Viewing Month: April 1964

Tabell’s Market Letter – April 03, 1964

Tabell’s Market Letter – April 03, 1964

Tabell's Market Letter - April 03, 1964
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.———————– — Walston &Co. —–Inc —- SrII' rOl'k Stock Erchange I L J;; NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 3, 1964 On December 20, 1963 this letter, as is its custom, discussed at some length the phenomenon of the year-end rally. We stated that an identifiable year-end rally had taken place in every year since 1897, usually beginning with the December low and continuing to some point after the new year. We followed up this comment on January 3rd with the specu- lation that the true beginning of the year-end rally was at the peak of tax-loss selling reach- ed on December 23rd at 752.82 on the Dow. Subsequent events.have.proved that this low was indeed the starting point for a rally of some magnitude. Some of the rather unique characteristics of this rally were discussed in our letter of March 6th. In that letter we pOinted out that the rise had been (l) relatively steady, and (2) relatively moderate. .- – – – — – We pointed out that a steady and moderate rise of this nature produced a character- istic formation on a chart known as an uptrend channel. The interested reader can very eas' inspect this channel for himself. Any daily chart of the past four months' action on the Do.v- Jones Industrial average the one in the next-to-last page of the Wall Street Journal is a good example) can be used for this purpose. The reader will note that it is possible to draw a straight line which is touched by market lows at no fewer than four points. An almost parallel line can be drawn connecting the various highs reached. This line will be exceeded during the week of March 13th to 20th on an arithmetic chart, such as the one in the Journal, but if a more accurate geometric chart is used, the uptrend channel remains inviolate. In connection with this channel, last week's market action is interesting. After mo- ving sideways for some eight trading days, the Dow Late Wednesday afternoon a sharp rally began which was f ow f8h09.r7s9daoyn Wednesday. by a 4. 79 point advance on heavy volume. This strength was exae i a ednesday's low, of course, was almost exactly at the bottom of the uptr ann' cussed above. The second characteristic of the han in 1tion to its steadiness, has been its moderation. The mean rise so far h b at nnual rate of 340/0. Some analysts have.-suggested g.. this is -the – '- case, the 340/0 annual rate much steeper rate of advance. Major bull markets tend to start with a rise from September 1953 to June of 1955 was maintained n some twenty-one months. In 1958-59, the Dow rose at an annual 2 i n months. The moderation of the present rally, now a little over three m 01 , s not compare with upswings of this nature. How long will t r continue within the confines of the present channel There is, of course, no real ans for this question. In our study on the year-end rally last Decembe we drew attention to two facts. We said, first of all, that in the seventeen years the rally has continued into March or later, the eventual trend was upward in fifteen instances. The rally has, of course, now continued into April. It is also interesting to note that the longest continuation of a year-end rally without an identifiable correction has been into June. We have also suggested that the magnitude of the rally is an important clue as to the year's trend. An advance of 100/0 or more, strongly suggests an upward market. The advance to date has been just about 100/0. It is interesting also to extrapolate the present trend and see where the market may be if the present channel continues. Projection of the geometric mean of the channel would call for a mean price of 841 at the end of April and 881 at the end of June. It is, of course, highly probable that the uptrend channel will be penetrated before this time, thus giving us a clue that a new phase has begun. In March we suggested that uptrend channels are broken in one of two ways. We said The less frequent method is by a sharp rise out of tre channel On the upside – normally accompanied by heavy trading volume. Such a rise is usually sharp- ly retraced at a later date. More frequently, the breaking of an uptrend channel takes place on the downside, not necessarily confirmed by any increase in volume. With the advance now 73 days old, the investor should be alert for either one of these occurrences. Dow-Jones Ind. 822.99 Dow-Jones Rails 195.46 , J , ( ANTHONY W. TABELL WALSTON & CO. INC. Thll; mnrket letter IS not, lind under no circumstnnces is to be eon..truerl 0&, on utrCl' to lIell or n liolicitatiun to bll)' nny sec\lrit!CII referl'ed \tI herein. The Information contninc(1 herem is not j.tuarnntecrllls to necllrney or eomplelene.s and the fllrOlt-hinj.! thereof flot. nnr! Untlel nco ('11 111 to be ('(lllhtl ned n lIOn by Walston & Co., Jne All cxprCSSlOns of opinion al'e to ehanl.!e \\ith(lllt nutlee Wnb.ton & Co. Ine.. ami DllcctOlS, Stoekholdet!l RIlII thereof, pUlChasc, Bell nnd mny havc an mterest In the men tInned Thill market letter ill Intendc,1 nnd pre..ented merely no; n I-enerlii. mformnl commentary on day to day market news and not as a complete llnnly;.il1 A,I,lItlflllltllfl(ut'nllltlOn \\ith Ie-peel to tiny M.'('nritJes I'c(ellel( to helem WIll he furnIshed UJ)on request. \\.\ 101

