r '11'lii.\BUEn..n..' s 1il1lJlii.\ Ii,m rEV LrEYYIER 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 March 18, 1988 ——-….–1 n .. a-pa-t te n – wh-i-Gh-has- a l-mos t-…becomether.-u I.e -i-n–rece nt…. weeks, -t he ..-marke t—s taged-a …- -t–I late surge on Thursday afternoon, taking the Dow Jones Industrial Average, along with a majority of other indices, to a new post-crash high. The October 21 peak, at 2027.85, was first broken on January 27 following an early-December test of the October 19 low. The January bastion was breached 2 1/2 weeks ago, on March 8, when the Dow attained 2081.07. That high was, in turn, bettered at yesterday's 2086.04 close. As new pinnacles are achieved, various indicators are giving conflicting signals. The bulk of the evidence, however, remains, for the short-intermediate term, essentially positive. While there is some doubt about how far the various averages might go on the upside, it appears safe to s'ay that we are looking at a stock market which, for the time being, does not seem to want to decline a great deal. The superstars among market indicators are, at the moment, those measuring market breadth. This, constitutes, moreover, a reversal of form. The high attained by the Dow two days after the October crash was confirmed by breadth, but the early-January new high saw breadth significantly below where it had been in October. Between January and March, however, distinct broadening was evident. The February 29 peak at 2017.62 was confirmed by breadth and, for the week of February 29 – March 4, daily breadth achieved new highs in advance of later peaks in the Dow. Breadth confirmed the March 8 surge and also the high achieved yesterday. This behavior is characteristic of the early stages of an advance. The fact that market leadership is broadening is confirmed by Our weekly analysis of some 5,000 individual stock patterns. Since mid-January, literally hundreds of issues have moved into short-term uptrends, and around one-third of those have moved into intermediate-term uptrends also. More evidence of improving market breadth can be seen in the resurgence of the OTe -.marke.t…–1'heDow.,andS&….E-500have-both-adv.a.ncedbout'20.f.l-.om-the-i-r-October–l.ows,—t-I The NASDAQ Industrial Average, meanwhile, has moved some 37 from its October bottom. This, we think, is of more-than-trivial significance. The small-stock sector of the market has been out of phase with the maJor-company component for a number of years. The Over-The-Counter Industrials, it must be remembered, peaked in June of 1983, with the Dow at barely 1200. To the July, 1984 low, the OTC average fell 38, and that July low was tested in December, 1984. The August high last year was not all that much above the prior, June 1983 peak. Thus the fact that OTC stocks are now outperforming large-capitalization issues lends the market picture more creditability. It is even possible on recent evidence that OTC issues could move ahead while the market is flat to down, as was the case in 1976 – 1978. 'Furthermore, it is still possible to find, in the OTe sector, stocks with mUlti-cycle bases, which go back well before the October lows. There remain some uncertainties and negatives. A puzzling phenomenon is the recent concentration of daily change in the last hour of trading. The past 27 trading days have seen 15 up and 12 down markets. However, in 22 of those 27 markets, the last hour change was positive, and accounted for a major portion of the day's total change. A preliminary study of the historical significance of this behavior is unclear. We intend, however, to explore this issue further. Meanwhile, a few fairly important negatives remain. During the same period that the Industrials were moving from below 1900 to well over 2000, the Dow Jones utilities have trended downward from over 190 to around 175, with only a modest recovery taking place this week It is not clear to us why utilities should be expected to be leaders, but, with interest rates currently being viewed with supra-normal significance, they have, indeed, in recent years, shown a leading tendency. There are other phases of the financial picture which remain disturbing. Banking-system failures appear to be reemerging, and margin debt, normally a coincident stock-market indicator, has been declining for some months. However, such bearish phenomena, for the time being at least, remain infrequent. All of this makes a forecast rather difficult. However, it is sufficient to assume, until some sort of deterioration presents itself, that major-market indices are headed higher. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (1200) 2093.17 S & P 500 (1200) Cumulative Index (3/17/88) 271.98 3672.33 No statement or expression of opInion or any other ma11er herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an offerlc buy or sell any security referred to or mentioned The matter IS presented merely for Ihe convemence of the subscnber While we believe the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action 10 be taken by the subscnber should be based on his own mvestlgallOn and information Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later take, POSItionS or trades In respect to any securrtJes men\loned In thiS Or any future ISSue, and such poSition may be different from any views now or hereafter eKpressed In thiS or any other Issue Delalleld, 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 secUTIty menlloned herein IS available on request

TABELL-S MARKET LETTER 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 March 25, 1988 – – – …..A new- book ChaoS-;-lly-J ames…..Glf!tl!!lC is;-in'1'ii''''''''''w-. abstruse mathematics intelligible to the lay reader. It examines the recently emerged concept that the true shape of most objects in nature is far too complex to be represented by the familIar Euclidian geometry of hnes, planes. and cubes. Consider, for example, the problem of measuring a shoreline. It is easy to describe a seacoast's length by drawing a straIght line between two pamts on a map of that coast and measuring the mlleage between them. A typical coastline, however, contams coves and promontories. If we were to decide to include such features in our measurement, we would have. instead of a straight line. a zig-zag pattern whose total length would be somewhat longer. It would be possible. moreover, to arrive at longer and longer lengths simply by contmuously reducing the mterval between measurements. The process could be carried all the way down to the level of atoms. The pattern produced by this procedure was named, by its discoverer. Benoit Mandelbrot. a fractal. and It is interesting that one of the measurements involved in exploring such complex shapes was a price-tune series, which defmition. of course. includes the stock-prlce charts with which we are aU familiar. We have always