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Tabell’s Market Letter – January 08, 1960

Tabell’s Market Letter – January 08, 1960

Tabell's Market Letter - January 08, 1960
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filE COft Walston &- Co. Inc Mernbe,'s New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 8, 1960 After two days of sharp rally, the market sold off m the final two sessions of the week and lost all of its previous gains, plus a bit more. The Dow-Jones Industrial Aver'- age moved above the August high of 683.90 to reach 688.21 on Tuesday. However, the new high was caused mainly by strength in two issues, General Electric and Eastman Kodak. Also, the Dow Industrial average was the only one of the important averages to reach new h1gh territory. I have expressed concern in my last two letters about the poor technical action of Jhe ma,r!et despjte the strength,jn the .averages . lVIost of this concern has been about '-0. the poor breadth-of-the-market behavior.- Strength has been cen'tered in -afew stocks, . while the great majority of issues are moving sldewise or are in downtrends. This indi- cates a loss of upside momentum. Actually, this 1S not an entirely new development. lVIy advance-decline index started to show detenoration as early as April. When the mar- ket turned down in August continuation of this action was to be expected. But since late September the index has failed to turn around with the advance in the market averages, and desp1te the 75-pomt advance on the Dow Industrials, the advance-decline mdex 1S at just about the same point it was when the average was 615. Other breadth-of-the mar- ket indices, such as new highs and new lows, advancing and declining volume show, at best, neutral action. As I noted in recent letters, I had hoped these indices would start to show better action after the turn of the year. So far this has not occurred. These indices must continue to be watched closely. One of the more encouraging bits of technical action has been the above-average action of the Rall average. While the Industrials have 1 advance from the December 31st intra-day low, the Ra11 average at Friday co 1GB. 10 was still well above the December 31st low of 153.36. Thls eth ' . t h i long period that the Rails have shown better action than the Industn n lt inues for a while it may mdicate an important change in earl. pressed group. , As far-at'nhe g'eneral-market is'co e' d, S' alfacts-must'be borne m mind. The advance that started in e fore, subj ect to wide price n. wh\M s ed a mature stage and is, thereadvance starts, the initial move is almost the entire k e here are only a few backward groups. It usually takes abo 0 complete this initial upward surge. After that time period is reac d, th rket becomes more selective and price swings become wider. In past letter ave compared the present market to the 1953-1957 I'lse. On that occasion, a I' the market had ltS initial upswing from September 1953 to March 1955, there were five wide price swings before the move ended m June, 1957 and a 200/0 decline followed. The initlal phase of the present market ended in August of th1S year. Since then, the entire market has failed to participate in advances and price corrections have been wider and 1t has been increasingly more difficult to select advancing stocks. I suggest you read over the reprmt sent you in November of my talk to the Arizona Bankers Convention. In it, I suggested that we are probably in the final phase of the advance that started in 1949. After it ends, it will be followed by a long and lengthy consohdation phase. From here on, wide price swings are to be anti- cipated, Present investment polIcy indlCates'a.graduallightening of accounts durmg, periods of strength. All stocks will not reacli their highs at the same time. l! said in lo.st week's letter that most analysts ippear to be looking for new highs in the 700-750 renge to be made sometime m mlddle or early 1960, followed by a reaction m the latter half of the year. Recent action leaves some doubt as to the ability of the averages to reach the upper level mentiGI'ed o.bo\'c. Dow-Jone's Ind. 675. 73 Dow-Jones Rails 158.10 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not. and under no Clfcumltnnces IS to be construed as, an offer to sell or n sohcltatlOn to buy any cecurit\CS referred to herem The mformabon contamed herem IS not guaranteed as to accuracy or completenE'!S8 nnd the furfllshmg thereof IS not, and under no CIrcumstances I'; to be construed as, a representa '\ tlon by Walston & Co., Inc All expressions of oplfllon are lIub)ect to change Without nohce. Walston & Co, Inc, and Officers, Directors, Stockholders and Employees theroof, purchase, sell and may have an interest In the secUritIes mentioned herem This market letter is mtended and presented merely as a genera\, … mformnl commentary on day to day market news and not as a complete anah-sls Addlbonal informatIOn 'Ith respect to any securltles referred to herem WIll be upon r e q u e s t ' \\ N 30t I

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Tabell’s Market Letter – January 15, 1960

