Viewing Month: July 1969

Tabell’s Market Letter – July 03, 1969

Tabell’s Market Letter – July 03, 1969

Tabell's Market Letter - July 03, 1969
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W—-a–l-s-tIoncn–&—-C–o-. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange, OVER 11)0 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER July 3, 1969 Expen.ence 1. S the 0 nly proph ecy 0 fW'1se men …….. Alphonse de Lamartine The past is the key to the future! This has proven to be especially true over the years in regard to the actions of the stock market. It is not at all difficult today to find market letters and advisory services relating the sequence of past events and subsequent market activity. Of late, much can be read about Summer rallies, how often they have taken place in the fileable past and how well these rallies did in their respective upward movements. Only last week, this letter retraced the history of the last 13 years with regard to oversold levels and subsequent changes in the Dow Industrial index six months later. Thus;-investors often'turn 'past-for-their-solace; espectally'whe– market events have proven unsettling. In reviewing the past, it is interesting to note one particular piece of information that has generally gone unheralded by the investment commu nity as the bearishness of the last several weeks grew ever more intense, The market, as registered by the DJI, reached a peak in May of this year and started into its decline from a closing high of 968.65 (intra-day peak of 974.92). The closing low was reached late in June at 869. 76 (intra-day nadir 862.46), a drop of almost 100 points on a closing basis and 112 points on an intra-day basis. This decline has had the effect of turning many a bull into a bear and generally has worked unfavorably on investor psychology. In recent days it has not been difficult to find market analysts predicting much greater declines later on in the year, and one advisory service recently said that the best Christmas bonus this year will be the end of 1969. But, if indeed the past is the key to the future, there hope for the balanc of 1969. It is a fact that the Dow Industrial p te 'ng high only once in the month of May since 1900. That particular 0 nce in almost 70 years did May manage to win out as the high month for the Th cent high of 968. 65 really is not so very far away from the present ustrials. It came down in less than two months and the year 1969 ef . 1t. July is a bullish month normall market averages increase – – — .p.o – -rIng JulY-than forarlYother-month, and the most consistent record i investment climates Since the turn of the century is held jointly b n fact, since 1900, July has recorded more tha twice as many adva c s, vs. 23, to be exact. We are, we b I C n n a rallying phase that most likely will be referred to a the Summer Rally of 6. eavily oversold position now has been altered to one more approaching a neutral st e, which in turn is expected to turn into an overbought condition before the rally ends metime in the several weeks ahead. At least, this is the anticipated schedule. The extent of the rally probably is not as important as the duration. A rather long drawn out rally, with backing and filling, would build a base that not only could afford sup- port in any subsequent downturn but also prov1de the basis for a later advance, Earnings for the second half are difficult to predict at present. Perhaps the earnings on the DJI will be somewhat less than the previously estimated 63 a share. Also, perhaps the recent market decline already has adjusted for this disappointment. If so, then there is a possibility that the lows for the year may have been recorded and that May 1969 just might step aside later in the year to hand over the prize for the closing high to another month yet to come, maybe November or December, both of which are on record as normally being bullish months, Thus, cgreaLpessimism seems uncalled for. , . In the past it has proven good investment sense to seek out values in the market place, not regardless of the general market climate, but often m spite of it. The market has been in poor health in recent weeks, but many stocks and stock groups can be found that have re- covered from their illnesses. It is in these industrial groupings that investors aoe most likely to find situations of greatest interest. While no one knows now what will be the next glamor group, there are certain groups that appear to have the technical factors and the fundamentals in their favor. Among these we would include OFFICE EQUIPMENTS, DATA PROCESSING,-RET.AILING,..JJRUGS & COSMETICS and selected OILS. ,- I Dow-Jones Ind. 886.12 Dow-Jones Ra ils 212.30 ANTHONY W. TABELL-HARRY W. LAUBSCHER WALSTON & CO. INC. AWTHWLamb ThIS market letter IS lluhho;hed fOI ('onYemenl'(' lind mfOlm.ltlOn nnd J.!. not nn offl'r to 'leU 01 .-I sohrlU\hon to bu\ ,111) 'e('untu.'S lhseus'Il'd The in- formatIOn ,,\I obtnlned flom '-OUf(',…, WI'' 1,,'II('\'1' to h(' rehablt,. hut I' tin not ltUarantee Its .11'('ur.I('3 \\-'III;lon & Coo. In(' ,inri Ils offieerl!. (hrectors or cmploy'1 may have an Interest III or urehuse and bell the W(.\lI Ltll' ll'fl'r! I'd to helem. WN.aOl

