Solid Action

Today's action was very constructive. The market held on to its early gains, and added to yesterday's rally. Volume was again above-average, and breadth was strong.

The Hi/Lo index on the NYSE surged to +259. This is well above the level the index hit in December when the SPX reached 1275. Moreover, its the highest reading since last August. So it looks, at least for now, as the leadership that was so lacking in the market may be broadening again.

Remember, this is one of the indicators that caused me to turn more cautious on the market. But if leadership expands, and we get some follow-thru to yesterday's rally, my cautious optimism will return.

I still feel strongly that we will get a more pronounced correction sometime in Q1, but if the market can hit new highs, maybe it will not be a January event.

Have a great night--