Tabell’s Market Letter – June 24, 1977

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VOAI( STOCK EXCHANQE, INC MEMBER AMERICAN STOCK EXCHANGE June 24, 1977 Trend lines have been a major weapon in the technician's arsenal for many years. – HlstoffcallY7ihese lii'ies-haveoeerldfawnUSr;tlieeyeoa11 -inetliod;,,slmply'by'ifpplylng-a–niler- -. – and pencil to a stock price chart. The advent of computer-stored price data allows employment of a more sophisticated technique — mathematical computation of a channel describing price action between any two points in time. The method involves choOSing a given prior-high and low, computing a channel which describes price action between these two pOints and projecting that channel to the present to ascertain whether it is still descriptive of current price action. The technique has been applied in the chart below. INTERMEDIATE &MINOR COMPUTED OOWNTRENDS – DJIA .J.nE 22. 1m f f — OCT ,.,. … ' Ff81m '971 -' 177 We have, in recent history, two recognizable highs for the Dow-Jones Industrial Average, that of 1014.79 on September 21, 1976, and the year-end high of 1004.65. The most ,-;orecent low is,.of course,898.66 on May.31,1977. The,chart presentsg,computed channels —-.,' drawn from each high to that low. – – As can be seen, both channels have largely contained price action since their in- ception. The wider one, from the September high, is declining at the rate of .28 DJIA pOints per day and is some 78 pOints wide. The more recent, dropping at some. 53 points per day, is 52 pOints wide. The upper limit of the first is now around 961 and the latter at 932. Both channels have now been established long enough and fit the data closely enough to assume, in our view, some importance. We think eventual upside penetration of the two channels (to be decisive that penetration must last for a few days) will constitute an impor- tant first indication of reversal of the market's current slow downtrend. Dow-Jones Industrials (1200 p.m.) 928.77 ANTHONYW. TABELL S & P Composite (1200 p.m.) 100.99 DELAFIELD, HARVEY, TABELL Cumulative Index (6/23/77) 677 ; 23 pWT/jb No totement or expression of opinion or any olher moIler herein (Contolned IS, or IS to be deemed fa be. directly or indirectly, en offer or Ihe SollCllotlon of on offer to buy or sell ony security referred 10 or menlloned The motler 15 presented merely for the conveltlence of the subscriber While oNe believe the sources of our Informa- han to be relioble. we In no way represent or guarantee the accuracy thereof nor of the statements mode herein Any octlon fa be token by the slJbscnber should be bosed on hiS own mvestllJotlon and infOrmotlon Janney Montgomery Scott. Inc. as a corporation, and Its officers or e'l1ployees, moy now hove, or may later toke, poslhons or trades In respect to any securltlE!S mentioned In thl or ony future Isue. and such pOSition moy be different from ony views now or hereofter expressed In thiS or ony other Issue Janney Montgomery xott, Inc, which IS registered With the SEC as on Investment adVisor, may gIVe odvlce to lIs inVestment adVisory ond other customers Independer'ly of (my statements mode In thiS or In any other ISsue Further information on ony security mentIOned herein IS avalloble on request