Viewing Month: April 1970

Tabell’s Market Letter – April 03, 1970

Tabell’s Market Letter – April 03, 1970

Tabell's Market Letter - April 03, 1970
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Walston &Co. —–lnc —– Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND l'ABELL'S MARKET LEtTER April 3, 1970 We concluded our market letter of February 6,1970, with the following language We would, therefore, be buyers on weakness. Whether we will be buying for an intermediate ter rally, or a major bull market, we do not know as yet. But it is a problem we would prefer to approach holding equities rather than holding cash. To date, the first part of the forecast has ensued. We have, so far, enjoyed a reasonably good intermediate-term rally with the Dow up some 50 points from lows made just before the letter was written. The present question is whether the calf spawned last February is in the process of maturing into a full-gr'J.vn, rampaging bull. The evidence becomes more persuasive daily sive. To put the picture into perspective, let us glance at the somewhat painful market his- tory of the past 16 months. The Dow-Jones Industrial Average closed on December 3, 1968 at 985.21 and on January 31, 1970 at 744.06, a decline of 24.480/0 over a 14-month time span, typical performance for a post-World War II bear market. Llke all such bear markets, it was interrupted by occasional short-term advances a 7.670/0 advance from February to May 1969 covering 54 trading days; a 7. 620/0 from July to November in 73 trading days; and a 5. 370/0 advance in 11 trading days in December-January. The present reversal has taken the Dow from 744.06 to 792. 37 as of Thursday — a 6.490/0 advance in 42 trading days. To date, therefore, there is very little to distinguish the present rally from the previous in- terruptions of the long-term downtrend. In order for the present rally to dlstinguish itself from its predecessors, it would at least be necessary for it to continue a bit further. An say to around the 810 level, would certainly indicate great s couple of percent, than the market has been able to show at any time during the past year. l/(fPae '0 0 t dvance, moreover, would do a lot more than that. The downtrend t1i mber 1968 highs is, at present, reasonably well defined, and its Were the advance to continue, the downward , — for 16long 'mit ow roximately at the 802 level. p cha which has contained the market I It; , – — As we indicated evS e\..hJ;t s'ive. Since July, each success e a vi 0 1 a t 1 0 n will take place is carrying to-new lows on the averages, – , has provided more evi e ce CI haustion. The following table, which shows the nu ber of weekly new s d c ccessive low in the averages since July, is indicative of what we are talkin ll t Week Ended DJIA Closing Low Weekly New Lows Aug. 1, 1969 801. 96 1102 Dec. 19, 196 769.93 620 Jan. 30, 1970 744.06 449 Obviously, a great many issues made their lows as much as nine months ago and have been spending the intervening period basing for a new upswing. If, indeed, we have laid the bear to rest, what might be the eventual price targets for a new bull market The type of pattern recently formed in the Dow makes it difficult to answer this question at this early stage. It is possible, for example, to read the base forme since mid-December as indicating 875. However, heavy overhead supply exists at the 800- 835 area from the July-November trading range. It would logical to expect some backing and filling in this area on the way up, thus ultima.tely broadening a potential base pattern which could, at a minimum, indicate new highs for the Dow-Jones. There would be nothing surprising about this. Bull markets historically have recaptured all the ground lost in the previous downswing, plus a bit more. With evidEonce abounding that leadership on the next upswing will be provided by Dow-type stocks, we should certainly expect any advance to reach historical peaks in this index. We are, in sum, reaching a critical and interesting juncture. Inability of the present upswing to generate further upside momentum at this stage would be disappointing and pos- sibly indicative of a continuation of the long-term downtrend. A further extension of the advance, by contrast, would probably relegate the long 1968-1970 bear market to the ar- chives and usher in a period of surprising upside strength. Dow-Jones Ind. 791. 84 Dow-Jones Transp. 174.35 ANTHONY W. TABELL WALSTON & CO. INC. AWTamb ThIS mnrket Jette! L9 Jlubhshc,l for IJUI nn, Infnrm.,tlOJl lind 1.'1 not 1111 If, I… (01' II ,nhtatlOn to UU\ fOlm,ltLon wao; obtmned from souu'; we \,h'!Vl' to he IchabI', but we ,10 nut gu,\ranlp,- Lh. aecurm') \\tllh,ton & Cu, Inc and Its emploet's mn)' hlwe 1m mtelcst m OJ In!rchusl;' ,md sell the wfe/red to hT'm ,h ..ru-.sed The Lndlredors 01 WN301 I' 11 I' I! .

