Walston &Co. Inc .11flllleI S X fll' Y m Ie Stnrk Echal1f1f NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OffICES COAST TO COAST AND OVERSEAS TABflL'S MARKET LETTER March 1, 1963 For the first the stock market chalked up a significant and general decline. The Dow-Jones Industrial average, which had reached a peak of 694. 27 on February 18th, had, by the end of the week, plummeted to an intra-day low of 656. 66. Frida marked the eighth consecutive trading day in which a new intra-day low was made by the in- dustrials. Rails and Utilities showed similar weakness. In the stock market it is necessary not only to get the right answer, but also to ask the right questions. The question being most widely asked this week was, How far Will the decline cmtinue . It was not the right one. It can be answered, of course, with a fair degree of probability. There is no signifi- ca-nt top 'forma tion it'! the-Dow marKet .', indices. There is, furthermore, rather good support around the levels the Dow traded at last December – – roughly between 657 and 642. This support area is close enough to current levels so that any further decline should produce a rather attractive short-term buying op- portunity. However, the major question about stock market action has gone largely unasked — that is, the question of the character of the next rally. It will be helpful perhaps if we take a look at a few salient statistics. The following table shows the Friday close of the Dow-Jones Industrials each week since November, the percent change each week and the weeks' advances and declines. Week Ended Closing Dow-Jones 0/0 Change Advances Declines 10/26/62 11 /2 11/9 11/16 11/23 11/30 12/14 12/21 12/28 1/ 4/ 63 1/11 1/18 1/25 2/1 2/8 2/15 2/21 3/1 569.02 604. 58 616.13 630. 98 644. 87 649. 30 67 . 52 679.71 683.19 679.92 686.07 681. 64 659.72 -6.2 1.9 2.4 1\ c..Af 1. 7 1. 4 O. 1 1.1 0.5 – 0.5 0.9 O. 6 – 3. 2 0 997 1003 448 546 701 1177 974 774 913 745 598 782 524 350 (E) 137 279 214 300 356 ..,……–5-60 – 903 772 562 176 365 529 419 593 732 526 771 1000(E) A close study of the table shows a rather clear picture of a rise at a de- clining rate – – in other words, a loss of momentum. During November, for example, in the initial stages, the percentage rise each week was fairly sharp and around a thousand advan-. ces were normally scored. During December, the market paused, but a goodly number of stocks still advanced, and declines were not too serious. In ;January, the r-ise again reslililed but this time the gains were less sharp than they were in November and, moreover, the num , ber of advances were generally between 700 and 900 ins1;ead of well over a thousand. This week, as can be seen, produced the sharpest weekly decline so far and, although we have been forced to estima te the figures, probably a record number of declining stocks. If the next rally duplicates the momentum of January, there will be, for the time bein little cause for alarm in the stock market picture. If, however, it is accompanied by less vigorous gains, by unimpressive advance-decline figures, and by deteriorarion in other tech- nical indicators, the loss of momentum will then be clearly demonstrable. Such a rally should afford an opportunity to dispose of any unfavorably situated stocks still remaining in the investor's portfolio. ANTHONY W. TABELL Dow-Jones Ind. 659.72 WALSTON & CO. INC. Dow-Jones Rails 149.67 ThiS mnrke-t letter IS not. nnlt undCl no clfcum-'lnIlces I' to he contL \led AS, nn fTCI tn I'll 01 n to 1'IIY lillY ''(,1II111C''' 1efcil cd I ht'l eln The lnfrllluhnn 'untamed herem Ib nut ltllllluntcccillq to IICCIIlUCY I nnd the lhel(',r …. IIut nn,1 \\1\'(1'1 11 tv he .n-.t\1I1'1I n…. Il I 1'1l1c-.I'nl,\ t,n by Wnlston & Co. Illc All uf OIl1nlOn Ilte … uhJcl'l to ch,\!.!' Ilhut LltilC & (,(). Inc nn,\ OffICC!'I. nucclol …. StockhIllct-. IIncl Joml)loyee., thereof. lUlcha'lc. sell nncl mny hn\e nn mterest In the secllrltw' mcntwned helem 'fhl' IlIlllket lettel Intende.1 ,lIId plel'lllecl mel ely ,1-' n ..encrnl, mformnl commentary on dllY to dllY Mllrket n(ws Ilnd not as a compi(tc nnllhl A.I,htlnnl IIIfm IIInlLUn \\ dh 1(…..1'1'('1 II) ,111\' erllllll(, 1efel 1(11 to helelll \\ill be furnn,hed uPOn request \\ ,\ ;01