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Tabell’s Market Letter – April 10, 1964

Tabell’s Market Letter – April 10, 1964

Tabell's Market Letter - April 10, 1964
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–…… Walston &Co. Inc – – – – – rol'''Memilel',. XCIl' Stock Euilanflf JIL IE NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 10, 1964 With moderate upswings and retracements alternating, last week's market move- ment was essentially sideways. Throughout the week the Dow-Jones Industrial average ranged within the confines of the uptrend channel discussed at some length in last week's letter. At the moment the outer limits of this channel are approximately 815 on the downside and 837 on the upside. A slow uptrend, similar to that in the Dow-Jones Industrial average, has also been in effect since December 23, 1963 on our daily (short-term) breadth index. A penetration of this uptrend would probably be as significant as a penetration of the uptrend in the average and might, indeed, foreshadow such-a'penetration 1'0 date, however,-both uptrend lines remain inviolate. Meanwhile, the investor should be on the alert for a sharp change in either direction, A sharply higher market accompanied by heavy volume could be the start of a possible blow-off top. A penetration of the Dow uptrend channel on the downside, i. e., a drop below the S15-81B level in the next week, would also be a negative sign. It will be more difficult for the non -chartist to detect a penetration on the breadth index, but a period in which de- clines consistently outnumber advances would probably produce such a condition. Meanwhile, a number of stocks, along with the Dow, continue to move up im- pressively. On January 10, 1964, before the issuance of the report of the United States Public Health Service Advisory Commission, this letter five major cigarette companies, pointing out that they possessed favorable 1 a eN\.s, that health scares were not new in the cigarette industry, and that e sharp recoveries after initial declines in per-capita cigarette I no ecoming evident that history is repeating itself. March cigarette tax i st States were down only mOderately or, in some cases, ahead of a ed to sharply unfavorable com- parisons in January and February. March sales topped the'1963 levels, 'W.W m es told their annual meetings that 9tR,\i oay;''''R7J-Reynolds'Tooacco, wnich is on our recommended list, the company's first quarter earnings would be equal to 67 f' t quarter of 1963. All of thi t ced in the rna rket. Reynolds on Friday reached a high of 47 3/4 vs. a 00 1/8, and other tobacco stocks have enjoyed similar price improvement. R no ,however, is still selling for less than fifteen times its 1963 earnings and bids r to show another earnings increase in 1964 as it has in every year for the past deca e. It is probably still an attractive buy on minor dips. Savings and Loan shares have also been firm of late, and in the case of these issue! like the tobaccos, the market seems to have begun to realize that near-term problems do not change the promising long-term outlook and fundamental cheapness of the stocks. It now becomes apparent that the new Federal Home Loan Bank Board regulations are some- what less onerous than had been previously suspected, especially in the case of the larger, well-established companies. Two such companies, First Charter Financial and Great Western Financial, are on our recommended list. They continue to have higher objectives over the long term. Another stock on our recommended list, Sundstrand, ha's, by contrast; as yet failed to recover from the effects of temporary setbacks, and at Friday's close of 22 3/S was selling not far above its 1964 low. The company's earnings in 1963 were off sharply to 1. 21 a share vs. 2. 20 in 1962 under the impetus of a fourth quarter strike-caused deficit. The outlook for the company's aircraft and missile components and special purpose machine tools appears to be favorable and new orders are coming in at an excellent rate. The company is actively engaged in broadening its technical capabilities in the space field and, meanwhile, the 1. 00 dividend provides a yield of around 4.5 at current prices, The stock is again suggested,forcpurchase in capital gains accounts. Dow-Jones Ind. B21. 75 Dow-Jones Rails 195.2S ANTHONY W. TABELL WALSTON & CO. INC. Th t1 I-n k t letter Is not herein Is not nnd under no cu'cumstances III to be construed os, on offel to ell or as to uccurncy or contJlleteness and the tUl'nl!!hinj! thereut 0 solicitation til buy ill nut, nnd un.\el 1!1J nny …eeUl'ltlell Ii'!ctteurtbede til herem The intrmntlOn all, 1\ lelll -lentil Walston & Co Inc All ('XllreSS1Unl! IIf OPInion Rre to ('hHn)!e withllut nutit'(', & Cu, Inc, ond Olflcetll, Dhectnls. Stud,hut.tel nnd thereof on doy sell Rnd mny hnve an Intclest in to tiny mnrket news nnd nut fiB a the secllritie.. complete mentlUned helcin 'Chill mflll..et lettet' is inten(led AtldltlnnnJ inful nUltmn ith lelJled to IIOY 1111(1 ..ctlIIlticII melcly II )!encflti Idell,..t tn hClcln ulmllhed uPOn 1equt'&t.

