It’s one of the oldest rules of investing and undoubtedly among the truest: Don’t fight the trend.

Simply put, it means you should not bet against and investment that is in a long-term rising or falling pattern. The idea is simplistic and very sensible. Think about it in some other contexts. Investing allows you to bet on the winning team or contestant while the contest is ongoing. Imagine being able to place a bet on a football game at the start of the fourth quarter. Or imaging being at a horse race and being allowed to change your bet halfway through the race.

This is what investing does. If your investment is doing poorly, you can move your money to something that is doing better. Of course, being able to change your bet does not guarantee success but it undoubtedly improves your odds.

Sometimes trends can be difficult to see, especially over a short period. That has certainly been the case recently for the U.S. domestic equity market. But a longer period of observation makes it obvious that major stock indices are in an upward trend. The chart below makes this easier to see. It shows the performance of the Nasdaq (black line), S&P 500 (blue line) and the Dow (gold line) over the past year.

During that time the Nasdaq is up 21%, the S&P 500 is up 13% and the Dow has gained almost 12%. From a profit perspective, that clearly a nice advance. I’ve added some green arrows to the chart to point out the major upward moves during that time. Notice that all of the gains really came in four separate moves. The last occurred in early January. Since then the three indices have generally traded sideways.

I generally don’t try to make market predictions. I’ve learned that as soon as I try to forecast what the market is going to do, invariably something unexpected occurs. Nevertheless, right now I’m fairly confident that major U.S. stock indices will continue their gradual advance. An element of seasonality could come into play soon. Early summer is traditionally a good time for stocks. In 2005, stocks made a nice move in May and again in July. That doesn’t mean it will happen again in 2006, but technical indicators that give us some clues to market health are generally positive now. For example, the number of stocks making new highs on both the Nasdaq and New York Stock Exchange far exceeds the number making new lows. That is normally a sign of a robust market.

There are still plenty of things that could derail stocks and the mostly sideways movement this year is evidence that traders are being cautious. But so far even $75 a barrel oil and continued interest rate hikes have failed to produce a significant correction. So for now, you might as well keep your money on the horse that is in front.