Walston &- Co. —–Inc —– FILE COPV MrmhelS XrlC 1'Ol'k Siock Echallge NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFfiCES COAST TO COAST AND OVER.SEAS TABELL'S MARKET LETTER .. Fort Myers Beach, Florida March 8, 1963 The past month has been a very pleasant one as far as the writer is concerned. The early part of the month was spent on a tour of some of the Walston offices in Southern California, Arizona and Texas, and the later part in Antigua and in Florida. As a result, I have been more or less away from the day to day developments in the stock market since early February. This, on occasion, is a very sound procedure. It gives one an opportunity to ignore the often confusing nearer term action and to concentrate on the longer term picture. As I look at the technical pattern from the longer-term viewpoint, there is very little of irrfportance tnaChas month.- year;- tm.fietter— said that 1963 would be an inside year. By that we meant that the Dow-Jones Industrial average would not reach a new high above the 1961 high of 741, or reach a new low below the 1962 low of 525. Probably the range will be even narrower than that and the average will not move much above 700, or much below 600. This is part of the long-term pattern that was en- visioned as far back as 1959, when this letter said that the market would probably reach a high in 1961 at around the 750 level, and then react to the 550-525 level, to be followed by a lengthy trading range between these two extremes for several years. We find no reason to change this fo recast. – Contrary to general opinion, the market is not always moving either up or down.' It actually spends most of its time in sidewise movements This is normal action as price movements usually go to extremes – – both on the upside and long period O.f consolidation are ne.eded to adjust to a new set of conditi s. r there have flve lengthy consolidatmg penods before the market e1 rntory. In May, the Dow-Jones Industnal average reached a post-waNrli of was not until April of 1950, or forty-seven months later, that this was er After a high of 295 in Januar 1953, the market had a comparatively mild c On t o u t 250, but it was fourteen – , ril-of-1956;-trre–avera.-ges and it was not until monihs later, that a new high was reach- ed. The August 1959 high of 68 0 until twenty-one months later in March, 1961. The all-time hi h t D -Jones Industnal average was made in November 1961, or approxim 1 . t n n ago. Considering the fact that the first phase of the long-term bull mark r le 9 low probably ended in 1962, and that the correction fran 741 to 525 was the sha es cline (290/0) smce 1937, it would appear that the ensuing consoli dating period or tradin nge mlght take two to four years. In other words, it may not be until somewhere between October 1963 and October 1965 that a new high is reached. Recently, we have noted some comments comparing the present market action with that of a year ago just before the April-June 200-pomt decline to 525. Outside of the fact that the present market has lost some of ItS upside momentum after the sharp 140-point rise since October, there is no technical resemblance to the market of a year ago. In March of 1962, the breadth indices had been showing unfavorable action for ten months, and a sizable distributlOnal top had been formed with a dQwnside potentialofasizable decline. Today, the breadth index has been fluctuating with the market and there has been no sign as yet of deviation. Furthermore, neither the average, nor most indlvidual stocks, have formed dan- gerous top patterns. Last year, the market was close to a downside brea-lCoilt of a ten-montif– distnbutlOnal top. Today, the market is in the process, in our opinion, of forming a very important long-term reaccumulation base that will probably require a longer penod of time to complete. In late 1961, and early 1962, our advice was to sell On strength Today, our advice is to forget about the averages and buy selected issues during periods of pnce weak- ness In 1963. – Dow-Jones Ind. 672.43 Dow-Jones Rails 151. 