TABELL'S MARKET LETTER 600 ALEXANDER ROAD. PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9B7-2300 It would require a sublime stretch of the imagination to find anything particularly impressive in last week's stock market action. Essentially, it consisted of the market's grasping at a brand new straw—the machinations of the assorted Sheiks of Araby to prevent the price of 011 from faUing into the single-digit range. TheIr agreement to cooperate for two whole months had the market up some twenty pomts at midday Tuesday before it fell back. Wednesday's and Thursday's action demonstrated mild firmness but no particular follow-through. From the technician's pOint of view, the various averages did, indeed, spend the week engaging in some fairly important testing of prior lows, and they emerged from that test wlth a passing grade, although that grade would have to be a great deal closer to a C minus than an A plus. The two previous important closing lows on the Dow were 1735.51 on April 7th and 1758.18 on May 19th. The August 1st close of 1763.64 left those two prior lows intact. Intra-day, the May 19th bottom of 1746.53 has been penetrated twice, on July 30th and on August 4th, but in both cases rallies at the end of the day kept the closing figures intact. The S & P 500 has even managed to act a bit better than the Dow, not having posted a new low since July 15th, whiCh bottom also managed to remain above the April-May figures. This, undoubtedly, is due to that index's Utility component. The action of the S & P 400 has almost exactly paralleled that of the Dow and, indeed involved a modest new closIng low in mid-July. Meanwhile. the averages' third major component, the Transport issues, continued to Sink like a stone, with the DJTA posting a new intra-day bottom of 697.13 on Monday. This constitutes a fairly impressive 17.3 decline since March 31st. The saving grace here, however. may be that the most pessimistic downside objectives for that average's top are begInning to be run out. 670-655 is about the worst downside target that can be read. Breadth action additionally continues to be abysmal. Our breadth index is now down more than was the case in Novemb.!',…!183 , ..which drop presaged the 1983-84,correction andJulLIIlaoexceededits … decline of July-November 1985. one of the deepest declines ever later erased. The divergence from the April 21 breadth high has now lasted 76 days. Some modest grounds for optimism may be found in the following table, Which updates a study published in this space in early July. That study, based on trading through June 30th, three days before the DJIA high, tallied the number of stocks that had made highs in March, April, May – mid-June, and mid-June to the date of the stUdy. We updated the study this week to inclUde trading through August 1, and the results are of moderate interest. DATE OF HIGH NUMBER OF STOCKS 6/30 8/1 -DIF-F March April May I-June 13 June 16-Aug. 5 341 297 301 367 320 -21 247 -50 242 -59 490 123 EXTENT OF DE C LIN E 6/30 8/1 6/30-8/1 24.6 18.8 14.0 4.3 31.3 26.6 24.3 12.6 -8.8 -9.6 -12.0 -8.7 First of all, the number of stocks making highs in the March – June 13 period has dechned by 130, and the highs from June 16 – August 1 surpassed those of June 16 – June 30 by 123 (there were seVen delistings). 198 of the 490 stocks posting recent highs managed to do so after the Dow peak on July 2nd, and it is interesting to note that 93 of those 198 stocks were Utilities, including the vast majority of listed issues in the industry. At first glance, It would seem to be suggesting that market leadership has narrowed even further down to this single market sector. What is interesting. however. is the average decline shown by the four groups of issues on June 30th and then August 1st. The figures are not all that different, as the computed average July declines show. and indeed the declines for the first three groups are about the same. with the stocks that made highs early having declined less during July than those making later peaks. The stocks making recent highs are, as could be expected, an exception. The figures. it seems to us. have at least some suggestion in them of a rotating correction, one where some issues. at least. are close to completing their corrective phase. This could be an indication that the market might complete the corrective process it is now in by using up time, rather than demonstrating further violent action on the downside. This thesis could be confirmed if the lows mentioned above were able to hold. and the market were then. following this test, able to produce a fairly decent rally. AWTvf! Dow Jones Industrials S & P 500 Cumulative Index (August 7, 1986) 1785.71 237.42 3020.34 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL, INC. No stal0ment or expression of opInion or iJny other matter herem contained IS or IS \0 be deemed \0 be directly or indirectly an offer or the soliCitation 01 an offer to buy or sell any security mferred 1001 mentioned The matter IS presented merely tor the convenience o11hesubscnber Whlle …. e believethesDurces of our information 10 be reliable we Inno way represent or guarantee the accuracy therool nor 01 the statements made herem Any action to be taken by the subSCriber should be based on hiS own Investlgallon and Information Delafield, Harvey labell Inc. as a corporation and Its officers or employees, may now hae or may later tare positions or trades In respect 10 any securities mentioned In thiS or any future ISSue, and such pOSition may be dillerenl from any ICWS now or hereafter c,prCsscdlll Ihls or ilny other Isue Delafield Harvey TilbcU Inc whiCh IS registered With Ihe SEC as an Investmenl adVisor may give adlce to Its Investment adlsory and olher customers Independently of any slalements made In thiS or In any olher Issue FUrlher Information on any security mentioned herein IS available on request

