.——–'——'– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOC' EXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE April 7, 1978 or. .sto;ks oftheir senlorcounterparts contained In the market averages has by now reached the status common)(nOwleoge-tlira-rJCet prlslngly, were the first to draw attention to this situation, and our readers will be aware that our own comments on the subject have been reiterated ad nauseam. The phenomenon has been so widely noted that all market analysts are now expected to have opinions on the subject, and, not unexpectedly, thos e opinions are divided, ranging from predictions of Its Imminent end to total Inability to find any indication that outperformance by secondaries Is unlikely to continue. We confess our own bias toward the latter view, and we suspect that many of the forecasts of the collapse of secondaries represent wishful thinking on the part of those who have been avidly embracing t he indexing fad of the past couple of years. Indexing, it will be recalled, was based on the rationale that few investors were able to outperform the market averages and that, therefore, a sensible investment policy Involved duplicating the performance of those averages. With large pools of money havmg become invested, admittedly or otherwise, so as to duplicate the averages, it was predictable that the averages would begin to underperform just about everything in sight. Such, or course, has been the cas It is perhaps worth documenting just how dramatic the outperformance of secondary issues has been. The following table shows levels of four market averages at recent dates in the past. Each average has been restated to make its level of September 30, 1973, equivalent to a base of 100. The comparative results are not without interest. 9/30/73 100 DATE Feb. 27, 1976 Oct. 29, 1976 Mar. 31, 1978 DJIA .' 10 2.69 101.88 79.97 S & P 500 91. 96 94.90 82.27 Cum. Index 82.64 80.33 92.00 Amex Index ,,, 97.77 93.52 121.95 As can be seen, the American Stock Exchange Index and our Cumulative Index of all NYSE issues declined a great deal more than the market throughout the downswing of 1973-1974. The Cumulative Index lost more than one half its value and ASE stocks, on the average, showed a drop worse than the one-third fall which took place in the widely-followed indicators. As could be expected, the bounce- back of the broader indicators in the 1974-1976 bull market was likewise more dynamiC. This dynamiC upswing caused the ASE Index, like the Dow, to recover almost all its loss, although, despite a 75 rise, the Cumulative Index failed to post a full recovery. None of the averages did much through the middle part of 1976, but close study can now date the superior performance on the part of secondaries as having begun around November of that year. It is Interesting to note that In the 17 months since November, 1976, the Cumulative Index has outperformed the Dow on a month-to-month basis in 14 of 17 cases and the S & P In 15 of 17. The ASE Index has outperformed both Indicators In 16 of the 17 months. The net result, of course, as the table shows, is that the Investor In both the Dow and the S & P In the fall of 1973 now shows a substantial loss versus a modest loss In the Cumulative Index and an astonishing 22 profit In the average American Stock Exchange Issue. The performance over the past . . 17 months IS even more astounding. OIer that period the Dow and the S & P have dropped by 22 and 14 respectively. Meanwhile, the Cumulative Index has appreciated 14.5 and the Amex Index more than -;- – -'-.- – – – . , ' —- – – – – – – It is interesting to hypothesize four investors who started out with equal amounts of capital at the end of October, 1976, and whose performance duplicate'd each of the four averages. The investor who duplicated the Cumulative Index now possesses almost one and one half times as much capital as the investor in the Dow and the investor in the ASE Index 1. 6 times as much. It is also interesting to projec what would happen were the same performance ratio to continue for another year. At that point the Cumulative Index would be at almost twice the relative level of the Dow and the ASE Index at 2.4 times the same level. Investment results, if the current performance pattern continues, could, indeed, be impressive. Dcw-Jones Industrials (12 00 p. m.) S & P Composite (1200 p. m.) Cumulative Index (4/6/78) AWTrak 765.94 89.93 685.82 ANTHONY W TABELL DELAFIELD, HARVEY, TABELL No stotement or expressIOn of opinion or any other moiler herem contomed IS, or IS 10 be deemed to be, directly or indirectly, on offer or the 50licllollon of on offer 10 buy or sell ony securlly relerred 10 or menlloned The molter presenled merely for Ihe converlence of the subSCriber While we believe the sources of our Informa- tion 10 be reliable, we In no way or guoronlee The accuracy thereof nor 01 the stalements mode herem Any actIOn to be token by the subscriber should be based on hl5 own mvestlgotlon and information Jonney Montgomery SCali, Inc, as a corporal lon, and Its officers or employees, may now have, or moy loter toke, pOSlhons or trades In respect 10 any secuflhes menhoned In Ihls or any future Issue, and such position may be different from any views now or hereafter expressed In IflIS or any other Issve Janney Montgomery Scott, Inc, which IS regiStered With the SEC os on InveSlmenl adVisor, may give adVice 10 Its Inveslment adVisory and othel tUstomers mdependenlly 01 any stetements mode m thiS or In ony other Issve further mlormatlon on ony setUnly menlloned herein IS evolloble on request ——-

