Stocks are surging this morning on news of better-than-expected earnings from bellwethers Intel and JP Morgan. The S&P 500 Index now is above its Sept. 23 high of 1080. So, does this new high represent another breakout for stocks, or is this a market fake out and the hitting of a new top for equities? We'll all know for certain in the weeks ahead, but until such time, there are two things you can do to make sure you take maximum advantage of current conditions.

If you now are long on equities, my advice is to continue holding your positions. You also should make sure you have stop losses on each and every position in your portfolio to ensure you don't let your gains slip away. 

Now, one thing that worries me about this rally is that to a large extent, prices have been fueled by the trillions of dollars of government assistance -- some might call it interference -- in the free market. The amount of cheap, short-term money invested in the stock market by professionals seeking fast gains is huge right now, and if those professionals decide to move out of stocks, we could be in for a waterfall of selling that could take stocks down hard.

Another fly in the ointment right now is the potential for rising interest rates. Below is a chart of 30-year Treasury yields. 

Here we see rates beginning to creep higher since the beginning of October. I think if interest rates start to climb significantly higher, the cost of borrowing by businesses and the federal government will wreak havoc on our economy. I am paying very close attention to rates here, as it could be the spark that sets a market sell-off on fire.