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 24. 1985 We had the pleasure, two weeks ago, of attendmg the 10th Annual Convention of the Market Tech— …–!nls-.A!ia!ion at HIlton . S)Uth Carolina. These gatherings (we have been fortunate enough to be present -at every one over the past decade) ,are aIWays-enjOywle ana-inror-mattve-NOtonly is it .–.-' useful to be exposed to the thlnking of our COlleagues by way of their formal presentations, but it is also instructive to meet in informal gatherings and compare current market views. What \VRS most strIkIng about this sort of interchange this year was the unusual similarity of the market OpInIOnS of most of our technical brethren. and we must confess that we shared in this consensus. The four-year cycle is a phenomenon as famIliar to our fellow technicians as it is to us, and we found most of our colleagues agreeing that, in terms of this framework, the current market cycle is in a pretty mature phase. They also seemed to agree that. despite that maturity. signs of near-term deterioration are conspICUOUS by their absence and that the present short-term course of least resistence for the market is upward. The consensus, in other words, agreed m calling for higher prices — but prices not all that much higher and perSIsting for not that much longer. This, of course, is the view we have been expressing in this space for some weeks now and one we summarized just a week ago. Another principle of which technIcians are uniformly aware is the theory of contrary opinion. It is ffilr to say, therefore. that, collectively, we felt nervous at our apparent agreement. Market analysts are a perverse lot and, rightly or wrongly. they prefer to be alone in their views rather than part of a consensus. A good part of the informal dIScussion, therefore was devoted to what might emerge to make the consensus view essentially incorrect. If that consensus is for moderately higher prices, then two contrary views are possible. The rust one would call for Immediate sharply lower prices — the surprise emergence of a bear market. The second possibility IS that higher prices could indeed ensue but, rather than constituting a modest Improvement on todey's levels, they wIll be significantly higher and win persist for a protracted period of time. The theoretical underpinning for such a view would be the compressed -cycle theory to which we alluded last week. Under thIS theory. an l1unrecognlzed bear market took place between the Fall of 1983 and July. 1984 thus completing a shortened 23-month cycle which began in August. 1982. We currently find ourselves, therefore. in a bull market, not 32 months old but dating back less than a year. I–t—liQuchanupswing….quite-ob\dously–W.Ould…hsve A great….m09m …..ontheJmside '. -I It IS possible to cite a number of arguments in favor of this thesis without being -totally conVlnced by them. The first such argument would involve the action of market breadth. As we have been pOlnting out for the past ten months. breadth has generally outperformed the popular averages ever since the rise from July. 1984 began. Such out performance IS characteristic of the initial stages of a bull market. It followed, moreover, on the heels of a previous breadth divergence which had lasted from J.me. 1983 through January. 1984. That divergence. it can be argued. foreshadowed the 1983-1984 correction. completed last summer. Moreover, insofar as market breadth is concerned, it is Significant that, as of last Friday, our daily breadth index surpassed Its June, 1983 high, something which weekly breadth indicators had done early this year. Thus. there exists at the moment no breadth-divergence condition and the emergence of such a conditlon generally leads a market top. often by as much as two years. This, in turn. argues for a protracted period of better prIces. Another argument would be that, whlle it is difficult to recognize a completed bear market in the Widely-followed market indices. during late 1983 and 1984 such a condition certainly existed in large segments of the market, notably the High Technology IOver-the-Counter sector. This bear market began m June, 1983. before the decline in the averages started later that year and persisted after the listed seg- ment had bottomed, to December of last year. This out-of-gear condition thus could have helped to make the 1983-1984 bear market difficult to recognize. A final argument, which is not as perverse as It seems. can be found in the present slowdown of the economy. At first blush. this would seem to confirm the consensus theory — weakness in leading economIC indicators presaging a market which is about to top out. This is well and good, but it fmls to recognize the demonstrable fact that the market leads the economy rather than the other way around. ThtS. the 1983-1984 weakness can be interpreted as having correctly anticipated the current economIC slowdown. and. consequently. the present strength can be read as presaging economic improvement later on thIS year. FInally. there is. as we noted last week. the precedent for at least one severely compressed stock-market cycle. one runnIng between August, 1921 and July. 1923. Although this leads us into the realm of the exotic. there do. indeed, exist intriguing similarities between the present and the early 1920'S. – This is a subject which deserves further discussion at greater length. We reIterate our conclusion of last week that, fascinatIng as the above arguments are, we are not ready to be totally swayed from the conventIOnal view. While that conventional view suggests tat the market be approached with a certain degree of caution at this stage, it still calls for an aggresslvely- Invested pOSItion. one which would be equally conSIstent with the contrary theory outlined above. AWTrs Dow-Jones Industrials (1200 p.m.) S & P Composite (12.00 p.m.) Cumulatlve Index (5/23/85) 1297.93 187.82 2474.51 ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. NO statement or e,,-prC5Slon 01 opinion or any other matter herein contained IS or IS!O be deemed to be dlfecllyor Incilrectty, an ofler or the soliCitatIon of an offer to buy or sell any secunty relerred 10 or mentioned The maum IS presented merely lor the convcnlcnceof Ihe subSCriber WhIte we belIeve the sources of Our information to be reliable we m no way represent or guarantee the accuracy th(!flwf nor of Ihe statcmerl1s made herein Any aC!lon!o be taken by the subscflber should be based on hIS Own Investigation and Information Delafield, Harvey, labell Inc. as a corporation and I!S oltlcers or employees may now have or may laler take POSitIons or trades In respect to any securttles mentioned In this or any future Issue, and such pOSitiOn may be dlif(!rfnt Irom any views now or helealter eJCpmssed In thiS Or any other Issue Delafield, Harvey labell Inc wh,ch IS reglslered With the SECas an Investment adVisor, may gIve advice to Its if'lvestmenl fHlVlsory and other customers mdependently of any statements Inade In thiS or If1 any other Issue Further Inlormatlo on any secufltv mentioned herem IS available on requesl

