Viewing Month: October 1987

Tabell’s Market Letter – October 02, 1987

Tabell’s Market Letter – October 02, 1987

Tabell's Market Letter - October 02, 1987
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'll'&.\IBlIEIL.IL.' S &'\Rl rxtlE'll' 1L.1E'll''ll'1E1Rl 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987 -2300 October 2, 1987 – – -Regular, readers are–,-aware of our view-that the. most J probable -stock–mar-ketscenario calls-for- , – short-term strength. but strength that is not likely. for the time being at least, to carry much beyond the vicinity of the August high. The week's action seemed to conform to this hypothesis as the DJIA posted a 40-point rally on Thursday, breaking out of a month-long base formation in. roughly, the 2500 – 2600 area. Interestingly, the upside objective of this base appears to be 2720, a level just about equal to the previous high. Our own further hypothesis is that this test. and perhaps further future tests, of the Dow peak just above 2700. will compose a top formation. not yet complete, which may. ultimately. suggest the possibility of a conventional bear market. This thinking is buttressed by the continued abysmally poor breadth action which has prevailed since the August peak. It will be recalled that the last time our daily breadth index posted a new high was March 23, 1987, at which time the Dow was at 2363. By July, breadth had moved almost 40 points below that high and remained 11 points below it when the Dow peaked at 2722 on August 25. At the recent low, the breadth indicator was not ali that far from its July bottom, and any new low in the near future would confirm an ongoing downtrend. Unless a dramatic reversal is seen shortly. it appears unlikely that any approach to new high territory on the part of the Dow will be accompanied by a breadth peak. This. of course, would confirm an ongoing divergence. One of the most important tenets of breadth analysis, it should be remembered. is that highs in breadth indicators are likely to lead peaks in the Dow by a significant amount. As of August 25. 1987, the last DJIA high, the breadth high had led the Dow by 108 days. Today is the 134th day following that breadth peak so that a move to new high levels by the Dow would probably lengthen the divergence. A comparable divergence preceding the November, 1983 – July. 1984 downswing lasted for only 115 days. Bear markets during the 1960's and 1970's tended to be led by breadth for slightly longer periods, but we have definitely moved, in our view, into the time range where a breadth divergence ought to disturb us. New hIghs versus new lows, another serIes we have recentlyIocuseac;n-in gaugmgthe marketls internal strength continues to show below-average action. The net difference of daily new highs and lows moved. last month, into negative territory for the third time so far in 1987. Like deteriorating breadth, such action has, historically, tended to signify underlying market weakness. 'A broadened market top and an eventual conventional bear market—on the order of, say, a 20 decline. would not disturb us and would leave the market. we think. in 8 much healthier condition than that in which it now finds itself. This view puts us. we realize, on dangerous ground. There is a natural tendency—which has to be fought—to hope that the market will do what one wants it to and to seize on whatever shreds of evidence point in that direction. We hope we are not succumbing in this case. since at least a moderately convincing case for lower prices can. we think. be made. Why should we view the prospect of significantly higher levels with some alarm One reason relates to a study we began in early 1986 when we pointed out that the action of the Dow to that point showed what seemed almost eerie parallels to the market action of the early 1920's. Prices have diverged. recently, from the exact path traced out between 1921 and 1929 but they are still close enough for just about everyone who feels that stock-market history is important to have by now drawn attention to the similarity. The action needed to carryon the 1920's – 1980's parallel would, of course, be further strength to levels significantly above the already achieved highs around 2700. We would feel forced. therefore. to be less than enchanted were such strength to manifest itself without an intervening correction. Higher equity prices, moreover, would, in terms of earnings and dividends, both relative and absolute, bring the market to historically dangerous levels—levels which have, in the past. produced important market tops. As technicians we realize that this sort of analysis, while undeniably possessing underlying significance. is less than helpful over the intermediate term. during which prices tend to be influenced to a greater degree by suppply-and-demand factors. These factors may be strong enough at the moment to move the market into new hIgh territory. Such an achievement would bring us into totally uncharted waters. This is not impossible—it has already happened in Japan—but the risk produced by such an eventuality would be significant. We are thus comfortable with the forecast outlined above, which suggests that a relatively non-dangerous cyclical top may be in the making. Should this scenario ultimately prove untenable, the implications would require reexamination at that time. AWTebh Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (10/01/87) 2633.65 327.69 4034.97 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL IN C. Noslatement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an oHer orthe sollcltallOn of an oHer to buy or sell any secunty referred 10 or mentioned The matter IS presented merety for the corwenlence of the subsCriber While we beheve the sources of our Information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be laken by the subscriber should be based on hiS own investigation and information Delafield, Harvey, Tabelllnc, as a corporation and ItS officers Of employees, may now have, Of may later take, positionS or trades In respect to any secUrities men\loned In thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS registered with the SEC as an Investment adVISor, may gIVe adVice to lIS Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Information on any security mentioned herein IS available on request