Tabell’s Market Letter – January 15, 1960

Tabell's Market Letter - January 15, 1960
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/- FILE Walston &Co. —–Inc —– Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 15,1960 The market declined sharply on the first three days of the week and regained only a portion of the losses by the end of the week. At the week's intra-day low, the Dow-Jones Industrials reached 653.11, which is a declme of over thirty-five pOints from the all-time high of 688.21 reached on the first trading day of the new year. The decline in the Rail average was less severe. From a high of 160.90, it declmed to a low of 155.51. Referrmg to my letter of December 30th, it 1S a discouragmg fact that the DecemJ;ler 10ws..9f 658.48 .on the R'LI'Jopes the Standard&- Poor's IndustriafIndex were both January 12th, the earliest in the past twenty-five years that such a breakout has taken place. The low of the previous De- cember was broken in twelve of the past twenty -four years. In each case, the down- side breakout occurred in the early months of the year, mostly in January or February. In most cases there was a fairly substantial decline from the earlier h1gh of the year. In the worst case, it was 46 1/2/0 in 1937. In 1956, the subsequent decline was only 5/0. The average of the twelve years was a decline of 200/0 from the high to the low. However, the sharpest declines were in the seven cases prior to 1947. In the five declines since then the average decline from the high to the low has been 12/0. In seven mstances, the market closed lower on the year, but in four cases a subsequent rally from the lows resulted in a higher closing for the year and in one year the market was unchanged. In the worst decline (1937) the market fell 43/0, and in the best of these years (1938) the market was able to record only an 11/0 advance. These flgures are all based on Standard & Poor's 0 On the more encouraging side of the mar;Mt w s th the Rail average. I mentioned this in last week's letter ont' a to show above average action during the past week. The rails hoi; a portlOn of their advance from- the December-31 st–1owof-15 thWa y-4th' hlgh-of-1-60790 .'—'. This, of course, is only or sitlve action would be the ability to push above the high O\JIh nt technical pattern of the rails is most interesting. It 1S 1t is possible that the pattern has long term 'v Ab1lity to hold around present levels would glve indic '0 to tltude toward this unfavored group might be changing. There 1S, of rse, no change as yet in the breadth-of-the-market action which has be giving unfavorable warning Signals for the past few weeks. Until these indications change, I would contmue to adopt a very cautious attitude toward the market and lighten commitments on strength. It is also imp0rtant to watch the relative strength action of each mdividual group. During declines like the past week important clues to the identity of the leaders of the next rallymg phase are quite often given. The stocks that show the best downside resistance or relative strength',even though they are declining, are more often than not the leaders of the next advancing phase. For example, in 1957, durmg the early stages of the decline, the favor- able relative streI1gth of gr2'lPs as the food, chai);!!!, foods and tobaccos, indicated that they might be the leaders of the next rallying phase. It mIght be a bit early to select comparable groups for the present, but if the favorable relatlve strength of the rails continues, they will be among the candidate s. Dow-Jones Ind. – 659.68 Dow-Jones Rails – 157.98 EDMUND Vl. TABELL WALSTON & CO. INC. This market letter IS not, nnd under no circumstances 15 to be construed 8S, an offer to sell or a sohcltatlOn to buy any securities referred to herem The mformatlOn contamed herem 18 not n.s to nccuracy or completeness and the furnlShmg thereof IS not, and under no Clrcumsto.nces IS to be sonstrued as, a representa- bon hy Walston & Co. Inc All expressIons of opmlOn are to change WIthout Walston & Co, Inc., and Officers. Directors, Stockholders and Employces thereof, Pllrchn'le, sell and may have an mterest m the securltJes mentioned herem ThIS mnrket letter IS mtended and presented merely as general. \vUmformal commentary on day to da)o market ncws nng not as a complete analYSIS AdditIOnal information With respect to any secul'ltJes referred to herein I furnished upon request.

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Tabell’s Market Letter – January 22, 1960