.——–'——'– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOC' EXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE April 7, 1978 or. .sto;ks oftheir senlorcounterparts contained In the market averages has by now reached the status common)(nOwleoge-tlira-rJCet prlslngly, were the first to draw attention to this situation, and our readers will be aware that our own comments on the subject have been reiterated ad nauseam. The phenomenon has been so widely noted that all market analysts are now expected to have opinions on the subject, and, not unexpectedly, thos e opinions are divided, ranging from predictions of Its Imminent end to total Inability to find any indication that outperformance by secondaries Is unlikely to continue. We confess our own bias toward the latter view, and we suspect that many of the forecasts of the collapse of secondaries represent wishful thinking on the part of those who have been avidly embracing t he indexing fad of the past couple of years. Indexing, it will be recalled, was based on the rationale that few investors were able to outperform the market averages and that, therefore, a sensible investment policy Involved duplicating the performance of those averages. With large pools of money havmg become invested, admittedly or otherwise, so as to duplicate the averages, it was predictable that the averages would begin to underperform just about everything in sight. Such, or course, has been the cas It is perhaps worth documenting just how dramatic the outperformance of secondary issues has been. The following table shows levels of four market averages at recent dates in the past. Each average has been restated to make its level of September 30, 1973, equivalent to a base of 100. The comparative results are not without interest. 9/30/73 100 DATE Feb. 27, 1976 Oct. 29, 1976 Mar. 31, 1978 DJIA .' 10 2.69 101.88 79.97 S & P 500 91. 96 94.90 82.27 Cum. Index 82.64 80.33 92.00 Amex Index ,,, 97.77 93.52 121.95 As can be seen, the American Stock Exchange Index and our Cumulative Index of all NYSE issues declined a great deal more than the market throughout the downswing of 1973-1974. The Cumulative Index lost more than one half its value and ASE stocks, on the average, showed a drop worse than the one-third fall which took place in the widely-followed indicators. As could be expected, the bounce- back of the broader indicators in the 1974-1976 bull market was likewise more dynamiC. This dynamiC upswing caused the ASE Index, like the Dow, to recover almost all its loss, although, despite a 75 rise, the Cumulative Index failed to post a full recovery. None of the averages did much through the middle part of 1976, but close study can now date the superior performance on the part of secondaries as having begun around November of that year. It is Interesting to note that In the 17 months since November, 1976, the Cumulative Index has outperformed the Dow on a month-to-month basis in 14 of 17 cases and the S & P In 15 of 17. The ASE Index has outperformed both Indicators In 16 of the 17 months. The net result, of course, as the table shows, is that the Investor In both the Dow and the S & P In the fall of 1973 now shows a substantial loss versus a modest loss In the Cumulative Index and an astonishing 22 profit In the average American Stock Exchange Issue. The performance over the past . . 17 months IS even more astounding. OIer that period the Dow and the S & P have dropped by 22 and 14 respectively. Meanwhile, the Cumulative Index has appreciated 14.5 and the Amex Index more than -;- – -'-.- – – – . , ' —- – – – – – – It is interesting to hypothesize four investors who started out with equal amounts of capital at the end of October, 1976, and whose performance duplicate'd each of the four averages. The investor who duplicated the Cumulative Index now possesses almost one and one half times as much capital as the investor in the Dow and the investor in the ASE Index 1. 6 times as much. It is also interesting to projec what would happen were the same performance ratio to continue for another year. At that point the Cumulative Index would be at almost twice the relative level of the Dow and the ASE Index at 2.4 times the same level. Investment results, if the current performance pattern continues, could, indeed, be impressive. Dcw-Jones Industrials (12 00 p. m.) S & P Composite (1200 p. m.) Cumulative Index (4/6/78) AWTrak 765.94 89.93 685.82 ANTHONY W TABELL DELAFIELD, HARVEY, TABELL No stotement or expressIOn of opinion or any other moiler herem contomed IS, or IS 10 be deemed to be, directly or indirectly, on offer or the 50licllollon of on offer 10 buy or sell ony securlly relerred 10 or menlloned The molter presenled merely for Ihe converlence of the subSCriber While we believe the sources of our Informa- tion 10 be reliable, we In no way or guoronlee The accuracy thereof nor 01 the stalements mode herem Any actIOn to be token by the subscriber should be based on hl5 own mvestlgotlon and information Jonney Montgomery SCali, Inc, as a corporal lon, and Its officers or employees, may now have, or moy loter toke, pOSlhons or trades In respect 10 any secuflhes menhoned In Ihls or any future Issue, and such position may be different from any views now or hereafter expressed In IflIS or any other Issve Janney Montgomery Scott, Inc, which IS regiStered With the SEC os on InveSlmenl adVisor, may give adVice 10 Its Inveslment adVisory and othel tUstomers mdependenlly 01 any stetements mode m thiS or In ony other Issve further mlormatlon on ony setUnly menlloned herein IS evolloble on request ——-