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Tabell’s Market Letter – July 11, 1969

Tabell’s Market Letter – July 11, 1969

Tabell's Market Letter - July 11, 1969 page 1
Tabell's Market Letter - July 11, 1969 page 2
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Walston &- Co. – – – – – I n c – – Members New York Stock Exchange and Other PrincIpal Stock and Commodity Exchange. OVER 100 OfFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER July 11, 1969 The 1969 market slide picked up steam and took equities to new lows last week with the Dow-Jones Industrial Average reaching a bottom of 844. 30 on Thursday. The decline began early in the week, when the rally of the flrst week in July failed to hold in Monday's trading, and a 3-point loss in the Dow on Monday was followed by a preclpitouS 34-point slide over the next three days. A mild rally on Friday trimmed the losses somewhat, but the advance was unimpressive, with advanCing stocks barely exceeding declines. From a technical point of view, the market picture is now an interesting one, paradox- icallyoffering, on the one hand, the prospect of lower prlces and yet, on the other, the ,possibil-ity of an point not too far inctheJuture.As oLJune.27th,when.the. previous low in the Dow was recorded, the market had entered one of the unusual deep over- sold conditions which generally characterize declines of major importance. As discussed in our letter of two weeks ago, such conditions have characterized major bottoms in the past, but they have also occurred at intermediate bottoms within the context of longer-term down- trends. In such cases, they have been followed by periods of further distribution and an additional precipitous slide in prices. The tepid rally of June 37th-July 3rd was hardly sufficient to allow for further distribu- tion, and the oversold condition was never fully corrected. It thus appears more than likely that the next low to be reached could develop into a major turning point. Pinpointing the level of such a low is, at best, difflcult. Market downswings create their own momentum and traditional support levels tend to mean little, Just as they have meant little in the decline so far. The most bearish of the 1968-69 top would call for a retracement of the enttre advance fro 9 ve to the 750 level. This appears unlikely at the moment. A more i eo' tive is the 830-820 range, or a retracement of that portion of the advan e ich b in March of 1968. Such an objective would also make sense in that 0/. ow the June 27th low. This ben bottoms of the If the above analysis is Jl&t& weakness will provide a buying opportu- nity. Generally after a eriou d , !iharpest rebound is provided by two kinds of stocks – those which dest on the way down, and those which have gone down the least or d . It is generally a mistake to try to pick bottoms tn the first category. h pot hl gains are large, risk is great and the absence of any readable downside obj ct makes the possibility of mis-timing purchases rather hlgh. We would prefer to conc ate purchases in those stocks which have proved resistant to the