..,. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 085435209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 January 6. 1989 '- Following a 24-point 'slide' on-the-first-trading daYof '1989 ;ctheYear-end 'rally–in-ally– '.- -', ''– emerged, and a new postcrash high' was chalked up on Thursday. As discussed last week. the vigor of this rally will provide one clue as to the market's potential for the year ahead. It occurs to us as 1989 begins that there still remain a couple of aspects from which we hJ)ve not yet discussed its prospects. One such aspect is the decennial pattern, in which market patterns are analyzed in terms of the ending digit of the year. There are some interesting facets to such a classifaction. such as, for example. the fact that all nine years ending in 115 11 since the Dow was first computed have been advancing ones, and the average advance for those years is 35. five times as great as the 92-year average. Unfortunately. the pattern for years ending in 9 does not tell us much. Five years of nine have been up, but two-thirds of all market years have. historically. been up years. Some analysts have suggested that 9 years tend to be turning points. e.g., 1929 and 1949. but we suspect this maybe coincidence. Probably of more significance is the fact that 1989 will be a post-election year. The following table shows what the stock market did in the 23 most recent such years. It shows the average price for each month on the Dow as a percentage of the previous December's close (i.e., 110 means the market was up 10; 90 means it was down 10). Year president Jan Feb Mar Apr May Jun Ju1 Aug Sep Oct Nov Dec 1897 Cleveland 1901 McKinley 1905 Roosevelt u1909Taf,t 1913 Wilson 1917 Wilson 1921 Harding 1925 Coolidge 1929 Hoover 1933 Roosevelt 1937 Roosevelt 1941 Roosevelt 1945 Roosevelt 1949 Truman 1953 Eisenhower 1957 Eisenhower 1961 Kennedy 1965 Johnson 1969 Nixon 1973 Nixon 1977 Carter 1981 Reagan 1985 Reagan D 84 82 82 79 79 85 92 104 107 101 95 98 R 96 97 97 104 101 109 104 101 99 92 93 89 R 101 106 112 115 107 108 114 117 115 118 123 134 R 9,99.7 921,Ola.51.07 1.0–1 31.lA–1IA.L411.4 D 97 92 91 92 90 85 88 91 93 90 88 88 D 102 96 100 99 98 102 98 93 88 83 75 74 R 104 105 104 107 107 96 95 93 96 100 105 111 R 101 100 100 99 104 107 111 115 118 125 128 128 R 102 103 104 103 105 105 115 120 122 107 78 82 D 103 94 96 108 136 157 167 164 167 155 161 166 D 102 105 105 100 96 95 100 102 89 77 70 70 D 99 93 93 91 89 93 97 97 97 93 89 84 D 101 103 103 105 109 110 108 109 117 122 125 127 D 101 98 99 99 98 93 98 101 102 105 108 l11 R 99 97 98 94 95 91 93 93 90 93 95 96 R 97 93 95 97 100 101 103 98 94 89 87 87 D 103 106 109 111 113 112 112 117 115 114 118 118 D 102 102 103 104 106 100 100 102 106 108 109 109 R 99 99 97 98 101 95 89 87 88 88 89 84 R 101 95 94 93 90 88 89 87 89 95 86 81 D 97 94 94 93 92 91 90 87 85 82 82 82 R 100 98 102 104 102 103 98 96 89 89 89 91 R 102 106 105 105 106 108 111 109 109 112 118 125 The most obvious conclusion suggested by the table is. unfortunately. that such years appear to have a fairly significant bearish bias. In 13 of the 23 years, the average price for December was lower than the previous December's close. This is in direct contrast with the record noted above for all years since 1897. The market was up in 57 of those 92 years, or 62 of the time, thus suggesting that the post-election pattern, with 'only 43 advancing years, is a bit unusual. Nor does Mr. Bush's party affiliation help. Until President Reagan reversed the pattern in 1985, the market had been down in the year following the election of a Republican in every post-election year since Hoover. (This bias was apparently not present in the first part of the century with the accessions of Theodore Roosevelt, Taft, Harding, and Coolidge, all producing good years.) It will be interesting to see whether the 1985 reversal is repeated in 1989. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2198.21 S & P 500 (1200) 281.48 Cumulative Index (/5/89) 3985.80 AWTebh No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indlrectty, an offer or the soliCitatIOn of an offer to buy or sell any secunty 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 nor of the statements made herem Any action to be taken by the subSCriber should be based on hiS own mvestlgatlon and mformallon 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 securities men1lOned In thiS or any future Issue, and such position 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 mvestment 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 securtly mentIOned herem IS avaitable 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 — —– — – – — —-'; – January 13989—- – ;-I- At the'beginning of December, some two weeks after the market had embarked on its latest short-term advance. we made an attempt to fit that rally into the context of 1988 market action. We said at that hme. Projecting (the 1988) environment through December, one might expect a high some 2 above October. say 2225, as a possible target for a year-end rallyll. The Dow closed yesterday at 2222.32, pulling back after spending most of the afternoon well above the 2225 level. Date ——— Dec 4 87 Jan 7 88 Jan 20 88 Apr 12 88 May 23 88 Jul 5 88 Aug 23 88 Oct 21 88 Nov 16 88 Jan 12 89 DJ Average ——- 1766.74 2051.89 1879.14 2110.08 1941.48 2158.61 1989.33 2183.50 2038.58 2222.32 This Swing ———0.00 16.14 -8.42 12.29 -7.99 11.18 -7.84 9.76 -6.64 9.01 C han g e Number Of Days From Hi From Lo This Swing Cumulative 2.84 2.30 1.15 1. 78 3.32 2.46 2.48 o0 22 22 9 31 57 88 29 117 29 146 35 181 42 223 18 241 38 279 The analysis we used a month ago was based on the table above, now updated, and suggested that market action since December 7. 1987. when the October lows were tested. had consisted of eight trading swings, four up and four down, averaging some 9 in extent. It pointed out that the three short-term highs in April, July. and October had each exceeded the preVIous one by about 2 and that each low had likewise slightly bettered its predecessor. It was suggested that another rally comparable to the previous ones, a 9 advance to some 2 above the hIgh of October 21. would produce a -2225objective.'l'his.,ventu . .lityhasMndcedf'..t , .. .n s p i 1 ' e d '— – – What has. unfortunately. not come to pass is any Cumulative Net Advances improvement in the dreary undertone which was typical Upswing Total Avg per Day of the 1988 stock-market scene. One way to measure the strength of a short-term advance is to accumulate the net difference of advances and declines over the course of that advance. The table at right shows the results of such an accumulation for the five rallies which have composed market action since December. ——————–Dec 4 87 – Jan 7 88 Jan 20 88 – Apr 12 88 May 23 88 – Jul 5 88 Aug 23 8 8 oct 21 88 Nov 16 88 Jan 12 89 ———– 6,109 277 7.348 129 5.007 172 3.304 79 3,494 92 1987. For the last previous rally. that of August-October. the average daily difference between advances and declines was only 79. On the current rally, thl'ough yesterday. that figure had improved very little and remains well below previous levels. Av e r a g e Upswing ——————— Dec 4 87 – Jan 7 88 Jan 20 88 – Apr 12 88 -May 23 88 – Jul 5 88 Aug 23 88 Oct 21 88 Nov 16 88 Jan 12 89 Da i 1 Y Total ——– 178.9 178.4 188.1 146.1 136.9 V 0 1 u m e (million shares) Upside of Total Downside of Total —— ———- ——– ———- 97.3 54.4 61. 3 34.3 87.7 49.2 67.7 37.9 94.8 50.4 64.1 34.1 74.8 51.1 51.1 35.0 66.4 48.5 48.4 35.3 Volume figures offer no more encouragement than do the breadth numbers. The table above shows the average daily volume for each of the five rallies in the 1987-89 advance. dividing that volume into upside and downside volume. As can be seen. total volume has decreased on each of the fIve successive rallies. and this pattern has continued through the current upmove. In addition. upside volume for this rally is. by far. the lowest of the five both in absolute terms and as a percentage of total volume. Clearly. for the first two weeks of 1989 at least, the pattern of deteriorating breadth and momentum which characterized most of 1988 IS continuing. None of this is to suggest that there exists any immediate vulnerability, and. indeed, the opposite is the case. There still exists the possibility of an extension of the year-end rally to the 2300 level. which we previously suggested as one criteria for a positive 1989 proJection. Given the pattern indicated above, however, the sudden emergence. at this stage, of a broad and dynamic rising phase must be considered unlikely. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials (12 00) 2221.61 S & P 500 (1200) 282.82 Cumulative Index (1/12/89) 4039.05 AWTebh 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 or sell any security referred to or mentioned The matter IS presented merely for the corlVenience of the subSCriber While we believe the sources of our Information 10 be rehable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Anv action 10 be taken by the subscriber 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 take, positions or trades In respect to any secuntles 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, Tabellinc , whICh IS registered With 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 herem 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 January 20. 1989 It cannot be denied that 1989. so far at least. has been a pleasant year for the equity market. – In ,three weeks ..ihe-;-Dowllad. ,at-y,e,sterday's close.–1ovedup3 .2'LfrQm its .December 30, level. .This, move represented the continuation of a year-end rally that can be dated all the way back to lows posted over two months ago. Since then. the average. from a level of 2038.58. has now advanced almost 10. Before joy becomes totallv unconfined at this happy sequence of events. it should be noted that we have here nothing particularly new. Three of 1988's four short-term rallies posted larger advances. Recent action is, however. not without its impressive aspects. We are thinking here specifically of the fact that both currency and stock markets were able to shrug off disappointing trade-deficit figures and produce sharp rises in both stocks and the dollar. Now, if the market can ignore the next jump in short-term interest rates, we will really be impressed. We have taken up a great deal of space of late talking about short-term market swings, and it is perhaps worthwhile to step back and try to place the current trading pattern within a major-cycle context. To begin with, it must first be recognized that we are in a bull market. This may seem, at first glance. to be a reversal of position for this letter which, our readers are well aware, has tended to wax less than ecstatic over recent market action. Such, however, 18 not the case. The bull classification for the current market is. after all. the only logical one in terms of cycle theory. It seems to us absurdly obvious that October 19. 1987 (or its December. 1987 test). constituting the low point of what was arguably the second largest decline in stock market history, has to be identified as a major-cycle low. We have, moreover, documented the fact that the rally-in-a-bear-market thesis to explain trading since that time does not hold water historically. If October, 1987 was a major cycle low point. the ensuing period is clearly the upward phase of a new market cycle—in other words, a bull market. This thesis is confirmed by the traditional filter test for bull and bear markets, a 20 move. The Dow and the S & P 500 were both, this week. roughly 28 above their 1987 lows. So, a bull market we have. What we do not have. and this is this letter's rationale for – – continuingskepticism-;–is-a-very–good-buU-maTket. We will-not–bore-our-rcaders .'-f.urther-by-once-more—– reciting the litany of deteriorating breadth, momentum, and volumE' statistics which have accompanied the last ten months of the current upswing. In trying to cite an historical analogy to the present market I we have I in the past, referred to October, 1946 – June, 1949. We would not want to push this comparison too far, yet there are a number of points of similarity. It must be remembered that 1946 – 1949 was, indeed, a complete market cycle. As in the current case, a new low was made on October 9. 1946, at 163.12 on the Dow and was tested again some six weeks later at 163.55. There followed, throughout all of 1947 and the first half of 1948, a series of choppy up and down Swings, not at all unlike those of 1988. The bull-market phase of the cycle peaked on June 15, 1948, 20 months after the low. with the Dow at 193.16. 18 above its bottom. On the same date. the S & P 500 was 24 above its low figure. The advance displayed breadth and volume action even less impressive than that of today. The follOWing year constituted a bear market which retraced the entire advance. The subsequent cycle. 