Viewing Month: October 1971

Tabell’s Market Letter – October 01, 1971

Tabell’s Market Letter – October 01, 1971

Tabell's Market Letter - October 01, 1971
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE. INC. MEMBER AMERICAN STOCK EXCHANGE –Iw';b;;;, 'w7ue'Sj;c,;oervetrip;;pratsity;ea-r, ;d-;;r.mrann;y-;jo7utr ;;;;;'fu,;;tto'ur!consLtan!t.r!eF- iteration of the thesis that the basic investment background has. apparently, changed radically from that of the 1950' s and early 1960's. We would forbear devoting still more space'to the subject were it not for tfe appearance of a generally excellent article in the October issue of Fortune which reiterates, in greatly expanded form, exactly the same thesis. While it is possible to disagree with portions thereof, the questions raised by the article should place it high on any investor's reading list. Fortune points out that the return, including both dividends and capital appreciation, on the NYSE Index has, since December 31, 1965, been just about 5. This is in marked contrast to the 1945-1965 period for which University-of-Chicago figures show an average annual return of 12.6 on all common stocks. All of this, of course, is just another way of indicating that the secular uptrend channel which characterized most market indices from 1942 to the middle 1960' s has, by now, been decisively violated. Now it should be made perfectly clear at this point that what both we and thE1 Fortune article are talk- ing about are not bUll and bear markets as the financial community generally understands these terms. We are particularly sensitive to this point because our own repetition of the thesis has evidently earned us an ursine reputation with which we would prefer not to be saddled. What we are talking about here is the basic background against which normal bull and bear markets are played out. We think all the evidence indicates that this background consists of a much flatter and perhaps somewhat wider channel than the 1942-1966 channel, and it is obviously perfectly possible to maintain this thesis while being optimistic, pessimistic or neutral concerning the intermediate-term course of stock prices. The major implications of the thesis, we think, are largely unrelated to a market forecast at any given .–'I-'P a i-n,t-i,n-t-i-m e'''''''-';l!hey'ha,'e',.gFea,t…jeal–t101..rlo,,,e,vE'r-''',ithth,eijenerah, p'pr),cht1e' irlvs Itol'alncl–'I money manager should take toward the market, and, if we are correct, it is evident that a great deal of what has come to be regarded as proper investment strategy will have to be changed and changed radi- cally. We have, based on the long experience-of the 1950's and 1960's, come dangerously close to a conventional wisdom about how money should conservatively be invested. The baSic approach of this conventional wisdom is that good stocks should be bought and more or less permanently held as capital gains vehicles. There is also a conventional wisdom as to the names of said good stocks, the list mevitably including such standards as I.B.M., Xerox, Avon, etc., etc. Now the result of investing according to conventional wisdom is almost never disaster. It is more usually a substandard return vs. what history later tells us would have been available. Thus the conventional wisdom of