TABELL'S MARKET LETTER —– 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCI( eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe April 14, 1978 – Decemb't;-f972r. May,1970 Uctober; -1966.-rulle;-1962. OctobFr, 1953. June, 1949. No, we have not become a calendar freak. The investor will, or should, recognize all of the foregOing dates. They are the dates of the seven major stock market bot- toms that have occured since World War II. What the reader may also notice, in addition, if he is not already aware of it, is a rather interesting periodi;ity. The dates seem, upon examin- ation, to occur approximately four years apart. The phenomenon has not gone unnoticed by students of the stock market. It has given rise to a great deal of discussion of something commonly called the four-year cycle or, as Some techniCians are wont .to call it, the 51-month cycle, since the average bottom-to-bottom length of the cycles ending on the dates above was, indeed, 51 months. When one studies the manifestation a bit further, it turns out that 51 months is an even worse misnomer. But more on this later. Since December, 1974, is a date now receding into history, a number of analysts have played the game of trying to add the next date to the above list. Adding four years, of course, produces December, 1978, and 51 months produces March, 1979. Analysis of the list produces another interesting facet in addition to its cyclic nature. That is the fact that all of the bottoms have occured in the spring, May-June, or the fall, September-December. The above two lines of reasoning have been combined by a number of analysts to produce a forecast of continued market decline with a bottom either in the fall of 1978 or the spring of 1979 We have only one , One thing obviously wrong is the total absence to date of technical signs of a major bottom,- the lack of which this letter has been pointing out consistently since last November. The ob- jection is real, but we will not deal with it here. Let us instead examine whether an imminent or past low is consistent with the pattern of the so-called four-year cycle. Apparently, many students have studied the phenomenon in its post-war manifestation only and, thereby, have come up with the 51-month average length. If we back up to the beginning of the century, however, we find 13 additional cycles. The average length of thes e cycles was 38.4 months, and only one was longer than 47 months. The average length of the 19 past cycles over the entire century has been only 42 months. For the record, December, 1974, was 40 months ago and October,1974, when the S & p 500 made its bottom, was 42 months ago. Moreover, we have been talking so far only about bottoms, since it is from trough to trough that cycles are measured. At the moment both the prior bottom and top are known for the current cycle. They were October-December, 1974 and September-December, 1976. A study of 19 past cycles suggests that they tend to spend a fairly Significant portion of their total length in an expansion phase, generally at least 60.(The early post-war period averaged 80.) If we measure the rising phase of the last cycle from October, 1974 to December 1976, the longest Possible measurement, it consumed 26 months. If those 26 months are to constitute 60 of the total cycle it would call for a total length of just over 43 months. This would be extremely close to the 42-month average experience of the 20th century and would call for a – bottom-inMaY'of this year. figurati0l1-would-call fora-bottom – could already have occured. Spring may be a little late this year, but there is some question as to whether the cyclic pattern really calls for it to be postponed for 6-12 months. DCYN-Jones Industrials (1200 p.m.) S & P Composite (1200 p. m.) Cumulative Index (4/6/78) 786.73 92.08 696.64 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTrak No ,talement or expreSSIon of op'nion or any other matter hereIn tontomed IS, or n to be deemed 10 be, directly or mdHec1ly, on offer or the sollelfaltan of on offer to buy or sell any security referred to or mentIOned The matter IS presented merely for the convellenee of the slibscriber While we the sOlirees of our Informo. tlon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be taken by the subSCriber should be based on hiS own investigation and Informallon Janney Montgomery Scott, Inc, as a corporation, and Ih officers or employees, may now have, or may later take, positions or trades lit respect to any securities mentioned In HilS or Dny future lSue, Dnd such posilion may be different from any views now or hereafter expressed In thiS or ony other Issue Janney Montgomery Scott, Inc, which IS registered wllh the SEC as an Investment adVisor, may give adVice to ItS IfIvestment adVisory and othel customers Independently of any statements mode In thiS or In any other ISsue Further IItformatlon on any security menhoned herein 1 ovolleble on request – -.

