, … .! ,, I' ,ALL WIRES , the Dow-Jones Industrials and Dow-Jones Rails will constitute a Dow .Theory sell signal. For the record, this ,\ reverses the Dow Theory buy- 1 signal given some 45 pOints highe'r which, in turn, reversed the Dow ' , ', Theory signal which had been given 65 points lower. , Our own feeling is that who wish to operate on the theory off of this I. 'j ;.- r' !' J ' ', )1'.' . ,.. ' '. ' ,4 J j 1 , .; , ,\ Insofar as the Dow is concerned, the worst possible downs'ifle indication is taken by go,ing back to the original December-February top as since broadened. This indicates a possible downside objective of ,850, or roughly 60/0 current levels, This means three points on a with the strong probability that the better acting issues would not move down this 'much. Recent copy of our Recommended List is in the hands I of all offices. It is our feeling that the issues therein can be bought at the support,levels mentioned. Anthony W. TabeU – NY ., .,

Lr – Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 6, 1966 A number of years ago a 'New-York newspaper spread an eight-column banner headline across its financial page which read something like Bull Market Ends. The story went on to say in the lead paragraph something like The seven-year bull market ended yesterday, etc., etc. Two days later the market started to move up and shortly afterward went on to a new high. The story in question in response to a Dow Theory sell signal – a signal similar to the one given on Thursday of this week when both the Industrials and the Rails plummeted to new closing lows. The market response on Friday was of equal interest. In a classic selling climax on record volume of '13,110,000 shares,- the Dow-Jones Industrial Average reached an intra-day low of 882.90, off 16.87 from Thursday's close, and rebounded sharp- ly in the last hour and a half of trading to recoup the entire'loss, and close at 902.83, up 3.06. It is, at this point, far too early to say that we are out of the woods. Indeed, his- torically, many major bottoms have been of the multiple climax type, i. e., a series of selling climaxes coming at fairly widely separated intervals and at successively lower prices. It is, however, safe to say that history is replete with warnings about what happens to investors who attempt to treat the Dow Theory as a trading strategy rather than a matter of historical interest. The week's sharp decline, however, caught many investors by surprise. Measuring from the February intra-day high of 1001. 11 to Friday's intra-day low, the drop in terms of the Dow-Jones Industrials was 11. 80/0, about the same almost a year ago in May-June 1965. In other words, at Friday's low, 70 th from June 1965 to February 1966 had been retraced. All this fits 5'P tha 1S letter has held for some time – the concept of a trading range in which .0lction dividual stocks will be far more important than the action of the e pIe, the Dow index is cur- rently onl! 6. aboveits, low of el.even months . At time, Fairchi.ld Camera & Instru- -ment was sellmg for 36 vs- a , a agnavox'was'seillng at-35 5/8 vs. a low of 96 3/4. By host of blue chip securities, among them General Motors, J meli.ttores, General Foods and American Tel & Tel, found that a anaged to buy at the June 1965 low. There is a sp' elieve that the Dow-Jones Industrials have particularly misrepresented the m t r t market. As every investor has been reminded, ad nauseam, the blue chip issues, vily represented in the Dow, have been among the poorest acting individual stocks over recent months. For this reason, it may well be that the new low in the Dow index made last week is of relatively little significance. A great many stocks at their lows of the last week were nowhere near the bottoms they had reached just last March and it is, therefore, appropriate to suggest that these issues, unlike the Dow, have main- tained their uptrends inviolate. This fact, of course, further suggests that, whatever happen to the market, good results can be achieved in a number of stocks. Perhaps the greatest mistake the investor can make at this stage is to allow the excitement of present events to force him to make decisions in haste. At the moment the most pessimistic downside objective that can be read on the Dow is 850-825. This is the equivivalent of 3.4 points on the average 50 stock. Considering the fact that a great many of our short-term indicators have again moved into deeply oversold territory, it is doubtful that these levels will be reached without an intermedtate term rally of some sort. Moreover, if our trading range concept is correct, any further move toward the bottom of this range would constitute a fairly attractive buying opportunity. We will be in a much better position to judge the future course of the Averages and the individual issues which may assume market leadership when the present phase has completed itself and the base for the next intermediate term rebound has formed. Dow-Jones Ind. – 902. 