I I TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBER NEW YOAK STOCK EXCHANGE, INC. MEMBER AMERICAN STOCK EXCHANGE March 24, 1972 We presented, last week, a synopsis of the monetarist economic view together with a capsule history of the economy over the past 25 years tending to support certain assumptions of that view. We would like-; this-week,- to'ekplorefurther the effects-of-changes'in'the money supply-an-inflation and, further, on the stock market. The table published last week showed that the average annual change in the stock market over the past 25 years has been just under 9. Column 1 of the table below shows the percentage change in the S&P 500 for the eight years of greatest increase in the money supply and column 2 shows the percentage change for the eight years of least increas e in the money supply. It should be evident that increases in the money stock tend, immediately at least, to be good for the stock market. Six of the eight years in column 1 produced above-average stock market increases and the average of the eight years was one-third greater than the average for all 25 years. Even more striking is the effect of monetary stringency on the market. The average performance for the eight years of least increase in the money stock was a 1. 88 decline and these eight years include five of the seven down years that have occurred over the 25-year period. Column 3 takes the eight years of greatest money supply increase and shows, for each year, the amount of price increase, measured by subtracting the in- crease in real GNP from the increase in actual GNP. The average of 3.77 Is significantly above the 25-year average of 3.18. The fact that increases in the money stock tend to a) benefit the stock market and, b) cause inflation may lead to the aS,sumption that inflation is beneficial for stock prices. Clearly, however, over the short run, Inflation Is not helpful to common stocks. Column 4 shows the change in stock prices for the eight years of greatest inflation. The average gain Is a miniscule 1. 2 vs. an average market increase of 8.949'0. By contrast the eight years of least inflation shown in column 5 produced – -anaverage -6f–p-ercentClge gain 'for-th-esto-ck-markeYa-lm-osttwlcea-s'great-a-s -th-e-overaU-average; – – – I Years of Change Years of Greatest In Least Change Years of Increase Years In Greatest In of Change Years in of Change in Rise In Stock Rise in Stock Rise in Prices Greatest Stock Least Stock MoneySup. Prices MoneySup. Prices MoneySup. Inflation Prices Inflation Prices 1968 1967 7.66 20.09 1948 1957 – 0.65 -14.31 1968 1967 4.26 3.22 1947 0 1949 10.26 1951 16.46 1953 – 6.62 1971 1951 11.67 1960 16.46 1949 – 2.97 1971 10.26 1951 4.77 7.40 1948 – 0.65 1962 -11.81 1970 0.10 1961 23.13 1970 1965 1964 0.10 9.06 12.97 1959 1953 1956 8.48 – 6.62 2.62 1970 1965 1964 5.49 1.99 1.63 1969 -11.36 1963 1971 11.67 1950 1968 7.66 1954 18.89 21.78 45.02 1950 21.78 1962 -11.81 1950 1.41 1957 -14.31 1955 26.40 Average 12.47 – 1.88 3.77 1.20 15.88 With all of the above as prologue, we can take a glimpse into the future. First of aU, as suggest- ed last week, five years of an above-average increase in the money stock have produced a high rate of inflation causing the implementation of wage-price controls. (The monetarist view that, had money policy been more intelligent, the controls would not have been needed in the first place is impliCit.) In order to ascertain its implications, recent monetary policy must be examined more closely. The total money supply increase in 1971 was a high 6.2. This increase was achieved by U.6 annual rate of growth in the first seven months and a miniscule 15rate in the last five months,'all of which may have had something to do with the poor performance of the stock market throughout most of the second half. For 1972 a policy of stimulus is apparently being followed with the annual rate of change approaching 9 for the first 2 months of the year. We find ourselves, in other words, on the horns of a dilemma. Continued growth of the money supply will obviously benefit the stock mar- ket over the short run, and indeed that growth may account for the nearly flawless technical con- dition of the market at the present time. The dangers of continued growth, however, suggest the possible renewal of inflationary pressures. A certain skepticism regarding the efficacy of Phase 2 in combating these pressures must also be expressed. Such pressures might well lead, later in the year or in 1973, to a more stringent monetary policy. And, as the figures above quite clearly show, neither inflation or tight money tend to be particularly beneficial for the stock market. Dow-Jones Industrial (1100 a.m.) 945.36 ANTHONYW. TABELL S&P (1100 a.m.) 107.81 DElAFIELD, HARVEY, TABELL AWT'mn No statement or expreSSIOn of opinion or any other matler herein conlaliled IS, or IS to be deemed 10 be, d.rec1lv or Indirectly, an offer or the sollcllohon of an offer to'buy or sell any seCUrity referred 10 or menhoned The mailer IS presented merely for Ihe convCrlence of Ihe subscriber While oNe believe the sources of our mfarmolion to be reliable, we m no woy represent or guarantee Ihe accuracy thereof nor of the statements mode herein. Any adlon to be token by the subscnber should be based on hiS own Investigation and InformallOn Janney Montgomery Scott, Inc, as a corporation, and ,ts officers or employees, may now have, or may loler take, posItIons or trades In respect to any secuflllC5 menlloned In Ih.s Of any future 'nwc, and s,weh posilion may be d,fferenl from ony views 'lOW or hereafter epressed In thll or any other ISSU Janney Montgomery Scott, Inc, whICh IS registered With the SEC as on ,vestment adVisor, may give odvue 10 lis Investmenl adVISOry and othel cvstomer independenlly of any statements mode In thIS or In any olher Issue Further Information on any set1Jrlty mentioned herem IS ovollable on request

