TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC. MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 9249660 May 25, 1984 We have held, for some time, to a market scenario including an important low in the corrective process, which began last Fall, emerging in the May-June period. The weakness necessary to that scenario continu!,dmuring the-past- weekthe only difficulty-oeing-t1fat-it ',emerged in'a 'i'ashion- which has, to date, provided very little confidence regarding its imminent end. Having held for almost three month above the 1130 level, the Dow reached a new low on Monday and cO'1tinued to post new bottoms through all of the first four sessions of this week. By 'Thursday it was down 7.01 from a May' 2 high of 1186.56. The major problem, from the technician's point of view was, in essence, the utter torpor of the decline. On 10 of the 16 trading days since the drop started, volume was below the 90-million share level. Declines exceeded advances on 11 of the 16 days, but, even on the worst days, the number of declining issues tended to be in the 1000-1200 range, rather than in the area of 1500 and upwards which might connote a panic rush for the exits , We have, in short, the sort of market that is falling of its own weight — from a lack of bids rather than aggressive selling. The problem with this sort of action, historically, is that it can go on for quite some period of time, indeed, until such time as climactic actior clears the air. Meanwhile, the process was approaching a fairly crucial stage. That crucial stage, inCfdentaIJr was not the 1100 level on the Dow, with which that index was flirting at week's end. Our regular readers are aware that we do not share the common journalistic infatuation with round numbers, and we do not think 1100 as such has any particular significance. What was significant was the approach to those limits which have historically catagorized an intermediate-term decline and have tended to differentiate such a decline from a full-scale bear market. At Thursday's close, the Dow was down O'l'er a 123-tIlsding-day 'period 14.27 from its high of 1287.20, scored on November 29, 1983 following a 15-month, 65 advance. There have been, as we have .been pointing out in this space, many intermediate-term declines within the context of past bull markets. Indeed, as we have noted, there has not been a bull market in the modern era that has not included, -usually-in-its mature-stages,,-such-a-decline.,-.Since-,the45-months-fromAugust-,-l982-to-Novembcr.19831–1 had not witnessed anything resem1ting such a phenomenon, the weakness of January-February appeared to fit comfortably into this context. The trouble is that, as we approach the range of 14 in amplitude and 120 days of decline, the historical precedent begins to get thin. The bulk of past intermediateterm drops have been in the 10-12 range. We do have the weakness of January-October, 1960, in whic the Dow dropped 17.35 over a period of 205 trading days. Between April, 1971 and November, 1971 there occurred a decline of 16 on the Dow lasting for 146 trading days. We are, however, at the mo- ment, pushing against this sort of threshhold at a time when the market shows no immediate desire to reverse its downtrend. If we are talking full-scale bear market, the historic threshhold used to define such a phenomenon is 20, which would take us to somewheres around the 1029 level on the Dow. It does not further increase confidence to realize that most recent bear markets have comfortably exceeded that threshhold. On the other hand, we must confess that we still find it difficult to accept the full-scale bear market theory. It requires us to believe in the onset of such a phenomenon after a 15-month advance, something that has not occurred since 1938, and which, historically, does not tend to occur (although there have been exceptions) during the course of an election year. More important is our own reading of the existing distributional patterns and, while there is no doubt that they exist, they do not to us suggest a magnitude comparable to that which proceeded past cycle downswings. It has been furthermore, a characteristic of recent markets that patterns in individual areas tend to vary. The Over-the Counter market, for example, began to be taken apart almost a year ago, and, although the OTC average joined other indicators in moving to new lows this week, it has recently been performing no worse than the widely followed averages and there is ample evidence of basebuilding in this area. Energy, an area worth noting since it constitutes some 20 of the major averages, has been immune to the decline thus far and, .indeed, the Standard & Poor's Oil Composite Index reached a new two-year high just a week ago. The imponderable, of course, is the development which touched off the short-term weakness, the possibility of an impending banking crisis. However, recent action might even make us feel that we have learned something about the handling of such crises. As noted above, the market in the past three weeks was down some 7. The last wave of major bank failures produced the biggest bear market in history. We think, in sum, the decline has reached a stage where it is necessary to await the next rally attempt — and one will occur, if only on a short-term basis — before making a final decision on the cycle picture. However disappointing recent action may be, it is still possible that it is part of a process other than a cycle bear market. Dow-Jones Industrials (12 00 p. m.) 1109.30 S & P Composite (12 00 p. m. ) 151.60 Cumulative Index (5/24/84) 1852.50 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or expression of opinion or any other matter herem contained IS, Of IS to be deemed (0 be, directly or Indirectly, an offer or the sohcllallon of an offer to buyorsell any sec\wty referred to or mentioned The mailer IS presented merely for the conveOlence of the subSCriber While we beheve the sources of our mformatton \0 be rehable, we In no way represent or guarantee the accuracy thereof nor Of the statements made herein Any action to be taken by the subscriber Should be based on hiS own Investigation and tn/ormatton Delaflekl, Harvey, Tabell Inc, as a corporatIOn and ItS ofhcers or employees may now have, or may later take, positions or trades 10 respect to any securities mentioned In thiS or any fulure Issue, and such position may be different from any views nowor hereafter expressed 10 thIS or any other Issue Delafteld, Harvey, Taba!! Inc, which IS registered With the SECas an Investment adVisor, may give advice to Its investment adVISOry and other customers Independently 01 any statements made In thiS or In any other ISSue Further tnformatlon on any secuflly mentioned herem IS available on reQuest

