Tabell’s Market Letter – October 15, 1976

-.- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – ; ; ; , – – – – – – – – – – – – – – – – – – . TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY OB540 DIVISION OF MEM8ER NEW YORK STOCK EXCHANGe, INC MEM8ER AMERICAN STOCK EXCHANGE October 15, 1976 By this week, the rather vicious decline which ha s engulfed the stock market had pro- — . gressed far enough for a few of the usual fireworks normally seen in the advanced stages of downswings to develop. On Wednesday the drop was interrupted by a IS-point rally in the Dow. Like mosfadvances iii recenCweekii';''rCdispIayed-a s ingularlackOf'S'taYlng-power; aiiCrrnuts-day',nraClifig –1- saw the decline entirely reversed with a twelve-point drop. Breadth action, ironically, was better on the decline than on the advance. Wednesday saw only 1022 rising stocks, an unusually low number for an advance of that day's m1 agnitude. By contrast, the figure of 985 declines on Thursday was, historically, out of line in the opposite direction. We stated above that fireworks were to be expected at this stage, since drops like the present one always convince a few investors that the apocalypse has arrived and that stocks should be dumped at any price. Our own view, as readers are aware, is somewhat more sanguine, but we do think some attempt should be made to pinpoint how far the weakness might carry. In the table below, we have performed an exercise which has proved useful in the past — that is attempting to pinpoint individual downside targets for each of the 30 components of the Dow-Jones Industrials. We have given both an optimistic and a relatively pessimistic reading to each stock, and we have indicated with the letters 8 and T prior to each objective, whether the read- ing is based on a support level, a distributional top, or both. Adding up the figures and dividing by the Dow divisor gives readings of 883 and 809, respectively. It should be noted that a rule of thumb which has been fairly accurate in similar past attempts has been to add 5 to the results due to the fact that all stocks generally do not reach their bottoms at exactly the same instant. This translates to a downside target in the area of 927-850. It will be noted that we are at the moment fairly close to the latter objective and that the former objective, which we confess we regard with some scepticism, coincides with major support. The strong suggestion at the moment is that we are looking at an inter- mediate-term correction rather than a full-scale bear market. Note The above comments are based on I—–t'echntcal factors. Further information on all companie'S'is availa151e o-n re-que-st. Close 10/14/76 Downside Objectives Allied Chemical 36 8 34 T 28 Aluminum Co. 53 8 52 T 48 American Brands 41 8 37 8 35 American Can 36 8 33 8 30 American Tel and Tel 60 8 58 8 54 Bethlehem Steel 37 T 35 S 33 Chrysler Corp. 19 S 18 S 15 Du Pont 119 S 118 T 108 Eastman Kodak 86 T 85 T 75 Esmark Inc. 31 T 28 T/S 24 Exxon 54 S 47 S 45 General Electric 51 S 48 S 46 General Foods 33 S 30 8 28 General Motors 71 T 67 S 65 Goodyear 22 S 21 S 18 Inco 31 T 28 T 24 International Harvester 27 T 26 S 24 International Paper 66 S 60 T/S 50 Johns-Manville 29 S 25 S 23 – – – n – Miimesota-Mining-&'M1lfiufactUrihg-6-1 – e– T''59- –…….S55—–; Owens-Illinois 51 T 48 TIS 40 Procter & Gamble 92 T/8 88 8 85 Sears, Roebuck & Co. 65 T 60 T;S 56 8tandard Oil Co. of California 35 8 33 8 30 Texaco 27 S 25 S 23 Union Carbide 58 T 58 S 56 United Technologies 33 S 30 S 28 U. S. 8teel 47 T 42 T 40 Westinghouse 17 8 17 8 15 Woolworth 21 T 19 8 17 DJIA 936 883 809 Dow-Jones Industrials (1200 p.m.) 937.08 ANTHONYW. TABELL S &-P- Compos Ite (12.00 pm) J 00.94 DELAFIELD, HARVEY. TABELL ooY50CumuJ.q,N'c;t;,i.i!!Yi'te,ell';liJl'r…ur)i\t''rot'11!1l''0i0eY',-,anvJ,f.!t7f.w-) menl ..1e 3'r herein -me molter n contOlned presented IS, or IS 10 be deemed 10 be, merely for the converlentt of directly or mdnec1!y, the subscnber While on we offer or Ihe &ol1cllollon of believe Ihe sources of our on offer Informa- ,.-c. fa be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mode herein Any action to be token by the subScriber should be AWT /11d on hiS own Investlgallon and Informahon Janney Montgomery Scott, Inc, as a cOrporation, and Its officers or employees, may now have, or may loter toke, positIOns or trades ,n respect to any securities mentioned In thiS or any future Issue, ond such POSition may be different from any views now or hereafter expressed In thrs or any other Issue Janney Montgomery Scott, Inc, whICh IS registered With the SEC as on Investment adVisor, may give adVice to lIs Investment adVISory and other customers ,dependently of any statements mode III thiS or In any other Issue Further Information on any security mentioned herein IS available on request