TABELL'S MARKET LETTER —– 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCI( eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe April 14, 1978 – Decemb't;-f972r. May,1970 Uctober; -1966.-rulle;-1962. OctobFr, 1953. June, 1949. No, we have not become a calendar freak. The investor will, or should, recognize all of the foregOing dates. They are the dates of the seven major stock market bot- toms that have occured since World War II. What the reader may also notice, in addition, if he is not already aware of it, is a rather interesting periodi;ity. The dates seem, upon examin- ation, to occur approximately four years apart. The phenomenon has not gone unnoticed by students of the stock market. It has given rise to a great deal of discussion of something commonly called the four-year cycle or, as Some techniCians are wont .to call it, the 51-month cycle, since the average bottom-to-bottom length of the cycles ending on the dates above was, indeed, 51 months. When one studies the manifestation a bit further, it turns out that 51 months is an even worse misnomer. But more on this later. Since December, 1974, is a date now receding into history, a number of analysts have played the game of trying to add the next date to the above list. Adding four years, of course, produces December, 1978, and 51 months produces March, 1979. Analysis of the list produces another interesting facet in addition to its cyclic nature. That is the fact that all of the bottoms have occured in the spring, May-June, or the fall, September-December. The above two lines of reasoning have been combined by a number of analysts to produce a forecast of continued market decline with a bottom either in the fall of 1978 or the spring of 1979 We have only one , One thing obviously wrong is the total absence to date of technical signs of a major bottom,- the lack of which this letter has been pointing out consistently since last November. The ob- jection is real, but we will not deal with it here. Let us instead examine whether an imminent or past low is consistent with the pattern of the so-called four-year cycle. Apparently, many students have studied the phenomenon in its post-war manifestation only and, thereby, have come up with the 51-month average length. If we back up to the beginning of the century, however, we find 13 additional cycles. The average length of thes e cycles was 38.4 months, and only one was longer than 47 months. The average length of the 19 past cycles over the entire century has been only 42 months. For the record, December, 1974, was 40 months ago and October,1974, when the S & p 500 made its bottom, was 42 months ago. Moreover, we have been talking so far only about bottoms, since it is from trough to trough that cycles are measured. At the moment both the prior bottom and top are known for the current cycle. They were October-December, 1974 and September-December, 1976. A study of 19 past cycles suggests that they tend to spend a fairly Significant portion of their total length in an expansion phase, generally at least 60.(The early post-war period averaged 80.) If we measure the rising phase of the last cycle from October, 1974 to December 1976, the longest Possible measurement, it consumed 26 months. If those 26 months are to constitute 60 of the total cycle it would call for a total length of just over 43 months. This would be extremely close to the 42-month average experience of the 20th century and would call for a – bottom-inMaY'of this year. figurati0l1-would-call fora-bottom – could already have occured. Spring may be a little late this year, but there is some question as to whether the cyclic pattern really calls for it to be postponed for 6-12 months. DCYN-Jones Industrials (1200 p.m.) S & P Composite (1200 p. m.) Cumulative Index (4/6/78) 786.73 92.08 696.64 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTrak No ,talement or expreSSIon of op'nion or any other matter hereIn tontomed IS, or n to be deemed 10 be, directly or mdHec1ly, on offer or the sollelfaltan of on offer to buy or sell any security referred to or mentIOned The matter IS presented merely for the convellenee of the slibscriber While we the sOlirees of our Informo. tlon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be taken by the subSCriber should be based on hiS own investigation and Informallon Janney Montgomery Scott, Inc, as a corporation, and Ih officers or employees, may now have, or may later take, positions or trades lit respect to any securities mentioned In HilS or Dny future lSue, Dnd such posilion may be different from any views now or hereafter expressed In thiS or ony other Issue Janney Montgomery Scott, Inc, which IS registered wllh the SEC as an Investment adVisor, may give adVice to ItS IfIvestment adVisory and othel customers Independently of any statements mode In thiS or In any other ISsue Further IItformatlon on any security menhoned herein 1 ovolleble 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 21, 1978 We-'-assume-ttlat ani)'' a our Celdersspent thelitstfortnighf on'a desertislan.f. c We will, therefore refrain from wasting space recapitulating what the stock market did last week. A few comments on various aspects thereof, however, might be worthwhile. Volume — A trend reversal with the level of activity seen last week is always an impressive phenomenon. Last week's volume was demonstrably so. There were, after last week's action, those voices which were stoutly echoing the refrain, rally in a bear market. As far as volume