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC , – – (609) 924-9660 June I, 1984 Without a doubt, the most notable feature of last week's market actIOn was Wednesday's trading. The market had spent l\'lay in freefall. plummetmg from an 1186.56 close on May 2, to 1101. 24 on Tuesday. Of the 19 tradmg sessions Involved. the Dow closed lower In 13 of them. and 1;;4hadse(enmore'i1!lt 1 rally—–iss ues–than advancin gonesvrmTghout….ttre-enttIe-process' VO!uriH.'!–contiIfuoo '' million shares on Tuesday. and what attempts there had been were pitiful excuses. Markets can smk of their own weIght and thIS sort of downsIde dullness, experIence tells us. can go on for agonIzoingly long periods of time. Wednesday, however, provided a contrast. Volume expanded. to 105 million shares. More important, however, was the extent of the fluctuations which took place. Off more than 13 pomts at 130 p.m . the Dow moved ahead to an ll-pomt gain at three-o'clock. and then retreated to close up barely a point on the day. Such wide swings back and forth are. historically. generally a precondItIOn for a market at- tempting to post a significant trend reversal. This can be expressed mathematically by an intra-day change mdex WhICh is computed for each day sImply by addmg. wIthout regard to sIgn, the six hourly changes in the Dow and then subtracting, agrun without the sign, the daily change. The result IS then expressed as a percentage of the Dow it- self. The number obviously tends to be smaller where the market proceeds in one direchon for the en- tire day and larger where, as on Wednesday, there are wIde swmgs withm the day. Wednesday's figure was 4.22. The chart below shows the weekly high and low for the DJIA for the past 10 years and. on the lower bars, the week's high for the mtra-day change index. Arrows underneath the Dow mdicate those weeks where the high was above 3.00 . .. O JONeS louorRIAc qVeqGE INTRA-DRY CHANGE INOeAIWeeKLY HIGH) , I I 'W, I As the chart shows, action such as Wednesday's has had a tendency to occur around fairly important trend reversals. There was a cluster of occurrences around the 1974 low, and at least one such readmg at the Important intermedIate-term bottoms. 1978, 1979, and early 1980. A level of 4.81 was attmned on August 18, 1982. It should be noted that hIgh readmgs are not 10 themselves bullish or bearIsh. but rather tend to suggest a reversal or slackening of a past trend. Thus followmg rising markets. 1976 nnd 1978 nre ex- amples. hIgh levels preceeded fairly lengthy consolidatIons. , As with any other indicator. the technique is less than perfect. Premature sIgnals occured in early 1974, and, most recently. a reading of Just over 3.00 occured in February thIS year. Nonetheless. n hIgh level does, as noted above, mdicate at least the preconditions for a reversal attempt In thIS context. Wednesday's wild action may be seen as encouraging. Dow-Jones Industrials (12' 00 p. m.) S & P Composite (12 00 pm) Cumulative Index (5/31184) 1116.27 151.51 1845.43 ANTHONY IV. TAB ELL DELAFIELD. HARVEY, TABELL INC. No statement or expressIon or opmion or any other matter herem contained IS, or IS to be deemed to be, directly or mdirectly, an offer or the soliCitation of an offer to buy or sell any security referred to or mentIoned The mailer is presented merely lor the convemence 01 the subscrIber While we bellee the sources of our Inrormatlon 10 be reltable, we In no way represent or guarantee the accuracy thereof nOf olthe statements made herem Any acllon to be taken by the subscnber should be based on hiS own Inestlgatlon and information Delafield, Harvey, Tabell Inc, as a corporalton and ItS ofllcers or employees, may now hae, or may later take, posItIons or trades In respect to any secufll1es mentioned In thiS or any future issue, and such posltlon may be dilierent from any Iews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabell Inc, which IS registered With the SEC as an Investment advisor, may give adVICe to Its Investment adviSOry and other customers mdependenlly of any statements made In this 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 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 June 8. 1984 We noted last week that the market's behavior on May 30 was consistent with a reversal at- temQ,t,and!1,Ub.!l!lH uentactiQnhas .'1Ot. b.e.incongruent -l,tlf,t,l,,.coe .Dowmovedup .promptly …..,. to a level 'just under the '1130-1180 area. from which it had broken'down'in early May. Predictably. it stalled at that point. but spent most of the week in a continued attack on that level. Ability to move deeply into the supply area would have to be construed as bullish. Our feeling throughout the year has been that a bottom attempt would be made in early sum- mer. Given our orientation, this feeling has been based largely on technical factors. but we think it is also supported by elementary fundamentals. The following table outlines earnings data for the 30 Dow stocks. including their consensus estimated earnings for 1984 and actual results for the 12 months ended March and for the year 1983. PIE ratios. based on June 6 prices. are also given for the latest two periods. ' ESTIMATED TWELVE MONTHS YEAR STOet. —————- 1llCd Corp (11 lJmlnlJm Co AlTier Hli,ellC2f1 Br3nds ColIllerlC3n C2f1 jln;J It.an EPI'I2'5S .l1'lCrlt..311 Tcl&Tel J'ethlehem St.l !!'J f'ont f l; t !Ildn I\odalo' ,on Co rF IJf'rle 3 I-t-ec o FULL YEAR 1984 ————– PRICE PIE 6/6/83 EAF.NS RA TI 0 —— —— —— 50.81 5.29 9,61 34.75 5.13 6.77 55.88 7.67 7.28 44.00 4,80 9.17 8.00 .80 10OO 15.13 1.57 9.63 0.b3 !.70 7.64 47.75 6.21 7.69 t.6.38 6.03 11.01 40.10 6.25 6.48 53.25 5.14 10.36' ENDED MARCH 1984 —————f'/E –EARNS RTIO —— — .. 0,44 115.18 3.42 10.16 6.95 8.04 3.53 1.46 75 10.J 8 4.36 3.47 -0.06 0.00 5.40 8.84 4.06 16.35 6.32 6 .41 4.59 11.60 1983 E.RNS -0.36 2.03 6.76 3.4.' 3,41 C 03 -8.77 4. l) 3.11 5.79 5.39 G(i,'ne'I'al Ioods b('neI'al Motor's rnDofJ'ea r 1 re L t d! I I ( . O I- M I rl t 1 Har/ester 53.50 64.50 25.00 11.00 105.75 6.50 6.67 17.05 4.25 0.36 10.58 -1.51 8.02 3.78 5.88 30.56 10.00 0.00 6.10 14.87 3.25 -27 9.3Y -8.56 8.77 4.34 7.69 0.00 11 ,o 0.00 . 'I 11.84 2.71 -2.78 9.04 -11.56 I rd, 1 'a f'-.2 T' tlpr,r C IflC 50.13 89.5 5.64 8.89 6.78 13.16 4 -1'-) ,.I … 6.25 11.60 14.8 4. /.. 1 ''.10 f1l rlflo''O ta Mn!'! Ctwl-no. I I I I flC' –, roc. t,.r; T' & G.Jmble 76.50 34.,.,3 52.00 6.80 4.42 5.36 11.25 7.83 9.70 5.8l 2.95 5.34 13. 1,;) 11.7'l 9.74 …C ''-', .2. 18 5.33 tSlB I'S Roebucy d 011 of Cel Tf'acu Tnt. !Jr, on CiJr!..1lde 'JS Steed 1.1111 t ed rccrHlolo 31.13 37.50 34.63 54.13 26.88 6'1.63 4.56 5 .I-)' 5.24 6.84 4.93 8.84 6.83 7. t 3 6.61 7.91 5.45 7.31 3.93 '1.84 1.81 1.95 -9.33 8.23 7.92 7.75 7.20 27.7t 0.00 7.85 3.80 .). 