r—– . I TABELL'S II MARKET LETTER I i 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBEA AMERICAN STOCK EXCHANGE April 7,1972 We noted last week the importance of the 930-946 trading range which had contained the Dow during March, suggesting that an upside penetration of that range would indicate 956-960. The dilemma was quickly resolved when, with an ll-point advance on Wednesday, the Dow broke out of the aforementioned range -and; liy arl'tThursilay -moming–m'-suggesled 'faj\get1ff 9lmhaabh–teache(j -.We'also cc5mtnemed – last week on the desirability of such a rally since it could provide a breadth confirmation which had been lacking to date. Whether this breadth confirmation will ultimately be provided is probably the most crucial question about the technical state of the stock market at the moment, andt is, therefore, probably worth discus sing in some detail. Technical market letters, this one being no exception, tend to talk glibly about breadth without defin- ing precisely what they mean. Very briefly, the term breadth is a generic one for indices based on the number of advancing and declining stocks in a given day or week on the New York Stock Exchange. These numbers are readily available in almost any newspaper and their manipulation has been a prime concern of market technicians going back to the 1920's. -The conventional way of treating advance-decline statistics is to use them to create an index. The simplest such index involves simply subtracting the number of declines from advances each day and ac- cumulating the figure. This process produces a line which can be graphed and is often referred to as the advance-decline line, more properly the advance-decline line since it makes no adjustment for the number of issues actually traded. Such an adjustment can be made by dividing the net difference of advances and declines each period by the total number of issues traded, and this more sophisticated index is perhaps the most widely used. Based on empirical observation, we have tended to favor aninde produced by dividing the net difference by the number of stocks unchanged, and it is this accumulation we use in our own daily and weekly breadth indices. Historically, the theory of breadth interpretation has held that each successive peak in the Dow-Jones .Indus trial s. s houldbeconfirmed.by.alik e. p,eak in ,breadth. The Ltheoryis.JhaJiLs.l.c.h, high. ! snot con- adva-firmed, leadership is b';oJ1ling J1lore 'concentrated in blue-chip issues;a.;;ct the nc-; in th';'a-;'age .- – is masking underlying deterioration. This method of interpretation has had a historical record of considerable success in indentifying major market tops. For example, when the market peaked in December, 1961, breadth indices had reached their highs in May of that year and had stubbornly refused to confirm new highs posted by the average. In June of 1965, the Dow reached a peak of around 945, declined to under 840 and then rallied to over 1,000 in February, 1966. Breadth failed to reach a new high on this rally, thus successfully indicating the 1966 bear market. The 1968-1969 record is clear in retrospect although, frankly, it was ambiguous at the time. The Dow peaked in late 1968 at 985, and the subsequent rally in early 1969 carried only to approximately 970. At this pOint, the breadth index was dramatically below its former peak and it is clear that a non- confirmation existed here also. In the present case, as we all remember, the last major peak scored by the Dow had been 950.82 in April of 1971. This was followed by the sharp decline into November of last year. The former Dow high was approximately equalled on March 6 and exceeded decisively in this week's rally. For the moment at least, both daily and weekly breadth indices have failed to confirm their April, 1971 peaks. This is the first potential failure of this type in the entire history of the 1970-1972 bull market. The following table shows the Dow and the breadth index at each rally peak on the way down in the April-November decline. Opposite these figures are the date the previous Dow peak was first penetrated on the way back up in 1971-1972. As can be seen, each successive penetration was confirmed by breadth and breadth figures until the March high and Thursday's high when breadth reached 935.75 failing again to equal the -April, 1971 hgure. – – '– – – – – – – -.–,,— Date of Rally High Breadth Index Date DJIA High Equalled Breadth Index April 1971 June 1971 July 1971 Sept. 1971 950.82 923.06 903.40 920.93 946.2 930.7 924.3 929.2 3/6/72 2/28/12 1/5/72 2/10/72 940.9 936.1 926.9 935.6 Oct. 1971 901.80 921.4 1/5/72 926.9 Now the current breadth index is not all that far below its historic peak, and it would not take much in the way of extension of the rally to bring it back through the April peak figure. Such delayed confirma- tions, moreover, are not at all rare. (There was a period of almost five months in 1963-1964 when breadth failed to confirm new highs in the Dow, before finally doing so.) We will, at the moment, however, be watching breadth figures closely since a continued failure of confirmation could tum what is now a tiny cloud on the horizon into something considerably more menacing. Dow-Jones Industrial (1200 p.m.) 955.22 ANTHONYW. TABELL S&P (1200 p.m.) 109.12 DELAFIELD, HARVEY, TABELL AWTmn statement or expression of opmion or any olher motter here,n conlOlned is, or IS to be deemed to be, directly or 'rWrredly, an aHer or the solicitation of on oHer to buy or sell any secuTlty referred to or mentioned The motter IS presented merely for the converlen(E of the subSCriber While He believe the sources of our Informa 'Ion to be reliable. we In no way represent or guarantee the accuracy thereof nor of the statements mode herein Any adron to be token by the subscTlber should be based on hiS awn mVMhgallan and information Janney Montgomery Scali. Inc.. as a corporahon. and ,ts offICers or employees, may now have. or may later toke. poSlhans or trades In respect to any securities menlloned In thiS or any future Issve, and such poslhon may be different from any views now or hereafter expressed In Ihl5 or any other 15we. Janney Montgomery Scali, Inc. which IS registered With the.5EC as an Investment adVisor. may give adVice 10 ils H\Vestment adVisory and other customers Independently of any stotement5 mode In thiS or rn ony other IssUe. Further rnformollon on any senmty mentioned herein is ovo.lable on request

TABELL'S MARKET LETTER — –.——–' 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCI( ExCHANGE – ., .' . . -… . , . 0 ;'''c .. -.. ,. …….. —. .' .pril l! 19'!. George J. W. Goodman, in an early novel prior to his incarnation as 'Adam Smith', had oile of nis dha1'- acters utter an immortal piece of stock market advice. To his offspring who had been bragging about his cleverness in amassing a stock-market fortune, a wise old father rejoined, Son, never confuse brains with bull markets There is, unfortunately, a tendency in many segments of the financial community, not only to equate investment sagacity with the normal bull market process, but also to confuse a number of sacred cows such as earnings growth with that process. A hypothetical example will illustrate. Suppose an investor, on June 30, 1970, had decided to construct himself a portfolio consisting of six of the widely-recognized growth stocks, Avon Products, Eastman Kodak, IBM, Polaroid, Sears Roebuck and Xerox. He would have every reason to be pleased with his investment results to date. His portfolio value would be up 96 , the first three columns of the table below showing the details. Price 6/30/70 Current Price Advance Earnings 6/30/70 Earnings 12/31/71 Change AVP 70 124 77 1. 55 1. 