Tabell’s Market Letter – November 28, 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 …;;n.. November 28, 1969 It would be impossible for anyone, save for the most insufferable Pollyanna, to de- scribe last week's market action as good. Nonetheless, even with the market having declined in 9 of the past 13 trading sessions, and the Dow again flirting with the 800 level, one cannot resist the temptation to wonder how bad the market's action really was. The answer would seem to depend, by and large, on where one looks. As mentioned above, the Dow-Jones Industrials, the most widely followed of market indicators, have re- turned to within an ace of the abysmal depths in which they sold at the end of last July. In the process, almost all of the October rally from an mtra-day low of 793.95 to the November high of 871. 88, has been retraced;Those bearishly further.-fodder for.thet-I' pessimism in the action of the Dow-Jones Rails which plummeted last week to a 3-year low of 184.39, and were coming close to violating their 1966 low of 181. 97. Yet, it is also possible to cite indiCators proving that the last fortnight has not been all that unmitigated a disaster. The Standard & Poor's Stock Index, for example had, at its week's low of 92,24 retraced only 62 of its advance from a low of 88.04 in July to a high of 99.23 early last month. Similar action was evidenced by the Standard & Poor's-425 and the New York Stock Exchange indices. ' The above exercise is, of course, a perfectly valid illustration of the limitations of market averages and stimulates the unoriginal thought that investors own not averages, but stocks. It is always easy to define what averages are doing simply by citing their levels. With more than 2000 stocks listed on the New York and American Stock Exchanges, it be- comes a bit more difficult to quantify what different what relative numbers. at a given time, and in 0 Nonetheless, it is fairly easy to cite a few e e Dow Industrials ar at the moment, misleading us as to the level of the m .I w k only at the Dow, the market is, as noted above, back to 1tS levelsMstfJ T umber of ind1vidual stocks eshowing a comparable pattern, however, is a i ly . scule. This can be illustrated by . the following table which divides the – –Jw.Yiilto nine pliases— fivedeclines and four rallies. Each of the at or above the 800 level. The f AartJund 840-860 on the Dow and bottomed out olblJful shows a series of 10-point ranges for the Do close, and the highs and new low i 0 ing nine columns show the average number of new g the market phase that the Dow closed within that range. A glance at tli a e ev' ces the changing character of the market since last Summe Decline Decline Rally Decline Rally Decline Rally Decline 7-16 – 1- 8/8 – 8/14- 9/3 – 9/10- 9/25 – 10/10 – 11/11- DJ Close 7/30 8/7 8/13 9/2 9/9 9/24 10/8 11/10 11/26 830-840 3-291 21-44 4-58 38-78 69-24 7-71 820-830 3-368 6-55 7-64 14-56 3-83 20-80 11-99 51-26 1-92 810-820 2-416 2-131 2-81 13-56 5-129 4-158 58-50 3-154 800-810 0-685 3-117 12-99 28-77 4-130 The first time the Dow reached the 800-810 area in July, the average number of stocks making new lows was 685. On the next move to this range, only 117 stocks on the average made new lows, followed by an average of 99 in September and 130 at the moment. Similar figures can be seen for other market levels and, m addition, the increasing number of stocks making new highs on rallies-is–readily apparent. Quite patently, to say that the market has- returned to its levels of last Summer does not constitute telling the full story. There is nothing, in other words, in the action of the past few weeks to negate the the- sis that we are somewhere in the process of forming a base, this process being defined as a period in which more and more stocks entered defined uptrends and fewer and fewer remain in confirmed downtrends. It is certainly impossible to ignore the v1rulence of the recent de- cline or — now — to deny the distmct possibility that the Dow, and perhaps some other indi- ces as well, may reach new lows before the base formation process is complete. However, we think the present weakness will prove, historically, to have been part and parcel of a re- versal process and not part of an ongoing bear market. Dow-Jones Ind. 812.30 Dov'-Jones Rails 186.64 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb Thill market letter is published for yOUr convenience and Inrormatlon and IS not an offer to sell or a soliCitation to buy Rny seeurltLes J cussed Th I formation Was obtalOed.from Bources we believe to rehnble. lout we do not guarantee Its Itcurncy Walston & Co Inc. and t ffi 115 d to' n employees may have an mtere!lt In or l-'urchase and sell the securltiE's referred to helem 115 0 cers. Irec rtI or —