65 4.80 115 -11.99 7.91 I,'- l..1-lshol.lie El JfJol \-10 r'th F W 44.75 35.13 3.05 14.,7 'L45 7.89 .,5.27 3.81 8.49 9 ')') 5.08 3.72 I!.I I A 1133.83 136.65 8.30 87.38 1.9 72.4; Although the Dow is now at a rather expensive 13 times its most recent earnings. the 1984 consensus estimate ca11s for an 88 increase over 1983. The average is now, therefore, at only 8.3 times those earnings. Estimated 1984 results are close to the all-time record. set.. in the third quarter of 1979. Now it must be admitted that, at precisely the time that record was being achieved, the Dow multiple was around 6.. and the Average sold in the 800's. Equally low multiples prevaIled at the lows of 1974 and. even further back. 111 1949. It continues to be our belief. however. that the 1982-83 move to new a11- time highs ushered in a new secular trend as far as prices were concerned. We suspect this is also true for investor confidence, as expressed by P IE ratios. We feel, therefore, that the current level appears reasonable and would not expect a third test of 1974-1979 PIE levels. AWTrs Dow-Jones Industrials (12 00 p. m.) 1128.23 S & P Composite (12 00 p.m.) 154.80 Cumulative Index (6/7/84) 1898.08 ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. No statement or expression of opln!on or any other maHer herein contained rs, 'or IS to be deemed to be directly or Indlrcclly, an offer or the solicllallon of an oHer to buy orsel! any SCC\.Irlty relerred to or mentioned The ma1ter Is presented meroty for the convenience of the subscriber While we believe the sourCes of our information to be reliable we to no way represent or guarantee the accuracy thereof nor of the statements made herein Any aclron to be taen by the subscnbe' should be based on hiS own investigation and Information Oelafmld, HaNey, Taben Inc, as a corporation and Its officers or employees, may now have, or nlay later talo;e, poSitions or trades In respect to any secufilies mentioned In thiS or any future Issue, and such position may be dillerent from any VieWS nowor hereafter eJlpressed In thiS or any other Issue Delafield HaNey Tabell Inc, whiCh IS reglstercdwlth the SEC as an mvestment advisor, may give advice lOlls Investment adVISOry and other customers Independentll 01 any statements made In thIS or In any olher Issue Further information on any securrty mentioned herein IS available on reQlJest

,I TABELL9 S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924,9660 – June 15, 1984 – ,The problemwithlast.week's,.market.action .whichincludeda newclosing, but not. an -,I intra-day, low for the Dow, was that it was utterly conventional'. -In'late Aprii-early May; some market indicators had broken out of their February-May trading ranges on the upside. Breakouts can be either real or false (were they all real the technician's life would be too easy), and a false breakout can generally be detected by an almost immediate reversal. Such was the case in May, when the market reacted sharply. sinking back into its trading range and proceeding almost direct- ly to and through the bottom of that range. Had that breakout been equally false, one might have expected an immediate push back into the 1130-1180 area for the DJIA. Instead, following its re- versal of two weeks ago, the Average moved pI'a!isely to the lower end of the overhead supply and was immediately repulsed, leading to this week's new bottom. The suggestion, unfortunately, is that the breakout is, in fact, real and that a probe for yet lower support levels is now in progress. The action of the averages, by itself, of course, cannot tell the whole story. An in- depth analysis of the last year's price action of 1149 NYSE-listed issues, which we conducted this week. suggests that there are at least some areas of passable market action. (It should be noted that all of the comments below reflect prices as of Wednesday, prior to Thursday's 12-point break.) The Dow, at Wednesday's close, was down 13.7 from its November high and the S & P off 11. 88. As might be expected, however, individual stocks, more volatile than the average, generally showed a worse performance. Measured from actual high to actual low, the average de- cline for the 1149 stocks under survey was 36.8. Through Wednesday's close only 238 or 20.7 of all issues had declined less than the Dow and 184 or 16 had dropped less than the S & P. However, when one looks at the amounts by which individual stocks have been able to recover from their respective declines the prospect becomes a bit brighter. The Dow dropped from 1287.20 in November to a May 29 low of 1101. 24 for an 185. , ,decline. As of Wenprln, H naa ,,,,,uv,,,,,u . 2. p,!nrs or ;';,' 'Ii 01 lIS wral lOSS. Tne,. t' naa irO 172.65 to 150.29, a 22.36-point !all. The recovery was 1.84 points, or 8.2 of the tot-a1 loss. By contrast, the average stock of the 1149 issues we studied had, at Wednesday's close, recovered 25. 9 of its total loss from high to low. 181 stocks, or some 16 of all issues, had re- covered more than half of their loss and 50 of the 1149 stocks had recovered at least 20 of their total decline. The rotation of the dates of individual lows was also interesting. The averages, it will be recalled, made their first thrust at a bottom in late February when the Dow reached 1134.21 and the S & P 154.31. They held that low for a two-month period before reaching new nadirs in late May, at 1101. 24 and 150.29 respectively. At that point the Dow was 2.9 below its prior low and the S & P, 2.6. By contrast 414 individual issues had, as of Wednesday's close, held above their lows made through February. 137 issues, indeed. have managed to move totally against the market and have not posted new lows at all since last December. An examination such as the above generally detects areas of exceptional general relative strength, and it is interesting to examine the list of those stocks which have held above their February lows and which have posted exceptionally large recoveries from their 1983-1984 declines. Two of the standout areas appear to be Food and Energy. Fourteen of the 20 issues in the S & P Food Index have held above their February lows, as have the majority of issues in the Oil and Oil , Well Equipment Groups. Other standouts include Hospital Management Companies, Natural Gas, and Broadcasting. A fair number of the beleaguered Brokerage issues have managed to hold their February lows, although recovery has been small. The apparent conclusion from all of this is that, despite the notably poor action of the averages, a rotating bottom attempt may, in fact, be taking-place. As,this action continues, it will be worthwhile to watch those issues which can continue to hold above their bottoms Of late February. Such stocks have. in the past, tended to be leaders on the upside when the general market finally proved able to reverse itself. AWT rs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (12 00 p.m.) S & P Composite (1200 p.m.) Cumulative Index (6/14/84) 1096.84 149.77 1865.23 No statement or expression of opinion or any other matter hmeln Contained IS or IS to be deemed 10 be, directly or indirectly, an oller or the solict1atton of an offer to buyar sell any security referred to or mentioned The mailer IS presented merely lor the convenience of the subscnber While we believe the sources 01 our Information to be reliable we In no way represent or guarantee the accuracy thereof nor 01 the statements made herem Any action to be taen by the subSCriber should be based on his own Invesllgatlon and Information Delafield. Harvey, Taben Inc, as a corporation and lIs officers or employees, may now have, or may laler take, POSitions or trades In resPect to any securities mentioned In thiS or any future Issue, and such position may be olfferenllrom any views nOWOI hereafter eXPlessed In thiS or any other Issue Delafield Harvey.labell Inc. which IS registered with the SEC as an investment adVisor. may give aovlce to Its Investment advISOry and other customers IndependenUy 01 any statements made In thiS or In any other ISSue Further InfOrmal Ion on any security mentioned herein IS ayallable on request