– – ——— —————————— 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 May 31, 1985 We dlcussed at some length last week the theoretIcal dIlemma confrontmg the market analyst attempting to understand today's eqUIty climate. Interpretation in conventlOnal terms recognizes …'!-lhe—6oViousTact .tllatTmaj6rlJ5tlom-;-oc'curetllnKuguSt—nJ82 ,!-'-from hichoint .tIre -major aV'e'F8ges –….-I moved ahead to newall-tIme hIghs. scored as recently as 10 days ago. If the entire move is to be VIewed as the rIsmg phase of a sIngle major-market cycle. that cycle IS now in its 34th month, and historIcal precedent would suggest. first, that the advance is unlikely to contInue much longer in time and. second. that the bulk of the move. some 534 points on the Dow to date, has already been seen. That conventIOnal wisdom, in other words, would call for the recognItIon of a typIcal mature bull market. The problem hes In the Interpretation of the downSWIng WhICh took place between Fall, 1983 and July. 1984. If this relatIvely mild (in most stocks) correctIon IS to be viewed as a major bear market, the cycle which began in 1982 was completed at the end of that correction last Sum- mer, and we find ourselves currently in a bull market less than a year old. One mIght expect to be able to calculate prIce objectives from the existing chart patterns for the averages and deter- mIne which explanation was more hkely to be correct. Unfortunately, this is not all that easy, as the charts below ,Ii ' to ll1USIrIe I!!!, I \ I i ! I ! 'II i,I' ' !'! i ! i 1 I l !i'1 iiHil'HI,1Hi!mIHiIHiiHHH!Hf I' '1'1 I!! , II ii ,I I, i i l I I II 1'1 ,i,.co!Hl!f!IJij!Ht!t'iIH!iilttPil1\f'i!Il, jI I!I'i,Hmli,,'c'iiI Ii , The left-hand chart depicts the DJIA on a five-point-umt basis. If we are deahng with the termmal phase of a bull move, we should expect to read modest upside objectives from more re- cently formed bases and, it IS, mdeed, Just possible to do just this. The base at (C-D) between 1250 and 1280, formed between late March and early this month. proJects, as the chart shows, to 1360. A readmg of the base which preceded the year-end rally (A-B), formed in the 1160-1245 range between August, 1984 and late last year, yields a similar target of 1380. Modest price objectIves such as these appear to reflect the prevailing conventional wisdom in the fmancial community. An earlier base pattern between 1090 and 1180, from early 1984, is shown at (E-F) in the 10-point-unit chart at rIght above. This pattern also suggests a conventIonal sort of upside tar- get at the 1380 level . The dilemma arises from the fact that, if the extent of a major bull market, It would be proper to take a broader reading, centered around the bottom of that Dull market. That bottom must be taken to have occured in July of last year, and the best readmg of the pattern surrounding it comes from the S & P 500 rather than the Dow That index is shown on a two-point-umt chart at rIght, and, viewing June, 1983-January. 1985 as a head-and-shoulders pattern (G-H), –;. it IS pOSSIble to formulate a target as high as 236. The eqUIvalent figure on the Dow would be somewhere 10 the mId-1600's. Quite obVlously, the dIlemma remams unresolved although, as we have emphasized proper Investment policy, at thIS point. should tlt'l t recogmze that the course of least resistance IS upward, removed from current prIces the ultimate upsIde target may be. ANTHONY W. TABELL Jow-Jones IndustrIals (12 00 p. m.) 1307.57 DELAFIELD, HARVEY, TABELL INC. S & P CompOSIte (1200 p.m.) 187.93 CumulatIve Index (5/30/85) 2482.18 No statement or epreSSlon ot opmlon or any other matter herem contained IS or IS to be deemed to be directly or mdlrectly, an offer or the soliCitation 01 an offer to buy or sell any secullty referred toor mentioned The matter IS presented merely for the convenience 01 thesubsCflber While we believe the sources of our mlormatlon to be reltable wo In noway represent or guarantee the accuracy Ihereof nor 01 the statements made herem Any aCllon 10 bo taken by the subSCriber should be based on hiS own investigation and Information Delafield, Harvey, Taoell Inc, as a corporation and Its officers or employees, may now have, or may tater take, POSitionS or trades In respect to any secufltles mentioned In thiS or any lutufe Issue, and such POSition may be dilierent Irom any views nowor heleaf1er expressed m thiS or any other Issue Delafield, Harvey Tabell Inc whIch IS registered With the SECas an Investment adVisor, may give advice to ItS ,vestment adVisory and other customers Independently of any statements made m thiS or In any other ISSue Further InfOrmation 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) 9249660 – June 7. 1985 Hey. hey. anybody IIstenmg Hey. hey. anybody there Hey. hey. anybody lIc;tIng ………. Anybody care!! Children's song The most remarkable fact about the current stock market. In our view, IS that it IS gomg largely unnotIced. ConSIder what IS happening. The WIdely followed Dow-Jones IndustrIal Average. along WIth the more sCIentiflC. If less notIced, broad-based indIces IS sailing along merrIly postIng newall-time hIghs. These hIghs are being confIrmed,indeed on occasion beIng led, by new highs in market breadth, WhICh has now Improved to a positIon above its peak of a year ago. Upside volume. if not setting records. can at least be saId to be satisfactory. and. as of last Frlday, a new closing hIgh in the Dow-Jones transports managed to produce an upside confirmahon according to the hoary tenets of the Dow theory. Yet thIS has all transpired WIth only the most routine headhnes in the finanCIal press, and the prospect of Time magazine' s featuring a bull on its cover in the near future must be conSIdered remote. The market, In short. has totally failed to become a media event. True. the prevaIlIng attItude appears to be one of unconcern rather than active skepticism, such as Imght have been expected to be the case a few short years ago. !!Disaster ChIC n among the trendiest of attitudes in the early 1980 ' s, has passed from the scene, and there has been a notable absence, recently, of seminars charglng hIgh prices to Instruct the publIc on the sorts of food to stock in bomb shelters. Not that the snake-oil purveyors have entIrely departed the scene. The latest fashionable tOPlC for blg-buck semInars. the weekly news ,dcu.l.,y mform us, IS how to become rich in real estate with n!Ll1)Q,Il.ey down. Theapl.l-ealofthisI newest fashion to cupIdity rather than cowardlce– mayor may riof be conSIdered -a posItIve SOCIal trend. The point IS that the