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NEW YORK (TheStreet) -- At the beginning of the normalization phase of Federal Reserve policy, market technicals are positive but conservative investments in utilities and Treasuries are outperforming. Investing in stocks for aggressive growth will work as long as technical momentum is strong. Investing for dividends and safety also works as many investors shift out of stocks.

Given recent market volatility conservative investors are winning year to date suggesting that aggressive investors should begin to book profits and shift to more conservative investments.

Quantitative easing has ended and the normalization of Fed policy has begun. The next step is that the Federal Open Market Committee will begin to raise the federal funds rate six to nine months down the road. The funds rate has been 0.00% to 0.25% since mid-December 2008.

The huge inventory of bonds and mortgage-backed securities will remain on the balance sheet. When a Treasury bond matures a new long-dated bond will be purchased. When a mortgage-backed bond matures it too will be replaced. Reducing the balance sheet will begin once the FOMC begins to hike the funds rate.

Thursday's price action is sending investors messages about the markets and sets the stage for both growth investing and shifting to more conservative investments.

Dow Transports set an all-time intraday high at 8792.99 before the Fed statement on Wednesday which was a test of a key monthly level at 8790 based upon my technical analytics. This is a level at which growth investors should book profits and shift to a more conservative investments.

Dow Utilities set a new all-time intraday high at 590.95 on Thursday up 20% year to date. Investors are opting for the safety of dividend stocks in lieu of more volatile stock investments.

Another sign that investors are being conservative is that yields on Treasury notes and bonds are not ready to rise significantly. Investors in the iShares 20+ Year Treasury Bond ETF (TLT) - Get iShares 20+ Year Treasury Bond ETF Report are enjoying a year-to-date gain of 18% outperforming all major equity averages.

Let's look at the daily chart for the S&P 500.

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The daily chart for the S&P 500 shows that this major average is above its 50-day and 200-day simple moving averages (blue line & green line) at 1967.18 and 1911.39, respectively. This implies that a new high is feasible, but the index lags with a year-to-day gain of 7.2%. The decline from the Sept. 19 high at 2019.26 to the Oct. 15 low at 1820.66 was 9.8%, shy of a full correction.

Let's look at the weekly chart for the S&P 500.

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The weekly chart for the S&P 500 shifts to positive given a close on Friday above its key weekly moving average at 1953.2 as momentum shown on the red line at the bottom of the graph is turning up. The 200-week simple moving average (green line) at 1536.14 is the major uptrend last tested in September 2011.

In sum, there are two types of investors at the beginning of the normalization phase of Fed policy. Both strategies are working.

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.