the 1940's told us that a substantial portion of most conservative portfolios should be in long-term bonds. When pur- sued into the 1950' s, this did not necessarily show -great losses, but it certainly produced a much lesser return than that which could have been achieved using equities. We think the current conventional policy is just as likely to produce substandard returns in the 1970' s. We think the inevitable result of the new investment background will be to force the money manager, if he is to achieve an above-average return, to be a great deal more aggressive and active in the manage- ment of equity portfolios. Ironically enough, the discredited conventional wisdom of the 1940' s may be more accurate today. At that time, it was generally agreed that the conservative way of running money involved first making a decision as to the relative attractiveness of the equity market in general and then deciding the percentage of equibes that should be owned. Such an approach, of course, is totally appl cable to the sort of market we (and Fortune) are enisioning, — alwys assu'!!ing one'; ,!ssu,!ns about, the 'refieral-leverof eqilitY'pficesareesseriHally correct. ' The money manager, it seems to us, must also become more active in his approach to security selec- tion. This is not to say that every investor should immediately transmogrify himself into an in-and-out trader. Common stocks, obviously, can still be bought with the ultimate objective of holding them for an indefinite period. However, the art of security analysis has never been perfect, and, in any attempt to find the 1. B. M. 's of the future, mistakes will be made. In the past, the money manager has had a secular uptrend to bail him out of these mistakes. The new era will be considerably les s foregiving. We are not at all peSSimistic about the apparent change in the investment background. The job of the money manager, after all, is not to change reality but to recognize it. In every era diligence and skill have produced above-average returns. The coming one will be no different. Dow- Jones Industrial (12 Noon) 891.21 S&P (12 Noon) 98.80 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No staTement or express.on of opinion or ony other 10 buy or sell any security referred 10 or mentioned motter herein The maller IS conlolned presenled IS, or .s to be merely for the deemed to be, conven.ence of d.rectly or Ind.rectly, the subscriber WI-nle one offer or believe the the sollC.lal.an of on offer sources of our hnforma- t.on to be rel.able, we ' no way represent or guorantee the accuracy thereof nor of the statemenls mude here.n Any action to be loken by the subscrlberls auld be based on h.s own pos.t.ons or trades mvest.gallon In respect 10 and mformot.on Janney Montgomery any sccunhes menl.oned .n Ih.s or any Scali, fulure Inc, as a Issue, and corporallon, and .ts offlCcrs Of such pos.t.on may be d.fferent employees, may from any views now now ohravhee,reoarftmerayexporteertetodkheln, th.s or any other Lssue Janney Montgomery cott, Inc, whICh LS registered w.th the SEC as on Investment adVisor, may give odv.ce 10 Its mvestment adVISOry on 01 er customcrs .ndependently of any statements mode m th.s or m any other Issue Further mformatlon on any seamty mentioned herein IS available on request

