Disclosure: Anthony has recommended UWM to his newsletter subscribers.

Check out Anthony's investment advisory service The Edge. A two-week free trial has been extended to MSN Money readers. Click here to sign up. Contact Anthony at anthony@edgeletter.c​​om and follow him on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.