considered that the task of the market techniCIan should be to bring order out of chaos. and recognition of the chaotic nature of such phenomena as equity prices underscores the difficulty of this task. One technique long used by market analysts in trying to quantify the phenomenon of stock-price changes involves the use of a filter. (Since we are recommending books, it should be noted that probably the most extensive work in thIS area has been done by Arthur A. Merrill and IS summarized in his book. Filtered Waves, published by Analysls Press. Wilton. Connectlcut). We were persuaded to make filters the subject of this letter by the fact that the market's latest high. scored a week ago. is a haIr above 20 higher than the October low. As our readers know, we have suggested in recent years that a 20 futer seemed to be a good rule-of-thumb for establIshing the eXIstence of a bull or bear market. Given Industrials It is a simple matter to apply a 20 fIlter to the Dow Jones to the 1929' One century. It faus. however. to cope with markets of We are a price-time series, and cycles should roughly resemble each other in both dimensions. During the 1930 – 1932 bear market. there were no fewer than four counter-trend upswings of 20 or greater. ranging from 22 to 56 days lfl length. Comparable swmgs occurred while the market was moving ahead between 1932 and 1937. It turns out that we can adequately describe the period from 1929 to 1942 by applying a 38 filter. This yields cycles, measured from low to low. of 789 trading days in 1930 – 1932, 1707 days in 1932 – 1938, and 1227 days from 1938 – 1942. These are, of course. magnitudes that one normally associates with major cycle moves. However. we are not done yet. A filter as broad as 38. when carried beyond 1942. recognizes only one 8071-day upswing from 1942 to January. 1973. Our rule-of-thumb. 20 filter handles this period better but still falls somewhat short. The 12 years from 1949 to 1961 never produced a 20 correction, and this era. when filtered at that level. appears as a continuous 3239-day rise. It becomes apparent that a more sensitive tool IS needed to measure the price patterns of the 1950's. By hmdsight. a 13 filter works pretty well, accounting with reasonable accuracy for what we believe to be the five completed cycles occurrmg during that time period—1942 – 1946. 1946 – 1949, 1949 – 1953, 1953 – 1957, and 1957 – 1962. These cycles ranged between 764 and 1304 trading days in length. For swmgs after 1962. our 20 filter appears to be appropriate, or. at least. had appeared so until recently. As we have repeatedly noted 10 thIS space, the 1273 days between August. 1982 and August. 1987 are an awfully long span for a single bull market. By utIlizing a smaller futer, we can recognize a 493-day cycle in 1982 – 1984. thus making the upswmg from the 1984 lows appear more normal. However, the serIOUS conceptual dIfficulty with this interpretation is that It suggests that a major bear market was completed in just 38 trading days between August and October of last year. lOB days have elapsed SInce that low. and the pessimist can claIm, despite the 20 advance, that what we are seeing is a bear-market rally. However. we are lookmg at a market that has behaved excellently. If one wishes to take an optimistic view. and not too badly, it must be admitted by even the most confIrmed bear. If the Dow remains. as we suggested m our year-end forecast that it might. in a range bounded by the 1987 high and low. we will have only prolonged a period which is dIffIcult to identify cyclically. A short-term position, therefore. IS the only Olle we can responsibly take. but. it must be emphaslzed. such a VIew must be an optimIstIc one. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWT,ebh Dow Jones Industrials (1200) S & P 500 (12,00) Cumulative Index (3124188) 2009.45 263.39 3637.92 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed 10 be, directly or Indirectly an offer Of the soliCitation of an offer to buy or sell any security referred 10 or mentioned The matter IS presented merely for the convenience of the subSCriber While we believe the sources of our Informalion to be reliable, we m no way represent or guarantee the accuracy thereof nor 01 the statements made herem Any action 10 be taken by the subscnbershould be based On hiS own InvestlgaltOn and mlormaltOn Delafield, Harvey, Tabelllnc, as a corporallon and rts offIcers or employees may now have, Of may later take, poSlllons or trades In respect to any securities mentIoned In thIS or any future Issue, and such poSItIon may be dlfferem /rom any views now or hereafter expressed In thiS ar any alher Issue Delafreld, Harvey, Tabell Inc , whICh IS reglslered With the SEC as an mveSlmenl adVisor, may give adVice 10 Its Investment adVISOry and other customers Independently 01 any statements made m thiS or In ….ny O1.her Issue Further Informahon on any securr\y mentioned herem IS avadable on request

r 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 (609) 987-2300 March 31, 1988 -.,— estertB.),,'s Wall Street. J ournal tt1!rIl .!!llCJ ..gn,,sQrnethlfg ,it L-CLaJ.1ed….!ixed-O.-hx…..which ..it I cited 88 8 plan many financial advisors were recommending for risk-averse individuals. The strategy for such a plan was descrlbed 8S follows. A set percentage of the investment is put in each of several asset categories—foreign and domestic stocks. bonds, and real estateThen at the end of each year, the investor adjusts the holdings, selling (the investments) that have gone up in value and buying more of those that have declined, so that each fund has the same proportion of the total investment as at the start. It is an interesting approach and it has been cited by a number of other sources, one of WhICh calls It an equalizing plan. That source explains that in a declIning market. when stocks have declined 20 percent, the fund is again equalized; i.e., brought back to the 50/50 stock-bond ratio In a rismg market. at each rise of 25 percent the fund is equalized by selling stocks and buying bonds. ThIS explanation is found in a text entitled, Investment Timing By Formula Plans. by H. G. Carpenter. The subtitle is. Today's Approach to Investment Programs. TlToday presumably refers to the publication date of the book—1943. The comcidence is an example of a phenomenon which we have remarked frequently of late. After 34 years in the securlties industry, a great many of the events which characterized the start of our Wall Street career are occurring once again, sometimes in completely modernized form but. occasionally, with very little change. Formula plans. as they were then called. were all the rage in the early 1950's. and today's FIxed Mix was then known as a constant-ratio plan—as distmgulshed from a cousin, the constant dollar plan. By 1954, such plans had been widely adopted by prestigious