T I.ii.\liHEIL.IL.'S I.ii.\IRl l E T D..lETTIEIRl 600 ALEXANDER ROAD. PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 9872300 August 15, 1986 1–….,…-1 n…Jig h t-of–recent …mar..ket… ac.tion ,….it.lD.!l-ybe..w.qr.th whil….t9….Sum!!!e.-S-'!II!eof….the-.opJnions …exp r.essed—- in this lett-er in the'past'four moflths'-' .-.- – . . – – .- -.. . On May 23rd, we first noted the deceleration in the astounding rise, which, at that point, had taken the Dow from 1300 to 1850 over an eight-month period. We also noted, the two benchmark peaks that had, by then, formed, the first in early March, and the second in mid-April. We noted that this configuration possessed at least the potential of being a top formation with an ultimate downside objective in the low 1600' s. (It has since, of course. broadened.) Two weeks later, on June 6th. we asserted that the market seemed, on an intermediate-term basis, to have reached an overbought position. The following week. on June 13th, we noted the achievement of yet a third benchmark high in most averages, around the end of May, and, in a fairly detailed discussion of major market in'dicators, pointed out, some of the divergences that were, by then, beginning to develop. We pointed out the poor relative action of the Transportation issues, creating a classic Dow-Theory divergence, and noted that breadth indices had peaked in mid-April and subsequently declined Sharply. By that time, we suggested, it was possible to date the sea-change in market behavior with some degree of precision, the transition having taken place on March 27th, when almost all major averages peaked simultaneously, the high in the case of the Dow having been 1849.74. On July 3rd, which happened to be the day after the Dow made its all-time high, we presented a statistical study noting the narrowing of leadership and suggested that the strength of the averages was masking what appeared to be considerable weakness on the part of individual stocks. The following Monday produced the now-famous 62-point Dow decline in response to predictions with which, in light of the top that had by then formed, we could not find ourselves in serious disagreement. We did, however, at that time, pOint out the fact that shorter-term objectives seemed to be centered around the 1770-1760 area. Also, in the following week's issue, we indicated that the free-fall phase of bear markets seldom occurs immediately after the high is reached. We noted that in 1 – —-sevenofl.-the–ten….cycte–bearma-rket5-since-'-t946 that, following the initial decline, the liiarket-L——-I subsequently returned to within 2 of its previous high within periods ranging from 2 to 14 months. Last week, while reporting the continued long-term deterioration, we cited as yet another mitigating factor some evidence of rotation of leadership on the downside and also pointed out that the two major previous benchmark lows of early April and mid-May were, for the time being at least, successfully tested. As we now know, the Dow reached a low, on August, 1st, of 1763.64 and rallied, in a space of just under two months, to Thursday's close of 1844.91, within 3.3 of the July 2nd high. Now we are not, in all honesty. engaging in the above recital to prove that. in some form or another, we were right on the market. We hope that, in 30 years of market commentary. we have developed the humility which goes with all too often having been absolutely and gloriously wrong. The point we are trying to make is that, over the past 5 months, evidence concerning a plausable market forecast and a resultant appropriate investment policy has gradually been accumulating. What we want to emphasize is that nothing to contradict that chain of evidence has emerged. By the highs of the middle of the week, most averages had reached the upside objectives of the tiny bases the short period since mid-July had allowed them to form. Further basing may indeed take place, and we would not even be surprised by the posting of new highs in some of the major averages, although we would not expect the existing breadth divergence to be erased. We cited last week the evidence for rotating downside leadership rather than the concurrent collapse in many stocks which would produce serious weakness in the averages. In other words, it seems to us, the most optimistic scenario that can be foreseen is that the market might spend some time behaving pretty much the way it has since March, at the high for which month. let it be remembered, the DJIA was about five points away from yesterday's closing figure. Meanwhile the downside potential, if the process that has been going on since last Spring is indeed a distributional top. is a wee bit on the scary side. Formulating investment policy has always been, it seems to us. a matter of weighing risk against reward and we continue, at the moment, to have the feeling that the former is somewhat greater. This Tuesday. as th-e New York Times this morning noted. an anniversary took place–the fOUrth anniversary of the 1982 market bottom–which means that we have seen four extremely rewarding years. Certainly the sort of corrective process which would set the stage for a similar period ought not to be unwelcome. nor should a policy of conserving resources for that future bull market be inappropriate at this time. AWTvf1 Dow Jones Industrials 1846.03 S & P 500 246.14 Cumulative Index (August 14, 1986) 3121. 26 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL, INC. NO slat(lment or expression ot OpiniOn or ar'ly other matler herem contained IS or IS to be deemed to be directly or indirectly, an offer or Ihe sohcltatlor'l of an offer to buy or sell any secunly referred toor mentioned The mailer IS presented merely for the conver'llenceofthe subSCflber While we believe the sources of our information to be rehable, we In noway represent or guarantee the accuracy thmeof nor olthe statements made herein Any action to be taken by the SUbscriber should be based on hiS own investigation and information Delafield, Harvey Tabell Inc, as a Corporation and Its 011 Ice,s Of emplovees may now have or may laler take poSI\lons or trades In respect \0 any securtlles mentioned In thiS or any future Issue, and such position may be different hom any 'Ilews now OJ heleafier (lxpressed In this or any other Issue Delafield Harv(lv Tabell Inc which IS registered With the SEC as an Investment adVisor, may give advice to I\S Investment adVisory and oth(ll customers Independently 01 any statements made In thiS or In any other Issue Further information on anv secuflty mer'ltloned herein IS available on request