statistics are concerned, it Just won't wash. It is our practice to measure volume historically as a percentage of recent activity, and, on that basis, the upside volume seen last week was of the magnitude normally associated with major reversals. To give an appreciation of this magnitude, it is only necessary to note that the only day in the past 30 years on which relative volume substantially exceeded that of last Friday and Monday was the day of the reversal rally in May, 1962. Breadth — On the other hand, the number of stocks advancing during the rally phase was undeniably disappointing. True reversal rallies are generally accompanied by an extreme overbought condition in breadth terms. Such a condition may yet occur. It has not occurred to date. The Prelude — Another characteristic which kept last week from looking like a bottom was that which went before. Bear market bottoms in the past have been preceded by conditions of panic selling. The past two weeks were preceded by torpor. It is somehow hard to envision a volume climax suddenly emerging from the lackadaisical atmosphere of March, 1978. A Rationale — It is, it seems to us, possible to explain the latter two disappointing aspects concurrently. Admittedly, an insufficient number of stocks advanced on the rally. Yet, we must 1ast week's action,.large unlike the,averages, Ing rather than declining. It seems unrealistic to expect that segment of the market which has never been in a bear phase to exhibit normal climactic action on a reversal. Weak breadth and the lack of an oversold condition suggest that It has not, indeed, done so. On the other hand, the area which has incontrovertibly been in a bear market, the high-capitalization, high-quality stocks in the averages, exhibited last week copious signs of reversal action — price washouts followed by upside reversal on record volume. A Change In Leadership — Last week was notably a phenomenon of the last becoming the first – the quality laggards leading the upside parade while secondary Issues languished. Could this signify a renaissance for high-grade stocks It could, perhaps, but we think the verdict is premature. Leader- ship by secondaries, a phenomenon which has characterized the market for a year and a half, will not be permanently reversed by one week's action, however dynamic that action may be. It is worthy of note that our Cumulative Index of all NYSE issues scored a three-and-one-half-year bull- market high last Monday. New Lows — If we are to accept last week's action as a reversal phenomenon, does this acceptance indicate that the lows for the averages have already been seen Not necessarily. The double-bottom phenomenon on a major reversal is a not-uncommon one. Indeed, stock market history is rife with examples of the averages moving to new lows after volume reversals, viz., May-June, 1962, August-October, 1966, and (in the Dow at least) October-December, 1974. Indeed, almost Invariably, in the case of true reversals, there has existed a subsequent test following the initial rally which involved approaching new lows if not actually achieving them. – .. We thInk,- in sum,–that-last week's 'actionCan hardly be-said to he-without-significance–AttemptS – – simply to pass It off as just another interruption in the past 16 months' dreary fall are not, it seems to us, consistent with the historical record. Dow-Jones Industrials (1200 p. m.) S & P Composite (12 00 p.m.) Cumulative Index (4/21/78) 814.19 94.43 662.17 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTrak No statement or expreSSion of op'OIon or any other motter herein contolned IS, or IS to be deemed to be, directly or on offer or the sohcltotlon 01 an offer to !xIy or sell any seclJrlly referred 10 or mentioned The mOiler presented merely for the convellence of the subscriber While believe the sources of our Informa- tion 10 be reliable, we In no way represent or guorantee the accuracy thereof nor of ihe statements mude herein Any action to be by the subscriber should be based on hiS own inliestlgatlon and mformatlon Janney Montgomery Seoll, Inc, as a corporation, and ,ts officers or employees, may now have, or may lofer toke, POSitions or trades In respect to ony secvfltles mentioned In thiS or ony future Issue, and such POSition may be different from any views now or hereofter exprened In thiS or any other Issue Janney Montgomery Seotl, Inc, which IS registered wuh the SEC as on Investment adVisor, may give adVice to Its Investment adVisory and other customers Independently of any stotements mode m thiS or m ony other Issue further information on any seamty 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 April 21, 1978 We-'-assume-ttlat ani)'' a our Celdersspent thelitstfortnighf on'a desertislan.f. c We will, therefore refrain from wasting space recapitulating what the stock market did last week. A few comments on various aspects thereof, however, might be worthwhile. Volume — A trend reversal with the level of activity seen last week is always an impressive phenomenon. Last week's volume was demonstrably so. There were, after last week's action, those voices which were stoutly echoing the refrain, rally in a bear market. As far as volume statistics are concerned, it Just won't wash. It is our practice to measure volume historically as a percentage of recent activity, and, on that basis, the upside volume seen last week was of the magnitude normally associated with major reversals. To give an appreciation of this magnitude, it is only necessary to note that the