institutions, and the approaches had become a great deal more sophisticated. Thus, constant-ratio plans gave way to variable-ratio plans—m one of which there were seven brackets. based on the Dow Jones IndustrIal Average. which determmed the percentage of stocks that an institutional mvestor should appropriately own. Such plans had been extensively back tested, and, indeed. had worked wonderfully during the 1930's and the 1940's. producing a modest profit over those two decades, which ended with the Dow at ——–Ilessthan- half….its–192-9…Jtigh …-The seven' bands -were fIrmly grounded n !o.the- h-iBt-ory'ofthe prior———-ll—I 20 years. They rose at an annual rate of 3 percent, totally consistent with the market pattern of those years. There IS. in plans of this sort. almost invariably a flaw. often produced by Ignoring a possible market trend which seems, on the face of it. patently ridlculous. The possibility of a market which would rise consIstently, bringmg the Dow to 1000 in the ensuing dozen years was considered at the time to fall into such a category. The plan took ItS hapless practitioners totally out of the market at DJIA 300 m March, 1954. An investor who stuck with the plan would have been out of the market ever since. Using the plan's formula today, an overvalued level would exist above 820 for the Dow. Another example of a financial formula. gussied up so as to appear m a thoroughly modern guise. is po'tfolio insurance, whose antecedents go back at least a century. This approach. as we all IClrned last October If we did not know it already. involves selling stocks after they have declined by a certain percentage. This is. of course. no different in principle from the long-familiar stop-loss order. The only essential difference is that derivative products are utilized rather than the sale of the stock Itself. such a technique reducmg transaction costs to a pOInt where the method can. on the surface. be demonstrated to appear plaUSIble. Just as 1954 formula-plan advocates were totally unprepared for a 12-year bull market, portfolio insurers were likeWIse unprepared for last fall's crash In which bids for futures fell through the floor. Still another famihar tendency has recently emerged. This bemg the persomfication of Wall Street as villain. responsIble for Just about every socially rep'ehensible trait. This IS a manifestatIon WhICh erupts at nregular mtervals. Back in the last century. William Jennings Bryan was able to run for President on the premise that fmanclers should not be allowed to crucify mankmd upon a cross of gold Tl Not too long afterward. Matthew Josephson characterized the Morgans and Vanderbilts as Robber Barons. In the 1930's. the blame for a sick economy was laid. popularly, at Wall Stre.t's door. Although the medium is new. it is not surpnsmg that there should appear today a popular movie dedIcated to provmg that the fmancw community is domInated by rather unattractive malefactors of great wealth. Thus one by-product of the October crash was the'emergence of Yupple Jokes. Now there is mdeed. in our view, a perfectly plausible JustifIcation of the securities industry as a socially-useful mstitutIon although we will not go into it here. It IS unfair, in our VIew, to chastise financial markets because they are. as they have been for a thousand years, vehIcles through WhICh some of the more unattractive aspects of human behavior—greed and fear—are able to assert themselves, The financilll commumty should be regarded as an institution, and. as such. it has. in our Vlew. achIeved success. In any case, It has been an mteresting place to earn one's daily bread for some three and one-half decades. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWT ebh Dow Jones Industrials (12 00) S P 500 (12,00) Cumulative Index (3/29/88) 1967.84 257.49 3597.46 No statement or expresSIOn of opInion or any other matter herem contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the SOliCItation of an offer to buy or sell any securrly referred 10 or mentioned The matter IS presented merely for the convenience of the subsCriber While we believe the sources of our mformallon to be reliable, we In no way represent or guarantee Ihe accuracy thereof nor of Ihe statements made herein Any action to be taken by the subSCriber 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, posrtlons or trades tn respect 10 any secuntles menllOned In thIS or any future Issue, and such poSition may be different from any v,ews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS registered Wlthlhe SEC asan Investment adVisor, may give advree to Its 1fwestment adVISOry and other customers mdependently of any statements made m thiS or In any other Issue Further Informallon on any securrly mentIOned herem IS available on request

r , .. 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 (609) 987-2300 April 8, 1988 After the Dow had backed off to a low of 1978 at the end of March, a 60-point rally on Wednesday …………brought the–averageback ..to-'.-8-,point … where ..it- was .. flirting with….the previous recovery -high of-2 08 1.0;-07 —— It is now almost six months since the October 19 low, and, as far as the general market is concerned, there exist still 8 number of uncertainties, some of which we have been discussing in recent issues. Regardless of the general market, however, a half-year is long enough for differing individual ..point-and-flgure chart patterns to have unfolded. Four typicsl cases are discussed below One sort of pattern is conspicuous by its almost total absence at the moment. The chart above left is a one-point unit chart on Hershey Foods. typical of the consumer issues which led the last bull market. Its base formed over no fewer than four major cycles—note the successively lower lows in 1962, 1966, 1970, and, finally, 1974. From that date an uptrend began, breaking the stock out of the entire pattern at 20 in 1981. It hardly declined at all in the 1982 bear market and, when that market turned upward, the breakout was confirmed. The high eventually reached, adjusting for subsequent — splits, –streng-t- was h- of . 