11& ISUE n..n… s Iil1iI&RMIEII n..1EIIIIIER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – August 22. 1986 Just about the entire media industry has spent the last week or so bombarding its readers hlp with analysis and commentary on the tax reform bill. We are, nonetheless. in our modest-circulation sheet. not embarrassed…..tothrow JrL.9J!..owntwo-cnts \!rt,spcia11y-'jnce !ax polic. and financial market-,s'-. ,I are not unrelated.' Herewith, then. a few comments… — — …. -… .. – .. – -…. .. – It will, first of all, not surprise our readers to know that we agree with the multitudes of our peers who assess the bill 85 one of the most important and far-reaching pieces of legislation to come along In years. One reason and one reason only. is necessary to compel us to that assessment—Iower margmal tax rates—the magic 28. The purists who carp about the effect. equality or logic of this or that feature totally fail, it seems to us to appreciate the importance of the single essential one. Having been life-long commentators on markets, we perforce admire them and cannot help but applaud legIslation which, by allowing each and every American citIzen his own control over the deployment of at least 72 cents of each dollar he earns, returns a huge dose of major economic decision-making to the market place. The retreat from the use of the tax code for economic and social engineering, is, in our view, to be applauded. the major recent results of such attempts having been, as far as we can see. capped oil wells. vacant office buildmgs. and bankrupt farmers. Even the most apparently successful of these tax-manipulation attempts, the 40-year effort to encourage owner-occupied, single-family housing. so politically sacrosanct that it had to be left in the new tax code, is beginning to show a few warts, it having come to the attention of numerous observers that a new generation finds itself unable to afford housing equal to that obtainable by their parents at the same age. Nonetheless, the new bill takes a long step in returning taxation to what should properly be Its single function–revenue raising. Having gotten the above off our chest, we can now return to the specific area we are supposed to know somethmg about and look at those provisions of the new code which specifICally affect the stock market. The first and most obvious of these is caPItal gains, and the purists referred to above are, of course, bemoaning the rise in the rate from 20 to 28. A simple-minded comment on this is that. in our 32 years in the business, we have been subject during most of them to a capital gams rate in the general area of 28 and occaSionally higher. We seem to remember. during those years, some pretty 1I good stock markets. It.is suggested in- various quarters that venture capital will imme(jiately disappear and entrepreneurship cease to eXIst. Bemg personatIy acquaInted wIth a few venture capitalists. we are skeptical of this arguement. Not surprisingly, these gentlemen would prefer to see their profits taxed at 20 (they would prefer 0 even more). but they are, by and large, simply attuned to assuming unusual risk in order to obtain unusual reward. We doubt that they mtend immedIately to transmogrify themselves into investors in government bonds. Our own purist's view IS, of course, that capital gams should not be taxed at all. but the problem WIth tax law has always been in defining precisely what constitutes capital gain. It has never been enough to say simply that it is the profit arising from the purchase of an asset at one price and its sale at another price. Such a transaction involving a can of soup by the A &; P has never been regarded as anything but mcome. On the other hand. retention of a financial asset for a protracted period of time has always been thought to be a different breed of cat, for reasons that can be discussed at length. American law has always emphasized a compromISe. the length of time held, as the criterion for duferentiating between capital gams and income, that length most often having been six months. although we recently underwent a short experiment with one year. It is one of those principals that has lasted a long time because it has, more or less, worked, but we would be reluctant to try to contruct a phllosophical arguement for it. In any case. one of the most signifIcant features of the new law is that the time test is going away. Capital gains are synonomous WIth income for holdmg periods rangmg from 30 seconds to inflmty. This will, we think, have some interesting effects. one of which will be more active trading startmg in 1988, an mcrease WhICh will. however. be mitigated by the large entent to which current stock holdings (i. e. pension fund positions) are not taxable in the first place. Short-term, as many analysts have pointed-out, we should see 8 pressure to take profits before the end of 1986. The other major aspect affecting the stock market. of course. is the corporate tax which. overall. will be mcreased to pay for the cuts that the majority of voters will be receiving. We cannot. however, view this WIth alarm. The corporate tax had. in recent years. become an incredible melange, largely due to additional social engineering attempts based on the thought that-the -useful life of an — asset could be legislated. The result was a huge list of major companies paying little or no tax at all made this ObVIOUS. On the other hand. a uniformly-applied 34 tax may make economic sense. The conventIonal wisdom has long bemoaned the low rate of U.S. saVIngs. Many stUdies have suggested that the corporate tax eventUally becomes, in large part, a pass-through and. thus. a consumption tax. It could therefore. provide a savings stimulus more effective than the ones which notably have failed to date. In a political environment. the new law was obviously forced to make trade-offs for the ultimate goal of lower marginal rates. In our view these trade-offs were eminently worth the result. AWTvfl ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL. INC. Dow Jones Industrials 1880.76 S & P 500 250.40 CumulatIve Index (August 21. 1986) 3135.62 No statement or eypreSSlon ot Opinion or any other mailer herein contained IS or Is to be deemed to be directly or Indirectly an otfer or the solicllatlon of an offer to buyor sell any security relerred lOOt mentioned The matter IS presented merely lor Ihe convenlonce ollhosubsctlber Whlle ….e believe Ihe sources of our tnformallon 10 be reliable, we In noway represent or guarantee the accuracy thereal no\ 01 the slatements made herein Any action to be taken by tho subscriber should be based on hiS own In..esllgallon and tnformatlon Delafield Harvey, Tabell Inc, as a corporation and liS olflcers or employees may now Ilaye or may lalOr take posljlons or trades In respcct to any securities men\loned In thiS or any future Issue, and such pOSition may be dillcrcnllrom any views nowor Ilelcaller eyprcssed tn 11115 or any other Issue Delafield Har.ey labell Inc whiCh IS registered With the SEC as an Investment adVisor mav give adVICe 10 tis Investment advlsorv and other customers Independently 01 any stalomenls made In thl5 or In any other Issue Further mforma\!on on any security mentioned l1ereln IS avallabte on reQuest

