Tabell’s Market Letter – December 26, 1969

Walston & Co. Inc Members New York -Stock Exchange and Other PrinCipal and Commodity Exchanges OVER 100 OFFICES COAST TO COAST AND OVERSEAS r TABEll'S MARKET lETTER December 26, 1969 For some years now, we have Stud1ed 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 ant 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 Industri 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 state'd above, an 1dentifiable year-end rally has taken place in every year since 1897. This.iaily oiten.has I having been reco-;'-ded. 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 and 1962, the rally reache'd a peak in the first week in January. In 1961, 1964 and 1967, it continued in- to Februa;y 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 has been down. In recent upw,aI rd years, 1959, 1963 and 1967 are examples, the rally commenced from early Decembe IIn 1962 and 1966, it began late in the year and 1969, a downward year, was no exception to /this rule. (3) – The important thing to watch in connection with mamt action in the early months of the new year is the low for the previous forty-two years out of the past seventy. However,,1n twe t – 1 lOw has been broken in a se forty-two cases, it was broken in January and February. Smce e en broken later than mid-March. with the single exception of 1965. the rket is able to hold above its December low for the first 2 1/2 year ances become good that this low II, will not be broken. For example, January 19-6-0-,- ana Ja.nuary ecember low was broken early in -64 and-i91J'r1Cnever was broken. 1-9-6-5;– as noted above, was cew. 1964 low of 850. 19 being broken in June when the Dow reached ow' 832.74. (4) – In y s e e er low has been broken, the subsequent trend has been downward two i s 1me. 1960, 1962, 1966 and 1969, of course, are typical cases. Again, 1965 as xception. (5) – The ma de of the rally 1S 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 th1rty-four years that such an advance has occurred. An advance of less than 10 from the December low before an identifiable cor- rection takes place has been followed by a downward market in twenty-three of the thirty- five years. In 1961, 1963 and 1964, the year-end rally approximated 10. In 1960, 1962 and 1967, for example, it was less than this figure. (6) – The length of time in which the rally continues into the new year also is important. For example, 11 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 continued into March and in 1961, 1963 and 1967, into February. In the coming year— therefore, the Decemberlow -of 45 'is-an important point to watch. If the present rally tops out in early January and breaks this low, it would be stron indication of probable market weakness. A like indication would be failure of the Dow to advance 10, or to approximately 840. On the other hand, if a rally continues into Februa or March, or reaches above 840, an extension of the upswing might be indicated. ANTHONY W. T ABELL – HARRY W. LAUBSCHER WALSTON & CO. INC. WE WISH YOU ALL A VERY HAPPY NEW YEAR Dow-Jones Ind. 797.65 Dow-Jones Rails 176.90 AWT J-WL at ThIS mllrkct letter LS for Hnd Inform1tHlIl lind not ,til otrl) to CmmatlOn obtalne,1 from we ht,llc\, to I'l' 1,,1)1111' I,ul ….. l ,J not gulll,lntec Its emJ)toycl'S rna have nn Interest In 01 pur('ha'l ,wi the '-.ClUlllw left'lred ttl her!!ln. — or ,\ RohllLlimll to hu\ In\ '!,.'Ulltll .W.,btnn 8.. Cu. Inc' lIu,1 It.. —;0 . u The In. '(lors or WN.30