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Tabell’s Market Letter – April 10, 1970

Tabell’s Market Letter – April 10, 1970

Tabell's Market Letter - April 10, 1970
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1, FILe Walston & Co. —-Inc —– Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OYER 100 OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER April 10, 1970 We are continuing, this week, review of major mdustry groups initiated in this letter three weeks ago. FRANCHISING – This group, one of the speculative favorites of a year ago, includes many issues down 50 or more in the last four months. Although in some cases downside objectives are bemg approached, we would continue to avoid these issues and would favor switches even at current depressed levels. GLASS – A wide disparity among mdividual issues can be noted. Libbey-Owens-Ford (45 1/4), Owens-Illinois (55 1/4) and PPG Industries (30 5/8), appear cheap but unexciting. . Corning Glass .(231 ).coul(Lbe vulnerable to further / 8) appears interesting for purchase on weakness with a long-term objective well above current levels. GOLD – Issues may be held on a tradmg basis, and contmuation of short-term strengt is likely. The argument for the stocks as long-term investments continues, in our opinion, to verge on fantasy. HOLDING COMPANIES – This category includes the conglomerates which were the targets of — in most cases — well-deserved selling last year. Such a decline always tends to separate the men from the boys and a few lssues now have well defmed recovery pros- pects, although most continue uninteresting. Issues we would be inclined to favor would !include AMK Corp. (25), Bath Industries (20), International Tel & Tel (52 1/ 4) and Kinney INational (34 5/8). We would continue to avoid A-T-O, Inc. (101/2), Gulf & Western (15 1/8) and Ling-Temco-Vought (19 3/4). HOTELS – By and large the group appears vulnerab to INSURANCE – In many cases technical 1 f ult 0 rice weakness. I 'nterpret due to recen I listing, but by and large the group appears attrachv . be e ality issues suitable for inclusion in investment portfolios. Aetna nti 1 p. (42 1/8), INA Corp. (34 7/S) and Travelers (33 7/S) all appear to be m the ce ges of sizeable base forJ7lations. -MAeHINE T00GS – ow ends fOT-uver'a-year-;-buttn-mo-st case – objectives appear to have bee very httle basmg has been done and we would regard them as tr ding h y\tlt'j'i such time as reaccumulation is complete. MACHlNERY-A R eere (41 7/8) is the most attractive issue in the group with an ups' 0' s. We would favor switching International Harvester (273/4) and Massey 1/4) mto it. MACHIl\TERY – oup, of course, includes many diverse companies. Among those which appear attracti t the moment are American Hoist (15) wlth an objective of 24, Clark Equipment (35 1/4) with an objective of 60, and Studebaker-Worthington (45 1/2) with an initial objective of 70. MOTION PIC TURE – Some prospects for near-term price recovery appear to exist in the group, especially in Twentieth Century-Fox (15 7/S). We WOuld, however, avoid othe issues on an investment basis. OFFICE EQUIPMENT – This group has, of course, borne the brunt of major invest- ment disenchantment over the past few weeks and the problems are well known — involving a combination of relatively high price/ earnings ratios coupled with slowing growth rates. We do not consider the stocks to be deeply vulnerable at these levels, although over the short-term probabilities favor lower prices. The problem is that time — perhaps a good deal more than in the past — maybe required before the sharp uptrends in these stocks are resumed. We would thus be buyers only on weakness, and then with the objective of patient holding,m' I.' ',elding.. OILS – Quality international oil issues have been the most recent targets of the 1969 bear market, dropping off sharply from peak levels reached around the middle of last year. Such issues as Atlantic Richfield (61), Mobil (44), Royal Dutch (3S 5/S), Standard Oil of New Jersey (56) and Texaco (26) appear to be bargains based on longer-term prospects, but no evidence of basing has manifested itself yet and holders of these issues should be prepared for a long wait before uptrends are resumed. For those willing to assume risk, attractive purchase opportunities exist in a number of specialties such as Mesa Petroleum (49 1/4) and Pacific Petroleum (29 l/S). Dow-Jones Ind. 790.46 Dow-Jones Transp. 172. 38 ANTHONY W. TABELL WALSTON & CO. INC. ThiS mnrket letter 1'1 mhhshcd for )our C'onventence ,mrl mfolml\tlon and IS not an offer to sell or ,\ soliclt,ltlOn to an)' ')C'unLte! ,jL'lcuso;cd The In- (ormnhon '\\1\8 obtluncd from SOUlI'C'l \\C 1.(l\c\c to bc rellahle. but 'H! do not guarllntee Its WRiston & Co. Inc. l,nd offieNs, dlrccf.Qrb 01 L'fn.JZ!0YCl'S n,a) have nn mterest In or nnd 'lei I the untll'' refcrl ed f.Q herem AWTamO WN-30! . ,'.1 …..m..n,a ),1 i i ….