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Tabell’s Market Letter – October 08, 1971

Tabell’s Market Letter – October 08, 1971

Tabell's Market Letter - October 08, 1971
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———————————————————————————————- TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE October 8, 1971 The market's initial response to President Nixon's announcement of Phase Two of his economic pro- gram was -;' essentilly;-a'yawn7'tooked'at 'purelyin'terms'oYthe 'averages ;-the'market remains on –aead 1- center, in the lower part of the 880-920 range on the Dow which has characterized it since the rally from the August lows. It is axiomatic that the ultimate penetration of this range will indicate the direc- tion of the next move. Guessing as to the direction of penetrations of this nature is always a risky business. but we admit an inspection of individual patterns leads us to guess that the penetration will be on the upside. In any case, accepting the theory that we are somewhere in the mature stage of an upswing, selecti- vity will become more and more a factor to be reckoned with. We are, therefore, inaugurating this week a review of the technical position of major industrial groups with comments on major stocks within those groups. The review will be continued in subsequent issues of this letter. AEROSPACE – Almost all issues in this group have shown deteriorating relative action recently, but the weakness has returned them to the bottom of potential long-term base formations. They could be thus appropriate for those investors interested in bargain hunting. Boeing Co. (17), McDonnell Douglas Corp. (30) and United Aircraft (32) are all close to downside objectives as is General Dynamics (2I). At the moment, the latter appears to have the broadest upside potential. AIR TRANSPORT – Most stocks in this group corrected sharply in the recent market weakness,' but the bulk of them appear to be about to post major upside reversals. Purchases of almost all major issues appear suitable for risk accounts at this time, with the most attractive being American Airlines (39) with an objective of 50 and Delta Airlines (46) with an initial price target of 65 followed by possible higher levels long term. A L U . ' -ThiS .qrouP.has.been hnwlna infrinr r.tionreltlv.to .the. L.or.o,er. two ve.ars .and I unlike the aerospace issues, no sign of a base.is apparent. We would be inclined to suggest switching issues in this group into stocks with more immediate upside potential. AUTOMOBILES – Potential bases are substantial on all three of the major companies. However, best relative action has been shown by Ford (72), and this is the only one which has broken out of its base formation on the upside. A switch into this issue out of others in the group is probably worth considering AUTO ACCESSORIES – The group as a whole has shown above-average relative action and, at least moder- ately higher objectives are readable in the case of most indiVidual issues. Eaton Corp. (41) has a possi- ble upside target in the mid-60's. BUILDING SUPPLIES – Recent group action has been only average, but a number of attractive chart patterns exist in indiVidual stocks. Among the more interesting issues appear to be Johns Manville (41), u. S. Gypsum (72), Flintkote (31) and Tim Walter Corp. (41). In the air-conditioning area, Carrier (43), which has spent the past two years in a broad potential base formation, appears to be the most interesting. CHEMICALS – Group action has been only average and as might be expected, individual patterns are mixed. Monsanto Co. (52) is probably the most interesting issue in the group with an upside target of 70 and good support just under current levels. CONTAINERS – METAL & GLASS – Relative action has been inferior and the patterns of American Can (33) and Continental Can (34) indicate possible further price vulnerability. We would be inclined to avoid the group at the present time. CONTAINERS – PAPER – By and large the downtrend from the April highs remains in effect. Chart patterns of most individual issues remain unimpressive and we would be inclined to consider switches out of the I-Iindustry. –… -. ..- .. '–';' '- – . – – – . COPPER – Recently having moved to new lows, the stocks afford generous yield. but heavy overhead supply now exists and upside action will probably be slow. COSMETICS – Here again individual patterns are diverse. Avon (98), the most important factor in the industry, has recently held in the 93-106 range and the direction of the breakout will determine the direction of the next move. The potential in both cases is fairly sizable. For the other issues, down- side risk appears limited, but immediate upside potential is unclear. DRUGS – Another instance of widely diverging patterns. Smith Kline & French (55) has just broken out of a major base with a long-term upside objective well above current levels. Merck & Co. (115) and Upjohn Co. (68) must both be rated as strong holds' despite recent moves to new highs. Hospital supply issues posses extremely strang patterns, with American Hospital Supply (41) having the broadest upside potential. Dow-Jones Industrial (12 Noon) 895.08 S&P (12 Noon) 99.46 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT'wn No statement or exprenlon of opinion or any other matter herein contained is, or 15 to be deemed to be, directly or indirectly, on offer or the soliCitation of an offer fa bvy or sell any security rcferTed to Or mentioned The matter 15 presented merely for the convelience of the 5ubscnber While Ne believe the Ourees of our Informohan to be reliable, we In no way repreent or guarantee the accuracy thereof nor of the statements mode herelM Any action 10 be taken by the subscrober should be based on nls own Invesllgatlon and mformatlon Janney Montgomery Scott, Inc, OS a corporation, and Its officers or employees, may now have, or may later toke, poSitions or trades 1M respect to any SI!C;u(1iles mentioned 1M thiS or any future ,ssue, and such poSition may be d,fferent from any views now or hereafter expresed 1M thiS or any other Ilsue Janney Montgomery Scott, Inc, wh,,h is feglstered wilh the SEC as on Investment advisor, may gIVe adVice to 'Is Investment advisory and other customers mdependently of any statements mode In thiS or In any other Issue further mformol1on on any secunty menhoned nerein ,s avollable on request

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Tabell’s Market Letter – October 15, 1971