227. . .t-he- b uTllh…i.ms aBrkoertt..offrocmh-aAr tugpusitc–t;u–r1e98e2xi;st'scahusaerddlaylmoasttallantlondvaeySfotlrfftwiToIitreraasdo.enss.tbckFSitros-tDreathke'o-u'zt-oI—-1 multi-cycle bases, and, in the majority of cases, carried them to all readable upside objectives. Secondly, the October, 1987 collapse was broad enough to include almost all stocks so that, in general. new patterns have had to form in less than a half-year. An example of the most common sort of pattern today is Ford. above right on a two-point-unit basis. The stock fell from 56 to 32 last fall, and all downside objectives were reached at that point. A small base was traced out, with an upside breakout early this year. That base. however. is no wider than the original top. and it is hard to forecast anythmg more than a testing of the 1987 highs. Although fundamentally the same sort of pattern. the two-point chart for InternatIonal Paper presents a more bullish configuration. The 1987 base is considerably broader than that shown by Ford. and. It is possible to read, from that pattern, objectives well above the stock's previous high. Such a reading is reinforced by the fact that the base is considerably larger than the previous top. A significant mInority of stocks now show such a pattern. and it is possible that more will do so as further broadening takes place. Unfortunately. a fair number of stocks have developed patterns like that of IBM. display above right. After its low at 102 in OctOber. it has never been able to move above the 122 area, and the lateral formation seems to suggest dIstribution rather than accumulation. With the Dow close to new highs. IBM remains only a few points above its October bottom. This exercise is an attempt to show that individual stocks are beginning to show widely differing characteristics. Given an uncertain general market outlook. it may be possible to achieve both upside potential and downside protection by restricting holdings to those issues which have formed the most positive patterns in post-October trading. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (12 00) 2060.51 S P 500 (12'00) 266.70 Cumulative Index (4/7/88) 3658.40 No statement or expresSIOn of opinion Of any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer Oftha soliCitatIOn of an offer to buy or sell any security referred to or mentioned The matler IS presented merely for the convenience of the subscnber While we believe the sources of our Informahon to be reliable, we tn no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be talo..en by the subscriber should be based on hiS own investigation and Information Delafield, Harvey, Tabelllnc, as a corporation and liS officers or employees, may now have, or may laler lake, positions or trades In respecllo any secuntles mentioned In thiS or any future Issue, and such pOSllion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield Harvey, labelllnc, which IS registered With the SEC as an Investmenl 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 mentioned herein IS available on request

, \, '1TIBUEIL.IL. S RIEU' 1L.1E'1T'1J1E 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 April 15, 1988 Lord Keynes (who, besIdes being a professor of economics. was a highly successful stock-market -I—- 8pecula tor )–once.. hkened-theinv-estmen-t–proce8S- to-'-bein g –one 'Of–'-8 ….panel-of–jud ges for-a-' beauty'con test. In this parhcular contest. however, the object of the exercise was not to pICk the most beauhful girl, but rather to pick the girl most of the other judges were likely to choose as most beautiful. Thursday's IOO-point fall in the Dow brought this comparIson to mind. since the universally accepted rationale for the drop was the fact that the U. S. merchandise trade deficit for February (Today's date. remember, is April 15) was 13.83 billion which, we were told. was substantially above expected levels around 11 billion. Perhaps so, but the link between the two events, at least according to most fmancial commentary, depends roughly on the following chain of reasomng 1. The trade deficit is an important indicator of the health of the economy. 2. A one-month observahon of a highly volatile series is significant in predicting the future course of that series .. 3. Chairman Greenspan and the rest of the Fed Board of Governors believe that short-term interest rates have a substantial impact on the balance-of-payments deficit, since hIgher U.S. rates tend to attract increased foreign investment. 4. These same gentlemen further believe that Federal Reserve policy, for which they are responsible, is a major determinant of interest rates. 5. They are. therefore. likely use their power to raise short-term rates, which, in turn, should produce a concomitant decline. 6. Bonds, therefore. will attract investment funds away from stocks, and, thus— 7. Stock prices will move lower. On this. we are to blame a loss of well over 100 bilhon in equity values. Now, none of the theorems postulated above are inherently implausible, but the extent to which they depend on what goes on in other people's heads is Interesting. There are, essentially, two mutually exclusive theories as to just what the Fed produces when it manipUlates the tools at its . . .-I—–,disposal- .-..!l'-hecla-ssieal–vlewsuggest-5tha-t suchmanipulahonaffects-the—economy-by-changes-'in—- -,—–.- interest rates. Thls view was standard from the birth of the Federal Reserve System and appears to be regaining stature today. There was, however. the interregnum of former Chairman Volcker during which the Fed appeared to believe that it was charged with the manlpulation of the money supply. Monetarists. who, during this perIod, were kings of the economic mountain, conceded that Fed action might have a short-term effect on interest rates but that, over the long term, expansive monetary policy. by producing a greater demand for credit, would, ultimately. cause interest rates to rise. Wall Street, it will be recalled, was never quIte converted to thIS view. Only a few years ago, everything stopped on Thursday afternoons awaiting the report on the week's money-supply data. An increase in Ml, or one of the other assorted M's. was sure to produce a decline in the stock market since psychoanalysis of Paul Volcker indicated that he would feel compelled to tighten money, thus raising interest rates, which would affect the bond market, which would affect the stock market, etc etc. Chairman Greenspan is no less immune from psychoanalysis. It is wldely felt that he will react to faster-than-average economIC expansion by tightening money for fear of a renewal of inflation. We have even, mirablle dictu. reached the stage where rising profits are used as Justification for a falling stock market. This particular paradox arises from yet another compulsion to probe the minds of others. Earnings are significant these days, not by being up or down but by being greater or less than expected. This has given rise to a new cottage industry, the compilation of earnings estimates. There has even developed a theory that investment managers should be following, not changes in earnings, but changes in estimates. Here we have Lord Keynes' beauty contest with a vengeance. There exists. of course, an opposing hypothesis of how the investor should react to the opinions of others—the theory of contrary opinion. Along with many of our fellow technicians, we are believers in this theory, but it has always. in our view, had a practical difficulty in that it is difficult to know to just what opmions one should be contrary. A recent summary of widely read