TABELL'S MARKET LETTER ——————– — —— 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 June 22, 1984 We may not yet know the results of the game, but it can, at least, be said that it is get- – -mrg -eJ(citifig3- Wednesoay'lr trading' resS-ion saw the-DOwJon'es–Inausti'iiil-Kverage-opEm-down – – some 15 points, giving up about half of the gain it had posted on Monday and Tuesday. The ostensible reason for this collapse was a greater-than-expected 5.7 rise in the Gross National Product for the June quarter coupled with the lowest quarterly inflation rate since 1967, We are, it must be admitted, getting old. We can remember that, back in the days of our youth, we were taught that this sort of news was bullish for the stock market. Now, of course, the conventional wisdom is that an expanding economy will constitute a provocation to the Federal Reserve Board toward institution of greater monetary stringency — followed in due course by higher interest rates and a lower stock market. This is a worthy attempt at sophisticated economic reasoning, but, as is the case with many such sophistries, we are skeptical of it. It is based on a view of monetary policy and its effects that we find, at best, questionable. Our own preference is for the naivete of the little child who pointed out that the emperor was wearing no clothes — the simplistic belief that an economic expansion and a low rate of inflation should be conducive to a good stock-market climate. The new-wave approach to stock market reasoning did not last long. By midday on Wednesday, the decline had bottomed out, and, in the last hour, the market not only recovered all the ground lost but, in what was termed a dazzling recovery'! managed to post a 16-point gain on top of that. This gain was further extended in early trading on Thursday before profit-taking set in. All this was referred to by some analysts as a selling climax. It was the wrong cliche. While the recovery was as plausible from a technical point of view as the earlier decline was bizarre, it was not a selling climax. Such action, to the extent –4.h,atG-eeeurk-place-onayseasured-by-our-4ntday-Ohang-indexwich——–II we discussed at the time. That indicator remained at a low 1. 7 on Wednesday. Furthermore, the day's volume was an unexceptional 99 million shares. Real selling-climax volume involves the sort of increase produced, for example, on Silver Thursday, 1980, where trading reached 63 million shares after having been in the low 30's. If one wishes to seek out a technical cliche to apply to recent trading, it can be termed a test of the lows, lows in the present instance having to be judged on the basis of intraday figures. Monday's intraday bottom for the Dow (1079.39) was a tad below the May 30th figure of 1083.19. For the S P 500, however, the two lows were about the same, and both the Dow Transportation and Utilities held above their late May bottoms. This test creates a new trading range bounded, roughly-;- on the downside by 1080 on the Dow and on the upside by 1130-1140. To drag out yet another technical cliche, such a range at least raises the possibility of a fulcrum base. Such a pattern forms when the market breaks out on the downside of a long trading range (1130-1180 between February and May of this year) and then forms a new range just below it. A breakout from the lower range is then followed by a dynamic move through the earlier overhead supply. It is far too early to tell whether such a pattern will emerge. A further consolidation at 1180-1130 may, indeed, be needed. The key question would be whether a subsequent rally attempt could push deeply into the 1140-1180 area. Were such to be the case, the resultant con- figuration could be extremely bullish for the intermediate term. AWTrs v — ANTHONY W. TABELL — — — -DELAFIELD, HARVEY, TABELL INC. – -.. — – – – Dow-Jones Industrials (12 00 p.m.) 1129.20 S P 500 (12 00 p. m.) 153.94 Cumulative Index (6/21/84) 1889.70 No statement or epresslOn of opinion or any other mailer herein contained IS, Of IS to be deemed to be, directly 01 indirectly. an oller or the soliCitation of an offer to buyor sen any secunty relerred toor mentioned The matter Is presented merely for Ihe convenience of Ihe subscriber While we believe the sources 01 ourrnformallon 10 be reliable, we In no way represent or guarantee tM accuracy theroot nor 01 the statements made hereM Any acllon to be taken by the subscriber Should be based on hIS own IrIvestlgatlon and IrIformallon Delafield Harvey, Tabell Inc, as a corporation and liS ofhcers or employees, may now have, or may laler take, positions or trades m respect to any secUrities mentioned m this or any future Issue, and such pos1\lon may be different from any views now or hereafter c)(presscd IIllhls or any other Issue Delafield, Harvey, Tabell Inc, which IS registered With the SEC as an Investment adVisor, may glyeadvlce to Its Investment adYlsory and olher customers mdependently 01 any statements made In thiS or In any other ISSue Furlher Information on any security mentioned herem IS available on reQuest

.., TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 , MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 9249660 June 29, 1984 'I TheseaSfnl.!i's.,nyriYe,dfo!lS;Ussiol1()tbe-o-sJ!l!erra!ly and s. seasonasd.uJY c!llebrate!.in . the Wall Street Journal on Monday, quotmg a number of our colleagues' on the'subject. Not surprisingly, . the reporter was able to turn up a number of analysts who felt that such a rally was predictable as the annual migration of whales and a number of others who derided it as a myth. The article also tOOk the opportunity for some well-deserved criticism of sloppy statistics, noting that the rally has occasionally been measured from the May-June low to the July-September high. Given the market's innate volatility, such a measurement has produced a summer rally in everyone of the past 20 years, but, as pointed Qut, if one chose to measure from the May-June high to the July-September low, a summer crash II could be also produced for each year of the last two decades. We do not like to think we are guilty of this sort of sophistry in the following table, which has appeared, updated, in this space around early summer for the past decade or so. It is based on percentage changes for fixed one-month and two-month periods since 1926 and shows for each period the number of advances, the number of declines and the mean percentage change. January FE'b rlJ.3 ry 37 30 21 1.03 28 -0.13 38 20 33 25 2.30 0,91 March 32 26 -0.03 28 30 -0.25 AprIl 33 25 1.5 36 22 1.29 H 28 30 -0.86 .June 29 29 0.87 33 25 26 32 0.60 -0.02 JIJ l!l 36 AIJ;tI.lst 37 SO.ec.et.ot.be IeJJrbJ'r……3!03… .. 