Signs from China, the US, and even the European economies suggest a positive market through the end of 2012. Here's where to put your money if that holds true, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

In my most recent column, "3 Ticking Time Bombs of 2012," I gave you my "relatively positive" timeline of macro trends for the fourth quarter.

Today, I'm going to give you some picks for profiting if my estimate of the 65:35 odds in favor of a relatively optimistic macro picture for the quarter turns out to be correct, a rough guide to how to stage the implementation of those picks, and some suggestions on what to do if the quarter winds up on the 35% side of my 65:35 forecast.

I expect you to use my suggestions to mix and match with your own view of the quarter to come, and with the stocks you already own, to make up an individualized portfolio. Your goals and risk tolerance are undoubtedly different from mine, and your portfolio should reflect your parameters.

Let me start with my take on the US economy for the quarter.

In the US, Tech and Homebuilding
In my October 5 column, I wrote that the US economy is:

  • showing signs of growth—accelerating from very sluggish to moderately sluggish
  • the financial markets now assume that Washington won't really drive the country off a fiscal cliff and back into recession in 2013.

"Both of those assumptions could turn out to be completely wrong," I wrote, but—and this is a critical piece of timing—"investors aren't likely to have evidence that they're wrong until the very end of the quarter or until the beginning of 2013."

If my view of the macro background for US stocks in the fourth quarter is correct, I think it's critical that you review your US portfolio to make sure you have enough exposure to growth stocks, so that you'd participate in any gains in the quarter. I suspect that a lot of investors worried themselves out of the growth sector at least once in 2012, and haven't fully restored their exposure to this sector.

I say this with the full realization that the S&P 500 has rallied to near a new high, and that US growth stocks, by and large, certainly can't be called cheap. But it looks to me like the market wants to move higher—on expectations that may ultimately be disappointed in 2013. I think the risks are reasonable right now and support increasing your exposure to growth stocks.

I also think that you can make those risks more reasonable if you look for stocks in sectors that are likely to show strong growth even if the economy grows only modestly. That doesn't remove all downside risk, of course, but it does improve the odds that you're buying above-average growth and will get more return to the upside.

Where to look? I'd look at the technology sector, particularly at the members of what I call the Apple (AAPL) ecosystem. This group of stocks, as I'll explain in my next column, is set to participate in the extraordinarily sales numbers that will be rung up this quarter by Apple's iPhone 5.

Apple certainly belongs to this group—and the stock is a member of my Jubak's Picks portfolio. But so do Qualcomm (QCOM) and Broadcom (BRCM). I'll have more on the Apple ecosystem in a few days, but in the meantime I'll add Qualcomm to the Jubak's Picks portfolio.

What else? Stocks in the housing sector. Housing is definitely putting in a bottom, and shares in the sector have rallied—and are likely to continue to do so on expectations of continued acceleration in sales.

I'd look here at PulteGroup (PHM), a company with bigger exposure to first-time buyers than either Toll Brothers (TOL) or Lennar (LEN). I'd also look at the stocks of suppliers to the housing industry. My favorite here is Lumber Liquidators (LL), a low-cost flooring retailer.

In China, a Speculation Game
Trends in the US economy and market could well show some fundamentals in the fourth quarter to support rising stock prices. For China, the setting for my next group of macro trends, the fourth quarter will rest almost completely on expectations.

(Just in case you needed a reminder of that, on Monday the World Bank lowered its forecast for 2012 growth in developing East Asia, which excludes Japan and India, to 7.2% from 8.3% in 2011. That would be the slowest pace since 2011. The prospects for a rally in China rest on that forecast marking the low in growth for this cycle.)

The story behind those expectations goes like this: In China, the November 8 meeting of the 18th Party Congress will finally put a new generation of leaders headed by Xi Jinping in power.

Speculation in the Shanghai market (before the extended and recently concluded Golden Week holiday) that the government and the People's Bank would strew new economic stimulus in the path of the incoming officials pushed up prices in a very depressed Shanghai market. I'd expect another flurry of stimulus measures after the congress itself. (For more on the nature and limits of that stimulus, see "The World's Next Big Stock Rally.")

Tickers Mentioned: Tickers: CCOZY, ACH, CAOVY, JIXAY, BIDU