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Tabell’s Market Letter – April 17, 1970

Tabell’s Market Letter – April 17, 1970

Tabell's Market Letter - April 17, 1970
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W—-a–l-s-tIonnc–&—C–o-. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 17, 1970 Recent weekly closes for two widely held stocks, Westinghouse and Xerox, describe recent stock market action far better than any volume of text we could produce. 1/30 2/6 2/13 2/20 2/27 .ll6 3/13 3/20 lJ.l. 4/3 4/10 4/17 WX 55 1/4,56 5/8,597/8,61 3/4,607/8,65 1/2,655/8,63 3/8, 67,6'6 1/4,66 1/2, 68 1/ B XRX 1005/8,1025/8,973/4,985/8,91, 933/4,901/4,903/8, 94,87, 861/2, 84 7/8 Diversity, in short, has been unusual. Since the beginning of the year we have seen sharp recent declines in many 1969 market favontes (Xerox' performance is outstanding com in …l!ad ions in early 1969 (Westinghouse had been down from almost80 to a low of -54 r – – – Of late, unfortunately, most issues have shown price action more similar to that of Xerox than Westmghouse, with the result that the Dow, which had been holding up better than most individual stocks, finally violated the uptrend which it had maintained since the end of January. This violation makes it extremely difficult to become optimistic over the immediate future f()r the market. An extreme oversold condition exists which, when reversed, could provide a worthwhile rally. However, the market's early-April inability to rise above the 800 level and reverse its 15-month downtrend makes the immediate picture somewhat questionabl The bottom will inevitably come, of course, and it will come as more and more stock as Westinghouse has already done, reach downside obJectives, broaden out bases and com- mence moving upward. This very diversity, of course, proves the the market and con centrating on individual issues and portfolio upgrading. W 0 15elow,in this connectio our review of individual industry groups. PAPER – This group was one of the leaders lat early 1969 upswing, and since that time has been in a correctlOnary PhSalt h i e better issues the correct- ions have, generally, been on the mild side. e ort-t bases built up are, by now, substantial-;– and-whIle we national Paper (36 1/4), vaco (25) as buys on minor wea e ;aPHOTOGRAPH – n 0 tlO Inter–o— Sctt(331/2),Klmberly(711/2)andWest- \, (74 5/B) will probably continue its recent sidewise action, although th e e IS favorable. Polaroid (90 3/ B) is approaching its downside objective, w u refer to avoid the issue for the time being. RADIO – TV -I) st es in the group should be aVOided at this time. RAILROAD EQ NT – Car-leasing stocks, such as General American Transpor- – tation (395 B) and Trans Union (301/4) appear to be attractIve purchases. Outlook for the . others in the group is mixed. RETAILS – Generally an attractive group with a number of better quality issues show ing above-average relative strength. We would favor Federated (35 1/2), among the Depart- ment Stores, and FIrst National (36 1/ 4), Grand Union (2B 3/ B) and Safeway (27 1/8) among the Grocery Chains. RUBBER – Most issues have been in sharp downtrends and in many cases earnings estimates for 1970 have been lowered. We think the long-term outlook more interesting than recent action would indicate, but for the time being would avoid. STEELS – It is possible — Just possible — that this could be the sleeper group of 1970. Short-term'uptrends have quite clearly now been established in most of the major issues, and it remains to be seen whether they can follow through and post the long-term breakouts which would mdicate deciSively higher levels. TEXTILES – Many issues in thIS area have formed attractive bases since mid-1969, and we are favorably disposed toward American Enka (32 1/4), Burlington (41) and, on any further weakness, Duplan (24). TOBACCO – The quality Issues have returned to their mid-1969 lows and appear at- tractive buys for long-term investment. UTILITIES – We continue to rate this group as outstandingly attract ive, not only for investment accounts, but also, in the present market, for aggreSSive ones as well. In general, out of the large number of issues available, we tend to favor the relatively high-growth utilities, vis-a-vis the admittedly somewhat cheaper income producers. Dow-Jones Ind. 775.94 Dow-Jones Transp. 167 40 ANTHONY W. TABELL WALSTON & CO. INC. 'Ihls mnlket 1l'ttel IS I'ubh;;h…(! (.)r \OUI uld mformntl)n ,lIltl IS not ,111 offel to sell 01 I 'Oh'LlatlOn to ,ul) -.ccunllCS dllCU;,sd The In- formltlOn \\,1' ohtmnl.''I hom tOUH'!'-. \\(' he!'l\o to lw 1.1I.lble lout v.e .1 not IUnrrmtee Its .l.!'(urn('\ \'.nlslon &. Co, Inc, ,m,-i Its office.s. dlrecton. or etTIIJloycll rna) have nil Iflterest rn or purlh,u,c ar11 till' 'l'(Ulltll' r ('/1 (, …1 to herl'lfl. AW b WN-!

