Tabell’s Market Letter – December 30, 1966

Tabell’s Market Letter – December 30, 1966

Tabell's Market Letter - December 30, 1966
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W- – -a-lsItnocn .&- -C-o-. MUNICIPAL 80NDS UNDERWRITERS MUTUAL fUNDS Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER December 30, 1966 For some years now, we have studied the familiar seasonal tendency of the stock market to stage a year-end rally, and it has been the custom of this letter each December to point out some of the conclusions that can be derived from a study of this phenomenon. We have suggested that an exhaustive study of chart patterns since the Dow-Jones Average first was computed in 1897 indicated that such a rally, however minuscule, invariably had taken placE'. A number of interesting facts about the market action of the year end may be noted. (1) – As stated abov-;;, an identifiable rally has bken place in e;ery year since 1897. This rally often has been of great magnitude with advances as great as 280/0 ha been recorded. It also, on occasion, has continued with only minor interruptions for as long as six months into the new year. However, on other occasions, it has been of only a few days duration, reaching a top extremely early. Thus, in 1960 and 1962, the rally reached a peak in the first week in January. In 1961, 1963 and 1964 it continued into the latter part of February or March. In 1965, the rally peak was reached in early February. (2j – There has been a persistent tendency for the rally to begin early in years the market has been up, and late in years when the market has been down. In recent upward years, 1959 and 1963 are examples, the rally commenced from early in December. In 1962, it began late in the year and 1966, a downward year, is no exception to this rule. (3) – The important thing to watch in connection Otion in the early months of the new year is the low for the previous as been broken in forty-one years out of the past sixty-eight, includin . e three of these forty-one cases, it was broken in January and February. it never been broken later than mid-March, with the single exception e market is able to hold above its will not be broken. For January 1960 and January 196 i I .e e r&i e December low was broken early in 1964 it never was broken. 1965,as nntprtl above, was reached an intra-d I 0 1 4 ow of 850. 19 being broken in June when the . I (4) – In yea n been downward tWO-thl ds Again, 1965 was an ex cember low has been broken, the subsequent trend has e time. 1960, 1962 and 1966, of course, are typical cases. (5) – The magnitude of the rally is an important Clue as to the year's market trend. For example, an advance of 100/0 or more from the December low has been followed by an ward or neutral market in twenty-eight of the thirty-three years that such an advance has occurred. An advance of less than 100/0 from the December low before an identifiable correct ion takes place has been followed by a downward market in twenty-three of the thirty-five years. In 1961, 1963 and 1964, the year-end rally approximated 100/0. In 1960 and 1962, for example, it was less than this figure. (6) – The length of time in which the rally continues into the new year also is important. For example, in eighteen years the rally continued into March or later. In sixteen of these eighteen years the eventual trend was upward. In 1964, the year-end ;rally continued into March and in 1961 and 1963, into late February. In the coming year, therefore, the December low of 779. 34 is an important point to watch. If the present rally tops out in early January and breaks this low, it would be a strong indication of probable market weakness. A like indication would be a failure of the Dow to advance 100/0,or to approximately 865. On the other hand, if a rally continues into February or March, or reaches above 865, an extension of the upswing might be indicated. Dow-Jones Ind. – 785.52 Dow-Jones Rails – 203.02 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb This market letter I. pubUshed for YOUI' convenience and Informfltion I\nd ta not an ofter to sell or a eollcttatlon to buy any securities dlseusaed. The In. formation was obtained from sourees we beheve to be rellable. we do not guarantee Its accuracy. Walston Co.. Inc. and Ita officers. or ftl1JJ101eeB mlQ' have an interest in or purchase and sell the secuntles referred to herein. \l!……WNB01J

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