only day in the past 30 years on which relative volume substantially exceeded that of last Friday and Monday was the day of the reversal rally in May, 1962. Breadth — On the other hand, the number of stocks advancing during the rally phase was undeniably disappointing. True reversal rallies are generally accompanied by an extreme overbought condition in breadth terms. Such a condition may yet occur. It has not occurred to date. The Prelude — Another characteristic which kept last week from looking like a bottom was that which went before. Bear market bottoms in the past have been preceded by conditions of panic selling. The past two weeks were preceded by torpor. It is somehow hard to envision a volume climax suddenly emerging from the lackadaisical atmosphere of March, 1978. A Rationale — It is, it seems to us, possible to explain the latter two disappointing aspects concurrently. Admittedly, an insufficient number of stocks advanced on the rally. Yet, we must 1ast week's action,.large unlike the,averages, Ing rather than declining. It seems unrealistic to expect that segment of the market which has never been in a bear phase to exhibit normal climactic action on a reversal. Weak breadth and the lack of an oversold condition suggest that It has not, indeed, done so. On the other hand, the area which has incontrovertibly been in a bear market, the high-capitalization, high-quality stocks in the averages, exhibited last week copious signs of reversal action — price washouts followed by upside reversal on record volume. A Change In Leadership — Last week was notably a phenomenon of the last becoming the first – the quality laggards leading the upside parade while secondary Issues languished. Could this signify a renaissance for high-grade stocks It could, perhaps, but we think the verdict is premature. Leader- ship by secondaries, a phenomenon which has characterized the market for a year and a half, will not be permanently reversed by one week's action, however dynamic that action may be. It is worthy of note that our Cumulative Index of all NYSE issues scored a three-and-one-half-year bull- market high last Monday. New Lows — If we are to accept last week's action as a reversal phenomenon, does this acceptance indicate that the lows for the averages have already been seen Not necessarily. The double-bottom phenomenon on a major reversal is a not-uncommon one. Indeed, stock market history is rife with examples of the averages moving to new lows after volume reversals, viz., May-June, 1962, August-October, 1966, and (in the Dow at least) October-December, 1974. Indeed, almost Invariably, in the case of true reversals, there has existed a subsequent test following the initial rally which involved approaching new lows if not actually achieving them. – .. We thInk,- in sum,–that-last week's 'actionCan hardly be-said to he-without-significance–AttemptS – – simply to pass It off as just another interruption in the past 16 months' dreary fall are not, it seems to us, consistent with the historical record. Dow-Jones Industrials (1200 p. m.) S & P Composite (12 00 p.m.) Cumulative Index (4/21/78) 814.19 94.43 662.17 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTrak No statement or expreSSion of op'OIon or any other motter herein contolned IS, or IS to be deemed to be, directly or on offer or the sohcltotlon 01 an offer to !xIy or sell any seclJrlly referred 10 or mentioned The mOiler presented merely for the convellence of the subscriber While believe the sources of our Informa- tion 10 be reliable, we In no way represent or guorantee the accuracy thereof nor of ihe statements mude herein Any action to be by the subscriber should be based on hiS own inliestlgatlon and mformatlon Janney Montgomery Seoll, Inc, as a corporation, and ,ts officers or employees, may now have, or may lofer toke, POSitions or trades In respect to ony secvfltles mentioned In thiS or ony future Issue, and such POSition may be different from any views now or hereofter exprened In thiS or any other Issue Janney Montgomery Seotl, Inc, which IS registered wuh the SEC as on Investment adVisor, may give adVice to Its Investment adVisory and other customers Independently of any stotements mode m thiS or m ony other Issue further information on any seamty mentioned herem IS available on request

— — —- TABELL'S MARKET , LETTER ,I L -, I i 1 .JI 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF /h711le!, u/(;'n/p'omCl' Y'cott fnC. MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK excH ….NGE April 28. 1978 ,. A J.0ucEing ,!t. rl'Ila.1!!,s '..!llJlallY one of the most unpredictable of all phenomena, there are aspects thereof which occur with refreshing …. repetition and regularity. True, the stock market cycle is largely irregular in terms of time, in contrast to the year and the seasons, which have fixed,predictable lengths. Nonetheless, after all markets which have declined deeply over a protracted period of time and then rallied sharply, as has been the case with the stock market over the last two months, certain plants have sprouted as predictably as the magnolia blossoms in Princeton, New Jersey, did last week. There is, in other words, nothing like a market advance after a long decline to bring forth the cry, Rally in a Bear Market. It is not our intention to appear overly avuncular when we note that, having been professionally involved with no fewer than seven bear markets over our own career, we have heard the phrase enough times now so that it has a refreshingly