83 Dow-Jones Rails – 240. 54 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thl'l market letter IS llUblished for conenlcn('e nnd Information and 1; not fin offer to aell or R solicitation to buy Rny IleeUrltles discussed. The ill- formation WflS obtmncd from sources we bdlev, to he reliable. but we do not gl,larlintCI! Its 3('rumry &. Co., In/ nnd ltS officcls directors or may hnve an Interest In or purchase and sell the ;t'eunbe; referred to hcrem , i, –

-, . Walston &Co. —–Inc —-INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 13, 1966 The market slide continued this week. Aft er a sharp dip on Monday, the Dow-Jones Industrials rallied on Tuesday and Wednesday, but selling set in on Wednesday at noon and the decline an intra-day low of 868.65. It is difficult to judge how-low'the Averages may go. Our letter of last week pointed out that various downside objectives between 850 and 825 can be read. If this area is reache the market would have come full cycle, returning to the levels reached at the lows of last June. In other words, it will be possible to describe the market action of the past twelve months as a trading range with highs of 941 and 1001 in May 1965 and February 1966, and lows of-832-and -whatever-low is -dedirieti'lJ'un-efg-6DaniMay , This is entirely consistent with our view expressed in this letter over the past year. At the 1965 lows this letter said – The uptrend channel in which the market has held since the Cuban crisis low has ended and will, in our opinion, be succeeded by a broad trading area which will be featured by'wide swings both up and down…….. The market could remain in this movement for a year or longer with the Averages and individual issues showing wide price swings. The lower limits of the range should ,be viewed as a buying opportunity. The upper limits should be viewed as a selling opportunity in issues with below-average longer term attraction. We see no reason to change this opinion today. Nonetheless, it would be ridiculous to say that the recent erosion in stock prices is without meaning. In the process of their decline from' the Februar-y highs, a great many issues have broken out on the downside of substantial 0 In a great number of these cases the downside implications of these trJffing e c siderably below current levels. Moreover, a great many of the v sted such downside breakouts are those issues on which market leadersl1iI,v.Pas c red during the June- Feb- ruary rise, issues in such industries as Ail l' s, Electronics, etc. It ap- more Qrobable toqaythan be in the process of being deglamour' pasLthat ' . .. – I To some, no doubt, . belated with Fairchild Camera (136'1/2) II, down from 216 n from 233 1/2, or Boeing (137 1/2) down from 182. However, e above their lows of w, most of these issues were selling at prices 100 mm. The investor who bought them at that time can happily I accept his profit. The Jo -come-lately should have been aware of the risk in the first place. What implicati;ns does all this have for the market as a Far less serious ones, we suspect, than many analysts are implying. For while the advance in the perform- I. I ance issues has been merrily going on since last June, high quality stocks have been en- ga!,red, as we all know, in their own private bear market. It is worthwhile to examine at this point just how far this bear market has carried. At this week's low, the Dow-Jones Industrial Average was selling at the same price earnings ratio it sold at at the 1962-low. Examination of the individual components of the Average, moreover, shows that twenty- three of the thirty stocks therein were selling at lower levels in relation to earnings than they had in June, 1962. This is hardly the fabric of which major market declines are made. In other words, what seems to be taking place is a distinct shift in market leadership. On the one hand, the best that can be foreseen for a great many leaders of the June-Februar rise is a technical rally back to heavy overhead supply. On the downside there appears to be very little protection against further substantial losses in the event of a continuous down- swing. On the other hand, in a whole host of issues, bases still exist to indicate substantially higher