04 EDMUND W, TABELL WALSTON &. CO, INC. 11,- ,11 I ,'1 Ie'! ,… nl 111.1 undt II, It, 111\ .. 1.. I., 10(' '''11 .. 1,11(',1 ,-. .11 IT1 ( ..,11 (II I ..I,. .11, I 111\ ,Il' ..,', ' II H 'f, , d I JII' ,',11 '11l( Jnf,., ' '\1 ,,,1,,,,,, .'''. ,, t '''11',1 h, ,r,1I Ilt !.!II It 01 H' 111 ,,( \ ,,' ''''''1,1, Il1d Ih, fUI i.,hH' 11,,'11( I .,wl 1I,h', nhl '111' l' I Ill' 1('I ,….'1.1- 11 hI (,' I, ,\11 \1'1'…… '''11'' lr PIII'''n I IIIo,L 'h''' ,1111'111 I \\ ,1,1n ,\ (,' 1, ,,,01 (lllllI 11,,,,, '1,1,1,111 ,I tI,,,I nl'l,,1 1', , 111(',f, 1'111' h (', ell IIll,IV 1,,,1, .I ,nl,,,\ III 1111'10111 ,d JII' II 'll II 1,,'1 1,'1\, ' ,hIOI,1 ,nil 1'1''''',,1,,01 m,,,'11 h ,\ C.IHI tI to,11 r, ,,,/ '''Irlrt)('lrLII \ ,/,(\ /II,!! /..1 I \\' II,) ' I, omplel' '1I1h .., ,\,),111 '''U ,\ 11,1'11 /1,0/1 ,III /,,'11 I Inl ,11,11. It f, 1'\ I.. h,It'11I , I,, ,,– .. -j' , The groups are as follows Early Peak stocks Allied Chemical Alum. Co. of Amer. Anaconda Chrysler International Paper Middle Peak Stocks Bethlehem Steel Du Pont Eastman Kodak General Electric General Motors Late Peak Stocks American Can American Tel & Tel American Tobacco General Foods International Harvester 1960 Low Stocks American Tel & Tel American Can Chrysler Du Pont General Motors Weak Stocks American Tel & Tel Anaconda Bethlehem Steel General Foods Goodyear Tire Standard Oil of California Standard Oil of New Jersey Swift & Co. Union Carbide United Aircraft – Goodyear Tire Owens Illinois Glass Texaco, Inc. U. S. Steel Westinghouse Electric International Nickel Johns Manville Procter & Gamble Sears Roebuck Woolworth International Harvester Standard Oil of California Standard Oil of New Jersey Texaco, Inc. United Aircraft International Paper Johns Manville Owens lllinois Glass Procter & Gamble U. S. Steel

Walston &Co. —–Inc —– Melll/,el'. Sell' York Siock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET1ETTER—-.—- March 15, 1963 Most investors are fairly familiar with the fluctuations of the market as measured by the Dow-Jones Industrial Average. It sounds ridiculous, therefore, to say that the actual all- time high for the Dow was 877.63, and that the subsequent low was 469.38. Yet, in a sense, both statements are true. It also seems ridiculous to say that the Average was over 1000 in 1961, that it was under 400 in 1962, or that it went down steadily from 1956 to 1961. Yet, these statements are also true of substantial segments of the average. ' Let us take the statement made in the first paragraph. Individual stocks in theAver- age reached highs as early as 1955 and turned down again. If the absolute high for the 1955- 1961-period'in'each stock-is taken; the high ii-dhe Average many' stocks made lows in 1960. If the low on each individual stock for the 1960-62 period is taken the Dow corrected to 469. 38 rather than 525. These two figures give some idea of the real magnitude of the correction that took place in the 1956-62 period. This points up the fact that the Dow is, after all, only a conglomerate of individual stocks, all of which behave differently. For example, it is possible to divide the Average into three groups of ten stocks each. In the table below, we have taken a group of ten stocks that made their peaks in 1955-57 and taken an average of these stocks, adjusting the divisor to produce 524.37, the actual 1956 high in the Dow, at the 1955-57 peak for each individual stock. The table shows that, as the Dow moved ahead, these ten stocks were actually under- going a fairly sharp correction. . 1955-57-High 1959-60- Ten Early-Peak Stocks 524. 37 4B5. 6 Actual DJA 524.37 (iftS8.2 In the following table we have utilized the n stocks which reached their highs in 1959 and 1960. It will be seen that re d a high surprisingly close to the ultimate Dow-Jones high some two erage itself reached that figure. Ten Middle-Peak'Stocks Actual DJA The pat 0 h J1J 688 21 741. 