decline and which appear to have reached short-term downside targets. Among the issues and industries which would appear attractive for purchase at levels not too far under cur- rent market prices would the following. Brewing Rheingold, SChaeffer, Schlitz. Broadcasting American, Columbia Broadcasting, Taft Broadcasting. Chemi!cals Atlas, Big Three Industrial Gas & Equipment, Nako. Communications Comsat, Western Union. Containers-Metal Continental Can, Crown Cork & Seal. Cosmetics Alberto-Culver, Avon, Lanvin-Charles of the Ritz. Drugs Merck, Parke Davis, AmericanHospital Supply, American Sterilizer, Carter-Wallac Electronics Texas Instruments, AMP Inc., Burndy Corporation. Savings & Loans Flrst Charter Financial, Glbraltar Financial, Great Western Financial. Foods Campbell Soup, Borden, Kraftco Corp. Machinery Caterpillar Tractor, Clark EqUlpment. Office Equipment Addressograph, Computer Sciences, International Business Machines, Sperry Rand, Xerox. Oils Pacific Petroleum, Superior Oil, Standard Oil of Indiana, Royal Dutch. PaPers Mead Corp., International Paper, Union Camp Corp., Westvaco. Retailing Federated Dept. Stores, Sears Roebuck, Jewel Companies, Von's Grocery. Dow-Jones Ind. 852. 25 Dow-Jones Rails 205. 58 ANTHONY W. T ABELL WALSTON & CO. INC. ThiS m,arket It'ttcr IS published for your convemence ami In(orlllll(lOll and not an o1T(t to sdl or a ItltlOn tu 10\1\ ,lin rll …cussed The In. formatIOn was obtamed from sources we bch('v( to he rt'lmblp, hut v.e do not IUllr.1Il1ee Its aCCUrIlC, \\'.II;ton & Co. Inc and lts officel),!J llre.tQrs or employees may have an mter(!!;lt m or Imrchase and bell thl' 'll'(.untl(,'l l('ferred to herCIn. t' ', WN301 –!1 .( .July 11, 1060 ALL I The prcclpitolls market decline of the past two clays comlDg on top of ./ the deeply oversold condition which had been reached on .June 27th points' strongly to the following conclusions. (1) The market IS probably going lower. (2) The bottom when it occurs will be of at least inter-mediate term,and quite possllJly, major proportions. The present 'wultiple climax selling waves,from a teclmical pomt of view in other words,are strongly rcminiscent of major market lows such as 1962 and 1966. As noted above, nearterm possibiltty is for lower prices and a tentative target in terms of the Dow-.Joles Industrial Average would be in the 830-820 range, although it is very difficult in this sort of a market to pinpoint absolute targets for the average. Would, however, he a buyer 0f above-average Issues on clips into that range and would in addition suggest purchases on any evidence of a climax reversal, i. e., a sharp drop followed by an equally sharp recovery both on above average volume. At the moment the most attractive purchase candtdates are those issues which are holdi ng above their February lows. Industrial groups in which most major tssues fall into this category mclude Cosmetics, Drugs, Office Equipments, Papcrs, Savings & Loans, and Retailers. Woulel strongJy emphasize such issues many buymg program but would set purchase levels blow present market in most cases. Anthony W. N.Y.