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Tabell’s Market Letter – April 24, 1970

Tabell’s Market Letter – April 24, 1970

Tabell's Market Letter - April 24, 1970
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( W—-a–l-s–tIonnc–&—-C–o–. Members New York Stock Exchange and Other Principal Stock and Commodity Exchange. OVER 100 OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER April 24, 1970 In most discussions of last week's stock market, three catch-phrases seemed to pop up repeatedly. They were oversold condition, bear market and pessimism. They were, indeed, appropriate in light of the continuing abysmal performance. The week featured five more days on which declines exceeded advances, making it fifteen conse- cutive days now that this melancholy condition has existed. Wednesday and Thursday fea- tured 10 and 12-point declines in the Dow with over 1100 declining stocks on both days, and on all five days of the week the erstwhile glamor issues of late 1969 continued to post multi- point losses on heavy volume. What was going on m listed stocks was a virtual picnic com- pared to .the carnage.being cwrought in the .overthe-countermar.k!t w1)ere.biQs .ora .. of issues virtually disappeared. Thus, the three phrases mentioned ab'ove certainly had a great deal of validity as far as the week's market action was concerned. It is, however, worth exploring each one and placing it in context. Oversold condition is, unfortunately, a much misunderstood term. The existence of such a condition is, contrary to the belief of many investors, absolutely no guarantee tha the market will go up. Indeed, the most vicious parts of severe market declines tend to occur at times when the market is already deeply oversold. The oversold condition simply remains in effect or gets deeper. The existence of an oversold condition means only that the market has reached a stage from which a rebound, when it occurs, could be of Significant dimensions and that, from a time point of view, a reversal is probably fairly near at hand. Now, today's market, by any measure one cares to use, is, in fact, deeply oversold and we think it likely, based on thIS fact, that, within a of time an impor- ' tant reversal will occur. The existence of the oversold co iti er, gives us abso- lutely no clue as to the level from which such a . t tak ceo Thus, unless marked reversal evidence occurs, and it certainly aM, t occ is week, it is difficult to get optimistic about the near-term market p mec. -I,- As to the phrase bear market, us t sc this week's decline, it is probabl. 'avarnrone .. -h ointedoutin–t-hepast-;–the-Dow-Jones — Industrial Average has been 100-pomt wide downward channel ever since December 1968. As of e I 's or'WP, WIth the Dow at 790, the market had a chance to break out of r nel and failed the test miserably. Thus, the pres- ent retreat is squ I ext of the long-term downtrend that has existed for well over a year. And yet, we thl k market atmosphere at this stage is a great deal different than that which existed in y 1969. Since July 1969, there have been a whole series of market downthursts of which the present one is the fourth. Each one has been more or less severe, depending on what sort of market index one was looking at. The present drop is particularly severe in the American Stock Exchange Index and moderately so in the broad-based New York Stock Exchange and Standard & Poor's 500, all of which, last week, carried to new lows for the move. It is least severe in the Dow-Jones, which is still holding above its January low and which IS down, so far, only a bit over 50/0. The Dow Utilities also remain well above their lows of last January. We are inclined to take some comfort in this statistic simply because it is the sort of action that tends to take place during the terminal rather than the early phases of a de- cline. Such phases are generally featured by liquidation of past speculative excess and rela- tively less'vulnerability investment-grade segmenCoIfne'lisC-This is preCisely what we are seeing at the moment and the technical patterns of better-quality issues indicate that more-than-modest drops in the future are unlikely. The final phrase descriptive of the current market is pessimism and, indeed, this feeling is unquestionably building up as the market moves into lower levels. We must confess we find this encouraging. What, in retrospect, was wrong with the February-March ad- vance was the fact that too many people were ready to hail it as the end of the decline and the beginning of a new market upswing. This is generally not the case at the start of a real bull market. If, when the next rally occurs, we are widely assured that it is only temporary, the odds of a real reversal having taken place will be that much greater. DOW-Jones Ind. 747.29 Dow-Jones Transp. 161. 82 ANTHONY W. TABELL WALSTON & CO. INC. Thl'l l'rl.llIket Il'tl'T 1 ImtJhshei for your Hnd mfOlm.lllol ,,,111 1; not all offel tn sell 01 11 bullulntlon to buy rtf!) SCf'Ufltlt'9 UlbCU;SI,1. The tn. rOlm.ltmn Wl!, (1)tllnl'l'1 florn lOUII' we Iohlvl' tn Iw l'h,d,I hut WI' do not JroHI,mtl aCCUIJtry WHltOll 8.. Co Inc .Inll offictrs, (lircctor,. 01 may huve nn IntclcBt III 01 11Uf('hHSl 'Hul '.!IJ thc to hcrcln AWTamb- — WN.301

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