market-letters contained – one' suggestion that there were far 'too many disbelievers in the – – …. ongoing- bear-market theory. and that, therefore, the market should head lower. There were 18 other market letters quoted on the same page, and, of those, 15 were bearish. There are, we think we have emphasized. a fair number of uncertainties about the current market picture. and investors should react to such uncertainties in a fashion that makes them feel most comfortable. If the market is to continue to move lower. though, it will do so in response to forces a good deal more basic and fundamental than a one-month change in a smgle isolated economic series. AWTebh Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (4/14/88) 1995.69 256.67 3613.77 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or expression of opInion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or indirectly, an offer or the soliCitation of an offer to buy or sell any security referred to or menlloned The matter IS presented merely for the convenience of the subscrtber While we believe the sources of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subscriber should be based on hiS own Investlgallon and information Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later lake, posrtlons or trades In respect to any securities mentioned In thiS or any future Issue, and such pOSition may be dlHerent trom 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 rts llweslmenl adVISOry and other customers mdependently of any statements made In thiS or In any other Issue Further information on any secUrity mentioned herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (S09) 987-2300 April 22. 1988 Today will be the 129th trading day since the market crashed on October 19. At its most recent ,- – -high on -April-12;-the 'DJIA';-at2UO08;-hadadvanced -2h4'from -its 'October 'HIc1ose'of ' i 7il874'.—- Since a 20 filter is a common rule-of-thumb for identifying major turning points. it is necessary to confront the hypothesis that 8 new major bull market began on October 19w Resolution of this issue is as important to the bear as the bull. for the pessimist needs to refute it in order to justify his stance. One market aspect that supports such a refutation is the lack of follow-through following the posting of new highs. The table below shows the date of 15 past major lows plus the current one. The columns show the number of days on which new highs for each advance were scored, over periods ranging from 30 to 240 days following the market low. Market Number of New Highs Over Low 30 Days 60 Days 90 Days 120 Days 180 Days 240 Days 11/13/29 07/08/32 10 10 18 34 19 27 27 27 27 27 03/31/38 04/28/42 7 7 16 20 27 14 21 21 21 39 63 10/09/46 06/13149 4 9 11 11 11 21 18 26 32 40 59 72 09114153 19 27 37 43 70 90 10/22/57 7 7 11 11 25 47 06/26/62 11 17 17 28 40 57 10/07166 13 13 24 29 38 45 OS/26/70 12/06/74 6 9 15 18 41 57 15 28 37 42 48 48 02/28/78 08/22182 10 22 24 31 32 32 13 22 22 26 42 46 07/24/84 11 11 12 12 19 27 1- —–Fol1i0o1w191i8n7gO ctober.1192newhighs–w5ere–posted '5C)IiOctotier110.r..and-21but''the'nextnew;O- peak .. waB–not–I—. achieved until January 5. a gap of 51 trading days. This is reflected in the table which shows that the number of daily new highs In the Dow posted for 30. 60. and 90 days following the low were lower in 1987-8 than in any past bottom. The current period's eleven new peaks scored after 120 days ties two other markets for the lowest figure. Interestingly. these two past bottoms. 1946 and 1957. required long basing periods before advancing. Such may be the case at the moment. Market Percent Advance to High After Low 30 Days 60 Days 90 Days 120 Days 180 Days 240 Days 11/13/29 07/08/32 32.6 68.3 32.6 93.9 38.7 93.9 47.7 93.9 93.9 93.9 03/31/38 22.3 22.3 41.9 47.2 55.8 04128/42 9.9 17.0 17.0 17.0 2S.2 37.6 10/09/46 7.7 9.3 10.5 13.1 13.1 14.6 06/13149 9.1 12.6 15.6 19.8 26.9 33.2 09/14153 7.7 10.9 14.6 17.3 28.6 37.1 10/22/57 7.2 7.2 9.3 9.3 14.8 27.1 06/26162 10/07/66 11.6 10.3 15.0 10.3 15.0 15.7 22.1 17.8 28.6 22.2 35.7 26.1 OS/26/70 14.1 16.5 22.5 24.2 39.8 47.8 12/06/74 14.1 31.2 41.9 48.7 52.7 65.2 02128/78 08/12/82 4.3 20.3 15.7 37.1 16.8 37.1 21.3 40.6 21.3 57.0 21.3 60.7 07124/84 14.1 14.1 14.5 14.5 19.6 23.1 10/19/87 16.6 18.0 18.0 20.6 The table above is SImilar to the first but instead shows the percentage advance at the high for the various periods. On this basis, 1987-88 does not look bad at all. The two-day rise following the low wasexceptiofi81, 'and indeed. if one eliminates the volatile markets of the 1920's and 1930's, the performance folloWing October was the second best for a 30-day period. For longer periods, while not quite as impressive, the percentage advance posted fits comfortably within the framework of past major market turning points. This dichotomy. we think, supports our own stance. which is neither wildly bullish nor wildly bearish. but. rather, calls for the continuation of the sort of trading range that has characterized 1988 so far. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. AWTebh Dow Jones Industrials (1200) S & P 500 (1200) 1999.83 257.47 Cumulative Index (4121/88) 3589.53 No statement or expression of oplnton or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the soliCitatIOn of an offer to buy or sell any secUrtty 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 to no way represent or guarantee the accuracy thereof nor of the statements made herem Any action to be taken by the subscriber should be based on hiS own mvestlgatlon and mformatlon Delafield, Harvey, Tabell Inc , as a corporation and ItS officers or employees, may now have, or may later take, POSitionS or trades In respect to any secunbes mentIOned In thiS or any future Issue, and such poSition may be dlfterent from any ViewS now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabell Inc, which IS registered with the SEC as an Investment adVisor may give adVice 10 Its Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further InformallOn on any security menttoned herein IS available on request