stock market has not—yet—become a particular focus of pubbc interest. In terms of headlines, It has remained well behind the storIes of mega-takeovers and. In our VIew properly. the prospects for tax reform. In thIS latter Instance, the American publIc. in one of its not-Infrequent exhibitions of great good sense. appears to be amazing its appointed leaders by demonstrating a solId consensus in favor of reform, in dIrect opposition to those pundits who were assuring us earlier this year that reform had no chance of taking place. The stock market. meanwhile, seems to have excited nobody. Burled deep In the agate type of yesterday's financial pages were the pronouncements of a couple of heroes who thought that the Dow might get all the way to 1400 by the end of the year, this, of course. conslltutmg a move of all of 6. the equivalent of three pOInts on a 50 stock. If this is the best our fearless forecasters can do. it is not surprising that the stock market fails to attaIn the status of front-page news. It IS forecasts of the Dow-2000 varIety that are reqUIred to accomplish this. They. of course. have been conspicuous by their absence. A large part of the lack of Interest. It must be admItted. can probably be explained by the changed nature of today's equity markets. Institutional dominance IS now. of course. a fact of hfe I and the forces mOVIng the market upward of late tend to be buying programs. orders to Invest some number of ZIllions of dollars spread across 100 or more stocks. ThIS is not the sort of thing calculated to set the JUIces flOWIng in the same way as the latest runups in current speculative favorites tended to do a few years ago. Nonetheless. we must confess our OpInIOn that a market which IS rISIng under healthy technIcal conditions without a great deal of outcry should be viewed as an eminently healthy phenomenon. Indeed. such a rally should be a great deal more sustaInable than a rIse which has reached the pOInt of maximum publIc awareness. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (12 00 p. m.) S & P CompOSIte (1200 p.m.) Cumulative Index (6/6/85) 1321. 80 190.67 2528.93 NO statement or e..oresslon 01 opinion or ani other matter herem contained IS, or IS to be deemed to be drreclly or indirectly an oHer or the soliCitation of an offer (0 buyor sell any secunty referred to or mentioned The matter IS plesented merely for the convenrence of the subscriber While we believe the sources of our mformallon to be reliable we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be laken by the subscrrner should be based on his own investIgatIon and information Delafield Harvey, Tabell Inc as a corporahon and Its oilicers or employees may now have, or may later take, poSitions or trades In respect to coy secuntles mentIOned In thiS or any future Issue, and such posilion may be dlfleren\ from any views nOli or t18leai!el expressed In thiS or any other issue DeI81Ie!d, Harvey Tabell Inc which IS registered With the SECas an Investment adVisor may gIve advice to ItS Investment adVisory and other customers Independently of any statemerlts made In thIS or m any other Issue Further mformatlon on any secunty 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) 9249660 June 14. 1985 – table The season has arrived for disucssion of below;'whiCnwe aiily recompute e.rch year the as nSeuwm- mfiegrurralbleycoalnfdiereapvuabilliacbalteion''ofth;e;—–II– The past few years have been particularly interesting in terms of Summer market action, specifically action during the month of August. 1982. of course. saw the first major-cycle bottom in history occur in that month, Last year. after a nine-month. intermediate-term de- cline. the Dow bottomed on July 24. and August produced a 9.78 rally in the Dow. In any case. as our readers will recall. the table below takes all one-month and two-month periods for the 59 years from 1926 to 1984, It shows the number of instances in which the Dow ad- vanced and the number in which it declined. For each period. the average percentage change is also shown. OoelIootbeeJl.ods i1226128) IwolIoo1beeJiods !122612841 EodlIootb Qdwaoces Declioes weJaseCbs. dwaoces Decll.oes aweJilaeCba. Januarw 37 22 0.97 38 21 2.19 Februarw 30 29 -0.22 33 26 0.75 Harch 33 26 -0.01 28 31 -0.32 April 34 25 1.24 37 22 1.29 Haw 28 31 -0.94 33 26 0.50 June 30 29 0.90 26 33 -0.08 Jul 36 23 1.72 36 23 2.58 Ausust Septe/aber 1- -oCt;ol;jer 38 23 31 – 21 36 28 1.58 -1.31 -0.37 40 19 3S 24 27 32 3.44 o. 23 -1.64 Noyember 36 23 0.72 35 24 0.40 December 43 16 1.18 —– 42 17 1.92 —– TO.TAL 399 309 0.45 410 298 0.94 The 59 years since 1926 have comprised a total of 708 months. Of those months. 399. or 56. produced advances, The normal expectation for any single month for the 59-year period. therefore. would be that approximately 33 months would show a rise and some 26 months. a decline, As can be seen. the record for both July and August. the latter month especially. is considerably better than this, It is on the basis of these numbers that many analysts have remarked the tendency toward a rally in the Summer months. As we have pointed out in the past. however. July and August do not constitute the most statistically significant periods in the table. The most unusual record shown is that of September which occurred as a rising month in only 23 of the 59 years. a phenomenon widely at variance with the overall history. Likewise. the year-end rally. as shown by the fact that a rIsmg December has occurred in 43 of 59 months. is a considerably more likely occurrence than an advance in July or August. Nonetheless. although the significance may be marginal. the July-August period does demonstrate an advancing propensity. This propensity becomes even more significant when one looks at two-month periods. The two months together have produced a rise in 40 of 59 years. and the average change for that two-month period is .3.44. a number 3! times as great as the average for the 708 periods under study. Given this record. the current market position with most indicators (as of a week ago at least) in gear on the up side. and the recent history of August explosions. the Summer of 1985 might well be an interesting one for the stock market. AWTrs Dow-Jones Industrials (12 00 p. m.) S & P ComposIte (12 00 p. m. ) Cumulative Index (6/13/85) 1293,79 185.93 2493.95 ANTHONY W. TABELL DELAFIELD. HARVEY. TAB ELL INC. No stnt!)ment or e)(prcSSlon 01 opinIon or any other matler herein conl'lIned IS Of IS to be deemed 10 be, dlreclly or Indlrec1ly an ofter or the sollCltallOn of an offer 10 buy or sell any security relerred toor mentioned lhe matter IS presented merely for the convenlcnce 01 the subscriber While we believe the sources of our Information to be reliable weir! no way represent or guarantee the accuracy Ihereol nor of the stalemcnts made herein Any acllon 