NEW YEAR RALLY BEST SINCE 1988 - LOW VOLUME QUESTIONS SUSTAINABILITY

DOW, NASDAQ, S&P 500 SURGE ON BELOW AVERAGE VOLUME... Today's broad based market rally is the best new year start we've seen in 15 years. (Historically, January 4th, 1988 was the last time the market had such a robust start.) The Dow marched ahead 3.19% to close back above its 50 day average. DIS (+5.8%), SBC (+6.6%), JPM (+6%), and INTC (+7.2%) led the Dow higher. (Both INTC and JPM were featured in today's earlier update.) The NASDAQ Composite surged 3.69% with buying concentrated in Computer, Telecommunication, and Financial related stocks. The S&P 500 gained 3.32% to close back above its 50-day moving average. However as spectacular as today's rally seemed on the surface, it was accompanied by lighter than average volume -which raises a caution flag. Therefore the ability of the market to follow-through and/or launch a sustainable upward move, at this juncture, remains questionable. We will be monitoring the markets closely in the next few trading days and will keep you posted on any new developments.

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