Tabell’s Market Letter – March 08, 1963

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