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 August 29, 1986 Two weeks ago in this space, we summarized our view of market developments as they had unfolded since last March. That view was not an optimistic one. We noted that the Dow. since reaching a high of-1821 nonlI1arc.tr-7th–hll'!l'SiIDsequel1tTIipOstedt1iree sligfitl'y'liignerSnort, term ,peakS'7 oni\ priI — 21st, June 6th. and. finally. on July 2nd at 1909.03. We pointed out, however. that these five months of mild upward bias in the major indices had been accompanied by a steady narrowing of leaderhsip with Significantly fewer stocks partIcipating in the market strength as time went on. We presented, we admit, little evidence for the positive view. We noted that the lows of early April and mid-May had been successfully tested. but we felt that most averages were, at that time, approaching short-term upside objectives. In the subsequent two weeks, however. further market strength has indeed emerged. The Dow has progressed to within a hairsbreadth of new high ground, and the Standard and Poor's 500 has actually moved. by an equally miniscule margin, above its July-2nd high. As we attempt to show in the chart below, however, it is difficult to find, in this strength, any great evidence of underlying market improvement. 00 JONeS INDUSTRIRL RvERRGE f rtfrfrtf frtfftfrtlfrflffrLrffffrflffl flf rfrtlftftfrff 'rlfftr lffrfrrrffllfrrri flfffrtffrflfftftfft JEn At the moment, as the chart indicates, we now have the third consecutive occasion since April of a peak in the average remaining unconfirmed by an equivalent peak in our daily breadth index. When we look, for example, at another measure of market leadership, the 10-day average of the difference between new highs and lows. we find that it has steadily deteriorated since March 27th. (The peak. indeed, was in February at 315.) It has, in the past couple of days, -by a miniscule amount but still remains well below its level of April. managed . to exceed its July peak . – — — 'T – -.-…;;… — Now this, of course. is only the picture at the moment. Breadth. and a host of other indicators showing deterioration, could. in future trading sessions. repair themselves, and we would then have to reassess the upside possibilities. Unfortunately. an analysis of individual patterns does not suggest that these possibilities are all that great. The former market leaders. disinflation-hedge issues, indeed could test their former highs but have. by and large, reached long-term objectives. Meanwhile energy issues appear to be the only large group of stocks that are in a position to provide a SignIficant new upside vanguard, and this possibility is by no means certain. While we do not rule out the continuation of modest short-term strength. we think that time, and an accumulation of evidence of internal broadening will be required to before that strength could attain major proportions. AWTvfl Dow Jones Industrials 1905,23 S & P 500 253,78 Cumulative Index (August 28, 1986) 3169,18 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL, INC. No statement or expression 01 opinion or any other malter herem contamed IS or IS\O be deemed to be directly Of Indirectly an offeror the soliCitation of an offer to buy or sell any secufltyreferred toor mentioned lhfol matter IS presented merely for the convenlenceol the subscriber While we beheve Ihe sources of our information to be reliable we In no way represent or guaranteo Ihe accu'acy Ihclco! nOl 01 the sJaJOmenls made helem Any aClron 10 be lalolen by the SubSCflber should be based 011 hIS own mveshgallon and mlorma/ion DeJa/lelc!, HaIVey, label) Inc, as a corporation and Its ollicers or employees may now have or may Jatot lake POSitionS or trades In resPect to any secufltles menltoned In thiS or any future rssue, and such POSition may be dlfferenllrom any views now or hereafter expressed In thiS or any olher Issue Delafield Harvey labell Inc which IS registered With the SEC as an Investment adVisor, may give advice 10 liS Investment adVisory and other customers Independently of any staloments made In this or In any other Issue Further Information on any security mentioned herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD. PRINCETON. NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 987-2300 September 5, 1986 – InQ'38-poiirt-;llil y on ThursdaY, the rull\. rocketed''t()a newalCtiine'liiglf-TMstren-gth7—– — however, was unimpressive, much of it being obviously program-related, and with a miniscule 116 new highs being posted. Although it certainly does not constitute the conclusive reason for skepticism, the strength also took place at the beginning of September, the only month of the year with a pronounced downward statistical tendency. The following table summarizes the 1076 monthly changes that have taken place in the DowJones Industrial Average since it was first calculated in 1897. It shows, from left to right, the mean percentage change for each month over the past 90 years, the standard deviation (a measure of the dispersion of individual values around that mean), and the number of months in which the Dow was up or down. As the final total shows, the mean of all percentage changes was a bit over one half of one percent, and, over the 90 years, the Dow has posted 611 up months and 465 down months. Month Mean January February March April May June July August Sepember October November December 0.98 -0.39 0.73 0.87 -0.37 0.59 1.37 1.79 1.24 0.06 0.78 1.33 Total 0.54 Std. Dev. 4.50 4.11 5.44 6.82 5.85 5.60 5.70 5.94 6.09 5.54 5.87 4.25 5.59 Months Up Months Down Z-Coeff. 