10 be taken by the subscriber should be based on his o …n mvestlgahon and Inlormatlon Delafield Harvey Tabell Inc. as a corporation ano lis officers or employees may now have or may laler take. pOSlhons or trades In respect 10 any secuntles mentioned In thiS or any lufum Issue, and such pOSition may be dll1l)renl from any views nowor herealler epressod mlhls or anyolher Issue Oelafleld Harvey labell Inc which IS reglslered With the SEC as an rnvestmenl adVisor may give advice to lIs rnveslmenl adVISOry and other customers Independently ot any statements made In IhlS or In any other ISSue Further tnformatlon on any security menllonod 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 – June 21, 1985 One of the venial sins best foresworn by the Investor is impatience. This can take many forms. One is a compulsIve desire continually to do somethIng. A rising stock becomes a candidate for profit taking. A temporarily underperforming stock is thought to be a switch possibihty, etc. etc. This particular compulsion is a modern-day phenomenon and probably a reaction to the conservatism of the typical investment management proceess of 30 years ago where the making of decisions was a task to be avoided if at all possible. Things are probably better today, but, all too often, compulsive actlvity results in portfolio performance inferIOr to that which could have been obtained simply by leaving well-selected stocks alone. A similar affliction is the compulsion to read transcendental Significance into everything the stock market is doing day by day. This compulsion has led to an especial frustratIOn in recent years, since, as we have spent some time in this space pointing out, the market's recent tendency has been to spend protracted periods of time doing nothing of much Importance, followed by short bursts of action during which important price change has taken place. It is almost a year now since July 24, 1984, when the' stock market made its last important bottom at 147.82 on the S & P 500, from which point it has advanced a rewarding 35. The initial phase of that rise lasted for exactly five weeks, to August 28,and took the S & P ahead. 13.2 to 167.40, with the index advancing on 20 of the 25 trading days in I -questtClTl.''4'iTere then followetl-smnl'lirween-duringwhich the-lliarket-tiid'nuthing-whatsoever;-o with the 500 holdIng in a range between 170.41, slightly above the August high, and 161.67, a range just 5.2 from low to high. Finally, starting on January 9 of this year, there ensued another explosion. Once more, this lasted for just five weeks with 21 of the 26 trading days being on the upside. The S & P moved ahead 11, from 165.18 on January 9 to 183.85 on February 13. The aftermath was similar, a 12-week hiatus while the average held in even narrower trading range of 3.9. This finally was followed by the latest upside burst, a four-week rally from May 8 to June 6, raising the level of the S & P by 5.8, an advance somewhat smaller in scope than its two predecessors. In the two weeks since that time, the market seems to have fallen into another period of lassitude, with the trading range so far being 2.4 from low to high. The point is there will probably be no good reason to become frustrated with this sort of action, especially if it continues for some time, as, based on the record of the past year, it may very well do. When the latest new high was posted just two weeks ago, most moment- um indicators were in gear on the upside, indicating the presence of a continuing bull market. There has been a distinct lack of noticeably broad deterioration since then, just as there were no such signs during the long frustrating periods between September and the end of 1984 and from February to May of this year. Lackadaisical action may continue for some time, but there is no indication at the moment that, following the appropriate period of digestion, the rise will not agaIn resume. — ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. AWTrs Dow-Jones Industrials (12 00 p. m. ) S & P Composite (1200 p.m.) Cumulative Index (6/20/85) 1304.09 187.08 2509.93 NO statement or expreSSion of Opinion Of any other maltcr herem contained IS Of IS to be deemed to be directly Of indirectly an ofler or the sollcllatlon 01 an olrer to buyor sell any security reterred toor mentioned The mailer IS presented merely lor the convenlcnceollhesubscnber While we believe the sources of our mformahon to be reliable. we In noway represent or guarantee the accuracy th'1reol nor althe statements made herem Any acllon to be taken by Ihe subSCriber should be based on hiS own mvestlgatlon and Informal Ion Oelaflekl, Harvey label! Inc, as a corporation and liS ofilcers or employees, may now have or may laler lale, poSlltons Oillades In respect to any securities menlloned In thiS or any future Issue and such POSition may be dlUerent from any views now or hereafler e.-pressed In thiS or any other Issue Delafield Harvey label! Inc which IS reglslered With Ihe SEC as an Investment adVisor, may give adVice tOllS Investment adVISOry and other cuslomers Independenlly of any statements made In thiS or In any other Issue Further mformatlon 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 28, 1985 Today's exercise might appropriately be entitled Where the action isn't. Thursday's trading saw new closing hIghs in the Dow-Jones Industrials (at 1332.21) and in the Standard & Poor's 500 II—S tock-Il,-,-a-1-91. 23hhere .-were ,-howeer-,—large.seg.men ts.o(,the emarkeLnoLparticip atingin the festIVItIes. ThIS IS not an entIrely new phenomenon. Despite the existence'of a bull market dating back to August, 1982, there remain a fair number of market areas where performance has been mediocre at best, as the two charts below attempt to show. The chart at left, which has appeared in thIS space before, traces the action of the Dow-Jones Industrial Average vs. the NASDAQ OTC Indus- trials from late 1973 to date. As the chart clearly shows, the history of the OTC market from 1974 through mid- 1983 can be almost described as one long bull market. During that period the OTC Industrials advanced from a low in the low 50's to over 400, a rise of almost 700. The corrections were steep, but over with quickly, with the exception of the protracted downswing from early 1981 through 1982. In the first phase of the bull market, how- Ole DJIA ever, what might be termed a blowoff move took OTC issues into new high territory, both on an actual and rela- –tivebasis..EollowlIlgthat.oLcourse ,O.TCstocks..sJlllIlLal1llarJJl.d.a.half illl!.majoJ'beJU' market' -I while the broad-based indices were undergoing- only a mild correction A sharp rally in early January of this year suggested that the downtrend might be over, but the rally has since aborted and, as the right hand side of the chart shows, relative strength has