89 22 EK 64 120 88 2.50 2.60 4 IBM 250 398 60 8.51 9.38 10 S 56 115 105 2.85 3.56 25 PRD 53 133 151 2.10 1.86 -11 XRX 73 145 99 2.26 2.71 20 The crucial questions is Why, and, unfortunately, most investors with similar portfolios would tend to utter pious declamations about the merits of growth stocks. As the table indicates, however, market gains ranging from 60 to 151 were achieved on earnings gains ranging from -11 to 25. The bulk of the;P0rtf0Ho-gain wasachieved, not-through .earningsgrowh,..but,through .theormal,buJI;mar-e!-cproces s . of marking up the price paid for a dollar of earnings. That this process has advanced to a fairly mature stage is suggested by the table below which com- pares the current p/e ratio of each stock to its peak p/e ratio for the 1968-1969 period. As can be seen, three of the six stocks are above that peak and the others are close. Current Price Earnings 1971 Peak P/E 1968-1969 AVP 124 1. 89 66 63 EK 120 2.60 46 40 IBM 398 9.38 42 47 S 115 3.56 32 26 PRD 133 1. 86 72 76 XRX 145 2.71 54 56 The implication, of course, is that further gains based on the market's willingness to pay a higher price for earnings may be limited. The following table takes 1972 estimated earnings for each of the six stocks, applies the highest multiple from the above table and indicates the price at which each stock would sell based on that multiple. As can be seen, the percentage advances from current levels on this basis are limited. Current Price AVP 124 EK 120 IBM 398 S 115 PRD 133 XRX 145 Est. 1972 Earnings Peak P/E 2.10 66 3.00 46 10.50 47 3.90 32 1. 75 76 3 . 1 0 – 56 Potential Price Change 139 12 138 15 494 24 125 9 133 – . — -174c ,,.– … -20 Now it should be made clear what the above study is not intended to do. Most importantly, it is not intended to make any judgment, pro or con, as to the current investment merits of the six companies. It is also not meant to suggest that the target prices mentioned in the last table posses any practical value for investment purposes. It is meant, rather, to reiterate a fact of which we should all remind ourselves as the market makes new highs in a two-year-old bull move, i. e., that the purpose of bull markets is to .-Jiscount rosy futures. It is also meant to suggest that, in the case of such easily-selectable issues as the ones above, the process of discounting may be reasonably well-advanced. The investor's dilemma at this pOint is that further substantial multiple plays can probably be found only by recourse to less convention- al stocks. Such recourse, quite obviously, entails the acceptance of a higher degree of risk. Dow-Jones Industrial (1200 p.m.) 965.98 SSP (1200 p.m.) 109.88 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or elCpre55ion of opinion or ony other matter herein contained IS. OT IS to be deemed to be, directly or Ind'fedly. an offer or the soliCitation of on offer to buy or sell ony secUrity referred 10 or menllOf'led The moiler IS prenlcd merely for the convef'ienre of the subscriber Wh,le..e belreve the sources of our information to be rehable, we m no way represent or guarantee the occuracy thereof nor of the statements mode herem Any action fo be token by the subSCriber should be based on hiS own Investigation and informatIon Janney Montgomery Seoll, Inc, as a corporollon, and lis officers or employees, moy now have, or may later lake, posilions or trade In respect to any K'Curllles mentIoned In Ihls or any future ISsue, and such poSlhon may be d,fferent from ally ViewS now or hereafter epressed In this or any other ,ssue Janney Montgomery Seolt, Inc, wh,ch 's registered w,th the SEC 0 on ,nvestment adVisor, moy gIVe adVIce to Its mvestmenl odv,sory and other antamers mdependently af any siotements mode m thIS or in any other ISSue Further mformotlon on any seCUTIty mentioned h-erem 's available on request

—-. -. -. -. TABELL'S MARKET L..I LETTER 909 STATE ROAD, I'RINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE April 21, 1972 As the market fell prey to a slight sinking spell last Wednesday, we were informed by the New York T , rm-ersco-o-ontoT h–ur sd,ay–m orning –… th a t on..-e r ea – son … was t he debate among money '- – . – . . -…. managers whether to continue chasing glamour issues with high-price earnings ratios- or to -concentrate -on orfierarea1; -irr'the stock market. There may be some doubt as to whether this is a precise explanation for the market's decline, but the eXIstence of such a debate IS undoubtedly a fact of life in the financial community at the moment. It will be recalled that we contributed our own two-cents-worth to the controversy in last week's letter, in which we studied the recent market and earnings history of six leading growth stocks. The conclusions reached were roughly as follows 1) The bulk of the rise from the 1970 lows was due to a markup in mul- tiples rather than earnings growth. 2) This process had brought those multiples to or close to historic peaks. 3) Therefore, further appreciation opportunities in these issues based on the market's willingness to pay more for earnings might be limited. The further conclusion, of course, was that the aggressive investor was forced, at this stage, to seek above-average upside potential in a more volatile and risky clas s of securities. A response to the dilemma on the part of some analysts has been to take another look at cyclical securities. The following table shows the price/earnings ratios, based on 1971 and 1972 estimated earn- ings, for four typical such issues. Stock C-lrrelt Price Earnings 1971 Earnings 1972-E P/1971 EarnIngs P/l972 Earninas Alum. Co. of America 55 2.45 2.75 22 20 Bethlehem Steel 32 3.14 4.00 10 8 International Paper 39 1. 55 2.25 25 17 Phelps Dodge 44 3.62 3.80 12 11 As can be seen, in two cases, at least, the multiples are modest by any standards. International -Paper.!.s-mu!tipl e .i snot.high-ba s ed ,0n-the…earningsimprmL8mentanticipaJei.f.Qr.l9).i!.Ild..theJe!atil1.1y. high prIce being paid for Alcoa can be explained by the fact that the substantial earnings improvement is not expected before the second half of this year. In any case, the multiples are considerably lower than those of the growth issues discussed last week. It is at least plausible to reason, therefore, the econ- omy being in the early stages of a cyclical recovery, that substantial earnings gains in is sues of this sort may result in considerably higher prices. Plausible but not necessarily probable. The last major cyclical recovery the economy has enjoyed ran from 1961 through 1966. The following table shows the earnings of the four issues for the 12 months ended June, 1961 and the 12 months ended' December, 1966. As can be seen, the gains were substan- tia!. The percentage increases in earnings for the period compare favorably with the increases for the same period In such growth stocks as IBM (114), Eastman Kodak (171) and Sears Roebuck (72). Stock Earnings 6/30/61 Earnings 12/31/66 Increase Alu I. CO. of America 1. 70 4.83 184 Bethlehem Steel 1. 