levels and any further moderate dips would bring these issues back to strong support. Such stocks are, generally, cheaper on an earnings basis than they have been in some years. The task of the investor at the moment is to adjust his portfolio to reflect these realities. Dow-Jones Ind. – 876.11 ANTHONY W. TABELL WALSTON & CO. INC. Dow-Jones Ra ils – 228.50 Thill market lelter III published for 'Our conveRience und mformallon and IS not an offer to eell or a solicitation to buy Rny Ile(!Urities discussed. The In ormation was obttuTlcd (rom sources we believe to lo;! reliable. but we do not guarantee its BCcurBP Walston & Co. Inc. and Its officers. dlredora or en1l'loyees may have an interest in or purchase and serl the secUl'Itles referred to herein. ' WN301 i – n,

Walston Co.lnc.(r INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BOHDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges 90 OFFICES CoASTToCoAST AND OVERSEAS I , /YlARkCT Reprinted from Thursday Issue, April 21, 1966 The COMMERCIAL and FINANCIAL CHRONICLE 25 PARK PLACE. NEW YORK, N. Y. 10007 .Basis for New Market 'II Advance Is Now UnderWay By ANTHONY W. TABELL Senior Vice Preslnent, Walston & Co, Inc. New York City l\lr. Tabell re-examines his father s famous prediction of ..ix yeIl'j a.go and ..ces little need to change it today. Similal'ly relying on the- Elliot \Vavo theory, analyst Tabell disagrees with those who say We have had one hull market Rin(c 1949 which still remains Wlcorrectoo. If so, he a(lds. uwe houid run for the hills. Actually, he claims, once the 19621966 Dow Inde' rnilrance is cor rect('d 1n PIE term.;; the upswing almO'it entirely disappears. Thus, in predicting a not too bullish market over the year ahead, i\'lr. TabelJ advi'!!cs taking advantage of any weakne..se'J. They prm.lde, he says, an excellent buy ing OPllortunity and he ha..es thi., view on the premise that we are now cOlllllleting a base fonnation for n new all\'unce 10 begin III the latter part of thi'!! dcc..'l(le. Some six years ago, my father, the late Edmund W. Tabcl1, delivered a speech m Phoemx, ArIzona (reprinted .n the Commer. cial &; Financial Chronlele of November 19, 1959) en titled What Time is It on The stock Market Clock The purpose of the speech was to make sam e o b s e r v a-A. W. Tabell tions' on long range cycles in the stock markth and to offer some oOserva- lions as to what the 1960's might have in store It was an important queshon at that pomt. The bme was two years prior to )he 1962 break in stock prices, the sharjr est del'1ine in twenty-five years Already a great many stocks had begun declinIng from highs they were not again to achieve for as mu('h as five years and which, Indeed, some stocks have not agam achIeved to this day. The question of what time is It or the stock market clock is equally Important today. We have recEntIy com pIe ted a rorty-two-month fIse in the leading market indices, the longest su('h rise .in post-war history. The,….length of this rise, …. Upswing Started in 1949 – Accurate Prediction I, for one, do not believe it is ended September, 1961, just be- true. Anyone close to the stock fore the market reached its market in 1961 is aware that peak, the Dow-Jones Industrial this period had all of the char- Average earned 29.03. Sin c c acterIstics of a major stock market top to a degree not remotely approached by today's market. I do not think it Is posSible, as so many are doing, conveniently to ignore 1961-62 as a mere techmcal interruption of a long advance. I think, in other words, that the, analysis made six years ago IS essenhally correct and that, in 1961, the bul1.market ended and the stock markct moved mto a new phase. If thIS is the case, the sharp rise in the Dow to new' high territory over the past three and one-half years, coupled with a much sharper rise in individual Issues, needs to be fittcd mto the pattern then outlined I believe that this can be done. First of all, we have been talking to date purely 10 term& of the averages. For the past decade, as most analysts are aware, this has been misleading For example, many stocks in the 1949-1961 rIse made their hIghs as early as 1956, and a great many more made the i r highs in 1959. A great many of thosp slocks which made theIr highs long before the market had already completed bas e formations for a substantIal new advance by June of 1962. As these stocks moved into major bull markets of theIr own, the rise in the Dow-Jones Industrial Average was extended to a point far beyond what would have been expected if all stocks had topped out as the then we have seen more than our years of