Tabell’s Market Letter – January 22, 1960

Tabell's Market Letter - January 22, 1960
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t;r Walston &- Co. FILE CO Inc Members New YOk Stock Excilange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 22, 1960 The market continued its decline in the early part of the week and the Dow-Jane Industrial average reached an intra-day low of 641.40. The RaIl average, at the week's low of 154.42 was stlll above the December 31st low of 153.36 and is the only one of the four Dow-Jones averages that is higher than the year-end closmg. The Industnal average is down over thirty paints. The market appeared to develop some resistance as the week ended. As I wired early in the week, there is a support zone at 640-630 which should furnish at least temporary resistance. Also, a number of leading issues have reiched or are approaching downside potentials for the shader term. There is no chang as yet in the unfavorable breadth of the market, but this will take time to develop. A few groups are beginning to show improvmg relative strength, but this also will take time to develop. Aircrafts, mining and smelting and natural gas are showing improvmg patterns. There is quite a divergence between individual issues in each group, however. The stocks mentioned m my recommended list for long term 'holding are also showing divergent relative strength patterns. The following are showing the best longer term relative strength action Butler Bros. (375/8), Cluett Peabody (58 1/4), Coca Cola (154), Consolidation Coal (36), Electric Storage Battery (60 1/4), Fansteel (63), Ferro Corp. (46 3/8), Fruehauf Trailer (26 1/2), Great Northern Paper (50 7/8), Great Western Sugar (31 3/8), Heinz (86 1/2), Kaiser Aluminum (49), Magnavox (36 1/8), Monsanto (49 1/2), National Distillers (33 1/4), Rayonier (25 7/8), Singer Mfg. (55 1/2), U. S. Foil B (41 5/8), West Virgima Pulp & Paper (52), Westinghouse Elec. (103 1/2) and Wilson & Co. (40 1/8). The last stock, Wilson & Co., has been held of its plants. It would appear that a full operation of pla t i troubles at some probabIlity and that the growth trend in earmngs will be resUd.,Af e urr abor trouble is ended shortly, it would appear that earnings of 5.p01 share Id be possible for current year ending October 31st. cause of labor problems and a flre ur' t s ,in\tM' 1 iscal year were cut ber probably cost the company 25 a share in earnings. Earnin s ar 1959 of 3.85 were well above 1958 earnings of 3.10. In Limited (18 1/8) also appears to be an interesting p ki of its South Am 'c 0 u more speculative than WIlson because selling around six times estimated earnings of 2.80 to 3.00 fo . Other issu s i list have been showing less favorable relative strength, but appear to be ne ownside potentIals. Amencan VIscose (40) may work a bIt lower into the 39-35 support levels, but should be a good long term holding. Earnings will be somewhat lower because of the tlre yarn price war, but are estimated at 4.00 to 4.50 a share for 1960. The aircrafts have shown poor long term relatIve strength action, but the shorter term Implications are Improving. Northrop Corp. (30) and Rohr (16 1/2) could rally from present levels. The oils have been below average performers, but Royal Dutch (43 3/4) has been showing some improving technical actlOn. Would switch Shell Transport (21 3/4) and Union Oil (38 5/8)into Royal Dutch (43 3/4). Getty Oil (17 1/2) can be held for a rally. The airlines are approaching downside potentlals and appear oversold. Northwest AIrlines (27) which reached its technical downside potentlal of 24, appears more attractive tha-n Pan American (20 1/8). Chicago; & Pacific (24), m the group, has shown better technical action recently and merger possibilitles with Rock Island indIcate the stock still has most interesting long term potentials. Newport News Shipbuilding (35 1/2) and Schenley (31 3/4) are near support levels, but may be slow. Dayton Rubber, International MinErnls and Pennsalt Chemical are showmg average relative strength, but I am removing them from the list in favor of the group m the second paragraph. EDMUND W. TABELL Dow-Jones Ind. – 645.85 V;C;,LSTON & CO. INC. Dow-,rone s Ralls 155,63 Thl mnrket letter IS not, and under no clrcumstl\Tlces IS to be const-rued as, an off!' to sell or a sohCltution to buy any 8ccunbes l'.efcrrcd to herein The informntlOTl contamed herem 15 not gunrnntccd as to aCCUl'ncy or completeness nnd the furnlshmg thereof IS not, and under no Circumstances is to be construed as, a rcprC'lentahon hy \\'alston & Co., Inc All e'tpresSlOns of opinIOn nre subJect to change Without notice Walston & Co, Inc., nnd Officers, Directors, Stockholders and Employees thereof, purchase. sell and may ha\'e an mtcrest m the SecUritIes mentIOned herem ThiS market letter IS Intended and presented merely as a Itencrnl, mformal commentary on fin)' to ilay market news and not as a complete analYSIS AdditIOnal mformntlon With respect to any securities rderred to helIn furm;hed upon request. – —-….-.;;

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Tabell’s Market Letter – January 29, 1960

Tabell’s Market Letter – January 29, 1960

Tabell's Market Letter - January 29, 1960
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fiLE COpy Walston &Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADElPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 29, 1960 The market continued its declme for the fourth successive week. At Fnday'se intra-day low of 619. 51, the Dow-Jones Industrial average was off 69 points from the- all ,time high of 688.21 reached on January 4th, the first trading day of the year. The Industrial average appears to be approachmg a test of the September intra-day low of 613.30. The Rail average has a somewhat different pattern than the Industrials. The Rail average reached its low in late November at 145.19, and while it has reacted, the decline has been mild as compared to the Industrials. The week's intra-day low was 1509 ' The breadth-of-the-market index,whlch has been the main source of my concer I.' about-tlfemarket' since'late-Decembe'r; unfav'orable actioh'IChas reached'- ) low below the level reached in September despite the fact that the Industrial average is still above Its September high. The main function of this breadth-of-the-market index i to give warmngs of a possible change m trend. When both the averages and the index a moving in the same direction, the trend then in force is liable to contmue. In the Nove ber-December rise, this typeDf action did not occur. The Industrial average rose fro a November low of 630.99 to over 680, but the breadth-of-the-market failed to rise wit the average and thus gave a cautionary signal. Now both the average and the index are in gear and are both moving downward. The next signal of a change in trend of more tha short term sigmficance will probably be given by the breadth-of-the-market index. If i can reverse its downtrend, whIle the average is still moving down or sidewise, a signal of intermediate significance would be given. I have several other indices of market breadth besides the one mentlOned above that also mIght give change of trend signals. These other indices are all either unfavorable or neutral at the moment. The fact that these signals give no indication at the moment of a chans'n does not preclude the chances of a good techmcal rally m rna et pr sent decline could be reaching a temporarily oversold p osition eh' rally could occur. The type of reversal signal given by the breadth- – e-ma index would be of inter,- mediate reaches new lows. The table when the Industrial – – ,. me of trading on the days in January five pOints. Januar January 1 th January 1 V 3,760,000 3,020,000 3,100,000 660.43 653.86 645.07 6.73 5.82 8.79 January 5th January 28th January 29th 2,790,000 2,630,000 3,060,000 639.07 629.84 622.62 6.78 7.83 7.22 It WIll be noted that volume has not increased on the declme, indicating a drying up of buying rather than heavy llquidation. This does not preclude a day or two of heavy volume for a selling climax. Relative strength patterns are also important to watch at this stage. The groups and individual issues that show abIlity to resist a downtrend are usually the leaders of t e next advancing phase. Relative strength group figures for the past week are not yet avai – able at thIS writing, but if the reader wishes to check near term relative strength actio he might take his Sunday newspaper, or-Barron's, on-Monday and check the week's ran e of prices and note the issues that either closed higher on the week or had only moderate declmes. If volume was heavy – so much the better. Watch the subsequent action of thes stocks over the next week or so as compared to the averages. In a market such as this, investor confidence or lack of it is probably the most i portant influence on prices. This factor is dIfficult to evaluate.A technical approach to t e problem is probably the best method to gauge the investor confidence factor. What h most optimistic and the most pessimistic potentials on technical graphs for the foresee future On the upside I see a potential 700 and a less llkely 750. On the downside proje ion I see 600 and a less llkely 550. This range could hold the market for a year or two. vestment policy should be to lighten commitments in below-average issues as the upper limits are approached, and to add to commitments in issues with a favorable outlook wh the lower limits are approached. In more understandable price terms, the market now selliflg at eg has B de ovflsiae 56tential 6 68 65 ana ali ap!ieie 156tcntiai of 1'8 1'5. ry'he 1 a t tiflt, of OPinIOn are subJect to chanKe Without nollce Wnlswn & Co, Inc, and Officers, Directors, Stockholders and may hu\c an interest In the securities mentioned presented merely as n general, oemformnl commentary on clay to clay mtlrket news and not as n complete analysis Addlbatr.4.Hri-fe/rhinltlior'…. ltH f\f)O t. referred to herein ''.Ill he \\ N 301 e