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Tabell’s Market Letter – April 17, 1964

Tabell’s Market Letter – April 17, 1964

Tabell's Market Letter - April 17, 1964
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W—-d–l-s–tloncn–&—C–o–. Melli/leIs Sell' Yo)'l. Stock Echa11ye NEW YORK SAN FRANCISCO LOS ANGELES .' PHILADELPHIA CHICAGO toOfFICES COAST COAST AND OVERSEAS TABELL'S MARKET LETTER April 17, 1964 .. Looking at th.e in' a broad, long term sense, we find little reason to change the op1OlOn expressed 10 thiS letter on several occasions. We believe the market reached a ma- jor top in the period between 1956 and 1961, and a major bottom in the period between 1960 1962, and is now in a broad pattern that will result in much higher levels 10 the latter part of the 1960's. The price action of the averages does not appear to conform to this pattern. This is because all stocks do not reach their highs or lows on the same day. Actually, if the individual action of each of the 30 stocks in the DJ Industrial average is broken down and the time element reconciled, the pattern is quite different from that shown in the overall average. The table below shows the price action of each of the 30 stocks in the DJ Industrial average from 1956 to date. The-figures in parentheses indicate-the year in which the high or low was reached. 1956-61 1960-62 1963-64 0/0 4/17/64 High Low Decline High Advance Clos.e Allied Chemical 66 ('61) 35 ('62) 47 58 65 55 Alum. Co.Amer. 133 ('56) 45 ('60) 66 82 82 82 American Can 52 ('58) 31 ('60) 41 47 51 43 Amer. Tel & Tel 139 ('61) 99 ('60) 29 50 143 Amer. Tobacco 55 ('61) 26 ('60) 53 38 36 Anaconda Co Bethlehem Steel 87 ('56) 59 ('59) 36 ('62) 28 ('62) 58 53 50 43 42 37 Chrysler Du Pont Eastman Kodak General Electric 25 a 249 ('59) 134 ('60) 99 ('59) 19 ('60) 160 ('60) 85 ('62) 55 ('62) 62 400 68 55 0 65 49 262 128 86 General Foods 107 ('61) 58 ('60) 58 90 General Motors 59 ('59) 40 ('60) 127 Goodyear Intern'l Harvester Intern'l Nickel Intern'l Paper Johns Manville Owens Ill. Glass Procter & Gamble Sears Roebuck Stand. Oil of Calif. Stand. Oil of N. J. Swift & Co. Texaco 51 ('59) 57 ('59) (fi)86 ('61) 48 ('56) 75 1 ' ('5 8 a 59 ('61) 25 ('62) B39 ('60f\\ I 3 v- . if) , 52 ( 48 64 '6'2) '60) 45 34 59 ('60) 38 40 ('60) 35 38 ('60) 26 b 44 50 45 ('60) 24 – 47 72 36 63 100 87 110 69 87 50 77 88 84 56 61 56 30 86 72 129 92 71 Union Carbide 150 ('59) 85 ('62) 43 130 53 United Aircraft 80 ('59) 33 ('60) 59 54 63 U. S. Steel 108 ('59) 38 ('62) 65 61 60 Westinghouse Elec. 65 ('60) 25 ('62) 62 42 68 Woolworth 93 ('61) 55 ('62) 41 83 51 Dow-Jones Average 911 a – Made high in 1955. 