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Tabell’s Market Letter – October 09, 1987

Tabell’s Market Letter – October 09, 1987

Tabell's Market Letter - October 09, 1987
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TABELL-S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 October 9. 1H87 – – Sho-rt-term-forecasts.-Blthough-it-is amusing to Indulge In th;m. often -ha'v-;-;; wayf pro-;'ing embarrassing. Last week we pointed out that the Dow. since September, had spent the bulk of Its time in an approximate range between 2500 and 2600. We proposed the concept that this area might constitute 8 base. the result of which could be a test of the late-A ugust highs. A test indeed dId ensue this week. but it was 8 test of the low rather than the high. as the index on Thursday dropped to around the 2500 level prior to 8 closmg rally. A further test of that level was underway on FrIday morning. Despite the embarrassment, our inclination at the moment is to hang in there with the expectation that the August peaks will be further tested. We have taken note in this space of the mternal weakness suggested by a number of macromarket indicators. but patterns on indiVIdual stocks still seem to argue against an immediate. severe fall. Even at the worst levels of the week. relatively few downside breakouts seemed to be taking place. WIth all the eXCItement engendered by last week's gyrations. such as Tuesda y's 91-point drop. one obscure sta.tIstic may have been lost in the shuffle—the fact that the NASDAQ IndustrIal Index reached 488.92 on Monday. That figure. interestingly. is a new, ali-time high for that average. J2500 2300 2100 1900 J700 -1 1SQ') 500 !300 ! tOO 450 400 9DD OW JONES INDUSTRIAL AvERAGE DO ole INlJU51R1RL SOD Te / OJIR 100 This fact can barely be perceived in the upper, right-hand corner of the chart above, but it may still possess some significance. The Dow. we ali remember, topped Qut at 2722.42 on August 25. However. the NASDAQ Industrials continued to rise for another four days and reached 484.5 on August 31. Both indices bottomed On September 21, but the decline for the DJIA was twice that of the Junior index, 8.43 versus 4.19. This. in turn. was followed by the new peak in the OTC mdicator on MondilY. Now there is no clear mdication in the action so far that OTe issues have reversed their underperformance vis-a-vis blue chips shown by the OTC/DJIA ratio. the third line down on the chart. Yet one could have bought the OTe average at year-end, 1986 and done just as well as with the Dow to date. We have just been through what may be the only nine-month period since June. 1983 about whiCh such 8 statement could be made. The OTe peak in that year was 408.4, and the index at last night's close was only 15 above its 1983 high. Over the same period the Dow had appreciated some 102. There is here. in other words. 8 possibility of a significant relative strength reversal for secondary issues, those largely composing the OTe index. Such a swing, if it persists, would indicate a shift of leadership in the direction of 8 relatively unexploited group. It is possible to make this statement even While being less than sanguine over the general-market outlook. It does not require too long a memory to recall 1976 – 1978. when the Dow dropped from 1014.05 to 742.12. 8. 26.8 decline. The most astonishing fact regarding this perIod was that the OTe index was 10 higher at the end of it than at the beginning. Not-too-long-ago history, therefore. could wind up repeatmg itself. ANTHONY W. TAB ELL AWTebh DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials 0200) 2513.71 S P 500 (1200) 31491 CumulatlVe Index (10/8/87) 3939.13 No statement or expression of opinion or any other matter herein contained IS, or IS 10 be deemed 10 be, dlrecllyor Indirectly, an offer orthe solicttatlor'l of an offer 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 InformallOn to be reliable, we In no way represent or guaranlee the accuracy thereof nor olthe statements made herein Any action to be taken by the subscnber should be based on his own investigation and Information Delafield, Harvey, Tabe!! Inc, as a corporallon and Its oHlcers or employees, may now have, or may later take, positions or trades In respecl to any ecunhes mentioned In Ihls or any hllure Issue, and such pOSltlon may be dlfferen! from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS reglsteredwlththe SEC as an Investment adVisor, may give advice 10 liS Investment adVISOry and other customers Independently of any slalemenls made In thIS Or In any olher Issue Further Informa1lon on any security mentioned hereIn IS available on request