again been deteriorating with the OTC Index moving sideways while the Do advanced. S&P CAPITAL GOODS I CONSUMER GOODS The chart at right shows another relative ratio, that of the S & P CapItal Goods Index to its Consumer Goods Index. Our colleague, Alan Shaw, noted in a recent letter that this ratio had declined to under I, its lowest level in years. Indeed, the inferior per- formance of Capital Goods stocks antedates the current bull market by a considerable extent, the ratio having peaked in 1980, well before the 1981-1982 bear market. The most recent declining phase is coincident with the current bull market leg from mid-1984, a rise in which Capital Goods stocks essentially failed to parti- cipate, and these issues now find themselves at the same level in relation to Consumer Goods issues that prevailed at the 1982 bottom anl previous to this, at the 1972-1973 high. As Alan pointed out, this is a repeat of a low reached many times before, going back to the 1940's. The reason for citing laggard areas at this thiie-is-that -the basIc-qiIesTion facing investors at -. the moment relates to the continuance of the current bull market. It is doubtful that a significant extension of that upswing can take place without new leadership emerging. The laggard perform- ance of the two sectors shown suggests that there are indeed areas from which such leadership could emerge. ANTHONY W. TAB ELL AWTrs DELAFIELD, HARVEY, TABELL INC. Dow-Jones IndustrIals (12 00 p. m.) S & P Composite (1200 p.m.) Cumulative Index (6/27/85) 1331. 43 191.28 2538.38 No statement or expression of opinion or any other matter herem contained IS or IS to be deemed to be directly or IndlrecUy, an offer or the solicitation of an offer to buyor sell any secunty referred 1001 mentlonoo The matter IS presented merely for the convenience of Ihasubscnber While we beheve the sources of our mlormallon 10 be reliable, we In no way represent orguaranleethe accuracy thereof nor of the slalemenlS made herem Any action to be taken by the subscriber should be based on his own Invesllgallon and Informallon Delafield, Harvey, Tabell Inc, as a corporation and Its officers or employees, may now have, or may tater tae, positions or trades In respect 10 any securtlles mentioned In thiS or any lutura Issue and such pOSl\lon may be diliereni from any VieWS now or hereafler c(pressed m thiS or any other Issue Delafield Harvey Tabell Inc, which IS registered With the SEC as an Investment adVisor, may give advice tOils Investment adVISOry and other customers Independently of any statements made Ifl thiS or In any other Issue Further mformatlon on a ny security mentioned herelfl 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 5, 1985 The second quarter of 1985 has come to an end, and the event was duly celebrated by the II'-., r!,e.!'.s!, …..nedneaynwper, ofm'1tpal ful!.c;I.JlerJ,!rma.!lceJor thaLquarJe,-On .average,- ..-..J6..) tile cpllblished 'results were somewhat less spectacular than July 4th fireworks. Although the mean fund performance was plus 6 for the three months ended June 30th, this figure was slightly under comparably measured returns for both the S & P 500 -Stock Index and the Dow-Jones Indus- trial Average. It was, moreover, as the press stories noted, the eighth consecutive quarter in which funds, on average, underperformed the S & P. The record of the past two years will undoubtedly please that minority, mostly in the aca- demic community, which still basinally believes in the strong form of the random-walk hypothesis. This hypothesis essentially states that it is impossible for professional investment management con- sistently to outperform broad unmanaged portfolios for which the S & P 500 may be oonsidered a proxy. Needless to say, as market technicians, we find ourselves in total opposition to this theory. Nonetheless, we think the figures indicate some of the practical difficulties which have faced the investment manager over the past couple of years. They are, in addition, we think, indicative of the changing nature of the market since the beginning of the current upward cycle in August ,1982. It is no accident, in our view, that performance difficulties for profeSSional managers go back exactly two years, to the end of the second quarter of 1983. It is also interestmg to note that, for the year previous to this, managed funds in general tended to outperform the averages by significant amounts, this despite the fact that, during that prior year, the averages in general put on one of their best performances of all time, the S & P 500 rising 53 from June 30, 1982 to June 30, 1983. It is worthwhlle recalling just precisely what was going on during that happy period. What was taking place, of course, was the initial liftoff of the present bull market ,and, as technicians are aware. such periods have a number of normal characteristics. One such charact- eristic is above-average market breadth which means, quite simply, not only that the averages are moving ahead spectacularly, but that most stocks are also di-;;I' so, and tll.-;'t; more. ;, tl , 1-a'llolmo,st ..v …. rru,u pomt or Vlew it is this breadth which makes it easy to avolO the sorts of portfolio mistakes which penalize overall performance. Another characteristic of the 1982-1983 period was that it constituted the last hurrah for the Over'-the-Counter market. While the S & P 500 was up 53, the OTC industrials almost exactly doubled. This suggests that it was a particularly easy period in which to improve portfolio per- formance by juicing up portfolio beta or volatility. There exist essentially two reasons why an individual stock will, at any point in time ,outperform the market averages. One is superior rela- tive strength characteristics, the often-ignored alpha in the equation which measures a stock's performance relative to the market. The second reason for outperformance is beta or volatility. High-beta stocks will, by definitIOn, magnify moves in the averages in whatever direction. OTC performance during 1982-1983 suggests that there were large numbers of such stocks available for selection. In contrast to this sort of atmosphere, the market environment of the past two years has altered radically. The period subsequent to June, 1983 saw the complete collapse of a large port- ion of the high-beta segment of the market. The same stocks that had done so much to bolster portfolio performance during the bull market's early stages were now producing precisely the op- posite effect, and it became necessary dramatically to reduce exposure to these issues. This was particularly true in view of the fact that the mid-1983-mid-1984 period saw stock prices generally enter a declining phase. Whereas portfolio volatility constituted a major tool for outperforming the averages in 1982-1983, defensive quality constituted the proper