1949 – 1953, then produced one of the strongest upswings on record. That upswing was a product of the fact that 1946 – 1949. for most stocks. constltuted a rebasing period. Like any cycle, it consisted of bull and bear phases, but both were relatively flat. It was also a period durlng which leaderShip rotated back and forth as various stocks and industry groups built up the patterns that led to the advance of the 1950's. When one looks at individual stock patterns today, there is a clear impression that potential base patterns, similar to those which must have been tracing themselves out in the late 1940' s, may well now be forming. The question currently posed for the technician must center on the timing of the breakouts from those patterns. It is. of course, conceivable that such breakouts could begin to take place en masse over the short-term. This seems to us rather unlikely. It is the normal characteristic of bull markets that they attain maximum upside momentum in their early stages and generally lose that momentum as they move ahead. A bull market developing an acceleration phase in its advanced stages is a phenomenon difficult to locate in the historical record. Expecting an advance now 14 months old, which has been deteriorating for 10 of those 14 months, suddenly to erupt on the upside requires an optimism which we do not possess. None of this is to suggest that the present upswing is over. Twenty months after all, elapsed between October. 1946 and June, 1948. and the present rise is only 14 months old. Furthermore, the current trading range shows an upside bias that 1946 – 1949 did not. If the present pattern continues. individual stock bases will become more and more impressive, and we have no doubt that the eventual upside breakout from those bases will produce a market which will be exciting, indeed. However, the immediacy of that breakout remains, in our view, questionable. ANTHONY W. TABELL DELAFIELD. HARVEY, TAB ELL INC. Dow Jones Industrials 02 00) 2241.07 S & P 500 (12 00) 286.76 Cumulative Index (01/19189) 4094.61 AWTebh No statement or expresSIOn of opinion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or Indirectly, an offeror the soliCitation of an offerlo buy or sell any security referred to or menilOned The matter IS presented merely for the convemence of the subscnber While we believe the sources 01 our mformatlon 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 Investigation and Information Delafield, Harvey, labelllnc, as a corporallon and Its offIcers Or employees, may now have or may later take, posrtlons or trades In respect to any secunties mentioned 10 (hiS 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 rts Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Informallon on any secuflly 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 January 27, 1989 The rally which beglln on November 16 was extended further yesterday and thIS mormng. At 'Ihur.sdays….closeof21.,O.7 …. the .Do had8dvanced…12 .4 over–48trading daYB. These numbers…..r.emain- –within the framework of the typical post-crash rally. but Ii number of encouragmg things are taking place. Among them is the attainment, intra-day at least, of the 2100 short-term objective mentioned in this space two weeks ago. extending the year-end rally to 10 above the December low. normally an encouraging sign. We noted last week. only semi-facetiously. that we would be impressed if the market could shrug off higher interest rates. It did this to some degree on Thursday when a rIse In durable goods orders brought about the predictable weakness in long bonds. Equities, however. were able to advance. spurred by good 1988 earnings reports from B. number of leading companies. This rationality is a refreshing contrast to the bad-is-good syndrome of 1988. Market improvement is often accompanied by shifts in leadership, and there is some sign, although stiU preliminary. that this is taking pltlce. The tables below show the 4-week and 26-week changes for a number of 8 & P industrial groups as of this Wednesday. The one on the left shows the 30 best-performmg out of a total of 95 groups over 26 weeks and is ranked in that order. The right-hand table is ranked on 4-week changes and shows the best-performing groups for that timeframe. 