30 i' e ernge was caused largely by ten stocks which reached their peaks a . A , these ten stocks out-performed the Dow in the later phases of the r a ctually reached a level over 1000. -57 – Hi h 1959-60 – High 1961 – High Ten Late-Peak Stocks 524.37 683.20 1019.96 Actual DJA 524.37 688.21 741.30 Much the same sort of action is being shown tOday. For example, let us take ten stocks in'the Average, nine of which made their lows in 1960 rather than 1962 and compare them at recent turning points. As can be seen, these declined somewhat less than the Dow in 1962 and are currently selling at levels above their high, 1961 .. High 1962 – Lows Current Ten 1960-Low Stocks 741.30 564.46 780.00 ctual DJA 741.30 524.55 673. 73 On the other hand, the ten weakest stocks in the Average lost almost half their value 'n the 1961-62 break and, to date, have recovered less than a third of their over-all loss. 1961 – High 1962 – Low Current en Weak Stocks ctual,DJA 741.30 741. 30 393.20 524.55 490.89 673.73 The purpose of this exercise is only to show once again that any statistic, no matter how well constructed, can be misleading. The market, as this letter has repeatedly pointed out, is now in the process of forming a broad long-term base for a major advance which will egin at some future date unknown. Of i800 individual stocks listed on both Exchanges, each one is in a different cyclical stage. It is a time, in short, when close fundamental and tech- nical scrutiny of individual issues will be the most important key to investment success. The averages, as shown above, can be highly confusing. Dow-Jones Ind. 676. 33 ANTHONY W. TABELL – -III Dow-Jones Rails 151. 71 WALSTON & CO. INC. ThiS market letter IS not, nnd under no Circumstances IS to be construed 8B, an to sel1;)1 n solicitatIOn to buy nny !'.CCUI .he., refe) re,llo hel em. The m(C) matmn ('ontained herem is not I!uarantccd nil to accuracy or completeness nnd the furnlshllll-! thel eof IS not, nnd unde! (10 cliclImbtn(lCeS to be cnnbtl ued n tlon by \\'olston & Co. Inc All expreSSIUn'! (If optnlOn ore suhJeet to chnnJ.!e wrthllut nutlce, Wnl..ton & (AI, InC'. arul Offlcel .., Du'ccturs. Stockholderll and Fmpioyees thereof purchn'!e lIell lind may have an Interest In the seCUrltleti mentlnne,\ heleln fhls market letter 18 Intended lind Ilrcent((1 merely nil (l on IIn)-' to dn)- market news olld not as a complete Iln(l\Yh Achhtmnnl rnfUlmnhon Ith 1t'llel't tu Imy '1CClllltics rcfCllel1 to hcrcin Will be furnrshcd upon request \\, 101

W—-a–l-s-tIonnc–&–C—o-. Member.. Xell' Yor'. Stock Euilange NEW YORK SAN FRANCISCO LOS ANGELES PHILAOELPHIA CHICAGO OFFICES COAST TO COAST AND ovEttSE.4.S TABELL'S MARKET LETTER March 22, 1963 Last week's market was, essentially, trendless with a late rally on Wednesday being the only feature to mark an otherwise dull week. 'The averages were just able to hold Wednesday's gains, however, and the week's close of 677. 83 in the Dow-Jones Industrials was little different from the previous week's final figure of 676.33. The technical position of the market remains, in essence, unchanged, with some loss of momentum continuing to show up on breadth and volume in d ice s, although no serious deterioration has yet taken place. Heavy overhead supply, of course, continues to exist in the 680 -700 area, but, on the other hand, downside risk at the moment appears limited. As regular readers of this letter are a ware, we havelong t;;;; interested in the seasonal phenomenon of the year -end rally. We have studied this rally in every year since the Dow-Jones Industrial average was first computed in 1897 and have previously noted that an exhaustive study of chart patterns over the past 65 years indicates that such a rally, how- ever minuscule, has invariably taken place. T'fIis rally has consistently started in December and continued after the first of the year. 1962-63 has been no exception to the phenomenon, with a rally having started from the December 19th low of 636.88 in the Dow-Jones Indus- trials and having, to date, reached a peak at 694.27 on February 18th. ' A good many clients, familiar with our work on the subject, have asked us what apparent continuation of this rally into