familiar ring. There are, you see, people who believe in rallies in bear markets, just as there are those who believe in astrology and the tooth fairy. The dreary fact, as we have pOinted out in the past, is that the bear-market rally, while not quite as mythical a beast as the unicorn,remains one which has precious little grounding in historical fact. Let us recite once more the dull statistical litany. The late bear market made its last low on February 28 at 742.12 on the Dow Jones Industrial Average. That average had advanced through Wednesday to 836.97, a rise of 12.78 over a period of 41 trading days. Let it be noted that in the post-World-War-II era, through 1973, there were no bear market rallies achieving a 12.78 magnitude. Now the market offers exceptions to everything, and the exceptions to the above are convenient to those with short memories. For indeed, the last known-to-be-completed bear market, that of 1973- 1974, had . 87,,a dvance ..0v,erA 6. tra days in August-October, 1973 and a 13.11, 67-day advance in December, 1973-March, 1974. Indeed, both these advances displayed new volume peaks, although record-setting volume equivalent to the current case was lacking. It seems to us that these two exceptions provide rather scant underpinning for the myth of a supposedly common occurance. We think, in other words, that over the past two weeks something of meaningful signific,ance, not a so-called bear-market rally, took place. What took place, in a Single phrase, we think, is a major reversal in those stocks which were in a pOSition to enjoy major reversal. That rather torturous phrase is unfortunately the best one we can come up with. For a stock to be in a position to enjoy a major upside reversal. it must first have gone down. As of two months ago, despite a 27 decline in the averages, the stock market woods were full of stocks that had not gone down at all and, indeed, in many cases had moved rather sharply up. It seems unrealistic to us to expect that large subset of issues to have displayed the behavior associated with bear-market bottoms. As we noted last week, it is our view that a number of the characteristics of the present rally,including the decidedly substandard breadth of leadership, can be directly attributed to this particular factor. While we think the available evidence pOints strongly in the direction of a bottom, we should, at the same time,not be unaware of a number of problems some of which we pointed out a week ago. We suggested then, for example, that prior volume reversals have often seen a subsequent test of the lows made and indeed, in some cases, penetration of those lows, although generally by a modest amount. (It is generally on th e occasion of such tests that the bear-market-rally cry becomes deafening.) It should also be pOinted out, however, that there have been past bottoms which have not involved such tests. We would 'hate to hang investment policy on the probabillty-of-one's' occuring'this . – .- – The second difficulty that should be noted Is that while bottoms are often periods of shifting leadership, pinpointing of such shifts around the time of the bottom is a process that is historically fraught with difficulty. Base formations take time to develop. It is only by observing the relative speed of this process in Individual Issues that one can attempt to gauge where the market leadership may, in the future, become concentrated. Despite these uncertainties, we think it fatuous to try to explain the past fortnight's almost-one- hundred pOint advance in terms of a largely mythical phenomenon. The advance points, we think, to a changed stock-market climate, the outlines of which will become clearer with time. Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (4/27/78) 826.84 95.81 718.63 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stotement or of opInion or any other matter herem contolned IS, or IS 10 be deemed 10 be, directly or md.rec1ly, on offer or the soliCitation of on offer to buy or sell any security rflferred 10 or mentioned The motter IS presented merely for the canvellencE. of the While -Ne believe the of our mforma- tlon to be rfliloble, we m no way represent or guarantee the accuracy thereaf nor of the staements m(lde herelfl Any action 10 be taken by the subSCriber should be based on hiS own Investigation and IfIformatlon Janney Montgomery Inc, os 0 corporation, ond Its offICers or employees, moy now have, or may loter toke, positions or trades In respect loony seCUrities mentioned In thiS or ony future Issue, and such pOIIIOn may be different from any views now or hereafter expressed In thiS or cny other Issue Janney Montgomery Scott, Inc. which IS registered With the SEC as an Investment adVisor, may give adVice to lIS Investment adVISOry ond other Independently of any statements mode In thiS or In any oher Issue further Informohon on any security mentioned herem IS aVailable on request