Tabell’s Market Letter – October 15, 1971

Tabell's Market Letter - October 15, 1971
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I———————— TABELLS MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, INC MEMBER A.MERICAN STOCK EXCHANGE October 15, 1971 We ventured the opinion last week that the 880-920 range, which had contained the Dow since the first upsurge of the Nixon Rally, might well hold. The hazards of short-term forecasting were I-once-againproven-as;-in-''l'hursdaysand'i'rlday's'trauing;-theDow'brok'eiafrly-decisively below- I- – that area. Meanwhile, the less-than-buoyant action of the equity market has been accompanied by screams of anguish from a number of analysts who argue that the market shouldn't be going cbwn, because after all the economic outlook for 1972 is so excellent. We have tried to lay to rest in the past the myth that economics determine stock prices. In the present instance, es pecially, complex forces are at work centering around the supply of and the demand for equities. Without going into details here, suffice it to say that the figures are less than encouraging and are totally consistent with a market behaving the way this one has since last April. We will confess, ourselves, to a certain optimism in that we do not see the risk from current levels as being all that great. In terms of the Dow, the most plausible downside objective is centered around the 850-835 area. Moreover, a great many stocks continue to possess excellent technical patterns, suggesting that the necessary downside leadership for a full-scale bear market is not yet, at least, present. Nonetheless, with the aforementioned good technical pattern; now constituting a minority, selection will probably be the key to preservation of capital. We are continuing below our review of individual groups, highlighting above-average patterns where they exist. ELECTRICAL EQUIPMENT – This is one of the more interesting groups at the current time, based both on relative action and ultimate upside potential of the indiVidual stocks. General Electric – –6l)-and-W-es-tinghousec(-9m-haveboth-m0vedlYshar-ply-sL. , uW,J v Lue ,yea., UUL-m both cases, higher levels are indicated. I-T-E Imperial (35), Square D Company (29) and Sola Basic Industries (17) all have upside objectives considerably above current levels. ELECTRONICS – There is no discernable group trend. Hewlett-Packard Co. (44) has shown good relative action and could be attractive for risk accounts. FARM EQUIPMENT- Deere & Co. (46) is the only issue in the group with an above-average pattern, having strong support in the 45-40 range and an upside objective well above current levels. r.FOODS – Most canned food producers such as Campbell Soup Co. (31), H. Heinz Co. (42) and Del Monte Corp. (25) have only neutral patterns and appear uninteresting as capital gains vehicles. In the dairy area, Pet Inc. (44) has an upside objective of 70 and support at 42-40 Swift & Co. (38) continues to be our favorite issue in the meat-packing area. INSTALLMENT FINANCING – This is a generally defensive group which, nonetheless, has been showing above-average relative action and where most of the companies have large potential base formations. We think, therefore, that selected issues are attractive both for the conserva- tive and the more aggressive investor. We are inclined to favor C. I. T. Financial (48) with an up- side objective of 60 followed by higher levels and Beneficial Corp.(61) with an initial price target of 86. LIQUOR – Action has been only average and we see no particular attraction in the group at this time. MACHINERY – Makers-of heavy-machinery should 'benefit'in'any incre-ase 'tn'capit,H 'expenditures next year, and technical patterns tend to reflect this. We have mentioned Joy Manufacturing (58) favorably in this letter in the past and would suggest continued retention of this issue. Ingersoll- Rand Co. (54) has a price target in the mid 70's. MACHINE TOOLS – Technical patterns on this group are still somewhat uncertain and we would prefer, in most instances, to avoid commitments until such time as they clarify. MOTION PICTURES – Group action has been distorted by the sharp move in Walt Disney Product- ions (98) earlier this year. This issue appears, at best, fully priced at the present time, and the technical patterns of the other stocks in the group are generally desultory . OFFICE EQUIPMENT-Burroughs Corporation (136),with a long-term price target above 200 and strong support in the entire 130-120 area, continues to be our favorite commitment in this group. We would be inclined to suggest avoidance of the other major issues. Dow-Jones Industrial (12 Noon) 873.32 ANTHONY W. TABELL S&P (12 Noon) 97.61 DELAFIELD, HARVEY, TAB ELL AV'TelRR No stalement or CXprel10n of opinion or ony other matter herein COnf(lIned Is, or IS 10 be deemed 10 be, directly or Ind,rectly, on offer or the soliCitation of on offer to buy Or sell any security referred to or mentioned The mailer IS presented merely for the converlence of the substnber While we believe the sources of our Informa' tlon to be reliable we In no way represent or guarantee thl! accuracy thereof nor of the stolements mude herein Any actIOn to be token by the subs.cnber should be based on hiS own 'InvestllJo!lon and Informotlon Janney Montgomery SCalI, Inc, as a corporation, and Its officers or employees, may now have, or may later toke, poslhons or trodes In respect to any SKunlle! mentioned In thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered wl1h the SEC as on Investment adVisor, moy give adVice to Its Investment adVISOry and othel C\lstomers Independently of ony stotements made In thiS or In ony other Issue Further information on any security mentioned herein IS ovallable on request