the end of March means. In this connection, a few comments are worthy of note. As we have said before, one of the most in connection with market action in the early months of the year is)ge 1 fo ,Wpr ious December – in this case 636.88 in the Dow-Jones Industrials or an & Poor's 500-Stock Index. As we have noted in previous letters, this bee oken in 39 years of the pas 64. In 23 of these 39 cases, it was broken uary. Most of the 16 cases where it was broken after the end of Since 1937, it hasnever-be-en -w;c r the early part of the century. ri arcn, and -slncel-929; never later than May. March is almost past course, the Dow is no where near the De- cember low figure. The nger e rKe c continue into 1963 without the December low being penetrated, the g teGl\El s erefore, that it will not be penetrated during the year. There rema! r, one important question to be resolved. That is, just how far the rally can be sai ave continued. As noted above, a high of 694. 27 was reached on February 18th. This not been penetrated. a rally of exactly 9/0 from the December low. To date that high has The importance of this question is indicated by the following statistics In 47 out of 64 years under study, the year-end rally has topped out in January or February. In 28 of these 47 years, the subsequent trend of the market has been down or neutral. On the other hand, the rally has continued beyond February in 17 years. In 15 of these 17 years, the trend of the market has been upward. Furthermore, an advance of 10/0 or more from the De cember lows has been followed by a dqwnward market only 5 times in the 31 years that such an advance has occurred. In the 33 years that the average has failed to advance 10/0 from the December lows before an identifiable correction took place, a downward or neutral market has occurred 22 times. Thus, at the moment, the February 18th high of 694. 27 becomes a figure of special interest. A substantial penetration of this high could well lead to the that the rally since the beginning of the year has been continuous. An advance much above it would produce a rise of 10, which has been followed by an upward market in 26 cases out of 31. It will also mean that the rally continued into March or beyond, which has produced an upward market in 15 cases out of 17. On the other hand, protracted failure of the averages to make a new high or a penetration of the March 1st low of 656.55, would indicate that the rally had indeed ended in mid-February. Such circumstances have generally tended to pro- duce a downward or neutral trend for the remainder of the year. Dow-Jones Ind. 677.83 Dow-Jones Rails 151.58 ANTHONY W. TABELL WALSTON & CO. INC. This mnrket letter III not. nnd under no 19 to be consh \led ml, nn offer to 01 n snlicltntlUll ttl huy nny SecUlllLCb rde-ned ttl herein The Inrnrmnhon Cllntnlncrl herem III not J!lInrantccti all to nCClirncy 01 cOI'lllietcnc'ls nnd the rUI nlShln!! thel cur .s nut. anll Ilndcl nn CII 18 to be n repi tHin by Walston & Co. Inc Ali e'(pressions of OPinion are SUblCt't to chnll).!e \\Ith!,ut notice Wnlbil)n & Co. Inc. nnl Officen-.. DlIectms. anrl Employees thereof, punhnse. selland may have an mtcrest III the securltleo, mcntlne!1 hClcin 'fhl nlalket letter lb Intended nnd I\rcen\ed merely n n ).!cneral. informnl commentnry on day to day market news and not ns n comilletc AlldlhIIUI infolnlotl(,n \11th lCllcrt t4l1lnY bC(,1llltlC8 Idelle!lto beleln Will he upon request \\ '\ 3()1

W—-a–l-s-tionnc–&—-C–o-. .11('m/wl's Xl'll 101 k Slock EJ'rilol1(J(' NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER March 29, 1963 FILE COpy Since early January the market averages have been swinging back and forth in a relatively narrow trading area. In terms of the Dow-Jones Industrial average, the range has been between the 1I1tra-day high of 694.27, reached on February 18th, and the low of 656.55, reached on March 1st. The question at the moment is whether or not this trad1l1g shelf is a prelude to a further advance into the heavy overhead supply area between 685 and 740, or a decline to the strong support area in the 