This was a very interesting day. Of lesser importance, but still very interesting, 14 of the 15 Internets I track took gas, ranging from 1/8 to 7 11/16 points. When these shareholders collectively figure out that they're playing musical chairs and they're short one chair, it could get ugly.

What was important today, and was very important, was the increasing market breadth. The Russell 2000 was up over 10 points, which is a tremendous gain for that index. It is nearly a 2 1/2% rise, and puts that index at more than a 4 month high. The action on the Dow Industrials was about as rare as the two full moons we'll get this month. While the Dow fell 93 points, advancing issues overwhelmed decliners by a ratio of 23 to 8. While the Nasdaq had a nice gain of 25 points, advancing issues scored a much more impressive gain over decliners by a ratio of 31 to 13.

An interesting anecdote along these same lines, comes from a review of 58 Biotech/Genomic stocks I track; a whopping 47 were up, 5 were down, and 6 were unchanged. Admittedly, these stocks have been beaten-up and tax loss selling just finished, but they are very positive numbers.

I would still hold the market leaders (excluding the Internets as I have difficulty valuing them) and would avoid the temptation to sell them at these high prices in the hope of buying them cheaper some weeks or months ahead. As previously reviewed, that's too hard to do. It's known as market timing, and not many investors do it very well, as they don't buy back in when they should, either out of greed or fear.

I would commit new funds to mid-cap and smaller issues, providing the earnings outlook and growth story make sense. If you are thinking of buying anytime soon, now is the time. Have no fear, and buy, buy, BUY! Stay tuned.

The Market Pro - December 31, 1998