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 (609) 987-2300 April 29, 1988 – at uLQv.ersix .m9Qth..J1avenow –P(!ssed–.since …the 8tockarket .crash of October…19.,1987. –To date least, none of the onward disasters predicted in the wake of the crash have materialized. Neither, however, has a new uptrend, of the sort that might suggest October was no more than a bad dream, emerged. What has happened, rather, especially over the last month, is a burst of lassitude. This can best be observed by a glance at trading volume. Yesterday's activity, 128 million shares changing hands, was the third lowest figure since the crash. We have had, in that time, only three lower-volume days, all related to the Thanksgiving and Christmas holidays. A ten-day average of trading volume was as low as 155 million shares earlier this month and will probably be lower today. AU of this does nothing to penetrate the fog surrounding the current market outlook. It is axiomatic that increased volume would be required to suggest a rally of any significance, but such an increase could manifest itself at any moment. The last two major bottoms, in 1982 and 1984, it will be recalled, manifested themselves after protracted periods of duUness. Meanwhile, group rotation has been pronounced. This can be illustrated by the following table which shows the levels for three Dow Jones Averages, Industrials, Transports, and Utilities, at various points following last August's all-time high, preceded by the dates, often different, at which the various benchmarks were reached. Following each average is its percentage change from the prior level. Industrials Transportation Utilities 1987 High Crash Low Initial Recovery December Test – January High – i fanuary–kow Late March High Jan-March Low Early April High Late April Low Recent 8/25 2722.42 10/19 1738.74 -36.1 10/21 2027.85 16.6 12/4 1766.74 -12.8 117 2051.89 16.1 U201879..14—.8.4 3/18 2087. 37 11.1 3/30 1978.12 – 5.2 4/12 2110.08 6.7 4/20 1985.41 – 5.9 4/28 2041.28 2.8 8/11 1100.11 10/20 740.25 -32.7 10/21 787.01 6.53 12/4 661. 00 -16.0 1/7 789.43 19.4 1/1131.576.6 3/23 904.12 22.6 3/28 854.84 – 5.5 4/12 884.56 3.5 4/20 827.36 – 6.5 4/28 840.20 1.6 8/14 213.79 10/19 160.98 -24.7 10/21 188.66 17.2 12/4 173.19 – 8.2 1/7 188.42 8.8 U14116.!l2–6.-1 1/29 190.02 7.4 3/30 171.29 – 9.9 4/8 176.56 3.1 4/20 167.26 – 5.3 4/28 170.40 1.9 As measured by the Industrials, the all-time high was reached on August 25 of last year, and the low, after a 36 decline, on October 19. Following a two-day initial recovery, the market moved gradually lower to a successful test of the crash low in early December. This test was followed by the attainment of a high above 2000 in early January. Since then, two subsequent highs have been posted, in March and in early April, neither one producing much in the way of followthrough. However, along with the series of higher peaks, each of the intervening lows has also taken place at a higher level, thus producing a pronounced uptrend channel, although not a terribly steep one. Measured from 1987 highs, the Utility Averaged has acted better than the other two. It now stands 20.3 below that high, with comparable figures for the industrials and transports being 25.0 and 23.6. For 1988, however, utilities have been the worst performers. The average is now more than 10 below a peak scored back in January, whereas the Transport Index is now 7 below its March high, and the Industrials level is now just 3.3 below a peak chalked up only a couple of weeks ago. Patterns have varied in other ways. Through the December low, the table clearly shows the Transport Average as the worst performer. It was the only average of the three to break its October low at that time. This was immediately foUowed by a period during January-March when it clearly outperformed the Industrials. That Qutperformance. however, seems to have evaporated since the March highs, with the average failing to better its early 1988 peak. The utility pattern is almost the opposite. That average was the best-acting one for the October.-December period. ,declining the least in .the. crash.showing the strongest subsequent recovery, and the smallest decline to the early-December test. For 1988, however, the utilities reversed this behavior. They struggled to a new peak in January—which has turned out to be their post crash high so far—and, as we noted at the time, actually moved below their early-December lows this month. All of this, of course, only shows what we have been suggesting for most of 1988—that market action remains varied and without any clear-cut indication of a general market trend. Needless to say. the appearance of such evidence will be welcome. and we hope to be able to identify it when it occurs. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (12 00) 2027.69 S & P 500 (1200) 260.89 Cumulative Index (4/28/88) 3638.96 — NO statement or expression of opInion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the solICitation of an oHerta buyor sell any securrty relerred to or mentioned The matler IS presented merely for the convenience of the subscriber While we beheve the sources 01 our Information to be rehable, we In no way represent or guarantee the accuracy thereol norolthe statements made herein Any action to be taken by the subscriber should be based on hIS own investigation and InformaMn Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may laler take, posrllons or trades ,n respeclto any securrlles menlloned In thiS or any future ISsue, and such osltlon may be different from any views nowor 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 rls Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue FUr1her Information on any security mentioned herein IS available on request

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 (609 987-2300 .y 6, 1988 Tnecon'!R!ctlon-betw!en-markl!tctiowofth-e-1920sanli un u, ,ue 'uu, WI. Hro, no Lea In this space more than two years I;lgo. Following the market crash of last October, a reasonable replication of the October 1929 drop, such comparisons have become wldespread—perhaps deservedly so, since some of the similarities are eerie. The following table covers weekly action following the 1929 and 1987 highs. The first week of decline in both cases is designated as week zero. The high and low DJIA close for each week is shown, as is the highest single dayts volume for the week. As can be seen, 1929 figures are adjusted. The levels for the Dow are multiplied by an adjustment factor which makes the 1929 Dow high of 381.17 equal to the August 1987 peak of 2722.42. Volume figures are similarly adjusted upward. This adjustment makes it possible to view 1929 in a more-ar-Iess familiar context. wk No, Date ADJ DJIA ADJ HI VOL High Low mill shs Date oJ IA HI VOL High Low mIll shs o Sep 7 1929 2722.42 2641,00 27647 Aug 28 1987 2722,42 263935 213.50 1 Sep 14 1929 2677,85 2616,57 251.78 Sep 4 1987 2662,95 256138 199,90 2 Sep 21 1929 2659,71 2579,50 242,59 Sep 11 1987 2608,74 2545,12 242,90 3 sep 28 1929 256408 2463,16 246,31 Sep 18 1987 261304 2524,64 19570 4 Oct 5 1929 2460.51 232245 279,46 Sep 25 1987 2585.67 2492,82 220,30 5 Oct 11 1929 2520,22 2464,08 211,78 Oct 2 1987 2640.99 259057 193,20 6 Oct 19 1929 2506,72 231317 203,13 Oct 9 1987 2640.18 248221 19870 7 Oct 26 1929 233202 2135.33 640,75 Oct 16 1987 2508,16 224673 33850 8 Oct 31 1929 1953.48 1643,22 81541 Oct 23 1987 2027,85 173874 608,10 9 Nov 8 1929 184042 1657,94 35697 Oct 30 1987 1993,53 179393 308,80 10 Nov 15 1929 163365 1419,10 385.64 Nov 6 1987 201409 194529 22830 11 Nov 22 1929 17742. 