22 21 35 28 1.77 1.44 -1.3L '0.37 – 35 39 34 27 23 19 4 31 2.60 3.36 0.09 -1.65 . November 36 2 0.76 December 42 16 1.17 — — —– 35 23 41 17 — — 0.43 1.95 —– TOTAL 393 303 0.47 405 291 0.97 The Journal article was able to rmd analysts who came down strongly pro or con on the subject of the existence of a summer-rally tendency. Our own view. perhaps less newsworthy, is that the question is an iffy one. It cannot be gainsaid that July shows the best percentage advance for any month of the year with August a close second, or that the two-month period ended August shows an average change over three times that of the average for all such periods. It is when standard statistical tests are ap- plied to the numbers above that one begins to get into trouble. We start out with the fact that the market rose in 393 and declined in 303 of the 696 months from 1926 to 1983. In the 58 Julys. however, it rose 36 times. For these numbers we can apply a chi-square test, a process best explained by analogy. Put 393 white marbles and 303 black marbles in a jar and draw out a sample of 58. What would be the probability of that sample's containing 36 or more white marbles Unfortunately, what the test tells us is that probability would be considerably greater than 20, thus raising the real possibility that the July-August results occurred purely by chance. As we have noted before, the only significant one-month seasonal periods based on this test are the September decline and the December rally. The probability of the statistics for those months having occurred by pure chance is somewhere in the vicinity of 1. What about the high average advance for July and August Over 58 years the market has advanc- ed, on average. 3.36 in the July-August period. The mean advance for all two-month periods is under 1. However, the dispersion of the individual numbers is fairly wide. (The standard deviation, for those familiar with the meaning of that term, is 8.57.) This data being known, we can apply another piece of statistical arcana known as the z-test, by which the summer rally comes out looking a little bit more real. A 58-month sample with a mean change oC3.36has only a 3.44 probability of being drawn by chance from the 696 months in question. However. even by this method, the tendency toward a decline in September is a much greater likelIhood, with a chance probability-of-occurrence of only 2. lYe have also drawn attention to the fact that much of the result for July-August can be attrilvted to the fact that the bottom of the greatest bear market in history occurred at the end of June, 1932. following which the Dow was up 27 in July, 35 in August, and 70 for the two months. This sort of thing has a tendency to skew results. In short. we continue to regard the question of the summer rally as an unanswered one. AWT rs Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (6/28/84) 1135.60 153.76 1874.95 ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL INC. No statement Of epresslon of oplt110n or any other mailer hereIn contained IS, or Is to be deemed to be, directly Or Indirectly. an oUer or the soliCitation of an oller to buyer sell any security referred toOl mentioned The matter Is presented merely/or Ihe convenience of the subSCriber While we believe the sources of our information to be reliable, we In no way represent or guarantee the accuracy lhereof oor of the statements made herein Any action to be laken by the subsCriber Should be based On hiS own investigation and InformatiOn Delafield, Harvey, Taooll Inc, as a corporation and ItS officers 01 employees, may now have, Of may later take, posItions or trades In respect to any securities mentioned In thiS or any fulure ISSUe, and such pOSition maybe dlHerent from any views nowor heleafter ellpressed Inthls or any other Issue Delafield, Harvey, labell Inc, which IS registered With the SEC as an Investment advisor, mayglveadYlce to 115 Inyestment adVISOry and other customers Independently of any statements made m thiS or In any other Issue Further m/ormatlon on any secunty mentioned herem IS avaIlable on reQuest

,. TABELLS MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 July 6, 1984 As almost everyone is aware, we celebrated. this week, the 20Sth anniversary of our nation's independence. More parochially, we also celebrated the anniversary of the July 3, 1884 publication of . the Customer's Afternoon Letter. For those who missed the Wall Street Journal artlCle on the subject, -w – that publication was the enterprise- ofwo- geriUemen-nameij'!.Dow and Jones, and-thnssuein questiOn-was — -0— the first to publish an average of various stocks. That average has been maintained, more or less con- tinuously, ever since, so this week, in effect, saw the 100th blrthday of the Dow-Jones Industrial Average. That first ur-Dow-Jones. instructively. contained 11 stocks, nine of which were railroads and most of which Bubaequently went bankrupt. The average has been able to maintain continuity and rele- vance over the years through periodic sUbstitutions. although, as is proper for a venerable institution, the authorities at Dow-Jones are reluctant to make wholesale change. We thought, however, we would celebrate the birthday by offering those authorities some — admlttedly gratuitous — advice on brinsing the average up-to-date. To this end, we suggest six stocks currently m the average be replaced by others as outlined below. The way to view an average of only 30 stocks, it seems to us. is to view each stock as a proxy for the broad industrial category to which it belongs. To do this, we classified the 30 Dow stocks into 16 such broad categories based on Standard & Poor's Industrial groups and compared the weight for each of the 16 categories to its weight in the S & P 400. We did not mean to imply, in this exercise, any Itsuperiorityll of the S & P average. However, since it is capital weighted, it is a fair proxy for the importance of each category to the American economy. The final column of the table below shows the ratio of the Dow-Jones Industrlal weight to the S & P weight, and the table is ranked in order of these ratios. IndustrIal Catesor StOCKS In DJIA Z Wht – DJIA I W,ht – SIP 400 RatIo Contw'rs – lletal and Glass AC,OJ 6,46 0,55 11.75 Steel 1U11nl(f1ll & Metals – MiscellaneolJs BS,X M,N 3,25 0,65 5,00 3.42 1.C2 3,35 A,tural H'fhlner Ihscellar,eous Industrial & HIgh Tech.) AHRLD,T,n.,HHM 0,54 15.15 0,27 7.78 12.,9050 – PC.h..ea.lieeaLlLsoIreCshte.J1oCQOulcsts- Hlseellaneous PPO,UK 37..616 2\4';.,0121.-11,,'\97.0,7 -1 r;Moo-I)iJfdl (Uee, ElI'IIenl 8rI J HI 145 fFioeorodspIacOether Cons,,, (2) AHB,GF,PG UTX 122.,5796 120.,4143 1.26 1.06 Drus I nOi.lt.1 SUP. hes RetaIl HR 7.12 6.93 1,03 5,1 5,12 5.24 0,9B COIiPuters & BUSlnl!SS EQUIPment 011 IBM CHV,XON,TX B.34 9173 B,61 19,37 0,75 0,44 FInancIal (1) Autos,Aut Parts,TrucKsITlres AEX 2.24 (2) Food,Brewers,Soft DrIoKs,CosmetlcsrSoapsrTobacco It is worth noting that 24 of the 30 stocks in the Dow re in the top 133 S & P 500 issues. There then intrudes a gap, and six Dow stocks find themselves in the lower half of the 500. (All subse- quent numbers in parentheses refer to the ranking in the 500.) The six are International Harvester (448), Bethlehem Steel (311), Inco (290), American Can (284), Owens-Illinois (273), and Woolworth (267). The most overweighted group, as the table shows is obviously, Containers, and it would appear appropriate that American Can and Owens-Illinois be removed from the Dow. The next is Steel, and the smaller of the two companies, Bethlehem Steel, could, it seems to us, be appropriately deleted. Third is the Aluminum-Metal category and it woula seem to us sensible that Inco one of the six smaller companies go. The same reasomng would apply to International Harvester. The next most overweighted groups are the Chemical and Miscellaneous Industrlal categories. Furthermore, Allied Corp., stilI partially a chemical