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Tabell’s Market Letter – July 18, 1969

Tabell’s Market Letter – July 18, 1969

Tabell's Market Letter - July 18, 1969
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Walston &Co.Inc Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER July 18, 1969 Although half of the week was spent in a rallying phase, the market gave little evidence that it had reversed the long slide that has characterized the year to date. The decline com- tinued unabated on Monday and early Tuesday with an intra-day low of 832.79 being reached on the Dow. A rally began at mid-day Tuesday, and continued through mid-day on Thursday with an intra-day high of 863. 04 being reached, but late selling pared most of the earlier gains and on Friday most popular averages slid back to levels just slightly above the lows posted at the start of the week. The present decline on a closing basis has brought the Dow down some 14.620/0 over 149 trading days, and the Standard & Poor's 500-Composite down 12.750/0 over a period of 151 trading days. It may perhaps be worthwhile to try to devote a bit of effort to setting these declines in historical perspective. If we define a major market downswing as one extending 100/0 or more, there have been, in terms of the S&P, 58 such downswings from 1928 to date, including the present one. Of the 57 previous drops, 50 have been greater than the present decline to date In other words, on the average, a worse decline than the present case has occurred a little bit less than twice a year The present drop, therefore, cal. hardly be characterized as a unique historical phenomenon. The following table shows the 18 declines of 100/0 or more that have taken place since 1942. The reasons for beginning the list at this point, incidentally, are something more ar- bitrary The experience of the 1930's is of little use to us in this particular case since un- failingly during that period market drops were shorter and steeper than the present one, having an average length of 34 days, with no decline than 96 days without a 100/0 recovery The length of the present drop places it the context of the post-1942 pattern Date of High Date of Low S&P 500-Decline s Aver. Daily Decline Sept 1941 July 1943 Feb. 1946 May 1946 Feb. 1947 July 1947 June 1948 June 1950 Jan. 1953 Sept. 1955 Aug. 1956 July 1957 Jan. 1960 Dec. 1961 Aug. 1962 Feb. 1966 Sept. 1967 Nov. 1968 April 1942 Nov. 1943 Feb. 1946 Oct. 1946 – 28 65 I & . \\'!V 13 5W cOo 17 i' 93 Mar 1 – .3 – 4 81 182 June 20 57 281 July 19 – 14 02 24 Sept. 195 -14.82 176 Oct. 19 -10.59 12 Feb. 1957 – 14. 78 132 Oct. 1957 -20.66 70 Sept. 1960 -13.39 205 June 1962 -27.97 135 Oct. 1962 -10.52 43 Oct. 1966 -22.18 167 March 1968 -10.11 110 July 1969 (to date) -12.75 151 .157 .115 .597 .287 .190 .078 073 .584 .084 .882 .112 .295 .065 .207 .245 .133 .091 .084 As the table quite clearly shows, the present decline has so far been one of the smallest in recent market history. This, of course, affords little comfort since there is no assurance that it cannot continue further. What is more interesting, however, is that the 151 trading days so far have carried this dip longer in time than all but five of the previous drops, and the decline of 1948-49 is the only one which was significantly longer than the present one to date. The final column, which shows the average daily percentage decline, is also of interes The steepness of the recent drop has been entirely unlike that of such major bear markets as 1946,1957, 1962 or 1966. So far, it has been most reminiscent of such de- clines as 1947-48, 1953 or 1960. Again, it must be reiter& ed that none of the above constitutes evidence that the decline may not continue further over the near term. On an historical basis, however, the case again an extreme drop from these levels, or one continumg over an extended period of time, is a fairly strong one. DOw Ihd 5'; '92- -. , Dow-Jones Rails 201. 52 ANTHONY W. TABELL … ,-r.'. … …- WALSTON & CO. INC. 'ThiR mllrket (Otter lS Jluhhahen for conVenLl'nce '\nd Illformatlon and 1'0 not an offer to sellar .1 …ohltatlOn to hU) .my dL!lCus.sed The In- ormatlOn WliS obts\lned rom sOUl'ct-q we bchl'\'(' to lie lchahle, but v,e 11o nut guarRntee Its accurlcy \\'aJston 8. Co, (ne. and Its officels, directors or AWTambma.y have an mterest In or 11Ul'chale Rnd '1ell the …..cuntltS refl.'rred to herem WNsol a., , .,, ,&…..

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Tabell’s Market Letter – July 25, 1969