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Tabell’s Market Letter – October 16, 1987

Tabell’s Market Letter – October 16, 1987

Tabell's Market Letter - October 16, 1987
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'1l&\lIHE 11..11..'S &\1Rl 1E'1l n..1E'1l'1l IE IRl 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 085435209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 October 16. 1987 The stock market, in thIS week's action. once again reminded us that it is not all peaches and cream and permanent profits. A 95-point decline on Wednesday was followed, yesterday. by a 57-point plunge. a .-drop perhapseven more l'rightening since-mose of-iew8scompressea-Tnlo-thelas1 half–hour — —– of trading. At Thursdays close. the Dow was down 13.5, the severest decline since November, 1983 July. 1984. That drop of 15.6, however. was a good deal less steep than the present one, since it lasted 164 trading days versus only 36 trading days so far for the current downswing. which, at this writing. appears still to be underway We do, honestly. hate to keep carping on this subject, but the one-day decline on Wednesday and the two-day decline ended yesterday were nowhere near the largest on record if measured properly in percentages rather than points. Wednesday's one-session fall of 3.81 has been surpassed by no fewer than 111 previous single-day drops since the modern Dow Jones Average was first computed. The two-day drop. 6.1. has been exceeded 75 times in the same timeframe. Furthermore. the most recent instances of one and two-day drops greater than the present one should be within the memory of most investors. having oecured just over a year ago on September 11-12, 1986. It is, furthermore. not necessary to resort to meaningless figures such as point-declines. since, in terms of being unusual. recent action can stand on its own two feet. Although, as we noted above, this week's fall has been exceeded many times in the past. the bulk of these cases occurred prior to World War II. As we have tried to demonstrate many times in the past. this history is largely irrelevant today, since markets of the 1920's and 1930's were uniformly a great deal more volatile. There have been only four single-day drops greater than Wedensday's since 1950 and only fourteen of approximately the same magnitude (greater than 3). Likewise, there have been only three two-day declines exceeding the current one since the 1950's and only eleven of the same approximate magnitude. This fact, by itself. should tell us something, since we are able to go back and observe the aftermath of past similar declines. Most of them. we are happy to report. occurred around important market bottoms. In some cases, the bottoms could be associated with the end of a major bear market (May 28, 1962 and May 25. 1970). In other instances. large one- and two-day drops were reactions to – – —-unexpectedevent-sl1eKorean Wlirin9'501mmh1)wer–ITearL aLL8cn4.955)-;–Sinue-the–d-rop'– so far, over 13. qualifies as intermediate-term in scope. it is necessary to give some thought as to how and when it might reach a bottom. As we have suggested in this space in the past, recent major lows have demonstrated characteristics quite different in today's institutionally-dominated market from those in previous past markets where the bulk of the trading was accounted for by individuals. In those olden days, a selling climax—consisting of a day or two of precipitous