medicine for 1983-1984. As mid-1984 approached and the second phase of the bull-market rise began, the market, pre- dictably became more selective. As we noted last week, large segments of the market, OTC issues once agam and capital-goods issues in general, tended to fail to participate in the advance. The same was true, to a large degree, of the important energy sector. Above-average performance -… tended to be concentrated in consumer-goods and interest-sensitive stocks, areas not generally considered as appropriate components for an aggressive portfolio. What we are saying here, of course, reflects our own technician's bias in favor of the thesis that markets possess identifiable characteristics and that a study of these characteristics is import- ant. We think that technical work can, in general, identify the sorts of broad shifts in market sentiment discussed above and can therefore constitute an indispensable tool in the overall portfolio- management process. AWTrB Dow-Jones Industrials (1200 p.m.) 1334.45 S & P Composite (1200 p.m.) 192.33 Cumulative Index (7/3/85) 2568.72 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. No statement or el'preSS10n 01 opinion or any othe! matter herem contamed is, or Is to be deemed to be directly or mdlrectly, an oller Of the sollc\tatlon 01 an oller to buy or sell any secunty referred loor menlloned The mailer IS presented merely lor the convemenceof the subscriber While we beheve the sourcesol our mlormallon to be reliable, we m noway represent or guarantee Ihe accuracy Ihereof norof Ihe statements made herem Any action to be laken by the subscriber should be based on hiS own mvestlgatlon and Inlormatlon Oelafleld, Harvey, Tabell Inc, as a corporation and ItS officers or employees may now have, or may later take, positions or trades m respect 10 any seculI\les mentioned m thiS 01 any luture ISSue, and such pOSition may be ddiercnl flom any views now or hOrealtcl expressed In thiS or any other Issue Detafleld, Harvey, Tabell Inc, which Isreglslered With Ihe SECas an mveatment adVisor, maYQlve adVice to liS Investment adVISOry and other customers mdependenliyof any statements made In thiS 01 In any olher Issue Further Information 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 \ July 12, 1985 Bond prices are up Bnd mterest rates have come down. Inflation hedge stocks are under pressure while finanCIal assets — bonds and the dlsmflation beneficiary stock sector — seem to be the only -;;g;;a;;;m;i;e''1n1owrr–wlienaIlOdia'hese cRan geslil1'lle 'CnaractensticSor-tbe markerow apparent-to – -'I – all of us. become identIfiable Last week, thls letter examined the recent relative performance or lack of performance of the mutual fund mdustry wIthin the past two years. Part of the reason for thIS below average performance was the inability of the money manager to IdentIfy changes withm the market. We concluded by suggestmg that markets do possess identIfIable characteristics and that a study of these characteristics IS. indeed ,Important. Techmcal analYSIS can identify the sort of broad shifts in market sentIment and can, therefore. constitute an indispensible tool in the overall portfoho-management procss. In order to answer the above question. the logical place to start to examine this change or shift In the nature of the stock market should be August. 1982. the start of the current bull market which IS now almost 750 days old. Instead of lookIng at some of the broad-based indices such as the Standard & Poors 500. we have Intead taken a monthly average of S & P groups that either constitute an Inflation hedge or would be a hsinflation beneficiary and have created two separate indexes. Inflation hedge groups would include. among others. metals. gold. copper and the entIre energy sector. DISInflatIon benefIciary groups would Include groups such as aIrlines, utilities, foods, drugs. banks. and insurance. STANDAD &POORS 500 INPlRTION HEDGE VS DISINFLRTON BENEFICIRR( RRTIO The chart above shows the monthly close of the S & P 500 and the ratio of the inflation group to the dlsinUMion group from January. 1972 through June. 1985. In other words. as the inflation hedge mdex IS advancmg more than the disinflatIon benefiClary Index. the ratio hne IS going up (1972-1980). Clearly. It can be shown from the chart that the inflatIon hedge sector has underperformed those groups which are disinflatIon benefICIaries since the August. 1982 low. It IS possible to go back even further than this date to Identify the beginning of this sigruficant change in the market environment, a change that has sustained Itself to the present. The ratio reached its hIgh at the end of 1980 comcident wIth the high 10 the S & P 500. ThIS date, by hIndsight, SIgnaled the peak of the ratIo of inflationary hedge stocks relative to those stocks that are beneficiaries of dlsmflatlon. It was during the subsequent correctlon in the market to the August. 1982 low that the mflationary-hedge mdex turned down. This occurred while the dlsinflation beneficiary index contmuea to move ahead in the face of a 15 decline in the S &; P 500. The final confIrmation of this SIgnificant mternal change came when the market rallied dramatically In August. 1982. but failed to Include the mflation-hedge sector As can be seen from the table on the OppOSIte page, from the ratio peek of December 1980, the mflation-hedge sector has declined WIth mmor interruptIons approximately 33 to June. 1985. The dlsmflatIon beneficiary mdex. on the other hand. has increased 125 to date. This IS not to suggest an immedIate switch mto the dIsinflatIon benefICIary sector was warranted shortly after the peak In the ratio ill December, 1980. However. we would suggest an examination of the data over time would reflect this gradual internal change within the market. By the August. 