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Market Wrap

Nasdaq sets a new all time high as tech investors participate in a feeding frenzy.

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        12-07-98         High     Low     Volume   Advances Decline
DOW     9070.47 + 54.33 9084.11  9003.78  658,827k  1,710   1,322
Nasdaq  2040.64 + 37.48 2040.88  2007.35  803,680k  2,016   2,080 
S&P-100  586.16 +  6.01  587.00   579.87   Totals   3,726   3,402
S&P-500 1187.70 + 10.96 1188.96  1176.71            52.2%   47.7%
$RUT     401.17 +  2.80  401.17   398.37
$TRAN   3115.83 + 63.58 3152.94  3049.81 
VIX       23.83 -  1.12   25.93    23.60 
Put/Call Ratio      .47

Nasdaq sets a new all time high as tech investors participate in a feeding frenzy.

Compaq, Texas Instruments, Intel, Microsoft all set new highs as the growing PC demand accelerated to cause shortages in some components. I believe it. I was in a Compusa at 10:AM Sunday and there were long lines at every checkout counter with shopping carts piled high with printers, monitors and software. It appears the gift of choice for this season could be PC gear and I am sure the gift givers are getting upgrades for themselves as well.

This tech frenzy lifted the Dow out of its depression late in the day and powered the Nasdaq to a new closing high of 2040.64.

The transports soared +63 today after Fedex made comments about their earnings expectations from increased shipments from Internet sales. They said the +$20 billion in expected Internet sales would result in significant increases in package traffic from Internet sellers. FDX was up over $7 at midday.

In spite of the positive market the Russell-2000 failed to rally out of its recent trading range of sub-400 until the last 10 min when it spiked to 401.17. This could be the start of a breakout since it has been trading between 396-399 for the last two weeks. With the transports positive and the Russell-2000 showing signs of life we could see new life for the Dow this week.

The oil services sector was strongly positive today after completing a triple bottom formation. Everyone was saying positive things about oil services all day. After the bell today Amerada Hess announced that it was cutting its exploration budget by 40% and starting a new round of layoffs. They will only drill 30 new exploratory wells next year instead of the 66 previously planned. Whether this will send the oil services back down for a quadruple bottom is now the question. If they go any lower investors will have to drill to find the stocks.

FYI - Gas prices are hitting a 10 year low across the country. The lowest I have heard is $.69 a gallon in New Jersey. I feel sorry for the people in IL. Their taxes per gallon are almost that much.

Ascend, a current pick, soared +6.88 today on news of a partnership with Frontier Communications to provide 2.5GB DWDM equipment. This is 16 times faster than typical ATM technology currently in use.

Other winners today were AMZN +2.50, CMGI +2.38, EMC +3.75, ETEC +2.75, IBM +2.94, SUNW +2.63, TXN +2.81, WCOM +2.06.

The only losers today were BK -.13 and PG -1.63.

Futures are flat at 7:PM so no help there. Japan opened up and hopefully Hong Kong will do the same.

I am looking for a continuation of the rally tomorrow IF THERE IS NO NEGATIVE NEWS OVERNIGHT. The reports out Tuesday are not normally market movers, so we are on our own. News is the key.

Keep your eyes and ears open.

Good Luck

Jim Brown

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