Well, I got the bout of profit taking I was looking for yesterday, but the market made a very impressive comeback. Impressive enough that last night I made my shopping list for this morning; I got in at the opening, all with market orders. When I want in, I want in, and I don't want to fool around trying to shave 1/8 or 1/4 point. Extracting the last fraction belongs to slow-moving markets, which is the last thing this market is.

Today was powerful Dow Industrials-wise, ending with a 105 point gain. The bad news was that advancing issues slightly trailed decliners. But the good news was great news, with cyclical issues like machinery, metals, and papers making significant gains after many months in the rat-hole. If this is the beginning of market broadening and new leadership, it will be great news for the market. If it's just a flash in the pan, then the Bull has to live off the billions that are still pouring in. In fact, almost 8 billion came in the first 4 days this week! Yes indeed, money makes the heart grow fonder.

Aside from watching the ever-important money flow, we must keep a close eye on the earnings reports which will come in starting now. That will show the direction and strength of this market after the rush of new money subsides. If you took our bullish advice that a strong Monday, December 21 would be an important buy signal, you would be in good shape and should have made significant profits. This Bull is still running and snorting, and has a way to go. So stay with it, but be watchful for the unexpected. When things are too good, that's when something could come out of left field to spoil the party. Stay tuned.

The Market Pro - January 8, 1999