decline followed by a sharp recovery, both on heavy volume—was the normal indication of a bear market's end. However. the last such classic climax occurred in March, 1980, and the last at a major bottom was in May, 1970. More recent plunges—such as 1982. and 1984, and even. to a degree 1974—have terminated with downside exhaustion followed by unusually sharp upside action. Part of the difficulty at the moment is deciding what sort of bottom we are looking for. To some degree, the action of the past couple of days suggests that we may be seeing climactic action for the first time in seven years. Thursday's volume of 263 million shares was important, not because it was the fourth highest in history (the three higher volume days having all occurred this year), but because it was some 50 above the most recent average—which average we compute using the prior 25 days. This level has indeed been associated with some lows in the past, but more important bottoms have generally occurred when volume spurted to twice its recent average. Likewise, the 1400 plus issues that declined on Wednesday and Thursday were about 70 of all issues traded, versus the 80 level which has tended to characterize climactic bottoms. By contrast. if the bottom for this market is to conform to the most recent specimens, one would expect that downside action will, eventually. simply run out of steam. and. as was the case in September. 1986, whatever low is reached will be marginally tested. We suspect that one or the other forms of market reversal will take place not too far from current levels and in the not-toa-distant future. The major averages have all reacted to important support levels. these levels being delineated by the highs reached on April 6, 1987. the subsequent lows, achieved in mid-May. and the June breakouts which produced to the current advance. This support area exists at 2405 – 2215 for the Dow. For the S & P 500. it is between 302 and 278. In the case of the Dow Transports the support range is 961 – 908. We think. in other words, that the support levels mentioned above should. minimally, produce breathing space which can be used to assess whether or not a true reversal has taken place. Needless to say, we expect this sort of analysis to be the theme of this letter over the next few weeks. ANTHONY W. TAB ELL DELAFIELD. HARVEY. TAB ELL AWTebh Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (10/15/87) 2342.20 294.60 3763.01 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Ind'rectly, an offer or the solicitation of an offerto buy or sell any secUtity referred to or mentioned The maner IS presented merely for the convenience of the subscnber While we beheve the sources of our Information to be rellabte, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subscriber shoutd be based on hiS own investigation and information Detafletd, Harvey, Tabelt tnc ,as a corporation and Its officers or emptoyees, may now have, or may tater take, positions or trades In respect 10 any securities mentioned In thiS or any future Issue, and such poSition may be different from any views now or hereafter expressed In thIS or any other Issue Delafield, Harvey, Tabell tnc , which IS registered W1th the SEC as an Investment adVISor, may give adVice to ItS Investment adVIsory and other customers Independently of any statements made In thiS or In any other Issue Further information on any security menlloned herein IS available on request