company, is in the latter category. It would thus seem that either it or Union Carbide, the smaller of the two chemicals, would be a potential deletion candidate. It is suggested above that a total of six stocks be dropped. What might be six appropriate re- placements Paradoxically, the only drastically underweighted group in the Dow is Oils and the average, which has three oil stocks already, appears to need another one. Ou suggestion would be Chlt'mberer (9) in the related oil-well equipment field, but Standard Oil of Indiana. (6) or Atlantic Richfield -(13 ( or domestic flavor) would also be appropriate. For our other suggestions. we examined industrial categories' not now contained- in the DJIA. Two Electronics categories constitute 2.92 of the 500, with none of the nine issues currently in the Dow. Hewlett-Packard (18) the largest, could appropriately be added. Many of today's industrial companies have been grouped together in Conghnerates, 2.39 of tlie S & P. Tennero (47) is the largest of these. Publishing constitutes 2.11 of the S & P. It would be chauvinistic for Dow-Jones (104) to in- clude itself in its own average, but it could go with Dun & Bradstreet (82) or Gannett (86). Two per- cent of the S & P is taken up by four groups generally imolved with consumer activity outside the home. McDonalds (61) is the largest company in this category. Finally, 1. 38 of the 500 is accounted for by a broad group of 21 companies generally associated with machinery. Caterpillar Tractor (80) would be a sensible new member of the thirty. Dow-Jones Industrials (1200 p.m.) 1115.95 S & P Composite.(1200 p.m.) 152.13 Cumulative Index (7/5/84) 1873.05 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No stalemnt or expression of Oplnton or any other matter herein contained IS or IS to be deemed to be, directly or lndl'ectly an oller or the SoliCitation of an offer \0 buyor sell any securJ\y referred \001 menlloned The matter IS presented merely for lhe convenience of the subSCriber While we believe Ihe sources 01 our Informal Ion to be reliable, we In noway represent Or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by Ihe sUbSCflber should be based on hiS own Inveshgatlon and Informal Ion DelafIeld, Harvey, labell Inc. as a corporatron and Its officers or employe('S, may now nave, or may later take, positions or trades In respect to any securrhes mentfoned In thfS or any future f55ue, and sucil posftlon may be dtflerent from any views OW or hereaUer efpressed In thiS or any other Issue Delafield Harvey. Tabell Inc which IS registered With the SECas an Investment adlsor, may give advice to ItS Investment adVISOry and olhe t'tstomers Independentty 01 any slalements made In thiS or In any other lssue Furlher information on any securltv menlloned herein IS available on request

— TABELL'S MARKET LETTER – 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9249660 July 13, 1984 With the market declining during most of this week, the phrase a test of lows began to be hel,lrd with-1l1ol!OtQnol!.s. lows-to- test ,- and, for trheigsl!f!o!'tbi!eYt''i1eTChaeS'eu-s;-ethoefret-hiiiis\iSct1!hchaev,eEoifXicsofuerdsea, siimdpelwiaesystTheraredianrge previous -rafig- ,- '!his, indeed, has been the fact. For 33 trading days, since May 29, the Dow has held between a closing high of 1134.28 (July 3) and 1086.90 (June 15). Previously, it had held for 61 days, from February 22 through May 18, in an area bounded by 1186.56 and 1130.55. Trading ranges, in other words, have characterized most of 1984 so far. We attempted, this week, to examine the historical implications of such ranges. For such an examination it is necessary, first, to formulate a precise definition of a trading range. Our defini- tion was that such a range existed at any time when the high and low of the Dow for the prior 30 days had been within approximately 5 (log difference .05) of each other. A scan of stock-market history from 1926 to date revealed that there had been 262 such periods. The most recent two, of course, occurred this year, the earlier one lasting for 44 days. This was by no means a record. The Dow held in a 16-point range between 142.96 and 159.01 for 176 days between July 17, 1944 and February 19, 1945. More recently, it held in such a range for 102 days between February and August, 1972. The first point that became apparent from the scan was that such ranges seemed to be characteristic of bull-market, rather than bear-market, periods. For example, there have been 125 occurrences since 1958. Only 30 occurred during periods historically defined as bear markets. Expressing this same phenomenon with more rigor, one can state that only 85 of the 262 occurrences occurred when the Dow, at its average price for the trading range, was down from its level of 100 days previous. Of those, only 30 occurred when it was down more than 5. Of those 30 periods, only 15 lasted 10 days or longer. Those 15 occurrences are listed below. Start Date ———– Jul 17 1940 Aus 1 1940 Mar 22 1941 Ha, .1.3 1941 Mar .O 1948 Sep . ;,2 1969 Ap r ,,2.6 1973 Ap r 2,9 1977 Ma, 31 1977 Sep 22 1977 Dec 16 1977 Mar 23 1978 Dec .14 1978 Dec ,21 1979 Mar i,1 1984 Tradins D. J. I A. End Date Da'5 HHlh Low Averaser;'t, ———– ——- ——- ——- Jul 29 1940 11 123.15 121. 64 122.31 Aus 29 1940 25 127.26 121.28 125.01 Apr 16 1941 21 124.65 118.59 121.92 Jun 9 1941 23 120.16 115.73 116.96 Mar 24 1948 13 173.66 165.39 169.16 Oct 20 1969 35 839.23 802.20 823.21 Ma, 11 1973 12 956.58 921.21 938.18 Ma, 26 1977 20 943.44 903.24 929.09 Aus 5 1977 47 929.70 886.00 909.81 Oct 10 1977 13 851.96 834.72 840.90 Jan 5 1978 13 831.17 804.92 819.41 Apr 13 1978 15 775.21 751.04 762.38 Jan 4 1979 14 826.14 787.51 805.90 Jan 11 1980 14 858.96 820.31 839.93 Ma, 18 1984 44 1186.56 1130.55 1158.65 100 Das DJIA ——- 130.03 130.57 125.96 124.42 183.06 765.05 955.90 814.80 830.39 742.72 840.61 895.79 822.16 858.70 11 Later 7- Chs u … 6.31 4.44 3.32 6.38 8.22 -7.07 1.89 -12.30 -8.73 -11 .68 2.59 17.50 2.02 2.24 11' The table above also includes, for the 14 previous occurrences, the level of the Dow 100 days after the end of the trading range. It will be noted that the Dow was higher in 10 of 14 instances. Interestingly, three of the cases where the Dow declined following the trading range occurred during the 1976-1978 bear market. a rather unique historical phenomenon, best remembered for its selectivity. That market, in many ways was similar to the present one, except that. at that time, quality stockS leclined with secondary stocks holding up, while the precise reverse has been true over the past year. .' . The table would seem to suggest the likelihood that the Dow will be above 1158.65 (lb\3 hun- dred trading days after May 18, in other words on August 26. Were the worst case in the table (April-May, 1977) to be duplicated, it might be down 12.3 from that level, which translates to 1016. AWT rs ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. Dow-Jones Industrials (1200 p.m.) 1107.55 S & P Composite (1200 p.m.) 150.77 Cumulative Index (7/12/84) 1838.05 No statement or eKpresslon of opInion or any other matter herem contained IS, or IS 10 be deemed 10 be, directly or indirectly, an oller or the solicitation of an offer to buy or sell any security referred to Of mentioned The matter IS presented merolyfof the convenience of the subscnber While we believe the sources 0/ ourm/ormatlon to be reliable. we in no way represent orguaranlee Ihe accuracy lhereof nor of the slatemenls made herem Any action to be laken by the subscriber should be based on hiS own Investigation and information Dela/lela, Harvey, labell Inc, as a corporal Ion and ItS officers or employees may now have, or may later lake, positions or trades 10 respect to any secuntles mentioned In this or any future Issue, and such posilion may be dllferenl from anY'lews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, label! Inc, which IS registered Wl\t1 the SECas an Investment adVisor, may give advice to Its mvestmenl adVisory and other customers mdependently of any statements made In thiS or In any other Issue Further Information on any security menfloned herein IS available on request