1982 low this change should have been clearly identifIed with approprtate shifts m weIghting made to participate In the advance which was to come. Where are we now in terms of thIS ratio The raho. based on data available from 1960 to date currently IS at the lowest level smce 1972, the historical low for the serIes. We know the stock market to be a leadmg inmcator histOrIcally reaching peaks and troughs earher than the correspondmg busmess cycle turns. Although it seems lIkely to expect further strength m the disinflatlOn benefIciary sector in the lmmediate future. It would seem Wlse to continue to momtor serIes of thIS type that attempt to measure shlfts m market sentIment so we do not find ourselves askmg in the future the reasons why bond prices have gone down and why are mterest rates up. Dow-Jones IndustrIals (1200 p.m.) 1336.58 S &; P Composite (12.00 p.m.) 192.80 CumulatlVe Index (7111/85) 259883 ROBERT J. SIMPKINS, JR. DELAFIELD. HARVEY. TABELL INC. NO slalQment or e)'preSStOfl of opinion or any Olher matter herein contained IS or 1510 be deemed to be dlreclly or Indlreclly, an Offer or the soUcl1allon of an offer to buy or sel1 any secl.mty referred to or mQnlloned The matter IS presented merely forthe convenience 01 the subscnber While we betl!;!ve the sources of our information to be reliable we In no wav represent or guarantee the dccllraCy thereof nor of tho statements mad herem Any action to be taken by the SUbSCflher should be based on hiS Own m..esflgaflon and mformatlon Oelafleld, Harvey Tabell Inc as a corporallo'l and liS olilcers or employees may now have, or may later take, poSitions or trades In respect to any SCCUfllles mentioned In fhls or any future Issue, and such pOslhon may be dllferem from any VICWS flOW 01 hereafter ( pressed In thiS or any olher Issue Delafield, Harvey Tatel1 Inc which IS registered With the SEC as an Invcstment adVisor, may give adVice 10 Its Investmenl adVISOry and Olher customers Independently 01 any statements made In thiS or In any other Issue Further Information on any security mel1\loned herein Is available on requesl ,—————————————— – PREPARED BY DELAFIELD, HARVEY, TABELL INFLATION DISINFLATION DATE HEDGE BENEFICIARY DEC 1980 114.58 79.85 JAN 1981 FEB 1981 HAR 19B1 107.47 100.83 104.55 84.47 84.60 91.1B APR 19B1 103.41 95.27 tlAY 19B1 100.95 95.50 JUN 19B1 96.05 100.94 JUL 19B1 100.54 94.49 AUG 1981 105.54 92.27 — -. — SEP 1981 OCT 1991 91. Bl 87.29 91.0B 9i44- ,1' – NOV 1981 91.54 92.71 DEC 1981 92.71 91.96 JAN 1982 82.52 B9.14 FEB 1982 HAR 1982 77 .05 70.42 93.65 97.05 APR 1982 72.3B 101.24 tlAY 1982 72.86 99.94 JUN 1982 66.08 96.97 JUL 1982 63.00 96.95 AUG 1992 62.37 94.95 SEP 1982 70.73 105.BO OCT 1982 79.10 119.47 NOV 1982 7B.57 127.54 DEC 1982 78.39 131.50 JAN 1983 B6.12 127.68 FEB 19B3 84.94 130.37 tlAR 1983 85.91 142.32 APR 19B3 90.77 148.94 IIAY 1983 97.29 148.90 JUN 1983 96.95 150.81 ,——- JUL-'1983' –fOO44 – ,c-150;45'- AUG 1983 SEP 19B3 101.76 102.86 140.75 IH.1B OCT 1983 97.29 147.B9 NOV 19B3 7B.92 149.88 DEC 19B3 79.99 147.5B JAN 1984 79.56 142.57 FEB 19B4 7B.12 134.11 liAR 1984 81.41 133.79 APR 1984 82.29 132.54 IIAY 1984 78.33 131.52 JUN 1984 72.72 131.85 JUL 1984 67.97 130.18 AUG 1984 71.87 138.30 SEP 1984 73.94 141.65 OCT 1984 71.45 141.97 NOV 1984 71.25 145.BO DEC 19B4 68.B2 147.61 JAN 1985 71.99 152.36 FEB 1985 , , liAR 19B5 – – –APRI985' 77 .14 75.67 77.01 160.B6 , -160.77. 162-;19 n', – IIAY 1985 77.06 169.77 JUN 19B5 76.13 180.17 RATIO 1.435 1.272 1.192 1.147 1.0B5 1.057 0.952 1.064 1.144 -1.052 -0;996- 0.9B7 1.00B 0.926 0.B23 0.726 0.715 0.729 0.6B1 0.650 0.657 0.669 0.654 0.616 0.596 0.674 0.652 0.604 0.609 0.653 0.643 -'0.668— 0.723 0.713 0.65B 0.527 0.542 0.558 0.5B3 0.609 0.621 0.596 0.552 0.522 0.520 0.522 0.503 0.4B9 0.466 0.473 0.480 0.471 – O475 0.454 0.423 .- — — – — -. – — – -co- — –7 , — —

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 July 19, 1985 On Wednesday of this week. the Dow-Jones Industrial Average posted B. new closmg record high of 1357.97. Wlth inflation at 8 low level and mterest rates appearing to want to work lower 11–'there–8 Slo1fe–a-syilchlhg-of !–assets' fromb6nQs- to'stocks-raklng–place–.. CO,u'1ea.wiltfij.n-tliiS'–o'– market environment 18 the contmued dommance by the institutIonal investor overshadowing an uncertain individual investor. Confirming this impressive actIOn of the market averages has been the continued strength in market breadth statistics. The chart below shows the DJIA from the August, 1982 low to date. together with two daily breadth indexes which are computed based on the number of advancing and declining issues for each day. We have had breadth statistlcs available to us for total issues traded on the New York Stock Exchange on a daily basis for over 60 years. Historically, Interpretation of thIS indicator has sug- gested that if succeSSlve new hlghs on the Dow were not confIrmed by new highs m the breadth index. lower stock prices were mdicated. An obYloUS example of this type of divergence occurred from June, 1983 through January, 1984, and is shown on the chart above with appropriate trend lines drawn. On the other hand, when breadth continues to outperform the Dow over time, a bull-market condition continues to exist. Such is the case today. The action of the breadth indicator of total Issues traded from the August, 1982 low to date has been extremely informative. From this low. each rally in the Dow to a new high through June. 1983 was fOllowed shortly by a confIrming new high m market breadth. Subsequently. new highs in the Dow were not confirmed by the new highs in the breadth index and the market corrected itself 15.59 to the August. 1984 low of 1086.57. Since that time, each new hlgh in the Dow has been followed by 8 new hlgh in breadth. In fact, thIS week, the cumulative NYSE advance/decline total lssue breadth index confirmed the recent high in the Dow. and in so doing reached 8 level exceeding its June, 1983 hIgh, As comforting as thls seems, and it is, it should be pointed out the total issue index has been distorted because of the recent strong performance of the preferred stock sector withIn the total issue index. Preferred stocks represent approximately 25 of total issues traded daily. During the late 1960 1s. the NYSE began reportmg daily breadth statistics of total Issues traded anCl, also of common stocks. The technician was now able to construct a breadth index of only common stocks as shown above. For the past few years. the total Issues breadth Index has outperformed the com- mon stock breadth index by a relatively constant margin. Both mdices moved in concert and any measured differences were msigniflcant. ThIS was true until the Fall of 1982. As can be seen by inspectIng the two breadth indexes, the inclusion of preferred stocks in the total issue breadth index has provIded an upward bias to this serIes. ThIS we must logically assume is because of the strength in the overall interest-sensitive sector of the market. Even while laggmg, the common-stock breadth index is currently close to posting a new hIgh for the year, albeit clearly well below its hlgh of June, 1983, The condition of the maturmg bull market IS indeed healthy. Overall breadth figures remain positive, the major stock-market indices are at record hIghs with no inwcation of negative dlvergence conditions existing. There is good reason for the market to contmue to sustain itself. We should only respect its age. ROBERT J, SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (1200 p.m.) S & P ComposIte (1200 p,m,) Cumulative Index (7118185) 1354,84 194,46 2636,10 No statement or xpresslOn of opinion or any other matter heren) contained IS or IS to be deemed to be dlrec1lyor mdlfeClly, an oHer or the soliCitation of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subscriber While we beUeve\he sources 01 our information to be reliable we Ir1 no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be talen by the subSCriber should be based on hiS own investigation and information Delafield, Harvey, labell Inc, as a cOlporatlon and Its officers or employees may now have or may later lake, pOSitions or trades In respect to any secunlles mentioned In thiS Of any future Issue and such POSition may be dlifp.rent 1rom any views now or Mlealter explessed In thiS or any other Issue Delafield, Harvey, labelt Inc which IS regIstered With the SEC as an Investment adVisor may gIVe advice to ItS Investment adVISory and other customers Independently 01 anv statements made In thiS or In any other Issue Further informatIOn on any secuflty 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 July 26, 1985 But many that are first shall be last. – . Matthew XIX, 30 .