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Tabell’s Market Letter – February 05, 1960

Tabell’s Market Letter – February 05, 1960

Tabell's Market Letter - February 05, 1960
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I Walston &Co. Inc. Mernbe,'s New York Stock Exchange fiLE COPt NEW YORK SAN LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER February 5, 1960 After two days of rally that carried the Industrial average back to an intra-day high of 640.30, the market drifted lower for the rest of the week. Friday's intra-day low was 623.63 as compared to last week's low of 619.51 and the September low of 613.3 There is no change in the unfavorable action of my breadth-of-the-market mdicator. I am always suspicious of unanimity of opinion. In the past several months there have been three almost unanimous forecasts by economists, analysts and news commentators – (1) At the year-end there was an almost uanimous opinion by government and econorriists-tlllif busineil'S- would reach nevni.ighsiIi-the first -halfof 1960 and then level off in the last half, and that the 1961 outlook was doubtful. (2) Most stock market analysts m their year-end forecasts believed the stock market would reach its high in the first half of 1960 at the 700-750 level and that the year's lows would be reached in the second half. (3) In the last two weeks, almost every newspaper, business magazine and business service has had a feature article on either the wavering bull market or the end of the bull market. In my opinion, there is a pretty good chance that all three of these forecasts could be somewhat off base. The business pattern might not be as optimistic as expect- ed in the first half of 1960, but could hold up well into 1961. In my letters and address- es in Octobe r and November, I also expressed the thought that the averages could reach 700-750 in the first half of 1960 and then react. The fact that everyone else seemed to have the same opimon made me rather uncertain, and when the breadth-of- the-market indices failed to move ahead with the stock market averages in December, I became extremely cautious. The way it looks now, very pOSSibly double cross the experts and make its low in the in the second half. As far as the end of the bull t ha f i ce its high ,maybe we saw the highs in the averages in August, but it would u al to have a market reach its top at a-time when many people -, usually end during a period of . I have expressed started in October, 19,.7 is t f . ad time that the advance that of the long term advance from the terrific 1S at the 1949 lows. When the move is com- pleted, it will be ekWa and lengthy consolidation period before a broad overall advance s. 1S period could be quite similar to the 1946-1949 period when the neld in a narrow 15 trading area for three years. When the low is reached, itwill probably be around the 550 level. When the low will be reached is problematical. The upper limit of the range could be around the 700 level. It is entirely poss1ble that three years from today the averages will be right where they a re-m'day, but possibly with stock A twenty points higher and stock B twenty points lower. This hardly fits the concept of a classical bear market, but it must be real- ized that swings in the stock market have been narrowing in recent years. The yearly range from high to low was over 44 in pre-war markets and has narrowed down to 19 in the past ten years. Selectivity has increased. Holders of quite a few blue chip question the been in a bull market for the past several years. You might have bought a very good growth stock like duPont at 250 in July, 1955, and almost five years later found it was sell- ing at 235 despite the fact that the Industrial average has moved from 460 to 625. On the other side of the picture, the declined 20 in 1957, but in utilities, drugs, food chains and tobaccos would have shown a good profit. In the market I envision for the next several years, stock selection will be much more im- portant than abihty to catch the moves in the averages. Dow-Jones Ind. 626.77 Dow-JonesRails 151.50 EDMUND W. TABELL WALSTON & CO. INC. This market letter IS not, and under no circumstances IS to be construl!'d tIS, an offer to sell or n soliCItatIOn to buy ll!'-Y secuntles referred to herem The mfl)rmatlOn con tamed herein IS not guaranteed as to aCCUfllCY or completeness and the furmshmg thereof Iq not, and under no Circumstances 19 to be construed 1l5, Il representa- tion by Walaton & Co, Inc All expreSSlOns of opinion are subject to change \\.lthout notice Walston & Co. Inc. and Officers. Directors. Stockholders and Employees thereof, purchase, sell nnd may have an Interest In the securities mentioned herem This market letter 1; Intended and presented merely as a general, mformal commentary on day to day market news and not as a complete analYSIS. Additional mformatlOn Ith respect to any securities referred to herem will be furmshed upon request \\)j 301