57 33 0.75 42 48 1.59 53 37 0.32 49 41 0.55 44 46 1.56 46 44 0.08 55 35 1.40 61 29 2.12 37 52 3.oi – 49 40 0.81 54 35 0.40 64 25 1.33 611 465 Chi-Square 1.57 3.75 0.16 0.20 2.29 1.18 0.69 4.43 8.39 0.11 0.55 8.30 The final two columns represent bits of arcana of interest only to statisticians. The two statistics, z-score and Chi-Square, are standard tests of statistical significance. Both attempt to measure the probability of attaining by chance a subset of given characteristics from 8 larger set of values whose properties are known, in this case the 1076 known values of monthly percent changes in the Dow. The z-test relates to mean and the Chi-Square to fixed attributes, in this case, direction — up or down. In the case of September, we have a record of 89 months with a mean change of -1.24. In 37 Septembers, the Dow was up for the month, and in 52 it was down. The z-test tells us that the chances of choosing a sample of 89 with a mean of -1.24 by pure chance from the 1076 months are considerably less than 1 in 200, and the ChiSquare figure shows the same thing with respect to choosing a sample with 37 up- and 52downmonths. The table quite clearly shows that, in terms of mean, September shows the highest degree of statistical SIgnificance of any month under study and slightly surpasses December in terms of direction. A couple of interesting sidelights are, perhaps, worthy of note. Part of the downward bias in September stems from its including two of the worst declines of the 1929-1932 period, September, 1931, the second worst (after October, 1929) month in stock-market history, and September, 1930. -However, interestingly enough the tendency towards a weak September has become especially pronounced since the start of the current secular bull market in 1974. The Dow today is well over three times its level at the low of that year. Yet, since 1974, 10 out of 12 Septembers have been downward months. This seasonal pattern, therefore, provides another reason to suspect the current rally may not persist too long. AWTvfI Dow Jones Industrials 1909.59 S & P 500 251.82 Cumulative Index (September 4, 1986) 3201.29 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL, INC. NO statement or expreSSion 01 OPinion 01 any other maller herein contamed IS or IS to be deemed to be dlreclfy Of Indirectly an oller Of the soliCitation of an otler to buy or sell any secunty referred to or mentioned The matter IS presented merely for the convenience of the subSCriber While we believe the sources of our Information to be reliable we In no way represent or guarantee the accuracy thereof nor otthe statements made herein Any action to be taken by the subSCriber Should be based on hiS own investigation and Informal Ion Oelafleld Harvey. Tabell Inc. as a corporation and I\S officers or employees may now hAve or may later lae poSitions or trades In respect to any secuflhes mentioned In thiS or any tuture Issue and such POSition may be dltferen\ from any views nawor hereafter cpreSsed In thiS or any other Issue Oelafleld Harvey Tabell Inc which IS registered With the SEC as an Investment adVisor may give adVice to I\S mvestment adVISOry and other customers Independenllv of any 51 atemenls made In thiS or rn any other rssue FUrlher Information on any securrty mentioned herein 19 available on request

———– – ————— T aIBIELL S aIil1iI R IET LIETTIER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 987-2300 September 12, 1986 Thursday's and Friday's trading was, certainly, the stuff of newspaper headlines, with the Dow Gown (fit worst; -as or thiswnlin-gy some1.5UPoinf8-i1VthEfrWb cfayS – -This-extraorClin'Qry–; …….—-.,—,,,,, program-related weakness may stimulate some thought about what sort of Pandora's Box has been opened by futures trading. However, from a conventional technical point of view. all the market did was to traverse a well-established trading range. We first drew attention to this pattern in mid-May. and were able. by mid-June, to date its beginning as March 27th. Most of our letters during that time and afterward have devoted themselves to commenting on this pattern as it has unfolded. The pattern in question, in terms of the Dow-Jones Industrial Average at least, consists of a trading range with a moderate upward bias. That range, so far, has four obvious peaks—on March 27th at 1821.72, on April 21st at 1855.90, on July 2nd at 1909.03 and, most recently, on September 4th at 1919.71. The intervening three bottoms also were each at modestly higher levels—on April 7th at 1735.51, on May 19th at 1758.18 and on August 1st at 1763.64. It is interpretation of the trading that occurred during this period that is, it seems to us, crucial for formulating a market forecast. Either this range constitutes a broad distributional top, by now implying a cycle bear market, or it is simply a broad consolidation preparing for the resumption of the upswing that stalled out in late March. If it is, indeed, a top, the implications, while they may appear somewhat horrifying on the surface, are actually rather conventional, suggesting at the moment downside objectives somewhere in the 1540-1440 range. Though declines of a 400-500 point magnitude seem horrifying on the surface, they are, in percentage terms, no more than historically normal bear-market declines of the sort the market has been able to survive routinely in the past. It is to be stressed that, while it is time to begin thinking in terms of such figures as those above, it is not yet proper to offer them up as a forecast. Before a top can be definitely identified as such, a downside breakout must take place, and, even after Thursday's experience, we are not that close to such a breakout. Furthermore. in this particular case, even determining the exact breakout 1 -I-Point.J.sdifficu1t,dJe 10 'he .thre ascending highs mentioned–Ab-olla-.ehav.e,thereforelexpendedai fair amount of space in recent issues examining the internal nature of the market since last March, trying to formulate clues 8S to whether it constitutes distribution or consohdation. There are a number of arguments in favor of the distribution interpretation, the most important being the narrowing of leadership that has progressively taken place since late spring. Our readers are already aware of the breadth divergence that began with the April high and which now. with Thursday's 1,695 declining stocks, will be even more difficult to erase. We have pointed out also the divergence in the Transportation Index and the decreasing number of new highs. Secondary stocks have now apparently joined the downside parade. WIth the AMEX and OTC indices peaking in June-July. Trading of late summer has now produced an additional factor. Significant tops in individual issues. largely absent until recently, have now begun to emerge in many of the consumer stocks which have fueled the latest two years of the bull market. Such tops had already emerged, and been noted by us among financial issues. They are now beginning to appear in the fOOd. soft-drink, drug and consumer-products areas. The emergence of distribution among these market leaders must be taken as a strong argument in favor of interpreting the general market pattern as a top also. The one thIng that could mitigate any declIne would be rotation to new leadership. and there is indeed some evidence in favor of this taking place. The