Tabell’s Market Letter – October 13, 1967

Walston &- Co. —.;….Inc.—- MUNICIPAL BON1IS 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 October 13, 1967 Not unexpectedly, the market moved lower through most of last week, with the Dow- Jones Industrials rea,ching an intra-day low of 909.79 on Thursday. The low was reached on sharply reduced trading volume of 7,770,000 shares, brought about, largely, by the Columbus Day demi-holiday and, perhaps, by preoccupation with the events in Bcston. Friday's trading saw a mild sort of a rally with the Dow moving ahead some five points. At Thursday's intra-day bottom, the Dow had just about reached the most conserva possible downside objective based on the September-October distributional top. The decline to Thursday's low also brought the correction into line with most of the previous dips of 1 -As of Thursday, the Dow had declined'4. 4;-'and retraced- move from the- August low to the September high. This retracement required some thirteen trading days to complete, and thus was in all respects to previous corrections, except for the more serious Israeli-crisis drop in May-June. That decline took eighteen days to complete and constituted a drop of 8. 6. It also erased the entire previous advance, plus a bit more. In this connection, it is interesting to note that the most pessimistic possible downside objective which can be noted for the Dow is around the 875-870 area. Were such a further decline to take place, the total percentage drop would be about the same as the decline last May, and it would also wipe out the entire advance from the August 28th low of 887.73. It is, frankly, difficult to envision too much worse than this at the moment, and there is at least some precedent for the market's basing out and continuing its upswing from around the present level. Much has been made of the desultory action of the vance, together with the fact that the carrier index declin be ,quring the recent ad- A gust low last week. This would indeed be serious were it possible to sei;i.e i sater distributional top than now exists. The worst downside objective that n reaa the Dow Rails at the mo- ment is around 248 vs. an intra-day low hile we would certainly not expect any broad move in the Rails from the Is, eat many individual carru,rS,aJLOllll with the averages; group, at least,appears a The inferior action of th . eQ;JJ.;e W ive' 1). rid thus,-someconsoHdation in the .. e been widely noted. However, here again, both the or's utility indices appear to be reaching downside objectives at curr 1 e time to form a base will certainly be required, most stocks appear attrac . pri aespite the severe competition being felt from high-vlJ.u new issues of corporat b . Before leaving ubject of Averages, mention should be made of the broad-based dices such as the New York Stock Exchange Index and the Standard & Poor's 500-Stock site. Both of these indices continue to out-perform the more widely-discussed Dow and had; as of last wee!, formed only minor tops, the objectives of which they were approaching at the week's low. It is pOSSible, therefore, especially after last week's correction, to view the general market outlook with some equanimity. The same is not true of all individual stocks. The lesson has been driven home over the past few months that the stock market is not a On-' street, or a means for the manufacture of instant profits without dint of effort or ln1e.lllgen,cell The number of stocks that are below their highs of three to six months ago — some of them a good deal below — is legion, and it is quite possible that, in a number of cases, lower prices will be seen before the old highs are again -attained. It is-cbB.racteriStic of any up- swing that a large number of issues reach their peaks rather early in the game, and it is certainly probable that a substantial minority of individual issues have already seen their highs for some time. Indeed, even in most carefully selected portfolios, problem stocks are beginning to appear with increasing frequency. All this, as we have pointed out in previous letters, is normal, and it is incumbent on the investor to make the changes in his portfolio necessary to take advantage of shifting rna.r.. ket leadership. Meanwhile, we are inclined to view the general outlook for equities as re- maining reasonably favorable. The bull market may be entering a fairly robust middle age, but we doubt if it is approaching senility. Dow-Jones Ind. – 908.58 Dow-Jones Rails – 251. 55 AWTamb ANTHONY W. TABELL WALSTON & CO. INC. le mwauv thtoeabrvtea1i8naenpduIbnfUrtoeehmreed.tlIfOionurroeyreeopWwW' e!c'cobhnaev8lieeenvaienendtcoseeballentdhreeilni8afeobCrleUm. ralbttiuieostnrweAfeenrddroeIdsntnooot tbpeaarnerlanon.f.tte.ere to eell or a eolldtation to buy Its Mcurac)'. Walston & Co An)' Inc. .eeurltiee dlllCUDl!d. The and ita oiBei!ra. dlreeton In. or WN.101