Tabell’s Market Letter – July 25, 1969

Tabell's Market Letter - July 25, 1969
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Walston &- Co. —–Inc —– Members New York Stock Exchange ,and Other PrinCipal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET LETTER July – —g– 25, 1969 F! It is absolutely impossible to say anything encouraging about the stock market based upon the action of last week. The popular averages declined on all five days of the week and wound up at new 1969 lows, the Dow reaching an intra-day figure of 814. The fact that volum continued to recede provided scant encouragement. Volume also dried up during the 1966 break, and this did not prevent that slide from dragging on to its inexorable conclusion. In short, the obvious direction of the market continues downward. The job of the stock market technician during a decline is twofold. He must, first, try to pinpoint downside objectives and, secondly, try to identify a turn or a change in momentu when it comes. As, indicated … fore, – no -question of dissecting a rebound to see–if it constituted a possible turning pOint. -, When a rebound does occur, we will happily attempt this sort of analysis. At the moment, we are restricted to making estimates as to how low the decline may carry. The following table lists six popular market averages and indicates the 1966 low, the 1968 low, the present price, a conservative downside projection, and the lowest readable downside projection in each case. 1966 Low 1968 Low Current First Downside Obj. Lowest Downside Obj. DJ Ind. 735 817 818 820 730 DJ Rails 182 213 196 196 172 DJ Util. 119 120 118 116 S&P-500 73 88 92 92 87 NYSE Ind. ASE Ind 39 12 49 51 21 26 51 – 49 \0i 0 24 A few comments are interesting. First of alllJJf Ii ver s had, as of Friday's close, just about reached their more conservative pr' ions. We have, in other words, reached an area from which it usi'tip'to ect a rally, although there is no evidence as yet that such a rally ond . is interesting to note the dis- -, parity iff – – -e ' .-T .- – ore narrowly constructeo'Dow-Aver;- ages have performed broadly based indices so far. The Dow Industrials, for exa pIe, v t the way to thelr 1968 low and, indeed, breach ed that on an intra-da b i a e Dow Rails have performed even worse, having sharply broken th 1 lw-and ing returned almost to thelr lows of 1966. As for the Utilities, 1966 and 1 s the same and that Index has returned again to this general 500-Stock Index and the NYSE Index are measurably above their 1968 lows, as is more speculahve and volatile ASE Index. Of interest also is the apparent greater risk on the Dow-Jones Industrials and Rails compared to the more broadly based indices. The worst possible objective readable on the S&P-500 is 87, or a decline of some 5 from current levels, whereas a 10 decline in the Dow can be projected. It is impossible to project either the S&P or the NYSE indices back to their 1966 lows, whereas the possible reading on the Dow indicates that this move might be retraced. In short, the more broadly based averages indicate a conslderably more bullish picture. I Ii hc t We are inclined to go along with the picture indicated by the S&P and NYSE indexes and to regard the return of the Dow to its 1966 lows as being an overly pessimistic indicatio It will, therefore, be worthwhlle to watch the future action of these two widely followed indi- ces fairly closely. Any move of 'these indices toward the objectives indicated abOve should provide an interesting long range opportunity. It is also worth noting that time is on the side of the holder of common stocks at the moment. As pointed out in last week's letter, the present drop has already consumed more time than the 1962 decline and in another week will have equalled 1966 in duration. Likewise on the side of the investor is intrinsic value. At week's end, the Dow was selling at about the same multiple of earnings it had reached at the lows of 1966, which in turn was a nine-year record low. The stage, therefore, is set. Downside obJectives are beginning to be reached, stocks are at low levels, and the timing is about right. However, any evidence of a change in the downside momentum of today' s stock market is still waiting, as of this writing, in the wings. Dow-Jones Ind. 818.06 Dow-Jones Rails 196.86 ANTHONY W. TABELL WALSTON & CO. INC. ThiS mnrket litter IS IJuLhc;ht.'d for lour conVl.'flll.'nce nnd mform,ltlOn nnd 1; not lUi ofl''-''I to S('\l 01 n ;,()hut.l.tlOn to bu Rny M.'t'untlL'S dlscued The In- fOlmntlOn W,\S obluned flom SOUlet''! I.' h('l1l'v,' to ht lelllll)le hut Wt' do nut Its nrcurnn, \\',llstOlI li. Co, 1m', ,lIul lt'l offi('cl'I. dlll'Ctors or cmploy('t''1 may havc an mtelCAt In 01 pUI,-hase m,d !'cll tht' bt'LUlltlt'S I ('f1 led 10 ht'lcm WN.301

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