patterns for energy stocks. for example, are almost entirely different than the pattern for the general market. Most such issues have broken out of—or are close to breaking out of—major bases which go back many years. Like strength has begun to appear in other commodity-related groups such as forest products and metals. It is difficult to Justify this strength on a fundamental basis. (Most analysts, ourselves included. question the prospect for higher oil prices or a resumption of inflation.) The technical strength in many such Inflation-hedge issues, however is an unquestionable fact of hfe and must. in fact, be taken into account. It is, with no downside breakout and a short-term oversold condition, still too early to offer a definitive forecast. It is not. however, too early to suggest that a shift in portfolio strategy should be taking place. That strategy should, it seems to us, involve renewed representation In some of the commodity-related Issues which have been underperforming the market over the past few years. It should also, in view of the risk of the lower price levels, suggested above, involve beginning of the assumption of a defensive posture. Further evidence, once the shock of this week's gyrations is out of the way. will, we hope, serve to clarify the nature of the trading pattern that we have observed over summer, 1986. AWTlt Dow Jones Industrials S & P 500 Cumulative Index (September 11, 1986) 1791. 20 231. 07 3042.47 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No statement or e,presslon 01 OPinion or aflY other malter herein contained IS or IS to be deemed to be directly or indirectly, afl offer or lhe soliCitation of an offer 10 buyor sell any security ret erred toor mentioned The malll'r IS presenled merely lor the convenience of IhesubSCliber While we believe the sources of our Information to be reliable we In noway represent or guarantee the accuracy thereof nor of the slatemenlS mdde herein Any action to be taken by the subscriber should be based on his own Invesllgatlon and Information Delaflltd, Harvey, Tabell Inc, as a corporation and liS officers or employees may now have, or may later take pOSitions or trades In respect to any securities mentioned In thiS or any luture Issue, and such POSition may be dlffcrent from any VICWS now or hmealter epressed In thiS or any other Issue Delaheld Harvey Tabell Inc which IS registered With the SEC as an Inestment adVisor may give adVice to Its Investment adVisory and other customers mdependrmlty of anv statements made In Ihls or In any other Issue Further mformatlon on any secuflty mentioned herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 September 19, I QS6 With a week having passed since the 120-point, two-day decline of last Thursday and –'I'''''II-''i''Fs'r-'i;iddrariy''f,f'iciutlt steoe-mmasKea-p-p–rcoonp'rCriaettee to try -p-ronoll ntcoemcoennstisd, ers-itis nimsplicamtri ons in a readers ba-irte…m.aorweadrepth.areIt-,,;—— reqUlred to go to press at noon on Friday, and the ultimate outcome of the latest triple witching hour is unknown as we write this. Nonetheless, let us try to gain some general perspective on last week's extraordinary events. One of the words that last week's market repeatedly evoked was volatility. We were first prompted to study market volatility under conditions almost exactly the opposite of the present, back in December 1982 when the market was erupting on the upside rather than falling through the floor. We pointed out then that it was necessarv to distinguish between volatility and trend. (A market that goes up ten points each day for a long period is strong but not volatile; one which alternates 20-point rises with 10-point declines achieves the same result with considerably more volatility). We pointed out that the standard deviation, simply a statistical measure of variability, was probably the best gauge of market volatility. Accordingly, we calculated and charted the standard deviation of daily changes for each month from 1926 to the time of publication. This week, we extended that approach, calculating the standard deviation of hourly changes in the DJIA for each week since 1974. The 1982 study led to the conclusion that recent trading had not been particularly volatile on an historical basis, although, August 1982 had been. Further investigation prompted by the latter fact suggested that extreme variabilitv in a given month was generally consistent with market bottoms. The same held true for the weekly study we completed this week. We republished this work in May of this year in an effort to examine whether or not program trading had any effect on market volatilitv. Our conclusion at that time,I wmcn surpriseam-any, was-that it did not, and this remained true in'June also- It appears, however, that September will eventually go down in historv as one of the more volatile months since the 1940's. It will not set a record, to be sure, but it will be up there in a league with August 1982, May 1970, etc. Our weekly study showed the same thing for the week ended September 12th. Volatility was nowhere near a record, but equalled many weeks during late 1974, plus November 1978 and March 1980, all periods of notable downside climaxes. It is for this reason that the determination of whether we can blame last week's wide swings, to a considerable extent at least, on futures-related selling programs becomes important. If such is the case, then the comparison of last week's trading with past major bottoms becomes irrelevant. Much of the answer will be provided this afternoon. If triple witching hour proves to be a non-event or shows moderate strength, it will suggest that much of last Thursday's and Friday's gyrations can be blamed on the unwinding of outstanding buy programs. We are, frankly, unwilling to place too much Significance from the wide swings for September as a month and the week of September 8-12. For one thing, they came a week after the market had made a new high, not after protracted declines as in the instances mentioned above. Furthermore, as we pointed 011t last week, although it did so in only a few days, the Dow last week simply traversed the familiar trading range which has confined it ever since early spring. The deterioration that has manifested itself during the course of that trading range has been the constant subject of this letter throughout the summer. Certainly, last week's action, which constituted nothing more than a pause in the downtrend, is insufficient to reverse that deterioration. The most bullish factor