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Tabell’s Market Letter – October 22, 1971

Tabell’s Market Letter – October 22, 1971

Tabell's Market Letter - October 22, 1971
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————————————-.., TABELL'S MARKET LETTER t, – . .J 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISIO OF MEMBER NEW YORK STOCK eXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE – October 22, 1971 About a year and a half ago. the Institutional Investor magazine emblazoned its cover with the 1–l'lealthles5 rP'''hr,a,,s,e ;,,'This-isn'-t-'a 'bear'marketr—Thisis'the 'way things-are'going to -be fFomn0w0n.''– – The line tended to evoke nervous chuckles. At the time, the monetary squeeze was exerting its full pressure, the economy was halfway into a receSSion, the end of which was not clearly visible, and earnings comparisons were proving, to say the least, disappointing. Underthe circumstances, a plunge in equity prices was a logical expectation, and plunge they did, with the sickening thud typical of a bear market. Time passed. Prices bottomed in May, and by August, the obvious signs of a bull market were manifest. The warning, implicit in the magazine cover, was forgotten, as the recession ended, money flowed into the economy, and earnings projections began to improve. As we progressed to the Fall of 1971, the universal expectation was for an improving economic picture for 1972. Yet, in this totally different environment, stock prices were behaving in a manner much reminiscent of the Spring of 1970. We suggested in last week's letter that such behavior was totally consistent with our concep- tion of supply/demand forces affecting the equity market, and we discussed some of these forces in detail in our letter of September 3. It is worth reiterating them here, however, because it seems important to us to understand Just why the market has behaved as it has in the face of a quite obviously improved fundamental outlook. It is arguable, in other words, that this the way things are going to be from now on. To begin with, we have to disabuse ourselves of the notion that earnings have anything — ;11,, — .to do with the te.lool.oLstock Driro l\Tn L .. tho . 10. sentence brings the collective wrath of the fil .,,1 analyst community down on our head, we suggest that it be re-read — with particular emphasis on the phrase aggregate level. Earnings, of course, have a great deal to do with the prices of stocks relative to each other. The price of all stocks taken together is something else again. It is obviously possible for this figure to rise when, and only when, demand for stocks exceeds supply, and to fall when, and only when, the reverse is the case. The demand for all investment media, stocks included, derives ultimately from the rate of cor- porate and personal savings. This annual savings increment must be divided, in some way, bet1illEBn stocks and other forms of investment. Just how this division takes place cannot, of course, be documented, but it obviously must depend to some degree on prospective rates of return offered by other investments vs. those offered by equities. The division having been made, net demand for equities can be arrived at by subtracting from potential demand the total number of new common stock offerings. The residual figure is what will ultimately exert the upward or downward push on the stock market. Thus, in simplest terms, if stocks offer high rates vis-a-vis bonds and new offerings of common stock are low, it is potentially bullish for stock prices. If the relative rate offered by bonds (and other investments) is high, and new offerings of equities are at high levels, the im- plications are negative. This is precisely the case at the present time. Bond yields are well abo\e stock yields and have obviously been attracting fairly substantial amounts of individual and institutional money. Meanwhile, 'new offerings of equities-have been'at-recordor'near-'record levls- since June. Net result — the stock market posted a high last April and has not been near that high ever since. Now, as sugges ted above, this exercise is intended as an explanation rather than a forecast. As we noted in last week's letter, we do not see, in the present picture, the plethora of broad dis- tributional patterns which would suggest a bear market of the 1969-l970 scale. The most plausible downside objective, as we suggested last week, is 85G-835, the upper part of which range was touched during last week's trading. Also, on the plus side is the fact that a speculative binge, which normally has to be liquidated in a bear market, never really got off the ground this Spring. Under these circumstances, we think it probable that a near-term bottom may be at hand. None- theless, the factors mentioned above will remain with us and should be taken into account in stock market decisions. We think, in other words, that capital protection, as well as capital en- hancement, should be a major factor in investment decisions in the months ahead. Dow-Jones Industrial (1100 a. m.) 859.08 ANTHONY W. TABELL S&P (1100 a.m.) 96.29 AWTmn DELAFIELD, HARVEY, TABELL No statement Of expreUlon of opmlon or any Ofher motter herein contolned 1, or Il to be deemed to be. directly or indirectly, an offer or Ihe sollcilolton of an offer to buy or sell ony sect,rnty referred to Or mentioned The matter IS presented merely for the converlenCE of the subscnber While -c believe the sources of our informa- tion to be relioble, we In no way represent or guorontee the Clccuroty thereof nor of the stolements mude herein Any odlOn to be token by the subSCriber should be bosed on hiS own IrlVeshgollon and Informallon Janney Montgomery Scott, Inc. os 0 corporollon, and Its officers or employees, moy now have, or may loler lake, paS/fians or trodes In respect loony .secuTltles mentioned In fIIS OT any fulure JUue, ond sum poJlJon may be d,fferent from any views now or hereafter expressed Irl Ih,s or any other Issue Janney Monrgomery Scott, Inc, whICh ,s registered wl,h the SEC CIS on Investment adVISor, moy give adVice 10 Its Invelmenl advisory ond othel customen Independently of ony statements mode In thiS or In any olher ISsue Ft,rrther II'lformatlon on any secunty mentioned herem IS ovollable on request