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Tabell’s Market Letter – February 12, 1960

Tabell’s Market Letter – February 12, 1960

Tabell's Market Letter - February 12, 1960
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Walston &Co. Inc – – – – – FILE 111embers New Yo,-k Stacie Exc/wnge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER February 12, 1960 There appears to be little change in the market picture from that outlined in last s letter. A new intra-day low of 610.17 on the Dow-Jones Industrials was reached on 1I''''''1'-J1' and a new closing low of 618.57 was attained on Thursday. As of this writing, breadth- the-market indicators have given no indlcation of improving action. Short term indicator are approaching oversold territory and a technical rally remams a possibility. On an m- termediate term basis,nevertheless, the trend is still neutral to unfavorable. However, as was pOinted out last week, the market is fairly close to the bottom of the range we envision for the next two-three years. Further weakness, therefore, would seem to provide an' opportunity to make well- selecfecI 1iU'rCliasesorCi'Tong range' basis; Recent action of the various market averages has provoked much discussion of the Dow Theory and its interpretation of the current market. This Theory is probably the oldest and best known of all technical tools. It was first advanced by the late Charles H. Dow at the turn of the century, and has since been enlarged upon by many market student particularly William P. Hamilton and Robert Rhea. In highly Simplified form, the conditions are necessary for the Dow theorist to predict a change in a longer term llD,trenll (1) The market must make a clearly-defined top. (2) The top must be followed by a clearly-defmed decline. (3) A subsequent rally must fail to penetrate the previous top made in (1). (4) A new low must be made under the low made in (2). Obviously, action, the reverse of the above, indicates a change from a bear to a bull market. Such action must take place not only in the Industrial average, but must be con firmed by the action of the Rail average. Failure of the average to the other usually mdicates an uncertain or sideways mar t. us' students of the Theory have added many other factors to v po t ove rules. We have recently made a study of the perform n of e Theory from 1929 to date. T,he -e.ached wererather est! n. which may, of cou-rse, differ-from that of 24 . nals were given in the period under study. Nine of the signals re t ai 10 or more from one signal to the next opposite signal. fi .sjq;jtM'S were whipsaw signals, i. e. bull mar- ket signals given at a vel a bear mar ket signal,or vice versa. However, ;CUJiethe gains on the v li – on whipsaw signa . re nsive enough to wipe out occasional small losses ss incurred was one of 15, based on the average. On the other hand, 0 ose to 70 were recorded on two occasions, the 1930-32 bear market and the -56 bull upsurge. It wl11 be noted at the Theory, as is the case with all technical devices, lS prone to whipsaws. It has, however, successfully pOinted out all major turning points in the market beginning with 1929 and including 1932, 1937, 1942 and 1949. It has been' particularly ineffective in a sideways and trendless market, as exemplified by the pe- riods 1938 to 1942 and 1946 to 1949. Occasionally, valid bull and bear market signals were mterrupted by whipsaw slgnals. This occurred m 1929-1930 and in 1952-1953. The current standing of the market in the hght of the Theory is somewhat question- able. Using the Dow averages, the fact that the Industrials made a new high in January cancelled out any immediate slgnal under the Theory. Even had the Industrials not made a new high, any signal given at the recent lows would have been disregarded as the Rails failed to confirm it. USing-Standard & Poor indices on the -other Dow Theory .0- bear market slgnal was given as both the Industrials and Ralls failed to make new highs in January and posted a new low in the early part of thlS week. Even were a signal to be glven, however, its value by itself as a tool in determining investment policy would be somewhat in doubt. As has been noted above, the Theory is prone to giving whipsaw slgnals in essentially sideways markets. This is, of course, the type of market we look for in the early 1960s. Thus, the obvious conclusion is that whl1e the Theory is an extremely helpful technical tool, it must be taken in con- Junction with other indicators, such as breadth-of-the-market, volume indicators, pOint and figure counts, etc., in order accurately to gauge market probabilities. AWTamb . EDMUND W. VVALStOrJ & TcAolBmE\L…L-. be construed ns, an offc! to sell or a ObCltatlOn to Eu), any sccurl les rererred to herem. The mformatIon contained lierem IS t'iJh'ivletencs9 anli the CurnishIn.t thereof IS not. and under no Clrl!umstanl!es 15 to be construed n';, a cpresenta- 'Ql'.llij,Qo!.All opmlOn arc subJcct to chanve Without notice Wal'lton & Co. Inc. ond Officers, Directors, Stockholders anr! !faYe an Intercst m the securltlcs mentioned herein ThiS market letter IS mtended and pr.esented merely as a general. mformal commentary on dllY to day market news and not as a I!omplctc nnnlY';I'; AdditIOnal mformatlOn With I espcct to any securities referred to herem Will he furnisher! upon request \\TN 301

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Tabell’s Market Letter – February 19, 1960