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Tabell’s Market Letter – October 23, 1987

Tabell’s Market Letter – October 23, 1987

Tabell's Market Letter - October 23, 1987
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V Lii.\EDIED..D..S Lii.\ IRl IEV D..IEVVIEIRl 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 085435209 MEMBER NEW YORK STOCK EXCHANGE INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 October 23, 1987 —-A-few randomthoughts'On-being-present at- history, -'- – ,- -.-,–We have, in the past, castigated some of our 'colleagues for meslfuring declines in terms of points, so as to equate what were essentially minor downswings with the granddaddy of all market crashes—1929. This subterfuge is no longer necessary. The market managed to shatter, last week, most of the records achieved 58 years ago. Monday's 500-point drop in the Dow took it down 22.61, almost twice the 12.82 of October 28, 1929. The 26.17 fall over Friday and Monday was a tWO-day record, bettering the October 28-29, 1929 drop, 26 to 23. Only one 1929 mark appears intact. The entire drop from September 3 of that year through November 13 took the average down 47.87 in 56 trading days. The fall from August 25 through October 19 of this year has been, so far, only 36.15. Our initial feeling early this week was the amazement at the fact that, during the debacle, life seemed to go on. The magic year. 1929. had been drummed into our consciousness for so long that we expected everything to come to a screeching halt. Network anchormen, however, seemed uncomfortable with being required to treat the market's fall as a lead story and moved quickly along to Bernard Goetz, the Persian Gulf, and the World Series. There must have been, in 1929, some discussion of such unrelated items as the Philadelphia Athletics' comeback from an 8-0 deficit against the Cubs in the fourth game of that year's series. If- there are any minor beneficial side effects of the collapse, one such might be the stamping out of one of the more exotic weeds lately transplanted from the groves of academe to Wall Street. This is the hypothesis that markets adjust instantaneously to all known information. We would welcome knowing just what piece of information it was that emerged over last weekend and made stocks worth, on Monday, only four-fifths of their Friday price. And let us. for heaven's sake. forget the trade deficiC Blaming the decline on that news is akin. in the words of the late Red Smith, to blaming the Johnstown flood on a leaky toilet in Altoona. If cause is neeIe.!l, it is our own h)Cpothesis that the drop constitutes a failure on the part of the market mechanism we have allowed to accrue over recent years. Another recent —–.– import from the graduate schools has been the financial community's love affair with derivative products and their application to esoteric techniques such as portfolio insurance, which may be simply defined as an investment approach based on the premise that there is such a thing as a free lunch. The realization that derivatives may, indeed, be a destabilizing force emerged in many quarters this week, and we are inclined to agree with it. Returning to market history, one point, we think, deserves emphasis. This is that the phenomenon popularly referred to as 1929 really consists of two largely unrelated events which took place over a much longer timespan. The first is the market collapse which took place between September 3 and November 13 of that year. This phase, unpleasant though it was, was probably unavoidable, and indeed was followed by an almost-50 market rally. It is What occurred afterward that remains in most people's memory when the events of 58 years ago are recalled. This was the emergence of the Great Depression, which carried the market down slowly, on ever-diminishing volume over a period of more than two years, to a level 90 below the 1929 highs. The truly tragic part of the collapse ended, not with a bang in 1929, but with a whimper in 1932. Most authorities, it must be noted, feel that the second phase was not inevitable, and we would contend that this also applies to today's market. Against this background, it is necessary to offer some thoughts as to the future. Explosive as it was, we can and should place this week's action within a conventional, technical-analysis framework. What we witnessed between Monday and Wednesday was, quite simply, a selling climax—bigger, perhaps, than like events which have preceded it, but a selling climax nonetheless. Two of the characteristics of such a climax are a sharp decline on record volume and a SUbsequent rise on approximately equal volume retracing an important portion of the loss. This certainly describes last week's action, and it may well be that the rallying phase ended on Wednesday afternoon. The last part of a climax bottom is. generally, a test of the previous low, quite often, but not always, involving a new low not too different than the initial one. Such a test could occur, we think, within the next one to three weeks. If it does, it will, however agonizing, constitute an opportunity. The above covers only the short-term. It is, we think, impossible to assess the longer-term outlook at this time. We noted above, our feeling that 1930-32 was not an inevitable result of the 1929 crash. The next year will tell us how well we have learned the lessons of history. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (12 00) 1948.11 S & P 500 0200) 250.39 Cumulative Index (0122187) 3135.75 No statement or expresSIOn of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offer or the solICitation of an offer to buyor sell any security referred to or mentioned The matter IS presented merely for the convenience of the subsCriber While we beheve the sources of our InformalJon to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action 10 be taken by the subsCriber should be based on h,s own InvesbgallOn and Informabon Delafield, Harvey, Tabell Inc , as a corporation and lIs officers or employees, may now have, or may later take, poslllons or trades In respect to any securrtles mentioned In thiS or any future Issue, and such positIOn may be different from any views flOW or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabell tnc, which IS registered wrth Ihe SEC as an Investment adVisor, may give advice to Its Investment adVISOry and other cuslomers Independently of any statements made In th,s or In any other Issue Further ,nformatlon on any secUrity menlloned herein IS available on request

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Tabell’s Market Letter – October 30, 1987