that can be noted, it seems to us, is that the pause came where it did, in the mid-1700s, a level comparable to three prior lows for the DJIA. If this test of the lows is successful, it, along with the climatic action of last week, may become part of a chain of evidence that last summer's trading was consolIdation, rather than the distributional top we believe it to be. We would prefer, however, to await further such evidence from the standpoint of a defensive position. AWTjt Dow Jones Industrial Average 1768.70 S & P 500 232.02 Cumulative Index (September 18, 1986) 3014.99 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. NO statement 01 epresslon 01 oplOlOn or any other mailer herem conlillned IS or IS to be deemed to be directly Of Indirectly an oHer or the sohcrtatlon 01 an oller to buy or sell any security referred oor mentIOned The maller IS plOscnted merely lor the convemenceof the subSCriber While we behave the sources of our mformallon to be reliable we In no way represent or guarantee the accuracy theroo! nor 01 the slatcmQnts made herem Any aelion to be laken by the Subscllher should be based on hIS own Inveshgallon and mformatlon Delafield Harvey, labell tnc, as a corporatron and lIS olllcCIS or employees, may now have or may later take positions or trades In respect toany seCUrities mentioned In thiS or any future Issue, and such POSition may be different flom any views now or helIJafter e)ressedln thiS or any other Issue Detllletd Hlrvey label! tnc which IS registered With the SEC as an Investment adVisor, may give adVice to Its Inyestment adVisory and other customers Independently of any statements made In thiS Olin any other Issue Further mlormatlon on any security mentioned herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRI NCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 September 26, 1986 — —- – -Tlleaction.of the- market over-the–past two'vieelSwas ,remiriiscenCof-apUr'-clidrilnnighfer'- –. who has just taken an 8-count and managed to get to his feet and finish the round. The performance IS satisfactory, but affords one little confIdence as regards the future. In the concluding paragraph of last week's letter, we noted that the most bullish factor up to that time had been that the Dow had managed to hold the lows of the trading range which had contained it Close Intra-Day Low since last Spring. In previous letters, we have voiced the opinion that interpretation of that trading range is AprIl 7 1735.51 1712.52 crucial. It consists either of a distributional top or May 19 consolidation in preparation for an advance. The table July 29-30 1758.18 1766.87 1746.53 1741.56 at the right gives the successive lows which have defined Sept. 12 1758.72 1733.55 the range in April, May, July and September, plus two Sept. 19 1762.65 1747.61 subsequent September figures, which have, so far, Sept. 25 1768.56 1753.80 contributed to a succesful test. While the April 7th low is a bit lower than the following ones, they tend to show an identical pattern, with the closing figures centering around 1760 and the intra-day lows around 1740. As noted above, though, recent action, although it can be said to constitute a successful test, has hardly been impressive. Following the volume selloff ending on September 12th, the Dow moved ahead some 20 points on two successive days on which there occurred more declining stocks than advancing ones. It slid backward to the September 19th retest noted in the table, and then put on its 30-point advance of this Monday, Which, however, saw sub-par breadth and the lowest volume of the month. Two more modest rises followed, after which the average gave up the whole thing in yesterday's 35-point drop. We have couched the above discussion in terms of the.1l-o convenienc.-tWecouldlw-y'e just as well used the S&P 500-. – lndee-d, its pattern is fess encouraging than the Dow, since, on September 12th, it managed to reach both closing and, If anything, intra-days lows sIgnIficantly below its May and July figures. Breadth action, meanwhile, remains abysmal, with daily breadth havmg moved to new lows on September 19th. And yet the market hangs in there. We have noted before that practically the sole bullish element that can be cited in action over the summer has been its ability to exhibit rotation of leadership, with new advancing groups emerging to take up the slack as former leaders fall by the wayside. At tImes, it seems, this rotation proceeds at an almost incredibly rapid pace. In order to observe this, it is necessary to look no further than the action of the other two Dow Jones Averages, the Transports and Utilitites. Bouyed by a strong bond market, Utility action over the summer astounded most analysts, as successive new peaks were posted, culminating in an all-time high at 219.15 at the end of August. In just nine days, as of September 12th, the staid old indicator then managed to drop 9.3 on a closing basis, a fall worse than that of the Industrials. Suddenly, 'the most probable pattern for the Utilities appears to be a head-and-shoulders top, in which a decline to 196 would indicate still lower levels. In contrast, the action of the Transports has been driving Dow-theory buffs crazy throughout the summer. Its peak was on March 27th at 828.39, and each of the successive market upswings has produced a lower high. By early August, the Average was down almost 15 and appeared headed lower. However, in just a couple of months, while Industrial action was bad and getting worse, the Transports moved to a four-month hIgh this Tuesday. This high, moreover, looks suspiciously like an upside breakout from a base formation that could take the Transportation Average above its March peaks. If the reader gathers from the above that the market is one of. cross-currents, .he.is correct. Our basic view, however, remains as expressed in recent letters. We think that the market pattern presents signifIcant downside risk, and we would prefer to await evidence of further strengthening before adapting anything other than a defensive position. AWTmmr ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials 1770.25 S & P 500 232.26 Cumulative Index (September 25, 1986) 3043.79 NO statement or epresslon 01 opmlon or any other matter herem contamed IS or IS to be deemed to be, directly Of mdlrectly, an offer or the soliCitation of an olfer to buyor sell any security relerred to Of menlloned The mattor IS presented merely lor the convenience of the subSCriber While we believe the sources olour mlormatlon tobe reliable we In no way represent or guarantee the accuracy thereof nor 01 the Statements made herem Any action to be laken by the subscriber should be based on his own Investigation and mformatlon Delafield, Harvey, label! Inc, as a corporation and its officers or employees may now have or may later lake posllions or trades In respect to any secunlles mentioned In thiS or any future Issue, and such position may be dilierent from e.ny views nowor heleaiter epressed In thiS or any other Issue Delaheld Harvey, Tabell Inc which IS registered with the SEC as an Investment adVisor, may give advice to Its Investment adVISOry and othc customers Independently 01 any statements made In thiS or In any other Issue Fur1her Inlormatlonon any security mentioned herein IS available on reQuest