50 3.72 148 International Paper 1.52 2.40 57 Phelps Dodge 2.00 4.05 102 Unfortunately, for the same period, market gains in the stocks were either nominal or non-existent. The follOWIng table shows the prices of the four issues in June, 1961 and in December, 1966, together with the price/earnings ratios at the time. The obvious rationality of the market's treatment of cyclical issues IS apparent. While it is willing to place a premium multiple on cyclically-depressed earnings, it tends to place a much lower multiple on peak earnings. Thus, the investor who buys cyclical stocks —at this point must convince himself, not only that earnings are going to improve,-but, that; after-the– appropriate multiple markdown, there will be room left for price appreCiation. Stock PrIG! 6/30/61 PiE Ratio Price 12/31/66 PiE Ratio Price Chanqc Alum. Co. of America 72 42 90 19 25 Bethlehem Steel 42 28 36 10 -14 International Paper 31 20 29 12 -6 Phelps Dodge 30 15 38 9 26 Like last week's study, the above is intended to be only a generalization. Quite obviously, we think a number of investment current opportunities can be found in industries whIch might fall 1 n tot '. cyclical classification. We do not thInk, however, that, If most growth stocks are fully-prIced, It is necessarily a corollary that most cyclical issues are relative bargains. Dow-Jones Industrial (1200 p.m.) 969.97 S&P (1200 p.m.) 109.29 AWTmn ANTHONY W. TIIBLLL DELAFILLD, HARVey, TABLLL No statement or exprCUlon of opInion or any other matter herein contained 1, or IS 10 be deemed to be, dlreClly or Indirectly, on offer or the sollcltallon of on offer to buy or sell any security referred to or mentioned The moiler IS presented merely for Ihe convef'lena of the subscriber While we believe Ihe sources of ovr mforma- tion to be rel.able, we In no way represent or guarantee the accuracy thereof nor of the stalements mude herein Any ochon to be laken by the ubscflber should be based on hl own investigation and Information Janney Montgomery Scott, Inc, as 0 corporat.on, and .ts officers or employees, may now have, or may later toke, pOllhons or trades In respect to any seCUrities ment.oned In thiS or any future Issue, and such poslhon may be different from any views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered with the SEC as on Investment adVisor, may give adVice to Its Investment odv.so!), and other customen Independently of any statements made In Ihls or In any other Issue Further Information on any security mentioned herein IS aVailable on request —-

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE INC MEMBER AMERICAN STOCK EXCHANGE April 28, 1972 — – pasf a Moderage weakness has, for a chC!nge, bE!en the dominant factor in equity markets over the coupfe -ciJ week;;-'A1rattaii11ri(i new'lJuYG;;;arJethigh, closing at 968. 92 oApdf the Dow-Jones Industrial Average slid to a level of 946.49 on Tuesday, before recovering mildly at the end of the week's trading. Declines of similar magnitude were posted in the broader-based indices. To date, the drop appears to fit squarely into the context of the intermediate-term uptrend which began at the 800 level last November and which has carried the Dow up some 170 points in a five-month period. There have, in those exciting five months, been only three corrections worthy of the name. A 3.06 decline lasting six days took place in mid-January, a 2.26 decline lasting five days occurred in early March, and the recent drop, lasting for five days, was 2.31. At its recent low, the Dow had reached the downside objective of the small distributional top built up during mid-April and was reposing in a strong support zone at 950-930. Moreover, even were the above support not to hold (and the logical expectation is that it should), immediate downside risks do not appear to be Sizeable. A possible downside target for the Dow would lie in the 900-894 area, and the comparable objective for the S&P 500 would be 105-102. Neither of these figures represents a substantial risk from current levels. We do think, however, that there may be more reason for concern at this stage than there wasaLprevious lnterruptionsof-theadNance,,,,Thereare.anumberofreasons-for-thtsc.F-ir-st- is the desultory breadth action which we discussed at length three weeks ago. The deterioration noted at that time has continued. Secondly, at its mid-April high, the Dow was at a historic resistance level of considerable magnitude. Finally, the basically unhealthy supplydemand situation which has been overhanging the market for a year now continues to be negated only by the persistent willingness of the margin buyer to increase his borrowings. As we have suggested in past issues of this letter, this willingness is likely to continue at least over the intermediate term. It is, however, not the most substantial support on which a bull market could re st. On the favorable side, of course, is the absence of any eVidence of the sort of speculative phase which would signal a classic termination of a major upside move. It still seems to us probable, especially considering the character of recent buying, that such a phase should emerge at some stage of the game, and it could produce dynamic moves in individual is sues. Actually, secondary and tertiary issues appear to constitute the major area with considerable room still existing on the upside. As we tried to suggest in our last two letters, both conventional growth and conventional cyclical issues appear to be, at least, fairly well exploited on a fundamental basis. – There are those who, on reading-the'above,-wiH'accuse usof'indulging'in-;the-classic forecaster's refuge of hedging. We do not intend it thus. The behavior of the investor at this stage must, it seems to us, depend in large degree on his own inclinations. In view of the risks and rewards being offered at this stage, it would be perfectly plausible in our view for the conservative investor to assume a reasonably defensive position. Whether he should do this depends on whether he can accept with equanimity the possibility of a fairly dynamic speculative upsurge in which he would not be a participant. The aggressive investor, of course, can opt to continue to seek substantial capital gains opportunities in unexploited areas of the market. He, however, must realize that he is accepting a somewhat higher degree of risk than has prevailed in the past. Dow-Jones Industrial (1200 p.m.) 951.38 S&P (1200 p.m.) 107.50 ANTHONYW. TAB ELL AWTmn DELAFIELD, HARVEY, TABELL No !clement or expreuion of opinion or ony other motter here'n contolned IS, or 15 10 be deemed 10 be, directly or indirectly, on offer or the hCltotlon of on offer 10 buy 01 '!.till any !.etUflty fe(erred to or mentIoned The matter IS presel'lled merely for the c.onver'lenoo of thc subscrIber WhIle we belIeve Ihe sources of our Informa tlon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude here, Any action to be token by the subSCriber should be based an hIS own invcUlgahon ond Informotlon Janney Montgomery coil, Inc, as 0 corporotlon, and Its offIcers or employees, may now have, or may later toke, posihons or Irodes In respect to any secUritIes mentIoned m thl5 or any future Issue, and such poslhon may be dIfferent from any vles now or hereafter expressed In thIS or any other Issue Janney Montgomery Scoll, Inc, whICh IS regIstered wllh the SEC as on Investment adVisor, may gIve adVICe to It mvestment adVISOry ond alhel customers Independently of any statements made In thIS or In ony other Issue FUr/her mformatlOn on ony seOJnly mentIoned herem IS available on request \