4 VtE LHAkbE ,0 kEH HAkbt 4 Mttl MAhbt iO tt r1ANbt bW, NAKE lOBAL'u fO tHllN ,Ail ,,filuM et 211 ISll &1 2 O; ;; .4 HuM ,Jul , Ull RANl I ,… 4l.0j ,1.,,1 uur .,,' ntp.lTH LRt-MhL HI.OfWUkEo ,OO,IH. tKII jet 8 Ha ,m I .rib ll.lS4 15,4i tliuK Jui 2i Udu ,All I m. O -( IDIl 5 ii.I.1 Al FkElbMi fOoo; U i OJO 1, i.1il j J5 400 4 '1.I. buLii ,ONIAIN WE d.4S' 11.160 i -0.201 ,I 4.181 HAMUfA,TUm HOUlm mlllm MElAl I blA11 1 1141, ,I I I4i I li.lii l.i5I I,' IA.INbl , lOAM (HPAHIEI 10.,4, i 10.,.4 24 13.181 12 1;.,,3 PUllUTIOH ,0NIROl .; 'Jl; I 1u ,40 AlOMINUM i ;.,41 18 11.0\2 1 BROAOmUjll!'IA .(l-!-1'-f-'1.llp.'-c1–.;50l-MA(!!!HINE'-.!.!T,-,Ol-lI -C;L-'1'-,,019 ''–';!!U-!IIO' Hl11lE PROOUm 11 1.10, 9 b.2,J illU,Al bA, !U I 9.1 11 1).881 SEifRAIEI AlLOHOliL kAll,OAUI 'J11; 131 3.00, 10 18.m 11 'b.'ib bAMIb L,MPlNIEi liTtkT!IENT 11 8.159 12 i. i5l I, l7.m 21 II 11; IAYIm I lOAN ,0MPAlIEI I 10.,.4 11 Ii bUl aiL. bA, OKilliNb I, ;.ill 60 . ;;0 10FT DimS HOUlliOlD PROUm RES1KAT) IAKINI,OMYAMItl tlh.lRuMHLiM)lRUKtkiFliluh ALUMINUM AIR TRANSPORT fOOO iHlESAlm EHHkiAlNHENl 90 Ull ,1 UI4 2J II i i5, ,.,0u I.u5 i 2J 7.l.hl ;4 -u. i2 l\ 753 1J 441 H 18.100 l Ii .jH I. 11.b 1/ Ii illl 18 Ii 051 19 111 llS lu II 110 21 15 Lll MO,PlT!l N,hAitM,!i ,0KrANlb mAIl ITuRb,ORU ilAl itllKlbtl Al'UMUlh fHlUoIH i.b,, OiHEi HAJui SANl, Alit filtibni ,O,A,i HtOII itA TiLt rKuuULh 14 UI, II 6.4.1 '.B,It1 l\ JO'l ,i 11.1 b.dtl I; i 001 0 1.0J 11 i 5i, 22 i,HJO d lUll 11 1 9UI 4 152 10 1'.919 l -u Jiu 45 Ubi J 35.401.1 ,1'.501 S 1.Zjj MUliHUE mURAN,E 41 5 111 11 14 15. AIR TkAhiPOR! 1j 1.1.i 19 1'.11, hOSPITAL MANAHNENT ,mANIE H 8.5il 15 14 III MOU,EHOl; f I A 14 I lui .; Uli TO.I h,1.TUKP.L bAS lu ,41 Iv b.O 14 15; 25 IJ dl BRulERAGt IlKMl Cr1El'ilAL-ilH 15 I 10, 20 i u4u 1; 15.4 15 l,i27 liOmibE IIRMS 15 i.l06 ,,1,4,; (UMMEitlAl mil,,, ,I 1 G14 41 9.6.0 HuME 8UIlom ,1 5.')' 1I I) 153 mEL 1.1 .5 I.iii HETAlI mmllNEuUI uHIE iUU1PHENl & Sri'lib 5 11.m li l b70 1; 11 ;lu l'l 1, lIO fu, ,hAIN 5Mbt) '''; ,lU b III ,)1 811 51 b.JtI HllIlE APPAkH mI. 41 4,;,0 3, II II' The immediate impression gained by looking at the left-hand table is that it is dominated by consumer-goods industries, for example, Tobacco. Food Chains. Foods, 80ft Drinks, Restaurants. etc. It IS striking that a number of these groups. which have ranked among the top 30 in performance over the past SIX months, have dropped toward the bottom of the list when measured over the most recent one-month period. While all the groups shown at left bettered the 10.3. 26-week gain in the Dow. a great many of them were unable to equal the 4.6 gAin which the Dow had posted between December 28 and Wednesday. The right-hand table, on the other hand, shows a number of flnew ll names. Among the most interesting, in our view, are Aluminum, Machine Tools. Oil and Gas Drilhng. Coal. Chemicals. and 8teel. Many of these groups were among the worst performers over the past half-year, but have, in the last month, moved into the top third of the lit. Market leadership on the part of such cyc1ical stocks would be an encouraging sign in our view since. as mentioned last week, it is these issues which possess the multi-yetlr bases which could produce important upside moves. ANTHONY W TABELL DELAFIELD, HARVEY, TABELI, INC. Dow Jones Industrials (12 '00) s P 500 0200) Cumulative Index 0/26/89) 2326.07 294.14 4111.91 AWTebh No statement or expression 01 opinion or any other matter herein contained IS or IS to be deemed to be, directly or Indirectly. an offeror the soliCitation 01 an offer to buy or sell any security referred to or mentioned The maner 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 of the statements made herein Any action to be taken by the subscriber should be based on hiS own investigation and Informatlon Delalleld, Harvey, Tabelllnc. as a corporabon and Its officers or employees, may now have. or may later take, positions or trades In respect to any secun\les menlloned In thiS or any luture Issue. and such posllton may be different Irom 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 Informallon on any security mentioned herein IS available on request