625-580 range. On the favorable side, the present advance is still comparatively young. The 19531956 advance had a life span of 30 months, the 1957-59 advance lasted for 21 months, and theT960CfHrarlYhad-a tlme periodofabout 13 months. The present advance 6'om the June low of 524.55 is only 9 months old. Furthermore, in the three preceding advances the breadth-of-the-market indices began to show deteriorating action long before the actual high in the averages was reached. So far in the present market this has not yet happened. Our breadth indices continue to act like the market and, as yet, have shown no signs of deviation. On the unfavorable side, the Industrial average is approaching the maX1mum upside objective of 685-700, outlined by the May-June base. Furthermore, there is an extremely heavy area of overhead supply in the 685-740 range that will be difficult to penetrate It will also be noted that the time span noted above on the three advances since 1953 has been gradually lessening. If, as we believe, the market reached a top in 1961, it is probable that the life of the present advance will be Obviously, the trading area of the past 1tually be destroyed. In the event of an ups1de breakout it 1S difficult to a br advance in the averages. The heavy overhead supply between 685 and 72111 t to penetrate. However, an advance above the February high in ic t .s tin favorable action by ind1vidual ve-not'yet!'l!ached'the1lUpsideClbJect– LVes. Equally important, an the potential top pattern hat h Il t Ollie 3-month trading range would destroy would ind1cate that the distributi)J1al pat- tern will be formed at a iOO. . 1S, of course, would take further time and would allow individual is to their price objectives. If it turns ou hat ndustrial average reached its high 111 February at 695.27, the trading shelf of the three months is, from a technical viewpoint, a distributional top. The pattern pro ly is not complete, but a decline below the March low of 656 55 would indicate a downside potential of 645 followed by a probable decline into the 625-580 support area. From a longer-term technical point of view, this would be a very favorable development. It would broaden the base and indicate the possibility of an eventual advance well above the 1961 high of 741. 30. In summary, we believe – OJ That the market is in a broad consolidating area. On a long-term basis, bas1c investment policy should be to use this area to take major investment positions. (2) The consolidati..ngarea will probably con!inue for quit, some time at moment, we are near the top of this area. Basic policy, therefore, continues to be positive, but calls for buying On weakness to strong support levels in individual stocks. (3) During the con'solidation period, action of individual issues will be' highly diverse and extremely elective. It is, therefore, necessary to scrutinize the technical and fundamental outlook of individual securities in order to choose those in which long-term purchases should be concentrated, and those which should be switched into more favorable situations. Dow-Jones Ind. 682.52 Dow-Jones Rails 152.92 EDMUl\TD W. TABELL WALSTON & CO. INC. Thh 111.11 Jettel '''' nut al'Hl \lnl'k-, flO ell cum.,tnnce. 10 be con,tllle11 n …, nn (lITe! 10 ..ell U1 ,J lui1lli.llwll to hll) .III 'CCUllfH.. N!(et 1E'll1.. hel CIlI Th(' Inf, 111.1111'11 , lnt.lllH'd h('I('11I Il,.t J.,\I,'llInt('(',\ til ,IC(,llrncy.ol lotllpletcnl'-' /lud the fill 111… hlll.! th(1 ('uf I… n',1 .In,11II1IIel n, II' IIm ll1nc… b tll ,u'\I'II((l JI …..I l'IIn hv \\'.II … ton t… C .. In All C'IHCS'l.. r injn nlc .,lIhl(,t tn ,h.lll).!c \\lllwII\ Iltll' \\'111-,111 k e, hH , 111111 01\1('1' 'lIltl i'mpl(l\('C… Ih('r(..,f 1'1I11'h,\…e nml mny h,I\C nn Intel,''''\ In the cclIIHIc-. mcnllflc,1 h('IClll 'rht… mnlhl't Idl('t I… IlItI.ndCtI ,\lId Plfk-l.'lIt('\ m1'tc\) ,I' 1I ).!'C1WL,LI. l11ffll III III lIn dllY to, ,I,I 111111 \..('\ ne\\ … ,111(( not .1 ….1 lumpictc un.I!I … AtI,iltln,d IIlfHI lllollL1\ lilt I''''pe, I til ,II!I 'c 1I1111l' 'lrtl, (1 ttl helcll1 \\II! hI' fllllll … hfU l!Jllln 1'I)I1et \ \ ' 11)1