The January rally appeared to be coming early for investors last week, as the markets posted solid gains across all of the indexes. The Dow rose 177 points, or 1.7%, closing at 10,287, its highest level since June 2001. The NASDAQ added 25 points, or 1.2%, and is now up 7.8% this year, closing Thursday at less than 2 points below its 2004 high. The S&P 500 added 16 points, or 1.3%, and is now ahead 8.8% this year. It closed Thursday at 1,210, the first time it has closed above 1,200 in three years. The Russell 2000 added 7 points, now up 1.1% this year.

As positive economic reports were released last week, enthusiasm for stocks grew. An upwardly revised third quarter GDP report combined with favorable news on durable goods orders and consumer spending, helped equities post further gains. Stocks were also aided by falling oil prices, as crude oil fell more than $2 per barrel. However, the areas that likely contributed the most to gains were the favorable seasonal considerations and solid technical factors.

More good news to come? Reports were that last-minute Christmas shopping was better than expected. This should contribute further to the favorable seasonal considerations that have seen stocks post average gains of 1.5% over the last five trading days of the year and first two days of January.

What can investors look for this week? Not too much economic news. There are no major companies announcing results this week, no conferences and few economic releases. In fact, only December Consumer Confidence on Tuesday, November Existing Home Sales on Wednesday and the Chicago PMI on Thursday will be announced. Crude Oil Inventories will be released on Wednesday and Weekly Employment Claims will be announced on Thursday. The bond market closes at 2 p.m. on Friday.

IMPORTANT NOTE: This Wednesday - December 29, 2004, the OTCDigest.com web site will be down for up to 5 hours beginning at 7:00 AM Pacific Standard Time. This is for annual maintenance and may take as little as 2 hours so check back after Noon. If you have any questions please email us at info@otcdigest.com and we will respond as soon as possible.

Stay tuned!