\ TABELL'S MARKET LETTER . 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 …,. ' MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9249660 July 20, 1984 In case we needed to be reminded, the preemptmg of this week's television prime time by the .–such'Democratic NatioriaJ. ConventiOri'hfgl1lightea'1ne-filcf .thata-pFeSiaenHal.Cllinpaign nas begun a – '' period should be a good one for the stock market, which, on average, has advanced 6.24 between mid- July and election day in the last 14 election years. The market, as it so often does, however, is refus- ing to behave according to form and is once more testing its June low. A clue as to the reason for this may have been offered, inadvertently, by Governor Mario Cuomo in the course of his assigned partisan task of flailing the opposition in the Democratic keynote speech. Governor Cuomo said, Ask the Republican investment bankers on Wall Street what they think the chances of this recovery being permanent are …. they'll say that they are appalled and frightened by the President's deficit …Ask those Republican investment bankers what they expect the rate of interest to be a year from now … you'll learn from them what they predict for the inflation rate a year from now be- cause of the deficit. Governor Cuomo might also have asked, although perhaps inappropriately at a Democratic convention, why the stock market has been going down since last January. What the Governor was suggesting, it seems to us, is that the financial community and the Re- publican party (the two terms are not totally synonymous) find themselves somewhat uncomfortable with current trends m the economy, especially the largest deficit in U. S. history. It could also be asked whether the Governor — and Walter Mondale in his acceptance speech — found themselves uncomfort- able with rhetoric which, at least in part, could have been written for Alf Landon in 1936. This role reversal on the subject of the deficit seems to be a source of embarrassment for both sides. In our view, what is at issue here is the success or failure of supply-side economics. The as- sessment is complicated by the fact that there is, first of all, some question as to whether supply-side economics has even been tried, secondly, some doubt as to whether, to the extent that it has been tried, it is responsible for those positive economic trends that have emerged, and, thirdly, some question as to whether it may have produced an ephemeral success presaging disaster further down the road. This last, of course, is the posture the Democrats are likely to adopt in running against it. .. The RepubIIgans.,.-irt Dalla!Lal!!onthfI'omQwwm. of cO.\lI'Se…..giy.e….lliLan.el1tir.elyJliffeI'enLview. We'-will certainly hear at that convention that' the unemployment rate has been reduced from IOn to under 8, that real gross national product has shown one of Its sharpest expansions in history, and that the mflation rate has been reduced from 15 a year before President Reagon took office to the 4-5 range tOday. We will probably hear less about the deficit than we heard this week. The centerpiece of the Reagan program of four years ago was, of course, the tax cut, enacted in the face of a deficit that, even then, was mounting precipitously. This may have been the only real supply-side move of the administration, and it relied on the real, rather than theoretical, validity of the Laffer Curve, which tells us that, at a certain point, tax reduction will stimulate economic activity and produce increased tax revenues. The tax cut was coupled, it is not certain whether by accident or by design, with a period of fairly severe monetary stringency. The Democrats have already claimed that the results are a disaster, and the Republicans will undoubtedly trumpet its success. The truth is that the results are mixed, and the jury is still out — hence the uncertainty of financial markets. It is hard to fault the performance of the GNP, inflation, and unemployment figures mentioned above. It is, however, possible to attribute them to a pure-1930's Keynsian model rather than new sup- ply-side discoveries, and convincing data can be produced in support of this thesis. The recovery has, on the record, been supported by the sort of resurgent consumer demand which Lord Keynes told us 50 years ago such a deficit would produce, and has featured little increased savings despite record-high interest rates. It is also arguable that the reduction in inflation was bought with the most severe reces- sion since the 30's. Meanwhile the defbit continues. Or does it Governor Cuomo in his speech mentioned a deficit of 300 billion. There has never been such a deficit. It is a projection. Almost all news reports refer to projections, despite the fact that the hist- orical record of accuracy for such projections is a joke. The current deficit on a six-month annualized basis, is around 180 billion. For one glorious month, it was down to an annualized 60 billion. It is the supply-side contention that increased tax revenues from an expanding economy will reduce, not in- crease this figure. This contention has been neither proven or disproven by events. It is t furthermore, the conventional wisdom that continued economic expansion, especially at recent totally-surprising rates, must produce renewed inflation. Possibly, but it has not yet happened. Meanwhile, financial markets continue to express uncertainty. Interest rates are rising, stock prices are going nowhere, and savings stubbornly refuse to increase. Renewed inflation and lor a sharply escalating actual deficit would suggest that the market's fears are real. On the other hand, should the expansion continue. inflation remain low and J above all, actual deficits decline, the market could come to believe, rightly or wrongly in Reaganomics. The results thereof could be spectacular. AWT rs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (12 00 p. m.) 1102.36 S & P Composite (12 00 p.m.) 150.51 Cumulative Index (7/19/84) 1820 97 No statement or expression of opinion or any other matter herein contained IS or Is 10 be deamed to be, dlrec1ly or Indirectly, an oHer or the sohcltallon 01 an oller to buyor sell any secunty referred to or menltoned The matter Is presented merely for the convemence of the subSCriber While we bellcve the sources 01 our mformatlon to be reliable, we In no way represent or guarantee the accuracy thereot nor 01 the statements made herem Any action to be laken by the subscriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabett Inc, as a corporation and its oftlcers or employMs, may now have, or may latcr tal-e, positions or trades Ir\ respect to any secuntles mentioned In this or any tutme Issue and stith POSition may be dllterent from anyvlCws nowor hetealler e)'pressed In thiS or any other Issue Delafield Harvey Tabelt Inc, which is registered With the SEC as an Investment adVisor, may give adVice 10 lIs Investment adVISOry and other customers Independently of an.y statements made In thiS or In any other Issue Funher mformaUonon any seCUrltv mentioned herem IS avattable on request

'. TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9249660 July 27, 1984 It is difficult to find a great many good things to say about last week's stock-market action. It is tru thl't Illednesday and TllUrsdaY..l9th-teittuI'ed.!!Ig!I'lrlltely,,,,tro!tgaJ.licarr.Yil1gUIe.Dowc Jones Industrials 'up-a total' of 2Tpoints for the'two days. However.' there- was little -to differenti 0 ate these attempts, either in terms of breadth or volume, from their many predecessors of the past six months. Moreover. they did not occur from the sort of deep oversold condition which might tempt one to view them with a bit more seriousness. At this point, if the short-term market prog- nosis is to improve, it will have to do so via a process of the market's proving itself, developing more in the way of demonstrated upside vitality than it has been able to do so far. This dearth of positive technical action can hardly be said to be a new phenomenon. Indeed, it has been the rule ever since January and, to a lesser extent, for six months before that. As long ago as June 17, 1983, the Dow reached an intTa-day high of 1260.72 and the Standard & POOl'S a peak of 172.76. Both indicators were to make new highs, but only marginal ones, after that, the peak for the Dow coming in late November, and for the S & P some six weeks earlier, in mid-Octo- bel'. These highs were again approached in January for both averages, after which the market headed due south, reaching a new low this week of 1086.57 on a closing basis for the Dow. Where does all this leave us At this week's closing bottom the Dow was down 15. 59 from its January 29 high, with the S & P down 14.38. In simplest terms, we have a market which has been going down, certainly for most of this year, and, in terms of momentum, since last June or for over 13 months. A market downtrend has, unarguably, been taking place. However, one phrase, the ab- sence of which readers will have noted in this particular publication, is the term bear market. Our colleagues have been far less bashful. Many are using the phrase today and are tempering their occasional bullish opinions by qualifying them as forecasts of rallies in a bear market. It is certainly possible that they are correct. The possibility of bear-market conditions exists on any day that the market fails JOI1lke,a new high. This, as.the Dowis concerned, has been true since last November. ' If one is going to wave the phrase bear market around indiscriminately, however, he would do well to define just precisely what it is he is talking about. As far as defining bull and bear markets is concerned, this is not always that easy. Our own preference is to use the terms exclu- sively within a major-cycle framework. As we have repeatedly demonstrated, it is possible, without stretching the data too much, to go back to the beginning of this century and separate market act- ion into a series of cycles, the bottoms of which have tended to be pretty close to four years apart. Between the two lows of each of these cycles there has, by definition, been a peak, and the period between that peak and the subsequent low can, in our view, appropriately be called a cycle bear market. This procedure is not without its difficulties. For example, it forces one to call the period January 5, 1953-September 14, 1953 a bear market, despite the fact that the Dow was down barely 13, considerably less than it has already declined this year, This is quite simply because it is the only period that effectively separates the eight years between 1949 and 1957 into two separate cycles. By contrast, between January 5, 1960 and October 25, 1960 the Dow was down some 17.42, a much greater decline than that of 1953 and slightly greater than the one we have seen to date. It is dif- ficult, however, to call this a bear market. The market spent the next 14 months in a 30 advance that brought the average well above the point where the decline started. The real bear market then ensued in the first half of 1962. Concerning the present major-market cycle, there are only a couple of things which are known with any degree of certainty. The first of these is that its beginning low occurred on August 12, 1982. It is also highly likely that its terminating low will occur at some date fairly well out in the future, sometime in 1986 being the most logical expectation. If we are to posit a hIgh on Novem- ber 29, 1983, we would have a cycle that spent less than a third of its total lifespan in an expansion phase. There are historical precedents for this but not many of them. Another possibility which would validate the present bear-market thesis would be that the entire cycle will turn out to be contracted in length to two years or a bit more, with the declining phase actually having begun in November and to end fairly shortly. Again, there are a few, but very few, historical precedents for an attenuated cycle of this nature. It is for the above reasons we have taken the calculated risk, for the past six months, of refusing to call the obviously weak stock market we have been seeing a bear market. It is a risk which may prove to be ill-advised, but we will stick with it for the time being. AWTrs Dow-Jones Industrials (12 00 p.m.) S & P Composite (1200 p.m.) Cumulative Index (7/26/84) 1113.18 150.25 1794.40 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC, No sla\(menl or eopresslon 01 oplmon or any other matter herein contained IS, or IS to be deemed 10 be, directly or Ifldlrectly. an ofter or the soliCitation of an offer to buy or sell any security referred loor montloned The malter IS presenled merelv forthe conv(!menceof the subScriber While we believe the sources of our Informatton to be reliable weln no way represent or guaranleethe accuracy thereof nor of the statements made herein Any aCllon to be taken by the subscriber should be based on hiS own investigation and information Delafield, Harvey, Tabell Inc, as a corporatIOn and Its officers or employees may now have, or may later taKe, poSitions or trades In respect to any securilles mentioned 10 thiS Of any future ISSue and such pOSt!lon may be different Itom any views now or hereafter expressed In thiS or any other Issue Delafield Harvey, Tabelt Inc, which Is registered With Ihe SEC as an investment advisor, may gIVe advice to its Investment adVISOry and other customers mdependently of any statements made In thiS or In any 0lherlS5ue Further mformation on any security mentioned herein IS available on reQuest