Tabell’s Market Letter – February 25, 1966

Tabell’s Market Letter – February 25, 1966

Tabell's Market Letter - February 25, 1966
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TABELL'S MARKET Walston &Co. —–Inc —-INVESTMENT BANKERS MUTUAl FUNDS MUNICIPAL BONDS Members New 'lork Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS LETTER February 25, 1966 Three weeks age we cencluded this letter with the fellewing statement – It is, in summary, a steck market in which the intermediate term outleok remains relatively faver- able while there is some reason to. question the shorter term picture. At such a time, pru- dent investment pelicy generally calls fer having reserves available to. take advantage ef future buying epportunities. Since that time, the Dew-Jenes Industrial Average has declined ever fifty peints frem an intra-day high ef 1001. 11 earlier this menth, to. an intra-day lew ef 946. 10 this week. Fer eight days in a rew mere stecks have declined than advanced. This censtitutes the first significant cerrectien since the relatively mild decline in early Decem- ber,-which -f-remanJin-traday-high-of.96 9. -98 .te ,an.inba–qay 41. The cerrectien in December penetrated an uptrend line frem the June lews. Coincidently,this most recent cerrectien has also. vielated an uptrend line from the December lows. This dewn ward trend was arrested en Friday as the m3.rket rallied sharply frem oversold territery. This is the first time that our shert term escillaters have reached oversold territery since the May-June decline ef last year. As in mest escillaters, the eversold signals are mere impertant than the overbeught signals. These indicaters reflect fer the first time in ever seven menths a reactien that has tended to. shake stecks eut ef weak hands, a prelude to. put- ting the market in a firmer technical positien. Obviously, this process could take a consider- able ameunt of time. Because ef the constructien ef these escillaters, it will be difficult to. stay in everseld territery unless further weakness continues in the market. Hewever, any rally signalled by these escillaters from present levels ceuld well be temperary. Hew lew can the market go. at this peint The eb962-960, which cein- cided with the streng suppert level in the 960-950 area, wa x number ef pessibilities new exist. If the decline werge5-'P i i a Thursday's lew. A (Hately frem current levels, the lewest dewnside ebjective that ceuld be re8(l1 ,,uld b the 930-928 area, and a decline to. this area weuld represent a ever, if the market remains areund current levels, e!yushes up y 98 00, this have the effect ef breadening the petential tep and we evels at a later c r a t e . – ' A classical rule ef to. ene-half correctien is necessary be-' ; fere an advance can resu e. T 'em'lxttne 1965 through February 1966 carried frem an intra-day lew ef 83 7 carry the Dow to. 9 , a-.dhigh ef 1001. 11. A one-third retracement would 1 a ct'Ybeen just abeut reached, and a one-half retracemen ,1 would call fer 916. in g cerrelatien can be drawn with the Standard & Peer's 500- Steck Index. A shert ter indicated 90.50 which has, in effect, been realized. Hewever, there is a pessible fur r ebjective ef 87.00. Beth the Dew and the Standard & Peer's 500- Steck Index have cerrected themselves en a shert term basis, but beth can be ceunted fur- ther to. lower technical levels. Any miner strength in the Standard & Peer's 500 weuld also. have the effect ef breadening its petential tep fermatien. The abeve cerrelatien ends the moment we begin to. discuss the ether two. Dew-Jenes indices. The Rails centinue to. eutperferm the Industrials, and altheugh dewn frem its recent high, meets suppert in the high 250 area. The refu sal ef the Industrials to cenfirm the re- cent high in the Rails is also. cause fer cencern to. many classical Dew theerists. The Rail average has reached all leng term upside objectives and a new pattern must ferm, we feel, be fore any rise may resume. The Utility Average, on the ether hand, has pes ted a newlow at 141. 60. Judging fro. individual chart patterns which make up this average, it appears very likely that this greup will remain depressed fer some time to. come. It is, in summary, an interesting phase of the nl3.rket. At seme peint in time, the present shert term weakness will provide a buying eppertunity similar to. that afforded by the sharp weakness in M3.Y and June ef last year. If an immediate decline to the 930-928 ar!Oa toek place, such a buying eppertunity weuld prebably be presented. However, the market must be watched closely for a pessible broadening ef the distributienal pattern and an indica- tien that a lewer dewnside ebjective may exist. Dew-Jenes Ind. – 953.00 Dew-Jones Rails – 264.23 ANTHONY W. TABELL WALSTON & CO. INC. AWTRJS amb -, formation WitS obtamed from sources we bcheve to 1., rehable. but we do not guarRntee Its accuracy ernplo)et.'9 rna) have an mterest lh or purchase and sel! the secUrities referrt.d to herein. d;–U'-' ' -' ' 'T' 'h-,-,n- \\'alston & Co, Inc. and Its officers, or WN.SOI

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