The market staged a strong rally today. In what seems to be a positive reaction to a divided government outcome the major averages gapped higher at the open and rallied further most of the session. Some selling later in the day saw the major averages lose some of their gains, but they still put on a real advance. The Nasd averages finished high in their trading ranges while the New York averages closed in about the middle of their trading ranges. The greatest strength was in the Nasd averages with the COMPQ and the NDX gaining 3.85% and 4.41% respectively. The SPX was higher by 2.21%. Volume showed a nice advance across the board. It was higher by 12.66% on the New York and 12.29% on the Nasd. This was enough to produce a follow through on the SPX. Leading stocks were higher as well with the leaders index gaining 3.34% on the session. The index closed in the upper half of its trading range on higher volume. The market reacted positively to the prospect of divided government. It means that a lot of the proposals made during the campaign, like significantly increased tax rates, will not happen. The final outcome is still in doubt in the Presidential race but there was no wave in either direction. I said yesterday that volatility could lead to a follow through, and that happened today. We had a very strong rally, especially in the big cap tech stocks, and the market accomplished several of the things I said needed to be done. Primary a break above the 50 day moving averages on heavy volume. There are also a pretty fair number of attractive stocks out there that could be purchased. This follow through is however pretty poorly confirmed. The only one of the confirming indicators to confirm the follow through is the %E’s. That means that this is not a high probably follow through and should be treated with some care. Also big 4% advance days have a way of happening in bear markets. It is ok to take some positions, but I would not get in to heavily until the rally attempt proves itself. Jerry