1625,30 155.98 Nov 13 1987 1960,21 187815 206,30 1–I—–12NOI'1!ji! !j17'8..,1 cl-i-6 8 Oo-g3-l-8-()751-Nov—i!i)-l9 8-7—H-4 9.,.H)'-l,-B 9-i-ll9-;-2i——!-. 13 Dec 7 1929 188170 1726.29 234,29 Nov 27 1987 1963.53 191046 19950 14 Dec 14 1929 1872.70 173657 24934 Dec 4 1987 184897 176674 268,90 15 Dec 21 1929 1782.57 1649,08 27558 Dec 11 1987 190252 1812,17 23140 16 Dec 28 1929 1721,00 1661,65 173,52 Dec 18 1987 1975,30 1924,40 276,20 17 Jan 4 1930 1777.35 172172 20671 Dec 24 1987 2005,64 197845 203,10 18 Jan 11 1930 1785,78 1754,86 11911 Dec 31 1987 1950,10 1926.89 170,10 19 Jan 18 1930 179657 1759,36 15126 Jan 8 1988 2051,89 191131 209,50 20 Jan 25 1930 1850,28 1766.36 172.97 Jan 15 1988 1956.07 191611 19790 21 Feb 1 1930 1917,06 184199 18579 Jan 22 1988 196386 1879,14 18170 22 Feb 8 1930 1943,13 1903,70 216,75 Jan 29 1988 195822 1911,14 275.30 23 Feb 15 1930 1944.63 1918,13 182,31 Feb 5 1988 1952.92 1910,48 23730 24 Feb 21 1930 193363 188135 18857 Feb 12 1988 1983,26 189572 200,80 2S Mar 1 1930 195155 1874,63 164,47 Feb 19 1988 2014,59 1986,41 18030 26 Mar 8 1930 1968,20 1932,63 184,60 Feb 26 1988 2040,29 2017,57 21340 27 Mar 15 1930 1977,34 193020 22211 Mar 4 1988 2071.62 205786 236,10 28 Mar 22 1930 2003,76 1958,84 23001 Mar 11 1988 208107 202603 237,70 29 Mar 29 1930 204405 1993,48 251,68 Mar 18 1988 2087,37 2047,41 245,80 30 Apr 5 1930 2070,97 203748 294,76 Mar 25 1988 2067,64 1978.95 184,90 31 Apr 12 1930 2095,76 205955 282,29 Mar 31 1988 1998,34 197812 152,70 32 Apr 17 1930 210033 2086.97 218.54 Apr 8 1988 209019 1980.60 18980 33 Apr 15 1988 2110,08 200564 23420 34 Apr 22 1988 2015,09 1985,41 168,40 35 Apr 29 1988 204791 203233 157,00 As can be seen, both the Inltial 1929 coUapse and the October 1987 drop occurred in week 8 following the high and took the Dow to almost the same relative levels. At that point a divergence set in. Weeks 9.and 10 showed lower figures in …1929 ….while .)n the recent case. the market held. Volume expansion in 1929 was on the same order of magnitude as 1987 but a bit greater. The later weeks in each case also exhibit like patterns. In both cases. the market saw a recovery on light volume. The 1929-30 raUy peaked In week 32 at a level eqUlvalent to 2100, and the current high to date has been 2110 m week 33. We publish these fIgures at this point not to suggest that the similarities will continue, but to make it easier to detect when the two patterns flnally diverge. We have noted in the past our view that the differing economic conditions in 1929 and 1988 will eventually foster dissimilar market patterns. The time has come for such a divergence. If it is going to do so, to take place. AWTlt Dow Jones Industrials (12 00) S & P 500 0200) Cumulative Index (5/5/88) 2025.03 259.33 3714.85 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, dlrectty or Indirectly. an offer or the solicrtallon of an offerlo buy or selt any security referred to or mentioned The mailer IS presented merely for the convenrence of the subscriber While we believe the sources of our Inlormatlon to be reliable, we In no way represent or guarantee the accuracy thereol nor of the statements made herem Any aCllon to be taken by the subscTlber should be based on hiS own Investigation and Information Delafield. Harvey, Tabelllnc, as a corporation and ItS officers or employees may now have. or may later lake, poSllions or trades In respect to any secunbes mentioned In thiS or any future Issue, and such posilion may be different from any views now or hereafter expressed in fhls or any other Issue Delafield. Harvey, Tabel! Inc, which IS regrstered wrth Ihe SEC as an IfwestmenI adVisor, may give advlC 10 Its inVestment adVIsory and other customers Independently of any statements made In thiS or In any other Issue Further Informabon on any security mentioned herein IS available on request

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 16091987-2300 May 13, 1988 What if it doesntt matter at all We are referring, in this case, to the market crash of October 19, 1987 J and we want to explore. -at -least;-the -theoryth-at–ttre- crash -may7lln-e-xpectecUy–proQuce no really- significant- aftereffects- .— — –……. – – The argument can be advanced that this has been the case to date. For all of the fireworks of last October it is necessary to recall that 1987 will go down in history 8S an up-year for the stock market. The Dow currently finds itself at levels it attained for the very first time in January. 1987. Is it conceivable then, that the period from early 1987 to date, which saw the DJIA advance to over 2700 in the first eight months of last year and then give up almost 1000 points, more than half of them in a single day's trading. will wind up being recognized as only a blip on some sort of longer-term market trend Such a theory hardly seemed plausible at the moment of the crash. The natural reaction. after October 19 had occurred. was to relate it to what was. in fact. the only truly comparable period in stock-market history—i.e 1929. Our own reaction was to produce just such a comparison. We noted on October 23. 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 This comparison, of course, refers only to stock-market trading occurring over one week in October, 1929. We have set forth repeatedly, in this space. our own belief that most people who use the 1929 appellation today are in fact. consciously or unconsciously. using it as a code word covering a great deal more than than a sharp drop in the stock market which took place 59 years ago. They are certainly referring to, at the very least. the entire market collapse. which. with a total absence of fireworks in the latter stages. took the Dow from 386.10 in September, 1929, to 40.56 in July, 1932. Indeed. 1929-as-a-code-word covers even more than just the stock market experience. It involves the greatest economic contraction in U.S. hlstory, a depression in which Gross National Product was cut in half over a three-year period. It probably includes also the almost-ten-year aftermath to that depression, which saw only a modest recovery. and which included yet another severe contraction 1–lI–jn .lR37.olR38.lndeed ,wetendto a gl'ee. with thetheo,,-y–whic hhold s…thatonly4hti mulus,.f-World–'-I War II. more than 20 years later, was able to bring the American economy back to full resource utilization. Thus the market collapse of October-November, 1929, many would contend. was nothing more than a trigger. It acted only to set off a chain of events which essentially continued through the entire decade of the 1930's. Many forecasters seem to feel that the 1987 stock market may also carry the seed for a series of equally unpleasant future phenomena. So far, such phenomena have been non-events. We worried in December about the effects the crash would have on Christmas sales. There was no such discernible effect. The same was true of housing starts. Indeed, the