Tabell’s Market Letter – January 10, 1969

Walston &Co. —-Inc. —– Members New York Stock Exchange and Other Principal Stock and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 10, 1969 Forecasting is, at best, a hazardous profession, and the events of the last three weeks certainly constitute.an,examp1e.wPrior-to leaving for a short vacation over the Christmas-New Year holiday!we'i's'S1leilour'1969 forecast describing our conception of the outlook in reasonably optimistic terms. 1969 opened in an apparent attempt to give the lie to our prediction. The Dow had reached its 1968 high at an intra-day peak of 994.65 on the first day of December and backed and filled in early December trading. A sharp drop toward the ensl.of .the m()!1thensuedl;tl)d the took Rlace onthe last daY–9iJ;he year. A.! that point, the normal year-end rally ellsued, but it was among-the more minuscule such rallies in recorded history, lasting for only two days into January before a reversal set in. In this respect, it bore some similarity to the one-day rally which ushered in 1960. The early part of this week's trading produced a drop of some 30 Dow points in three days be- fore a rally altered the slide on Thursday. Even this rally was only moderately impressive, and the gains were not held in Friday's trading. At the end of the whole process the Dow had slipped just under 80/0 in twenty-two trading days from its December rally high, the sharpest decline since August of last year when a 7 1/20/0 drop in seventeen trading days took place. At the week's low, approximately half of the August-December advance had been cancelled out. The obvious question is, of course, whether anything has happened in the past five weeks to alter the optimistic outlook expressed at year-end. The answer, we think, is, by and large, No. This is not to overlook the obvious negative factor r 0 e picture. Among these, for example, is the early aborting of the yeW,M S an occurrence has often been a precursor of a down market for the yealj\ the re notable exceptions — 1968 being an obvious one which comes to Ano'tliiW erately bearish factor at the throughout most of 1968, a supportiv a – nG -posi-t-i-on.–I'emovi,ng.-what-was, u er market. Other negative feel rather strongly that they are out- weighed by the positive nes. e s ob us positive factor, of course, is that there simply has not been t' e month, to build a distributional pattern of anything even approaching . . A clear-cut top began to form in all of the averages in the latter part of c be d was penetrated on the downside in early January. At the week's lows almos e averages had reached the downside objective of that top, or were at least close t eir more peSSimistic objectives. Moreover, a strong support zone — at the 920-900 area in terms of the Dow — had been reached. Most short-term indica- tors were in a fairly deep oversold position, and the majority of technical readings indi- cated a short-term bottom area. Now it is true that major declines must begin with minor ones, and the uptrend will not be clearly reconfirmed until such time as the market again pushes into new high ground. Obviously, we will have to look at the vigor and momentum of the next rallying phase in order to make sure that an intermediate-term top pattern is not in the process of being built. At the moment, however, we think the odds are against it. Most indicators seem to suggest strongly that what we are now witnessing is nothing more than a temporary interrup tion of a long-term uptrend similar to the one which occurred lasYAuglist. If so, the ulti- mate result will be a move on to new highs by most averages and a great many individual stocks. This is not likely to occur overnight. Indeed, it would be unusual if, after a decline of the magnitude of the last three weeks, a period of consolidation in order to form a base did not ensue. We are, nonetheless, inclined to view the current market level as one of thos attractive buying opportunities which occur periodically during the course of an upswing. NOTE The annual tabulation of the performance of our Recommended List, together with current recommendations, has been distributed and is available from your Walston Account Executive this week. Dow-Jones Ind. 925.53 Dow-Jones Rails 263.10 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb , II Thla market letter 18 llubllshed for your and Information and IS not an ofter to sell or a solICitatIOn to bu) flny seeurltlcs Ul8cussed. The formation was obtained from sources v.c helleve to hI! rehnble, but we do not splnrantee Its .accuracy Walston & Co, Inc. nnd ita officers. dlrectofs or emloyees may bave an Interest m or pUFchase and sell the referred to helem. …