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER New YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE r– My 5, 1972 It all began, hindsight tells us, around March 6, some two months ago. Through that date equity markets had been in an uptrend as pleasant as any investor would have a right to desire. For some five months, the Dow-Jones Industrial Average had remained within the confines of an uptrend chan-tlen'lS il\(rat-lne 'fafEnrf'Cpproximately r'17-poir'itspetdlfy, 6nitswaytochalking'up'1l-21 'advance- – from the November low. This trend had as steep an upward slope as almost any intermediate-term advance on record. Throughout the period November 23-March 6, breadth action was well above aver- age with advancing stocks regularly exceeding declining issues by a wide margin. And, as the ad- vance moved ahead, a gratifying number of issues were pushing forward to new 1971-1972 highs. Then, in early March, an abrupt reversal of momentum occurred. This reversal has been perhaps less apparent on the surface than when one examines underlying market statistics. In terms of the averages, action has hardly been all that bad. Indeed, the Dow, currently, is at approximately the same level as It was when the whole process started. The first phase was a consolidation during which the Dow held roughly between 950-930 for the better part of the month of March. This was followed by what seemed to be a strong advance to a closing high of 968.92 on April 18. Following that high, in late April and early May, the Dow declined back to the 950-930 support area afforded by the March consolidation. As we suggested above, however, this innocuous performance by the averages masked consider- able underlying deterioration. Throughout the 17 trading days of the March consolidation, declining stocks on average exceeded those advancing by 175 issues per day. On 12 of the 17 days of the con- solidation, more stocks declined than advanced. Despite the apparent strength of the April rally, ad- vancing stocks tended to exceed declining ones for this period by only 120 issues per day, and In the most recent market period the average daily number of advancing issues has been 543 vs. averaq declines of 896, a pluraility of 353 declining issues. . . . N0rdG4hec-StatistiG-S-on.new-J1ighs-andIGws-hold.any .great-..GOmfort.ur..ingtheearlyApriL…a.d, . vance as the market was sailing to new peaks, an average of 61 issues a day were posting new 1972 lows. And, in the period since April 19 an average of almost 100 issues a day have been moving to new lows. A host of other statistics could be cited but the conclusion is obvious. The supply/demand equation, quite obviously favorable through early March, has altered dramatically since then, for reasons as yet unclear. Two questions suggest themselves. The first is Why and the second is What does it all mean As to the first question, we do not subscribe to the currently-fashionable theory which blames everything on the Vietnam situation. The existence of the Vietnam conflict is undoubtedly one of the most tragic and divisive forces affecting American life today. This does not make it a scapegoat for what is going on in the stock market. More fundamental, we think, is the fact previously suggested in this letter that, since November, a high level of individual stock demand, especially from margin buyers and foreigners, has been sufficient to offset reduced institutional purchases of equities and a relatively high supply of new common-stock issues. This was evidently true through March, during which month purchases from the above-mentioned sources continued at record levels. April figures will not be available for another few weeks and it will be interesting to see whether they show any change in this buying and selling pattern. If they do, it will be a source of some disquiet. As to the meaning behind the past two months' action, a number of considerations suggest them- selves. The unfavorable implications of the recent deterioration could be cancelled in one of two ways. The first would be a show of above-average market strength. This appears an unlikely even- tuality in the light of recent market behavior,.but it could, of course, .occur. Pardoxically, the.othe!. factor which would clear the air would be an immediate and fairly steep market decline. One of the plus factors inherent in the current situation is the fact that, through March, the market was acting so well that present dlstributional tops have had only two months to form. An immediate sharp de- cline would cause most issues to reach the downside objectives of those tops. In terms of the aver- ages, if such a decline were to occur, it might reach the 890-880 level,and it is difficult at the moment, at least, to envision a drop exceeding these proportions. Perhaps the worst sort of action would be continued consolidation around current prices while the underlying deterioration, evident since March, continues. This sort of action would serve only to broaden the distribution that now exists. Thus, while the current market outlook cannot be termed unfavorable, it is, for the first tlme In seven months, in a posltion where it could deteriorate appreci- ably. Dow-Jones Industnal (1200 p.m.) 943.26 ANTHONY W. TABELL . DELAFIELD, HARVEY, TABELL S&P (1200 p.m.) 106.74 A/TR1fi No tatement or expression of opinIon or ony olher maHer herein contolned IS, or is to be deemed to be. directly or indirectly, an offer or the solicltotlon of on offer to buy or 5e1l any secvrily referrecl 10 or mentioned The mailer IS Fesented merely for the converlena of the subSCriber WhIle we believe the Ources of our Informa han 10 be rehoble, we In no way represent or guarantee The accuracy thereof nor of the statements mude herein Any actIon to be token by the wbscrlber should be based on hiS own investIgatIon and Information Janney Montgomery Scalf, Inc, as a corporation, and ,Is offIcers or employees, may now hove, or may later toke, posItions or trodes In respect to any sea/rltles mentIoned In thIS or any future Inue, and such POSlt,on may be different from any vIews now or hereofter expressed .n thiS or any other Issue Janney Montgomery Scan, Inc, whIch IS registered WIth the SEC 0 on Investment adVIsor, may gIve adVIce to .IS onvestment adVISOry and otne, customers independently of any statements mode on Ih.s or In ony other issue FUr1her onformat,on on any securIty mentioned herein IS available on request.