continuous earnlOgS expansIon to the point where the Dow probably earned Just under 54.00 for the year 1965 and, probably, will earn 60 00 in 1966. At its recent low of 905, therefore, the Dow was selling for 16,9 times earnings, a fIgure not too much dIfferent than the P-E at the 1962 low. Put in terms of P-E ratios, rather than prices, the entire 1962-66 upswing almost entirely disappears. The Index corrected itself from a PE of 24.2 In lhe thll'd quarter of 1961 to one of 16.2 in the second quarter of 1962. Since that time the P-E has never moved m u c h above 19. ThIS sort of pattern IS far more conSIstent with the analysis offered in 1959 than is the conventional pattern of prices. And, thIS is, in a sense, as it should be. When we talk 10 terms of long stock market cycles we arc usually talking in terms of swings in investor confidence, It is at least an arguable premise that investor con- fidence in the overall market has improved very httle in the past four years. Indeed, it is possible that in- vestor confidence as expressed by the PE may ul- timately wind up WIth a classi- cal threewave y pe downSWIng. If this is the case, we might see a decline in the Dow-Jones P-E to around 14, the level which characterized it during 1956-57. ThIS would hardly be a major disaster. averages dId in 1961. Much Again, assuming 60 00 earnings more important, however, IS the fact that the market of the past five years has moved agamst a rdther unusual economIC back- for 1966, this would produce a Dow-Jones Average level of 840, not hoo different from the June ground For the twelve months 1965 low 4 Outlook OVer the Next Year If this is the case, the out- look for the stock market over the next year is not a terribly bullish one, and the immediate signs of market deteriOratIOn we are seemg at this late stage warn us against unreserved optlmism at this point The last high in the Dow-Jones Indus- trlals was, for example, not confirmed by our breadth 1 n d e x, indIcating some deterIoration of leadership It is quite pOSSIble that longer term volume indlces are just now beginning to top out, a phenomenon which has led all maJor stock market peaks in the post-war period. In other words. it is qUite IXlssible that a year from now the popular market averages could be somewhat lower than they are today. Yet, the important thing is how we VIew this antIcipated stock market weakness. If we subscribe to the theory that the entIre 1949-1966 period constitutes one single advance, we should certainly view any impending downturn with a great deal of alarm. If, on the other hand, as I do, we believe that the present market is in the process of completing a bas e formation for a new advance to beglIl 10 the latter part of this decade, then any weakness will provide one of the most im-portant buying opportunitIes for common stocks 10 r e c e n t years In other words, I believe that in later years, by hindsight. we will be able to view the 1965. 1966 or 1967 period as a WIde tradmg range which completed the base for a new upswing In 1959, in the analysis of time on the stock market clock, the conclusIOn was as follows- In conclusion, I belIeve the stock market will top out in 1960 or 1961 at around 750 to 800 During the next five years, we will have to drop the outmoded concept of bull and bear markets and concentrate on the outlook for individual Industries and issues. We will probably have to change our opinions on the outlook for many individual issues. We will not be able to solve the investment problems of the next five years by remaining static and owning the 'Favorite Fifty.' That investment pro g ram worked very well in the past ten years, but will not meet the probable changes of the next five years. If the picture is some-what obscure for the next fIVe years, it Is m u c h clearer for the next ten years. This is a growth country and we are still in the early stages of the advance. After the first wave is ended and the needed consolidating phase of the second wave completed, the econ- omy and the stock market will again embark upon another advancing phase. I do not expect that in the next ten years the market will duplicate the 300 risc of the past ten years. It could, however, be 100 hIgh er by 1969 or somewhere around 1250 and 1500 in the Dow-Jones Industrials. Although the time might have to be pushed forward to the early 1970's, there appears httle reason to change this prediction today. -An !.on 6, 1966 by IUr TabeIJ to the BMClub, BMton, MaS-'! April