Tabell’s Market Letter – February 19, 1960

Tabell's Market Letter - February 19, 1960
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Walston &Co. Inc. Members New Yorle Stocle Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER February 19, 1960 After reaching an intra-day low of 603.34 about midway in the trading session on Wednesday, the Dow-Jones Industrial average sharply reversed itself and on increased volume reached a high of over 615, closing ahead on the day. The rally continued on Thursday and Friday, with Friday's intra-day high being 630.26. Short term indicators have turned favorable, and this week's action may help eventually to improve intermediate term prospects. However, it must be emphasized that after a decline which lasted thirty-one trading days with practically no interruption, a fairly sharp technical rally can hardly come as a surprise. Prudent investment policy would di'ctate watching for improving breadth-of-the-market aiicfTormation of a basebe- fore aggressively making new purchases. In speaking of the market above, we use the familiar Dow-Jones Industrial aver- age. The average is a useful tool, but it is, after all, only the product of the individual action of thirty different securities. The followirg table compares the action of the aver- age with two of its components, American Tobacco and Union Carbide during recent market history. 1956 High Sept. 1959 Low Feb. 19, 1960 Close Dow-Jones Industrial Average 524.37 613.30 628.45 American Tobacco 84 1/4 96 1/2 106 3/8 Union Carbide 1333/8 132 1/4 132 1/4 As can be seen, the unlucky purchaser of Union Carbide at its 1956 high would have been just about even at the September 1959 bottom, despite the fact that the aver- ages were some 17 higher. He would have also been en at Friday's close despite the fact that the averages had improved another . in tr9lst, the buyer of American Tobacco at the 1956 high would have in 1 S mber and, even more interesting, a 26 gain at this week's close.\.Yv Obviously, this is another version the facfth-at movements in individual st so en by this e- far re important thari those of the averages. A study of these two r, provide an important clue for in- vestment policy over the To demonstrat this, 0 I cPo go back a little further, to 1952. In that year Union Car d 0 57 on earnings of 3.10 a share. In 1959,earn- ings had improv 0 per share, but the risein the stock carried it to a high of 150 1/2 for 1 4 0 rovement. In other words, about half of Union Carbide's rise was due to impro 0 earnings; the other half of the rise was caused by an increase in the p/ e ratio fro 8 to 26. Anerican Tobacco, by contrast, earned 4.79 in 1952 and sold at a low of 54 3/8. The earnings improvement of 93 to 9.23 this year was better than that of Union Carbide. Yet the rise of the stock to a high of 109 7/8 was only 102, a figure not much higher than the actual earnings improvement. Thus the p/ e ratio at the 1952 low was 11. 3 and at the 1959 high only 11. 9. All this may provide a clue as to why American Tobacco's action has been some- what superior to that of Union Carbide in recent markets. At some stage, a point must be reached where improvement in a stock's price must be generated on earnings im- provement alone, rather than expansion of the pie ratio. Union Carbide's earnings may well continue to grow at the 1952-59 rate. If they do, over a period of time, the advance in the stock should parallel the earnings growth. It is difficult, however, to project much in the way of further expansion of the already high pie ratio. On the other hand, if the earnings of American Tobacco continue to expand at their current rate, there would appear to be plenty of room for improvement m the mul- tiplier of 12 now being applied. Thus, the price of the stock could expand not only on growmg earnings, but also on improved investor confidence in the company. An analysis of stocks having the most at1ractive long term technical patterns would seem to indicate that a large proportion of them are companies like American Tobacco, where growth potential is coupled with a low multiplier which could improve as growth becomes a reality. EDMUND W. TABELL IS to be construed us, nn offer to sell or a to herein The informatIon MMfR Q rJill'f\ffi,tla'ti.tecdlali' .cYtWacy or complcten(!8S anrl the furnlshllll/ thereof IS not, and under no circumstances IS to be construed as, a l'epre.enta- twn by \Vnlston & Co Inc All sell ex nn pressIonS d mny ha of ve OPInion nn mtere nr st es In ubJect the sec to chn urities nge men tWiointheno.uht enroetmic e T Wa his lston mark & et Co, Inc, and Officers, DIrectors, Stockholdcrs and letter IS intended and presented merely as a genera, on dny to dny mat ket news lind not as a complete analYSIS. ArI(litlOnnl mformatlon With respect to any securIties referred to herem will be furn1shed upon request WN 301

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Tabell’s Market Letter – February 26, 1960