TABELL'S MARKET LETTER -I g)eIajUd, 1'13y, !YakII 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE May 12, 1972 During periods of sharply rising stock, markets, Fall 1970 – Spring 1971 and November, 1971 until recently being examples, we constantly heard about the market being in need of a correction. The '— 1mpH c111Ton-in-tli'i's s 6reofcommentary wa s' that'ari sing' market-wa S'S emehow-unh eaIthya nd,tha t,a, -, downswing would provide a sort of cathartic effect which would restore the market to a healthful condition. Regular readers of this letter will recall that we expressed our impatience at the time with this sort of thinking. Yet, we confess that, at present, we think a correction would be a healthy thing for the equity market. The reason for this apparent shift of philosophy is really quite simple. A sharply-rising stock market suggests, not an unhealthy, but a healthy technical state, and as long as upside momentum persists, there is no reason whatsoever to expect that a correction is needed to improve the market's internal condition. But what we have been seeing for the past two months is precisely the opposite — an obvious loss of upside momentum. Distribution, quite obviously, has been taking place and under these conditions a market correction, fulfilling the downside implica- tions of that distribution before it becomes too extensive, would, in our view, constitute a tonic. Viewed in this light, last week's market action must be construed as mildly disappointing. Presi- dent Nixon's decision to mine North Vietnamese ports provided the market, which has, for the past month, been using Vietnam developments as an excuse to reveal its intentions, with a perfect ration- ale for a sharp decline. Such a move began conventionally enough on Tuesday with a 13-point dip in the Dow in a session which set an all-time record for the number of declining stocks. The decline, however, did not follow through. A low-volume rally on the last three days of the week cancelled the entire drop and returned most market indices to their week-ago levels. Despite the end-of-the-week market strength, however, a developing short- ,,- , – ,t Qf,m-Gownsw,ing-at-this,s,t a,g e m u s,ta LleasLb,erjOlgar,(le!, asp ,Jp iIi t y. y ere this t a occur, it would be, bas ed on the limited distribution which has taken place to date, difficult — to envision that downtrend's developing into anything more serious than,a decline to, roughly, 890 on the Dow-Jones Industrials or approximately 103-102 in the S&P 500. There continue to be two develop- ments which could cancel out this implication. The first would be evidence of reaccumulation suffi- cient to suggest that the market was ready to test its mid-April peak. The other would be further dis- tributional action at current levels which might eventually suggest a downside target worse than we are now able to envision. When we back away from the confused short-term picture and examine the broad outline of what the market has done since the beginning of 1972, it is amazing how action to date has conformed to a pattern apparent months ago. The central tenet of our year-end forecast, issued in December, was that the market was, this year, likely to duplicate its 1971 performance, s pending most of its time in a range between 800 and 950. It has, o far, exceeded that range for a 13-day period in mid-April after which it promptly returned to it. A decline to 890 at the moment would, of cours e, prolong further the time spent in that range. 'We also suggested in our forecast letter that, were the 800-950 range to be decisively violated, that such violation would be likely in the latter half of the year rather than in the beginning. We still regard this as a possibility, and the pattern of a short-term decline followed by further market strength would fit precisely into the sort of market one would expect in an election year. We analy- zed the election year pattern at some length in mid-January and suggested that one of the more in- teresting general tendencies was one toward a relatively flat first half. After moving ahead sharply through April, the S &P 500 is now only some 3above its' Dec-ember' close and a drop-to th-e-l03-102 – – downside objective would bring it just about back to its year-end level. However, the most consis- tent fact about an election-year market is the tendency toward a strong second half. As we noted in January, in 15 of the 18 election years since 1900 the average price for December has been higher than the average price for Ju n e. And, in only two cases were prices significantly lower in Decem- ber than they were at mid-year. Thus, if the market were to restore its technical health by a short-term drop and later to show second-half strength, 1972 would conform almost precisely to the standard election-year scenario. That there has been recent market deterioration is obvious, and the fact has been repeatedly noted in this space. To date, at least. that deterioration has not been sufficient to require an alteration of the basic market premises expressed by this letter at the end of 1971. Dow- Jones Industrial (12 00 p. m.) 941. 23 ANTHONY W. TAB ELL S&P (1200 p.m.) 106.42 DELAFIELD, HARVEY, TABELL AWTmn No statement or eJOpression of opmion or cny other matter herem contolned IS, or I 10 be deemed to be, directly or ,dlrl'Clly. on offer or the 50lu;lloilon of on offer to buy or sell cny sl!cvnty referred 10 or mentioned The moiler IS presented merely for the converlenre of the subscrrber While we believe the wurccs of our mformahon to be reliable, we m no way represent or guorontee the accurocy thereof nor of the statements mode herein Any aCTIon to be token by the subCrtber should be based on hiS own tnvesttgotlon and tnformatton Janney Montgomery Scott, Inc, as a corporOTlon, and Its officers or employees, may now have, or may later toke. positions or trades In respect to ony securities mentioned m thiS or any future Issue, and such posItion may be different from any views now or hereafter expre-ssed m thts or any other Issue Janney Montgomery Scot!, Inc, which 15 registered wllh the SEC as on Investment adVisor, may gtve adVice to lIS Investment adVISOry and other (\,Istomers Independently of any statements mode In thiS or m any other Issue Further Information on any security mentioned herem IS available on request

TABELL'S MARKET LETTER ————-.– 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIYISION OF MEMBER NEW VORK STOCK EXCHANoe, INC MEMBER AMERICAN STOCK eXCHANGE May 19, 1972 We have noted In the past the stock market's unfortunate tendency to do that which will make the analyst's job most difficult. Last week's market action was an example of that proclIvity. We suggested In this space a week ago that a mild market correctIOn would probably be fairly 'desitable1ft this'5tage onlW'gaITfe-; Contrarily ;-th'emaik'-f;aftertwo moi'ith's-of -deterioration, eXhrD — – .. ited ItS first mild show of strength, when the Dow Jones Industrials, having consolIdated since early May in the 926-944 area, broke out of this area on the upside in Thursday's tradIng. Unfortunately, at the moment, it IS dIfficult, based on pOint and fIgure analYSiS, to forecast that the advance IS likely to carry too far–an objective of 966 on the Dow being the most plaUSible. Most readers are by now familiar enough with technical Jargon so that the thought double top should immediately come to mind, and this spectre does indeed exist. The strength and character of the rally, therefore, will bear a great deal of close scrutiny. Inspection of individual group action will also be interesting. It IS possible, at the moment, to break Individual group patterns down to three rough categories. The first category, conSisting of 35 of 96 groups,Includes those which have, essentially, remaIned in uptrends since the bull market began in May, 1970, showing only minor, if any, deterioration dunng the April-November, 1971 decline. These groups are listed below, with the 17 (approximately half) which have begun showing preliminary Signs of deterioration within the past two months marked with an asterisk. Air Trans Elec./Major Co's Mach./Oil Well RetaIl Strs/Department Auto Parts Elec./Househld Appl Mach. Specialty Retail Strs/Mail Order Auto Trucks Electrorucs Mobile Homes Retail Strs/Variety Bev/Brewers Finance-Small Loan Offshore Drilling Soap Bev/Soft Drink Food-Biscuit Bkrs Pollution Control Truckers Bldg Mat'ls-Air Con Food-Dairy Radio/TV Brdcasting Vending Machines Chemicals .