504 -45'70 b-Made low in 1957. 863 ll7 Sold above 1956-1961. 82 43 7J 77 34 59 98 83 109 62 87 46 78 128 48 56 35 85 827 It will be noted from the above that if all 30 stocks reached their 1956-61 highs on the same day, the high would have been 911 instead of 741. Subsequently, each of the 30 stocks declined sharply to reach-a low some time in the period between 1960 and 1962. The average decline was 450/0. 16 of the 30 stocks did not sell below their 1960 lows in 1962. If all stocks reached their 1960-62 low on the same day, the low would have been 504 instead of 525. Th advance since 1962 has been roughly 60 in terms of the average. If all of the 30 stocks reached their 1963-64 highs on the same date, the high would have been 864 instead of 830. Only 9 of the 30 stocks have reached new highs above the 1956-61 highs. The recent highs of 21 of the 30 are lower than the highs reached three to eight years ago. At a rough estimate 800/0 of all the common stocks listed on the NYSE are still below the 1956-61 highs. This leads to the thought that the market, in a very broad sence, is in a major reaccu mulation period between the 911 and 504 extreme s. The ultimate result will be an upside breakout, but probablya longer.period of consolidation is necessary before this occurs. Dow-Jones Ind. 827.33 Dow-Jones Rails 197.07 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter \s not. and under no circumstnnces IS to he construed as nn offer to bell 01 U sohcltntlnn to bu)' nny 1derr ctIln hel em. The In(m mntlOn contained herein IS nol Juarant.ccd as to accuracy or cOnllllctcnc&s lind the f1ll lh('l(,J( I.. not. nnd Ilnd('l no 1\1 to bE' eunbtl lied ab, n tlOn by Walston & Co, Inc. All C'IIllreSblOnS of OPllllOlI arc subJE'Ct to chnnlte wlth,,t ntlct' Wnl-;ton & Co, IIC, and DITI('N. DUectors, Stockholders anti Employees tbereof, purchase, seJl and may hnvc all lntere'lt 11\ tbe SeCUrities mentume,) bClcln ThiS marhet letter II JIItenllcd Hild prftlcntca mE'rely n!J II J!cncraJ inrormnl commentary on day to doy market news aud not as a complete analYbh A.!thtlOoal infO! matloll \\ Ith I CII-Cct to .my CClIllhe. I cferl cd to hel em will furnl'lhed uPon requesL \ \ ' .301

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Tabell’s Market Letter – April 24, 1964