Tabell’s Market Letter – February 26, 1960

Tabell's Market Letter - February 26, 1960
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—————–,——- —- FILE COpy Walston &Co. lnc – – – – – M embe8 New Y O'k Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS CHICAGO TABEll'S MARKET lETTER February 26, 1960 The market appears to be approaching a fairly crucial stage. The rally which began on February 17th continued this week and the Dow-Jones Inddustnals reached an intra-day high of 636.30 on Friday. The action of the next month or so should give some indication as to whether the current strength constitutes a technical rally, or the beginmng of an intermediate term market upswing. It will be remembered that the various downside potentials of the late 1959-early 1960 distributional top ranged between 605 and 550. It will also be remembered that the February.17th)ow was 603.24. As noted lasLweek, a ,shoIt term buy,.,signal certaiDly proven valid by this week's actlOn, was given. In order for a major change in trend to be indicated, a number of things would have to take place. (1) Strong base patterns would have to form in the various averages. Current bases give upslde objectives between 639 and 655, certainly not far above current levels. Continued backing and fillmg in, roughly, the 605-650 range could produce a much higher indication, however. (2) Breadth-of-the-market and other intermediate term indicators would have to turn favorable. This process may have begun, but it is by no means complete. In short, it does not appear to be wise to be an aggresslve buyer of equities at the present moment. However, the time is fast approaching when such a policy can well be pursued. This buying could take place at,or slightly above, current levels, if the conditions men- tioned above are fulfilled, or as new lows are made and the lower downside objectives between 605 and 550 are approached. On November 8, 1958 this letter published a seventeen low-priced issues. It was stressed at the tim ha of issues should be bought as a package in order to provlde the a i n ece y in a specu- lative list of thlS nature. The advisabillty of such icy a en borne out by ac!ion4s nc, . v ,geg.rr.oma7.1')Lgain ' to a 50 loss. Over-all, the gain in each stock, would have been just ed n equal dollar investment 0 or ghtly less than the gain in the Dow-Jones Industrials '. The original th or bull market, 10 market. If indeed theory would still be current price follow lined !if;n mendation was that m the final stage of a at' stocks tend to perform better than the general 11 is not completed, as may well be the case, this The ongmal list, together vnth recommended price and ssues especially attractive for current purchase are under- Recommended Price Avco 9 Chemway 11 Curtis Publishing 15 Decca Records D1VCO- Wayne 0 Fedders Corp. Freuhauf TrailerHome 011 A and B 18 17 19 17 20 Current Price 14 12 11 21 26 18 29 10 Recommended Current Price Pnce Hotel Corp, 7 6 Intern'l Packers 15 20 Kaiser Industnes 15 13 National Can Oliver Corp. Pacific Petroleum 12 19 18 10 19 11 E1Jlijicker Ind, 10 11 Rayomer 18 22 Uniterl Industrial 13 17 Adjusted for stock dividends. RIM(/.. Arrived at by adding prices of new common and preferred received via merger. AWTamb Dow-Jones Ind, 632.00 Dow-Jones Rails 150.86 EDMUND W. TABELL WALSTON & CO. INC. Thlfl market letter lS not, nnd under lHl ell cumstances is tn be conlrucd ne, nn offer in sell or n snbcltntlOn to buy flny Bccurltie; referred to herem The mformntlOn contained herem lS not Ituflrnnteeil as to OCCUtflC\' or completeness and the th'rcof IS not, and under no CHcumstances LS to be constI ued as, n -representa- hon b,. \\fnJeton & Co, Inc All expreSSIOns of opinIOn are suh)ect to change \\Lthout nO!lCe Walston & Co, Inc, and OffLcers. Dlrector'l, Sto(kholders nnd Emplo),!!Cq thereof, Il\Lrchnflc, sell and maY have an mterest 111 the F;ecurLtIes mo;ntLOncd herem ThLs market,letter L5 Intended and presented merely as a general, mformal eomment.nr) on day to day mnrket news and not as a complete nnah'SL!! AddItional mformntlon with respect to any secUl'Itle-; referren to herem furnIshed upon request

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Tabell’s Market Letter – March 04, 1960

Tabell’s Market Letter – March 04, 1960

Tabell's Market Letter - March 04, 1960
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o Walston &CO. Inc Members New Y01'k Stock Exchange FILE C1 NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 4, 1960 In the emotional climate of Wall Street, it is very easy for the most obj ective of analysts to be swayed by near term market action. From February 17th to the begin- ning of this week traders were becoming progressively more optimistic as the market rallied from a low of 603.24 to a high a week ago of 636.30. This week saw five conse- cutive days of market decline and the atmosphere of hope turned abruptly to one of gloom and doom. Fuel was added to the flames of pessimism by a rather questionable Dow Theory bear market signal purportedly caused by a new low in the Dow-Jones Rail average on Thursday. As the Industrials, after reaching an intra-day low of 600.36 on – Friday, -rallied sharply in th-e last h-our of trading and era-sed most 6fth-e loss-es, opti. mism again began to run rampant. Despite all these near term swings, the one point which must be emphasized is that this letter's thinking concerning the market has changed not one iota since early January. At that time it was pointed out that breadth-of-the-market action was deterio- rating and that prudent investment policy dictated the sale of unfavorably situated hold- ings and the accumulation of a cash reserve. It has never since been recommended that this cash reserve be reinvested, nor is it so recommended now. For us to make such a recommendation, one of two things would have to take place. Either the market would have to approach the 572-550 level, which has previously'been suggested as a possible downside objective, or it would have to hold around current prices with breadth action improving. Until one of these two courses of action takes place, a cash reserve position should be maintained. For the investor who failed to establish a reserve at a higher level, the market is currently rather low to consider aggressive selling. object- ive of 550 is, of course, only less than 10 below 7Jt,rren e t 'n margin such as this gives little room to turn around except on is. Despite the recent desultory action of the still ms to make a good . deal of seRse -to consider ,- -rchase on-fur-tber market – weakness. The Dow-Jones Rail id 19ht at 141. 83. A count across the distributional top formed in W', ownside objective somewhere in the 137-133 range, – e In terms of the Standard & Poor's Rail h d Lt30. 57, the downside projection is 29. In- dividual rails ar. I 1 0 ide objectives. The list which follows gives the closing prices of a e es, together with downside potentials based on chart action. In most case , t potentials are intermediate term while long term patterns can be interpreted t' lcate much higher levels. Atchison, Topeka & Santa Fe Chicago Great Western Northern Pacific Den var & Rio Grande Western Great Northern Southern Railway Western Pacific Downside Potential 24 34 40-35 15 47-43 42-40 19-16 March 4, 1960 Close 24 1/8 34 1/2 42 1/8 16 3/8 45 1/4 45 19 Not only are the rails close to support, but if dOViTIside objectives mentioned above are reached, they would be as statistically cheap as they have been in some time. A close study shows that at its year's low each year, the Dow-Jones Rail average tends to sell at around 7 1/2 times earnings. Projecting earnings for this average in 1960 at 17 -18, the low of 133 mentioned above would give a p/ e ratio of between 7. 8 and 7. 3. There is, furthermore, ample reason for fundamental optimism concerning the in- dustry. Without attempting to go into detail, there are several fundamental changes that could, slowly to be sure,result in an improving picture. Briefly, they are (1) a gradual elimination of unprofitable passenger traffic, (2) elimination over a period of time of the more onerous featherbedding practices, (3) gradual elimination of unprofitable branch lines, (4)the sale of costly terminals and stations, (5)the rise of piggy-back operation, and (6) possible savings by mergers. While near term action may be rather slow, selected rails seem appropriate for accumulation on any further weakness and over the long term Qsule sHe,.-, 813979 ever age is; estHleH.t f3erfepffi8Flee. rihl; mnct letter lSrl)21innJi. WlJler /I,nlrcumstances is to be construed us, an offer to sell or n The Informatlon UOWm.d&nIilS or completeness and the iurnlshmp thereof IS a.s, a reprC'lenta. nlAll.by lJ.lWQll..& 13P… J,;.. of opinIon a.re subJect to chllllpe WIthout notice htd Stockholders and U1J,.WtlJlJUntM;j. an interest 10 the secUTItleS mentIOned hClr.1Il ThiS market letter IS intended and present.ed merely as Il gencrlli, IIlforma.I. on nay to day markd news and not as a complete nnalysls Additional IIlfOrmatlOll With respect to any secuTities referred to herein will be WN 301