-..–Orugs .. -Ele-c. 'Equip Home Furnishings Hotel.LMotel … …. Leisure Time . Radio/TV Mfrs ReaLEstate.. Restaurants Ins urance/Ufe Insurance;l'rop.&-Uab–I—; The second category includes those groups which underwent fairly substantial corrections at some time dunng 1971, but have since moved back into uptrends. The oft-noted renaissance of cyclical issues is apparent In the inclusion of most major cyclical groups in this list. As in the first list, those issues showing preliminary deterioration are marked WIth an asterisk, and it is interesting that the total here is 19 or,again,just about half the 40 groups in the list. Aerospace Copper Mach. Ind Steel Air Freight Cosmetics Metal Fabrict'g Sulphur AlumInum Finance Co's Metals/Misc Textile Products Atomic Energy Food/Corn Refiners Motion Pictures Tobacco/Cigarettes Automobiles Food/Packaged Office Equip Toys Bev/Distillers Gold Mining Oil/Crude Producers Util/Nat'l Gas Pipeline Bldg Mat'ls/Cement Lead & Zinc Paper Banks/NYC Coal Bituminous Machine Tools Publishing Banks/Outside NYC Conglomerates Mach/Agric Retail Strs/Disc SavIngs and Loan Containers/Paper Mach Constr Shoes Insurance/Multi-lIne Finally, the following 21 groups, about one-quarter of the market, have, as yet, been unable to demonstrate any convincing recovery from their 1971 decline and still must be classified as being in neutral or downtrends. Bldg Mat'lq/Htg-Plmb'g Food/Meat Packing RR Equip Textiles/Syn —Bldg Mat'ls/RoofIng Forest Products Confectionery — . -'Mach/Steam Gen- Retail StrS/Food Tire & Rubber . 'Sugar Beet Ref –UuI/Elec- – -.- Cont/Metal & Glass Oil/Domestic Sugar/cane Util/Natrl Gas Food/Bread & Cake Oil/Int'l Textiles/Apprl Util/Tel Food/Canned Foods The overall picture–some three-quarters of the list in uptrends but with half that group shOWIng pOSSIble deterioratioI-lS typical of a fairly advanced bull market. Action from here will help determine whether the market stages a complete recovery from its April-May weakness or whether its technical health continues to deteriorate. We would be impressed by reversal of the recent weakness shown by the industries in the second group and by seeing the techrucal action of the third group improve enough so that 'some of them could be classified as moving Into uptrends. It IS from this class of relatIvely unexploited issues that the kind of leadership which could sustain the advance for a worthwhile period of tIme might very well come. Dow-Jones Industrial (1200 p.m.) 957.63 ANTHONY W. TABELL DEIAFIELD, HARVEY, TABELL S&P (1200 p.m.) 108.76 AVf'f .ele No stotement or exprenlon of opinion or any 01nel motter hHen contoll'led I, Of l!i 10 be deemed to be, dHlldly or mdlrectly, 01'1 offer or the lOhCltatlOI'l of an offer to buy or lell any seCUrity referred to or mentioned The motler IS preel'lted merely for the cOl'lVe('lenc5 of the subSCriber While e believe thE' sources of our mformo tlon to be reliable, we In no way represent or guoronlee the accuracy thereof nor of the statements mude herem. Any oellon 10 be token by the s….bscrlber should be based on hiS own Investlgahon and mformatlon Janney Montgomery Seat!, Inc, os 0 corporation, and Its officers or employees, may now have, or may later take, polllJOm or trades In respect to any Securilies mentioned m thiS or any ' …. ture Issue, and such posItion may be different from any views now or hereafter exprened In thiS or any other ISSue Janney Montgomery Scott, Inc, which IS registered With the SEC os on Investment adVisor, may give adVice to Its II'IVetment adVISOry and olhel customers Independently of any statements mode In thiS or In any other Issue Further Informallon on any security mentioned herem IS available on request

TABELL'S MARKET LETTER ., 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – May 26, 1972 Any attempt to relate political trends to the stock market is an occupation fraught with peril – – Ior tli-efiiatKet'-analysC Perhaps-the hara-esFtasknrtoma-intaln'-one-s'bbjecti vity;Bu'Wami bea-r – markets have, in the past, occurred under both Republican and Democratic administrations, and with a fine impartiality. It is a difficult task for both the analyst and investor to keep his own political views out of a rational assessment of the market situation, to avoid excessive opti- mism when his own party is in power and a tendency to look on the gloomy side of things when it is not. Despite these difficulties, it should remain, nonetheless, part of the investor's task to assess political trends and to try to relate them to possible developments affecting his securities. What has taken place so far in 1972 represents an interesting field for such an exercise. The major news, to begin with, has been the Democratic primaries, and it is obvious from the results of these primaries to date that the two major winners are Senator McGovern and Governor Wallace. Considered in what we have come to accept as conventional political termi- nology, two more dissimilar individuals could hardly be imagined. Political commentators, therefore, have spent a great deal of time trying to find a common bond between them and many of them have located such a bond in calling both populists — Le., the political heirs of William Jennings Bryan and Robert LaFollette. Like most such comparisons, it is probably a bit facile. The sort of .populism that consti- tuted a major political force prior to World War I was agrarian in its roots. And it was directed against an establishment represented by a Wall Street which then possessed power which it dOES I not ;-tha nkful1yretaifjtodoy -rhereaTe7n-oneth-etes s;- tiesthatbindth'e-currenttrend'with ' that of the early years of the century. In an article in Thursday's New York Times, Senator Fred R. Harris of Oklahoma, author of a book about and advocate of the new populism, quotes LaFollete as saying, The issue … is not the tariff or conservation of the currency. It is not the trusts. The supreme issue, involving all the others, is the encroachment of the powerful few upon the rights of the many. Harris goes on to argue that the central issue today is not tax reform, monopoly or the environment but a similar latter-day encroachment. It is not necessary to agree with this sort of thing to realize that it has attracted a following. It will be important to note this fact even if Senator McGovern is nominated and later defeated by President Nixon — an event the stock market (see our letter of January 14) is now apparently forecasting. It is the nature of political processes to respond to positions held by individuals who receive large blocks of votes even if those individuals themselves are defeated. This is why an assessment of the implications of a new populist trend is important to the investor. Two keystones of current populist thinking are impatience with the present tax structure, especially the so-called tax loopholes , and the belief that current income is somehow mal- distributed. It is irrelevant that both these propositions might be refutable. They are still widely held. The investor, therefore, should consider carefully investments which depend for their continued profitability on favorable tax treatment. The current depres sed levels of many oil stocks, as an example, attest to doubts which have already been raised on this score. The investor should also, in his'planning;be prepared to confront-the demise-of-fa-vorable tax-' treatment that he has been receiving. The exemption of estates from capital-gains penalties is one example that readily comes to mind. There are also implications for the investor on the positive side. Any steps toward a redis- tributive incomes policy could obviously