-, — On-the face or iClast 'week's -stock'market wa,s rather a dull., ,-'Justa week- ago, he Dow-Jones Industrial Average, in the course of its rather ' followthrough after PresIdent Reagan's recovery, had posted yet another new alltime high accompanied by a breadth confirmation, By week's end, the average had beaten a modest retreat to around 1352, an almost unnoticeable decline of less than 1. However, underneath the surface of all this, the market seemed bent on trying to prove the biblical adage. Essentially, what took place was an all-out assault launched against those stocks which had treated investors best over the past five years. One could pull a hundred or so individual examples of this sort of thing out of the week's trading, but perhaps the best simple proxy is probably the Dow-Jones Utility average. This rela- tively staid indicator had, until just recently, been scoring new peaks along with the Industrials. Its alltime high had been on July 12 at 168,92, Over a period of eight trading days ending on Wednesday, it had declined to 157.83, a drop of 6.56. This rather extraordinary performance in- cluded a one-day decline of 3.27 on Tuesday. The word extraordinary is here used advisedly. There have been, over the 35 years since 1949, only 10 trading days on which the Utility Average declined by an amount greater than 3. Over those 10, only two saw a drop significantly greater than the one which occurred this week, a 7.3 decline on May 28, 1962 and a 4.84 decline on April 23, 1974. The drop brought the Dow Utilities back to a level they had not seen since early May. On a relative-strength basis, the decline was even steeper. Utilities had, in general, been achieving peaks relative to the S P as recently as last month. Many of them dropped off this week to a position relative to the 500 that they had not seen since March, shortly after the latest leg of the bull market began. As we said above, we are, here, only using the Utility Average as a proxy for a much wider phenomenon. The declines were as dramatic in such industries as Food, n',gs, RRnk. andInsuRn Th ' .;n';, .in nth ,rI, .were lvthose rI'o'ft'n beneficiary stocks identified in this space by our colleague, Bob ,, two weeks ago. As the chart in that letter demonstrated, these issues have been superior nanuvc performers since late 1980. They were essentially resistant to the bear market which continued from that date to the 1982 lows, managed to participate in the first upleg of the subsequent bull market to mid-1983, and have been outperforming on the upside since the overall market turned up again in July of last year. As noted two weeks ago, the ratio of these disinflation-beneficiary issues to inflation-hedge stocks had returned to levels not seen since 1972. Last week's trading, then, represented an apparent sudden diSEnchantment with the sort of market action which has been going on more or less consistently for half a decade. The osten- sible reason for the action was the simultaneous emergence of large numbers of institutional selling programs which appeared to be concentrated in the sorts of issues we have been talking about. A modest pickup in volume on Tuesday and Wednesday lent credence to this theory. While trading activity (143 million shares on Tuesday) did not set records, it was in the vicinity of the peak levels generally seen for 1985 so far. One of the things that makes technical analysis a faSCinating discipline is that markets always constitute a blend of the old and the new. The institutional selling program, which, as last week's trading demonstrated, can create sudden and unexpected effects, certainly constitutes a trading factor that has achieved significance only in recent years and is likely to become more significant as time goes on. Classical technical theory would call for declines such as were seen last week to be preceded by long periods of distribution. Such was most emphatically not the case in recent days. The bulk of the isues that were hit hardest showed no tops of any significance. The retracement, however, conformed to the classic pattern in terms of lack of follow- through. By and large, despite the vicousness of most of the declines, they appeared to be peter- . ing out by the end of the week. Thus, while sudden large sales at distress prices may be a new phenomenon which the technician will have to live with, we think that the classical pattern will adhere in the present case — in other words, that the stocks hit hard this week will demonstrate decent price recoveries over the near term on both an actual and relative basis. Such a Neovery ma turn oilt to be part of a longer and more important distribution process. This, however, re- mains to be seen. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (1200 p.m.) S P Composite (1200 p.m.) Cumulative Index (7/25/85) 1351.69 191.87 2619.43 NO slJtlmenl or (ll'preSSlon 01 opinion or any other matter herein contallloo IS or IS to be deemed to be directly or indirectly an offer or the soliCitation of an offer to buy or sell any securltv retorred loor menlloned The matter IS presJnted merety forlhe convOnlenceof Ihesubscrtber While we beheve Ihe sources of our Information to be reliable we In noway represent or guarantee the accuracy thereof nor of tho statements made helem Any action to be taken bv the subSCriber should be based on hiS own 1fwestlgatlon and IIlfOrmatlon Delafield Harvey, labell Inc, as a COrPOf8tlOn 8nd lIS olllC(.fS Of employees, may now have, or may later take, POSitions or trades In respect to any securities mentioned In thiS or any future Issue and such posl\lon may be dilfeiont Irom any VleViS nowor hereattcr epressed In thiS or any other Issue Delafield, Harvey Tabell Inc which IS registered with Ihe SEC as an Investment adVisor, may QlveadVlce 10 lIS Iflvestment adVisory and olher customers IIldependently 01 any slatern!nts made In thiS or In any other Issue Further Information on any security mentioned herein IS available on request !