Tabell’s Market Letter – December 27, 1968

W—a-lslntocn.&–C-o-. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS FILE TABELL'S MARKET LETTER December 27, 1968 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 Industrial 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 above, an identifiable year-end rally has taken place in every year sTfiCe1897- This rally-often nas-beenof great- magmtudewfhaavances as 'great as -2-8-,-,—-1- having 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, 1962, and 1968, the rally reached a peak in early January. In 1961, 1963, 1964 and 1967, it continued into February or March. In 1965 and 1966, the rally peak was reached in early February. (2) – There has been a persistent tendency for the rally to begin early in years when the market has been up, and late in years when the market been down. In recent upward years, 1959, 1963 and 1967 are examples, the rally commenced from early in December. In 1962 and 1966, it began late in the year. 1968 is an exception — an up year when the rally began late. (3) – The important thing to watch in connection months of the new year is the low for the previous Decem . . forty-two years out of the past seventy. In ef broken in January and February. Since 1937 it has ii!bee in the early oQ- has been broken in 0 cases, it was n later than mid-March, with the single exception of 1965. Thus, if for the first 2 1/2 months of the year, chan -For-example, 1962 and February 1968. In above, was unusual with the D e r . ab hold above its December 10 orne that this low will not be broken. .- a!tlo1967 it never was broken. 1965, as noted of 850. 19 being broken in June when the Do reached an 10 (4) – In ye n downward two-third e ti and 1968 were exceptio s low has been broken, the subsequent trend has been . 1960, 1962 and 1966, of dourse, are typical cases. 1965 (5) – The rna ude of the rally is an important clue,as to the year's market trend. For example, an advance of 10 or more from the December low has been followed by an upward or neutral market in twenty-nine of the thirty-four years that such an advance has occurred. An advance of less than 100/. from the December low before an identifiable correc ion takes place has been followed by a downward market in'twenty-three of the thirty-six years. In 1961, 1963 and 1964, the year-end rally ,approxiJp.ated 100/0. In 1960, 1962, 1967 and 1968, for example, it was less than this figure. (6) – The length of time in which the rally continues into the new year also is import- ant. 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 c0.!l!inued into March and in 1961, 1963 and 1967, into February. . In the coming year, therefore, the December low of 945. 11 is an important point to vatch.If the present rally tops out in early and br\eaks this it would be strong mdicatlOn of probable market weakness. A llke mdlcatlOn would be a fallure of the Dow to advance 100/0, or to approximately 1050. On the other hand,1 if a rally continues into Februar or March, or reaches above 1050, an extension of the might be inoicated. A VERY HAPPY Dow-Jones Ind. 952. 51 Dow-Jones Rails 272.36 AND PROSPEROUS NEW ;EAR TO ALLI f ANTHONY w. TABELL! WALSTON & CO. INC. \ AWT-amb \ This market letter is published for your convenience and mformatlOn Rnd IS \1ot an offer to sell or a to buy Rny securities lhscussed The in- formation was obta.lned from 80Urces we beJleve to be reliable, but we do not guarantee (ts accurac). Walston & Co., Inc. and Its officers directors or emDto)'e!a may have an Interest In or pUFchase and sell the securities referred to h e r e m ' 'r I WN801 ,\\