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Tabell’s Market Letter – March 11, 1960

Tabell’s Market Letter – March 11, 1960

Tabell's Market Letter - March 11, 1960
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—————————————————————————————————-. FILE CQPV W—-a–l-s-tlonnc–&–C—o-. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFices COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER March 11, 1960 The Dow-Jones Industrial Average continued to slide this week with rallies on Wednesday and Friday failing to erase earlier losses, which carried the average to a low. More encouraging was the actlOn of the rails WhlCh finished the week above last Fric a 's close and which actually advanced on Thursday despite a decline in most of the rest of thE market. Basically, there is little or no change in the investment policy outlined by this letter for the past two months. Stocks should be bought either because they are at a low level or the trend appears upward. Either the market wlll continue to slide off, in .- – ..,. — -.-;–,;; – case selected stocks will appear to be cheap from a level point of view, or breadth and vitality will improve, m which case the k-rend will have changed from downward to upward. Until one of these two phenomena takes place, it appears wise to postpone aggressive stoc purchases. A decline such as the recent one offers an excellent chance to test the relative strength of individual issues, especially when their prices at the low point of the decline are compared with prices at a previous low. The table below does exactly this with Stand ard & Poor's group indexes, showing each index's percentage change from its September low to its February low. As can be seen, desplte the fact that the February bottom was somewhat lower than the one posted 5 months earlier, 18 out of the 62 group indexes wer higher last month, and 29, or almost half, had shown better action than the index as a whole. As we have often pomted out, in recent markets it has been far more important to own the nght stocks than to guess the action of the averages. The individual mvestor can and probably should scrutinize his own holdings very carefully, comparing their current prices to those at the September bottom. He lS ample reason for continuing to hold those stocks which v sure that there oor relative tt Electromcs 17.5 sug(;r;l – 3.1 Radio-TV 14. 8 – 3.2 – – Electrical h (\\\ \\Household Appliance 12.0 – Pipeline s – 3.4 Steel Alloy . Prmting Auto Truc w Publishmg 4.6 Office Equipmen 4.0 Metal Fabric g 3. 9 Soaps 3. 9 W..'\Jparel-3.5 t' Chemicals – 3.5 Small Loan – 4.0 Railroads – 4.3 Coal – 4.4 Machmery – 4.4 Lead & Zinc – 4. 7 Textiles – 5.6 Soft Drinks Food Broadcasting 3. 7 3. 1 3.1 Tires Distillers Finance Companies – 5. 7 – 5. 7 – 6.1 Cigarette s 3. 0 Electrlc Utilities 2.8 Carpets 1.2 Shoes Unchanged Drugs – 0.3 Mming & Smelting – Gold – O. 5 RallEquipment – 0.5 Natural Gas Distrib. – 1.1 Ship Building – 1. 2 Confectionery – 1. 3 Alrcraft – 1.5 Motion Pictures Retail – 1.5 – 1.5 COMFOSITE – 1. 8 Auto Parts Building Materials – 1. 9 – 2.3 Sulphur – 6. 3 Machine Tool – 6.9 Contamers-Paper – 7.4 Cigars – 7.8 Papers – 8.0 01113 Rayon – 8. 8 Vegetable Oil – 9.0 Agricultural Machinery -10.7 Aluminum – 11. 4 Coppers -11. 9 Automobile -12.7 Brewers Steel -13.3 -15.4 Shipping -15.9 Air Transport -20.0

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