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Tabell’s Market Letter – October 29, 1971

Tabell’s Market Letter – October 29, 1971

Tabell's Market Letter - October 29, 1971
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TABELL9 S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE October 29, 1971 The slide in stock prices, which has characterized equity markets since early September, contin- ued last week, developing momentum as it went along. As the August 10 low of 839.59 on the DJll — – was breacnedlnWnescra s tra-ding, following anariiiOStnne-pointslldetntfie Irtd ex; tned';'rop;;;;'-.–1, posted all kinds of near-records for sheer persistance. Wednesday marked the lIth consecutive declining day in the Dow, a number of consecutive de- clines which has been exceeded only once in the past 45 years — and that all the way back in 1941. The string was broken by a mild attempt to post a rally in Thursday's trading but this petered out toward the close and, even on Thursday, more stocks declined than advanced for the 12th consecu- tive day, again a record that has been surpassed only twice in 45 years of history, on both occasiore during the 1969-1970 bear market. Quite obviously, if we do not have a full-grown bear on our hands, we have a vicious, little cub quite capable of doing extensive damage. As readers of this letter are well aware, we have been arguing repeatedly over the past year that the stock market of the 1970's is likely to be an entirely new ball game. In the process, we have suggested repeatedly that supply-demand factors were extremely important and we have cited such negatives as continued public selling of equities, net redemptions of mutual funds, coupled with a low cash position in those funds, and the prospect for reduced pension-fund equity purchases. We are impressed by the extent to which parallel arguments have become popular in recent weeks and the extent to which they are being us ed as a rationale for still lower prices. It is here, we think, that a number of analysts may be treading on dangerous ground. At this point, it may be helpful to back up and trace the history of our own infatuation wit h supply/demand figures. Since we are technicians, this concern began, appropriately enough, with 1 asimple.examination0.marketaction.The.bearmarketof..l969-01970decisill,elyviolatedtheuptrend – – which had characterized the DJll since 1942, and the failure of the 1970-1971 bull market to move to a new high confirmed the probability that the' underlying trend of most stock averages since 1966 had been, if not down, at least flat. Obviously, there had to be some reason for this apparent statisti- cal change, and a whole series of explanations then immediately suggested themselves, including increased individual purchases of bonds,which offered near-record returns throughout the period, re- duced levels of new mutual fund purchases, etc., etc. We had, in other words, and still think we have, a plausible explanation as to why the market, cycle to cycle, has been able to make little head- way over the past six years. We