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 , , ' October 9, 1986 One more time, and then we promise to shut up. This is by way of introduction to I-I—-'the-fifth -(and-,we-hopey-the-final)lettero-in'the'serieswhich –began-some,eight-mont-h S–…–.,….,–.,. ago.' comparing tlie currerit stock-market/economic environment to that of the 1920's. Let us begin by quickly recapitulating the major points made in the prior four letters. We started out by noting the uncanny similarities of the market advances of August, 1921-March, 1923 and August, 1982-November, 1983. These two advances produced two equally similar corrections in March, 1923-0ctober, 1923 and November, 1983-July, 1984. This behavior was followed by renewed dynamic rallies in both eras, the current one falling slightly short of its 60-year-ago predecessor. We also noted some resemblance in the economic environment of the early twenties to that of the early eighties. Both featured the culmination of a quarter-century of inflation, followed by relative price stability. We noted that both bull markets represented, in part, a flight from real to financial assets and that both depended, to a degree, on the availability of an ample supply of credit—for margin debt in the 1920's and for credit-financed takeovers in the 1980's. Three additional points, we think, need to be made. First, the companson needs to be brought up to date, and it must be noted that the process of following in the 1920's footsteps can be seen as continuing. Let us compare the two benchmark dates of February, 1926 and March-April, 1986. The former showed the Dow Jones Industrial Average making a new high at 162.31, followed by a plunge to 135.20 in late March. This dip was followed by no less than four tests of the February high, in August-September, 1926 (when it was exceeded slightly), December, 1926 and MarCh, 1927. It was from that point that the market launched its nowinfamous advance to September, 1929. We will be the first to admit that there are differences between 1926-7 and the I—,.e-.-m,,,pl,eL we-'-he-seen—sineeing-,-ntably–'–theact-t-hat–t-he-e'I'ly—16-d1'Op-4n-,-1I\arch-o,—-I– 1926 created a range much wider than today's, where the April low is only 9.6 below the high. Both markets, however, can be defined as trading ranges possessing a slight upward bias. The second point concerns the likelihood of a repetition of the 1927-1929 experience, Which, as we previously noted, would carry the Dow to the 4000-5000 range. Our readers will know that we are not now ready to take a firm stance on this point, since we feel that the nature of the 1986 trading range is a still-unanswered question. We admit, however, that we would be concerned about the possibility of an immediate (2-3 years) rise of such a magnitude, since we fail to see the economic Justification for such an advance. We would, in other words, almost rather see a normal bear-market, cycle correction, which could then clear the way for better prices without overextension. Finally, we must assess the possibility of a repetition of the post-I929 experience. Of one thing we are certain. If it comes. it will arrive in a form sufficiently different from 1929 to cause most of us to be unprepared. The unwinding of over-leveraged balance sheets, for one thing, should be quite unlike the liquidation of margin debt which took place in 1929-1932. Furthermore, the monetary tools now available (tools largely developed in response to 1929-1932) are sufficiently sophisticated so that an exact repetition of that deflation, when the money supply was allowed to drop by one third, is unlikely to be repeated. There exists more reason, it seems to us, to question the fiscal tools available. The desirability of a balanced budget. now exemplified by Gramm-Rudman, can be considered to be part of conventional wisdom. This is undoubtedly justifIed after more than two decades of excessive Federal spending. However, the adequacy of monetary stimulus has never been tested under severe condItions, and it mIght be that, under such conditions, fiscal stimulus would be a necessary accompaniment. Deficits, in other words, might be not bad medicine but simply medicine long overabused. This we see as a possible chInk in the protective armor. Finally, we will once again stress that no prediction is implied by this letter or its predecessors. As usual, the stock market itself will provide us In its follow-on to the current sideways market, with the first clue as to whether history is repeating itself. AWTccg ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials 1792.74 S & P 500 235.89 Cumulative Index (October 8, 1986) 3077.83 NO statement Of expression of opinion or any olher matter herein contalnoo IS or IS to be deemed to be directly or indirect lv, an olfer or the soliCitation 01 an offer to buyor sell any security retorted to or mentioned The matter IS presented merely tor Iheconvcnlencc of the subSCriber While we believe the sources of ourmlormatlon 10 be reliable, we in no way represent or guarantee the accuracy thereof nor ot the statements made herein Any action to be taken by the subSCriber Should be based on his own investigation and information Delafield, Harvey labelt Inc, as a corporation and ItS officers or employeos may now have, or may later take pOSitions or trades In respect to any securities mentioned In thiS or any future Issue, and such poslhon may be dlflerent Irom any VICWS now OJ hClealter cpressed In thiS or any other Issue Delafield Harvey, labelt Inc. which IS registered With the SEC as an Investment adVisor, maYQlve adVice to Its Investment adVisory and o\he' customers Independently of any statements made In thiS or In anv other Issue Further information on any security mentioned herein IS available on request