– Walston &- Co. Inc INVESTMENT BANKERS MUTUAL FUNDS MUNICIPAL BONOS Members New York Stock Exchange . and Commodity Exchanges – OFFICES' COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER May 27, 1966 The prevailing stock market attitude appears to have changed from panic to lassitude. On May 17, when the Dow-Jones Industrial Average reached an intra-day bottom of 859.13, the index had completed the sharpest decline in over four years, a drop of 14.20/0. From that point the Dow chalked up advances in 7 out of 8 trading sessions to reach a high this week of 897. in a sharp upswing at Friday's close. The most notable feature of this rally has been the sharp reduction in trading activity. While volume had reached peaks of over 13.mi-llion shares on the way down and was almost lO,million shares on the day when the low was made, it has steadily declined since and reached a nadir of4.8million shares on Friday, -Contrary on the.record neither bullish nor bearish. It is a phenomenon which has characterized a number of short term rallies within major downswings, but it has also taken place shortly after a good man major bottoms. The obvious question in the minds of a great many investors at the moment must be wliether the present upswing is simply a short-term interruption within a major downtrend or whether it constitutes a signal that the downtre.nd has been rev;rsed. In tackling this question, a number of considerations present themselves, not the lell.fit-of which is the rather striking internal condition of the market as of last May 17. At that point, most of the short and intermediate term indicators followed by this letter had reached a deeply over-sold condition normally chaYacteristic of major market bottoms. One such indicator, indeed, became more over-sold-than it had done at any a rather striking comparison when one realizes this period includes the m ke t rRs of 1946, 1957, and 1962. Last week's rebound from this over.sold poanio9J a ro u earish inferences -in all but the most sensitive of these indicator-so \yV However, one interesting over-sold markets may be – noted. In a.gr-eat manY,cases.the tion'does not turn out to be the low . a he . extremf! oyer-sojd condi,- ery often' the extreme over-sold'low- is followed, from two J1i a further low just sligh1lbelow the previous one. In gene t ecline tends to be more selective and a great many stocks do no e w oms. It is'ihese stocks, generally, that tend to be the leaders of the u ace. — Of course, the os – – ity remains .that the upward move from May 17 to date is nothing more than a 'cal interruption in a major downswing. Such an interruption occurred, to cite one example, in August 1957 when the Dow, having dropped off sharply from a high of 524 t9 a low of 470, staged a smart rally which carried, six days later, to a high of 488, the bottom of this rally also coming from an extreme over-sold condition. The strength proved to be abortive, however, and stocks moved on to new lows with the Dow reaching its nadir of 416 in October. One observation about short-term rallies in bear markets, however, can be made. They tend, in general, to be fairly short. In almost all cases, they last, from bottom to peak, no more than six trading days. More- ,over, they are generally erased and a new low made within two weeks. Thus, the ability of the present upswing to extend itself for nine trading days must be considered a mildly Further .e-ncouragement woulfl ie if !he D()w could get through next week, say, without posting new lows. Such action would not eliminate the possibility of the terminal decline which follows an over-sold condition noted above, but it would sharply lessen the probability th-t last week's action constitutes only a minor interruption in a headed for significantly lower levels. Meanwhile, our basic opinion on the character of the market remains unchanged. As time goes on, it will become evident that a great many stocks commenced major downtrends at their February highs. A great lllany more stocks show no evidence of cessation in the downtrends which began last year. The range of attractive stocks presently available has been drastically restricted, and it should be the objective of every investor to upgrade his portfolio accordingly. Dow-Jones Ind. 897.04 ANTHONY W. TABELL Dow-Jones Rails 230.89 WALSTON & CO. J INC. market letter is published for your lind Information and IS not an offer to lIell or solicitation to buy an)' aeeurltles discussed. The In- fonnatlon WAS obtamed from sources we bt'heve to loe reliable. but we do not guarantee ita accurflC. Walston & Co.. Inc. and Its officers directors or emrrloyees may have an mterest In or purchase Ilnd Be'j the 11I!'CUritles referred to herem. WNSOI