— — —- TABELL'S MARKET , LETTER ,I L -, I i 1 .JI 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF /h711le!, u/(;'n/p'omCl' Y'cott fnC. MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK excH ….NGE April 28. 1978 ,. A J.0ucEing ,!t. rl'Ila.1!!,s '..!llJlallY one of the most unpredictable of all phenomena, there are aspects thereof which occur with refreshing …. repetition and regularity. True, the stock market cycle is largely irregular in terms of time, in contrast to the year and the seasons, which have fixed,predictable lengths. Nonetheless, after all markets which have declined deeply over a protracted period of time and then rallied sharply, as has been the case with the stock market over the last two months, certain plants have sprouted as predictably as the magnolia blossoms in Princeton, New Jersey, did last week. There is, in other words, nothing like a market advance after a long decline to bring forth the cry, Rally in a Bear Market. It is not our intention to appear overly avuncular when we note that, having been professionally involved with no fewer than seven bear markets over our own career, we have heard the phrase enough times now so that it has a refreshingly familiar ring. There are, you see, people who believe in rallies in bear markets, just as there are those who believe in astrology and the tooth fairy. The dreary fact, as we have pOinted out in the past, is that the bear-market rally, while not quite as mythical a beast as the unicorn,remains one which has precious little grounding in historical fact. Let us recite once more the dull statistical litany. The late bear market made its last low on February 28 at 742.12 on the Dow Jones Industrial Average. That average had advanced through Wednesday to 836.97, a rise of 12.78 over a period of 41 trading days. Let it be noted that in the post-World-War-II era, through 1973, there were no bear market rallies achieving a 12.78 magnitude. Now the market offers exceptions to everything, and the exceptions to the above are convenient to those with short memories. For indeed, the last known-to-be-completed bear market, that of 1973- 1974, had . 87,,a dvance ..0v,erA 6. tra days in August-October, 1973 and a 13.11, 67-day advance in December, 1973-March, 1974. Indeed, both these advances displayed new volume peaks, although record-setting volume equivalent to the current case was lacking. It seems to us that these two exceptions provide rather scant underpinning for the myth of a supposedly common occurance. We think, in other words, that over the past two weeks something of meaningful signific,ance, not a so-called bear-market rally, took place. What took place, in a Single phrase, we think, is a major reversal in those stocks which were in a pOSition to enjoy major reversal. That rather torturous phrase is unfortunately the best one we can come up with. For a stock to be in a position to enjoy a major upside reversal. it must first have gone down. As of two months ago, despite a 27 decline in the averages, the stock market woods were full of stocks that had not gone down at all and, indeed, in many cases had moved rather sharply up. It seems unrealistic to us to expect that large subset of issues to have displayed the behavior associated with bear-market bottoms. As we noted last week, it is our view that a number of the characteristics of the present rally,including the decidedly substandard breadth of leadership, can be directly attributed to this particular factor. While we think the available evidence pOints strongly in the direction of a bottom, we should, at the same time,not be unaware of a number of problems some of which we pointed out a week ago. We suggested then, for example, that prior volume reversals have often seen a subsequent test of the lows made and indeed, in some cases, penetration of those lows, although generally by a modest amount. (It is generally on th e occasion of such tests that the bear-market-rally cry becomes deafening.) It should also be pOinted out, however, that there have been past bottoms which have not involved such tests. We would 'hate to hang investment policy on the probabillty-of-one's' occuring'this . – .- – The second difficulty that should be noted Is that while bottoms are often periods of shifting leadership, pinpointing of such shifts around the time of the bottom is a process that is historically fraught with difficulty. Base formations take time to develop. It is only by observing the relative speed of this process in Individual Issues that one can attempt to gauge where the market leadership may, in the future, become concentrated. Despite these uncertainties, we think it fatuous to try to explain the past fortnight's almost-one- hundred pOint advance in terms of a largely mythical phenomenon. The advance points, we think, to a changed stock-market climate, the outlines of which will become clearer with time. Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (4/27/78) 826.84 95.81 718.63 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stotement or of opInion or any other matter herem contolned IS, or IS 10 be deemed 10 be, directly or md.rec1ly, on offer or the soliCitation of on offer to buy or sell any security rflferred 10 or mentioned The motter IS presented merely for the canvellencE. of the While -Ne believe the of our mforma- tlon to be rfliloble, we m no way represent or guarantee the accuracy thereaf nor of the staements m(lde herelfl Any action 10 be taken by the subSCriber should be based on hiS own Investigation and IfIformatlon Janney Montgomery Inc, os 0 corporation, ond Its offICers or employees, moy now have, or may loter toke, positions or trades In respect loony seCUrities mentioned In thiS or ony future Issue, and such pOIIIOn may be different from any views now or hereafter expressed In thiS or cny other Issue Janney Montgomery Scott, Inc. which IS registered With the SEC as an Investment adVisor, may give adVice to lIS Investment adVISOry ond other Independently of any statements mode In thiS or In any oher Issue further Informohon on any security mentioned herem IS aVailable on request