only area of the economy obviously affected by the crash so far has been the stock market itself. We noted last week the uncanny parallels between market action in 1987 -1988 and that of 1929-1930. Until this spectre is laid to rest. there will exist justiflable concern regarding both the market and economic futures. Meanwhile. the market can be said to have a few things going for it. Foremost is the aggregate of individual base patterns for many stocks, stocks which show sufficient accumulation to suggest, at the very least. a test of former hIghs. As we have noted. upside breakouts from such patterns have not been common. but the patterns. meanwhile. continue to broaden. We are, at the same time. looking at the second half of a Presidential election year. a period. which, historically, has tended to be a good one for the stock market. If the theory of contrary opinion is to be believed. the current plethora of bearish commentators suggests that stock-market surprises might come on the upside rather than the downside. None of the above represents a forecast. since we continue to feel that uncertainties remain far too great to warrant an aggressive investment posture. It is meant. simply. to suggest that an hypothesis calling for an extended upside move at some time in 1988 is not totally untenable. ANTHONY W TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (5112188 close) 1968.00 S & P 500 (5112188 close) 354.86 Cumulative Index (5111188) 3645.69 Note Due to the writer's attendance. along with his associates. at the annual Market Techmcians' Association seminar, the above remarks were prepared on Wednesday. May 11. No statement or expreSSion of opInion or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offeror the solicrtatlon of an offerlo buy or sell any security relerred to or mentioned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our Informabon to be reliabte, we in no way represent or guarantee the accuracy thereof nor of the statements made herein Any actIOn to be taken by the subscnber should be based on hiS own Investlgatton and Information Delafield, Harvey, Tabel1 Inc, as a corporation and Its officers or employees, may now have, or may later take, pOSltlons or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such position may be different from any views now or hereaffer expressed in thiS or any other Issue Delafield, Harvey, TabeJi Inc , which IS registered With the SEC as an investment adVisor, may 91ve adVice 10 Its investment adVISOry and other customers independently of any statements made In thiS or in any other Issue Further InformatIOn on any secunty mentioned herein IS available on request \

——————————————————————————————————- 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 – May 20, 1988 The stock market's tendency toward perverslty—some W(nila—even'say-irrationality—was–amply—l- demonstrated in this week's trading. We have had hammered through our skulls over the past six months the absolute necessity for reversing the trade deficit before any stock-market progress could take place. The recent release of March figures showed, for the first time, real improvement in the trade numbers The Dow put on a two-hour rally of some 20 points and then collapsed However, the purveyors of conventional wisdom are never at a loss. A broad-tape news story conceded that the improvement' underscores the increasing competitiveness of U S. exports … but it also signals strength in the economy that could produce higher inflation Presto-changeo, inflation became the operative bugaboo, fuel being added to the fire by new lows in the unemployment rate. Stocks. obviously. were going down because the economy was too strong. Got it Our own major fear (fear, not forecast) regarding the stock market has always been deflation, rather than its opposite. Martin Pring. in an excellent speech at last week's Market Technicians' Association seminar, pointed out that commodity prices and bond yields—which should fall in a depression—both showed potential very long-term tops. However, the shorter-term outlook for these …series is beginning to seem just the opposite of toppy and may explain the current inflation fears. I ..l2!l. I -', I''., CRB INDEX -….. \'11\,VI'\/'- .rJInl.,..4'- '\ (I'yol , -2lIQ lV'''f,I''/'\l V\''t -/'- ( 't,. I The CRB Index of commodity prices this week confirmed penetration of a downtrend line going back to its November, 1980 high, and the short-term course for this most sensitive of inflation indicators ought to be upward. It should be remembered, however, that 1981 – 1986 saw a decline in the index from 340 to under 200, a drop of some 40 percent. It is conceivable that a long-term trend toward lower prices remains intact. As the chart also suggests, bond prices (we utilize the Dow Jones 20-Bond Average as a gauge) have been tailing off for the past few months. But this fall can be viewed simply as a retreat from the overhead supply remaining from the period when the average traded well over 90 in 1986 and early 1987. At the moment, the chart suggests strong support just under current levels and would point to significantly lower interest rates only if the October lows were to be penetrated. As technicians. ,thankfully. .we. ar.e. exempt ,from ..worry as to. whether inflationary or deflationary… worries should be the operative ones for the current stock market. As our readers know we foresee a continued trading range, possibly continuing for the entire remainder of 1988. During this range, hopefully, the market's Ultimate direction will become evident. This week's switch in excuses for a weaker market does not alter that technical picture. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. AWTebh Dow Jones Industrials (1200) 1959.88 S P 500 (1200) 252.62 Cumulative Index (5/19/88) 3631.44 No statement or expressIon of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the soliCitation of an offer to buy orse!l any securrty referred to or mentioned The matter IS presented merely for the convemence of the subsctlber While we beheve the sources of our Information to be reliable, we m no way represent or guarantee the accuracy lhereof nor of the statements made herein Any action to be taken by the subscflber should be based on hiS own Investigation and Informallon Delafield, Harvey, Tabelllnc, as a corporation and ItS officers or emptoyees, may now have, or may later tak.e poSitions or trades In respect to any securities mentIoned In thIS or any future Issue, and such polllon may be dlHerent from any vIews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabefllnc ,WhiCh IS registered With the SEC as an Investment adVisor, may give adVice 10 Its Investment adVisory and other customers independently of any statements made In thiS or In any other Issue Further Informa\ton on any seCUrity menltoned herein IS available on request