Tabell’s Market Letter – April 24, 1964

Tabell's Market Letter - April 24, 1964
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Walston &Co. —–Inc —– .I1em!e,. Xell' 'ol'!. Stock Euiw!Ile FILE NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER April 24, 1964 The uptrend channels that have been in effect since December 23rd on both the daily price range of the Dow-Jones Industrial average and the daily breadth index have finally been broken on the downside. The uptrend channel was bordered by an uptrend line connect- ing the December low of 752, the January low of 767, and the successively higher lows since that time. An almost parallel line connected the December high of 769, the January high of 780 and the successively higher highs since that time. Both of these parallel lines have, of course, been moving upward and at the time of the downside breakout, had outer limits of 844 and 823. The lower limit of this range has been decisively penetrated on the downside during the past week. Asimilar uptrend channel in our daily breadtil index since the December 23rd low. This uptrend channel has also been penetrated – the downside during the past week. These uptrend channels have been remarkably steady, but relatively moderate. The steady advance from the December 23rd low in the Dow-Jones Industrials had lasted for ninety-one trading days without a worthwhile correction. This is quite unique from a time element. However, the advance has been only slightly over 10. This is a magnitude con- siderably less than many previous rallies of shorter time duration. The downside breakout has, in our opinion, considerable intermediate term signifi- cance. It indicates the probability of an end to the type of market action that has been in effect since December. The advance from the December lows has, in the main, featured the blue chip investment issues that comprise the Dow-Jones Industrial average. This has re- sulted in a steady rise in the averages while the bulk of done comparatively little ma rketwise. We would expect considerably more se e ti here on. As yet, neither the averages nor individual e k a e for mportant tops. In terms of the Industrial average, it is difficult to rea ch w an the 800 level on the first stage of the decline. A rally from ad eve! to a point below the recent intra-day high of 831. 63 would result oad g of the potential tops. This letteFhas 10 -25 in long term capital appreciation catil't'inue this policy on strength, if you have not already done so. \ The pattern t t 0 ving fits into the concept outlined in our letter of April 17th. The b k n e action of the thirty stocks in the Dow-Jones average since 1956 indicates f t at market made a major top in the period between 1956 and 1961. If all stocks rea he eir highs on the same day, the average would have reached 911 instead of 741. We fu r believe that the market made a major low in the period between 1960 and 1962. Every stock in the Industrial average suffered a severe decline from what- ever high made in the 1956-1961 period to the 1960-1962 low. The average decline was 45 and the low, if each stock had reached its low on the same day, would have been 504. This decline, in our opinion, corrected the entire advance from 1949 to 1961 and resulted in a major low. The advance from the 1962 low is still within the confines of the 1956-1961 high of 911, and the 1960-1962 low of 504. If all stocks reached their 1963-1964 highs on the same day, the high would have been 863 which is still below the 1956-1961 high of 911. Only nine of the thirty stocks in the Dow-Jones Industrials have reached new highs above the 1956-196 highs. If we take a!l NYSE listed stocks)nto consideration, probably 80 are still in the 1956-1962 trading area. This, to us, means several things. (1) The market, despite the recent new highs in the average, is still in a broad reaccumula tion area that will result in much higher levels in the late 1960's. (2) The advance from the 1962 lows is not the start of the broad advance. Probably one more decline is needed before the market advances in a broad overall scale. (3) The market as a whole is not as high as the averages indicate. (4) The next decline will be the last opportunity to buy stocks in the 1956-1962 range before they advance to much higher levels in the late 1960's. (5) The above applies to the general market. There are plenty of individual stocks that are ahead of the general rna rket pattern and are already in major uptrends. These 'stocks,should be bought and held. Dow-Jones Ind. 814.89 Dow-Jones Rails 196.18 EDMUND W. TABELL WALSWN & CO. INC. — Till., Innl ket ietltr IS not /lnt! unltel 11 en cumlltullce; Lb te) he m!(1 os. nn lItre! t ..ell 1 ,J .,,,lIcltatl1l tn Illl ,In)' -'('CI1111(!-. 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