Tabell’s Market Letter – October 30, 1987

Tabell's Market Letter - October 30, 1987
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11&\ISHEL L S Rl IEII LIETII IE R 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 October 30. 1987 Last week's market action can truthfully be defined as routine. This, of course, IS not true in any historical–sense…—Howev.er …..considecing the extraordinarynatur9C thewek wbich ppeceded them. of -the past five days, with their still wide. but less extreme, swings, lie well within th– range – — normal expectation. We noted, 8 week ago, that a test of the lows following an identifiable selling climax was 8 normal feature of climactIc bottoms. We stated further that there exists no hard-snd-fast rule to determine whether or not such a test need involve new lows below the climax bottoms. That particular dilemma still faces us. The Dow had a closing low this Monday at 1793.93 compared with a week earlier close of 1738.74. Wednesday's intra-day bottom of 1767.74 this week was well above the October 20 intra-day nadir of 1616.21. Whether this can be considered a successful test remains moot. We continue to feel that 8 new low remains 8 possibility. although Thursdays and Friday's strength, especially in the light of unfavorable news from abroad, must be acknowledged 8S impressive. Last week. in discussing market action for fall. 1987. we compared it with that of 1929. pointing out that most measures of recent trading exceeded records which had been set 58 years ago. It has been suggested by many analysts, notably Irving Kristal in Wednesdays Wall Street Journal, that a 1961-1962 comparison would be more apt. A case for such 8 comparison can certamly be made. The 1961-1962 bear market was one of the few that has taken place totally without any associated business recession. It occurred simply because with the Dow at 24 times earnings, the market had reached an excessive valuation level. Simllar conditions, of course, have prevailed recently. At this summer's peak above 2700, pIe ratios and yields were in the same general area of overvaluation that they had attained in 1961. If current forecasts are to be believed (and are not subject to later revision) a 1988 recession is it would seem, unlikely. From a technical point of view, 1929, 1962, and 1987 all possess typical selling-climax characteristics. The same point can of course, be made regarding dozens of other climax lows. We prefer, however, to equate 1987 with 1929 for one very simple reason. They were bigger. Equating the recent drop with any collapse other than 1929 is like comparing a housecat to a lion because they – —- –arflboth-oatsS.——————————————————– The recent drop and 1929-1930 are addItionally alike, in our view, in that they can both be associated with internal market structures which became untenable. In 1929 we learned, by way of 20/20 hindsight. that the villain was excessive stock market credit. Our hypothesis at the moment is that the same case could be made for this year although a more convoluted situation currently exists. The new factor which has entered the 1987 market equation has, of course, been the widespread use of futures contracts. Such contracts require as little or less margin than stocks required in 1929. At least two sets of participants in futures markets can, it seems to us, contribute to market volatility. One such set comprises floor traders, whose time horizon can be measured in minutes. The second such class consists of portfolio insurers, who, by definition, tend to sell on drops and buy on rallies. Futures markets, of course, are linked with stock markets via arbitrage (we use the word in its original sense) transactions carried out by program traders. In our view such traders have been unfairly blamed for the late crash, since they act simply as a conduit between the stock and futures markets. In simply taking advantage of intra-market spreads, they are no more culpable than the pedestrian who, perceiving a 100 bill lying on the sidewalk bends over to pick it up. The above is, of course, only a hypothesis. Autumn, 1987 will it is safe to say, be examined as no other market has been examined before. We will, at some time in the future, know a great deal more about who, in those tumultuous days, was doing what to whom. It may be that such a study will suggest relatively simple changes in trading mechanisms which could eliminate the apparently destabilizing force engendered by futures trading. One thinks, in this connection, of the now-almost-forgotten triple witching hours, which have effectively dIsappeared with the change from closing to opening settlements. There is here—we have said it before and will be saying it again—no suggestion that the similarity of the past fortnight's technical action to that of October-November 1929 necessarily indicates an aftermath similar to 1930-1932, which was, of course, when the real damage was done. It is devoutly to be wished that the lessons of 1929 have been adequately learned. We must admit our confidence in this regard has been slightly damaged by what seems to be total absence of questioning of current conventional wisdom which rails against the evils of the budget deficit and preaches the necessity of its immediate elimination. We were encouraged to learn. via the front page of Wednesday's New York Times, that a fair number of economists share our skepticism in this direction. However, the thought that deficit reduction which would indeed have been a proper policy in the early 1980's, might not be the correct prescription for 1987-1988 has, apparently. not crossed the minds of any of our 100 senators and 435 representatives. This is a subject we intend to discuss further in future issues. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. AWTebh Dow Jones Industrials (12 00) 2002.82 S & P 500 (1200) 252.32 Cumulative Index (10129187) 2938.94 No statemenl or expression 01 opInion or any olher matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or lhe soliCitation of an offer to buy or sell any secUrity referred to or menlloned 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 norof the statements made herein Any actIOn to be taken by the subscnber should be based on hiS own Investigation and informatIOn Delafield, Harvey, Tabelllnc, as a corporallon and ItS officers or employees, may now have, or may later take, posItIOns or trades In respect to any secuntles mentioned In thiS or any future Issue, and such pOSitIon may be dlHerent from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With the SEC as an Investment adVisor, may give adVIce to Its Investment adVISOry and other customers Independently 01 any statements made In thiS or In any other Issue Further InformatIOn on any securrty mentioned herein IS available on request

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