think it dangerous, however, to carry the analogy farther than this. To our knowledge, no precise model exists relating the flow of individual and institutional money to near-term changes in the equity market and, in the absence of such a model, we are inclined to rely on more conventional tools. Use of such tools, at the moment, tends to yield a somewhat brighter picture. For example, the market had reached, by the end of this week, an almost classic, deep oversold position. fYVe are using the phrase here, not as a catch phrase, as it is so commonly used, but, in terms of objective assessment of the levels of various technical indicators compared to past levels.) The significance of such a position is quite simply this. It provides no assurance that the market cannot, over the near term, go lower. The depth of the present oversold condition is, for example, nowhere near that seen at record low levels such as 1962, 1966 or May, 1970. It is deep enough to suggest, however, that from this level on down, we will probably be subj ect to what may, unscientifically, be called the rubber band effect. In other words,whatever-levelis'ultimately reached on'the' downside, it is quite probable that the Dow will return to present prices on the subsequent rally. We have cited before, in addition, the prevalence of a large number of good technical patterns which have remained stubbornly intact. That there has been damage done, some of it perhaps irre- trievable, to a good many technical patterns, we do not for a moment deny. Our own assessment of that damage, however, continues to be that it differs in degree from that witnessed in previous major downswings. Major tops have, in the past, been characterized by internal deterioration taking place under the guise of relatively firm prices, in other words, by markets which look better than their true internal condition. The current market has almost opposite characteristics in that, in many ways, it appears on the surface worse than it really is. Dow-Jones Industrial (Noon) 836.08 S&P (Noon) 93.89 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL htNttpbohlooaoiSSnsbeistodtiaortnoeoasbnmrneoyeshrenrioSelttltlrhioaoaaedrwnbreylensenx,sspIienunrwceevurseeeTsssiJlmtotpaiyngencarnneottoeiffoteyornwoTMpaaeaindyonnynid1rot0egsnpeIoonrcmoerufroersmirreatmynienetanySsltocliomoroonttnetgh,enuedtJrIaiaonrmnanTcnneha.edtetewyteemIhnrMiotchhtthohteeeinrSr1eto5giocInoSrrcmeucpgaer;rinoarseynyctseyleoSrfnleutcnldhtoeeuetddrWtre,emoIiStIIfheS,nrsocnetuhor,leyer,10foSaofEn1rC0adththbocesoeesurscapdtthoanoenterpevaImomnetSilveeolednhunsot,tfnsmnarameenmbnduoetadf,ya1e1dtdhbVihreeeoeisrfcsoefdutimrlicb,yfeSfrmeCosrArraeionynbIryetngrde.foiirmvcrWoeehpmcohlotoinldlayyevn,teloyecoseneb,ve1iombe0ftweafaIleytskisreenvnnmooeorvwwbtetyseohtemr'hsseeooenuels,tlrrCcueaoeibar!dssfOVt0ehIf,nOeyoerfu)yo(IrfoprInonfursolc0ordm!tfhkfoeienrer-' C'Uslomers Independently of any stotements mode In thiS or In ony olher ISsue Further Information on any seomly menlianed herein 15 avollable on request

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