aid industries with an interest in higher consumer spending, such as the leisure time industry, and the historic identification of populism with easy money may well have implications for bond prices. These and a host of other implications must be considered if Senator McGovern and Governor Wallace indeed represent the political force that a number of observers tell us they do. Dow-Jones Industrial (1200 P.M.) 970.57 S&P (1200 P.M.) 110.57 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL No statement or expression of OpinIon or any other matter herein contOlned IS, or 15 to be deemed to be, directly or mdlrectly, on offer or the solicltotlon of on offer to buy or sell any security referred 10 or mentioned The moiler IS presented merely for the convef'len of the subscriber While we believe the sources of our Informa han 10 be rehable, we In no woy represenl or guarantee the accuracy thereof nor of the statements mude herein Any oOlon 10 be token by Ihe subSCriber should be based on hiS own inVeSTigation and Information Janney Montgomery Scott, Inc, as 0 corporation, and Its officers or employees, may now have, or may later toke, poslhons Of trades m respeo to any securlhes mentioned In thiS or any future Issue, and such poSition mey be dlfferenl from any views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered Wllh the SEC as on Investment adVisor, may give adVice 10 lIs Investment adVISory and olhel customers Independently of any statements made In thiS or m any other Issue Further information on any security mentioned herem IS available on request

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC. MEMBER AMERICAN STOCK EXCHANGE June 2, 1972 As the advance from the 1970 lows reached its second anniversary a week ago, the major market average; celebrated the event by attaining new closing highs for the move, with the Dow-Jones Industrials attain- ., ing a Monday intra.day peak of. 979o.,41iz.'c9.mlortablyaJoyepreyio.us—.QeaksregstredJ!1ea.r!yv1aclL r- and early April. It would be nice to be able to say that the technical condition of the market in June was- as healthy as it had been in March but this is, unfortunately, not the case, and there is no use burying our head in the sand and refusing to recognize the fact. The following table shows the action of three major stock market indices over the past three months. As can clearly be seen, the pattern for the three averages is similar, a high in March followed by a minor decline, a higher peak in April followed by a drop to a new low and, finally, new high ground in late May. It is almost a textbook example of a type of action known as a broadening formation — one of the earliest patterns recognized in technical literature. Indeed, references to this sort of pattern can be found in the literature dating back to the early part of the Century. March High March Low, April High May Low May High Dow-Jones Industrials 957.03 925.87 977.52 917.37 979.46 S&P 500 109.75 105.86 111.11 103.83 111.48 S&P425 122.08 117.57 123.94 115.64 124.74 Let us quote from one of the definitive works on technical analysis, Technical Analysis of Stock Trends by Robert D. Edwards and John Magee, Jr., on the s1,lbject of broadening price formations. Broadening price patterns (are) definitely bearish in purport. They appear most oftEm at or near an important topping out of the trend. Hence, it is reasonably safe to assume that prices, when they finally break away from the formation, Nill go down or, if they do go up, will very soon turn around and come back down again … One particular manifestation .. is known to market technicians under the specific name of Broadening Top . (It) has three peaks at successively higher levels and, between them, two bottoms with the second b.ottom..l9tha !Lt!)efics t.,!,hea s s.umpUon .ha sbe.enLtha Lit J..s,completed.a ndLln. effecLa sa n.lmp.orta nt,, reversal'lI;'ciicatio;; j''st as soon as the rection from its third peak c;;rrle -below the lev';-l'';f its secod– bottom . ., It is only necessary to look at the chart of the Dow-Jones Industrial Average on the back page of the Wall Street Journal to see that recent action constitutes a perfect example of what Edwards and Magee are talking about. Compounding the situation at the present time, we have the fact that breadth indices were lower at the April peak than at the March peak and were lower still at last week's high. Moreover, all three highs in the breadth index were below its peak of April, 1971 despite the fact that all of the major averages have long since surpassed that high. Add to this such factors as a near-record low in mutual fund cash pOSition and a low level of short interest related to volume. Consider the failure of the Transportation index to come even close to confirming the highs in the other averages. The picture does not constitute a bright one. Now we are doing nothing in the above but reporting on what has happened to date. Market action could Imporve, and a new upsurge of buying power could develop from these levels but, as we enter June, 1972, any such improvement remains in the realm of hope rather than fact. To set against the unfavorable developments to date there are still some favorable factors. First is the lack of significant deterioration in large numbers of individual stock patterns. Indeed, it must be noted that a significant number of stocks have absolutely no deterioration whatsoever. And yet, as many learned to their sorrow in 1968 and 1969, top formations often do not become complete until well after the market ha s reached its high. A further case can be made for higher prices by the presence of large potential buying power in margin accounts,it.being the utilization,of this.buyingpower,which essentially was able.to drive the market up from its November lows. Furthermore, the original upside objective of 1065 for the Dow-Jones Industrial Average which we have been citing since October, 1970 still constitutes a valid reading. It is further true that the broademng formation referred to above will not be confirmed as a top until a downside break out below the May lows takes place. And finally, as we have been suggesting for some time, the n9rmal election-year pattern calls for higher prices in the second half. None of this, however, can erase what has been happening in the marketplace during March, April and May. One possible resolution to the dilemma, of course, would be the development of a decline of inter- mediate rather than major proportions which would be followed later this year by a surge into new high territory. Here agam, however, we would be willing to let the market tell its own story. From here on out we think it is incumbent upon the market to show improved technical action sufficient to erase the deterioration which has characterized the past three months. Dow-Jones Industrial (1200 p.m.) 962.22 S&P (1200 p. m. ) 109.75 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stotement or expresSion of opinion or any other molter herein contolned IS, or 15 to be deemed to be, directly or Indirectly, on oHer or the sollcllollon of on offer to bvy or sell any security referred to or mentioned The matter IS presented merely for the conVef'lenCE of the subscriber While -Ne believe the sources of our Informa- tion to be reliable, we m no way represent or guorantee the accuracy thereof nor of the statements mude herem Any action to be token by the subSCriber should be bClsed on hiS own mvestlgatlon Clnd Information Janney Montgomery Scali, Inc, as a corporallol'\, and Its officers or employees, may now have, or may later toke, posiTions or trades In respect to any 'Ccurltles menTioned 11'\ thiS or any future luue, and such pOSition may be different from any views now or hereafter expreued In thiS or any other Issue Janney Montgomery SCali. Inc, which IS registered wllh the SEC as an Investment adVisor, may give adVice 10 lIs Investment adVisory and othel cuslamers Independently of any statements mode In Ihls or In any other Issue Further mformatlon on any security mel'\llOned herein IS available on request