Viewing Month: September 1989

Tabell’s Market Letter – September 01, 1989

Tabell’s Market Letter – September 01, 1989

Tabell's Market Letter - September 01, 1989
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1Li\ (lUE IL.IL.' S Li\IRlIE1 1L.lE11lEIRl 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 September 1. 1989 Just about a year ago in this space. we remarked on what seemed to us at the time to be a rather strange phenomenon—the large number of issues that seemed to be windlng up each day unchanged from tnei!, – previous cIose-.-WIlat(\rew- this -toQurattention- was-the-fact that- 0I1mll.ny-days ;-mor,,'thaI1500– – issues were closing unchanged. something that had formerly been a fairly rare occurrence. We decided at that point to go back and look at some past history. Quite obviously, the round number of 500 was an accidental product of the number of issues that at the time tended to trade on a given day—between 1950 and 2000. For purposes of historiCal comparison, 500 could be translated into 25.5 of issues traded. What was remarkable to us about our examination was the dlscovery that. from time to time. trading patterns seemed to emerge where unusually large numbers of issues tended to trade unchanged. these patterns remaining in force for protracted periods. Updating the figures, there have been, through yesterday, 17150 trading days since 1926, and on 2832 of these more than 25.5 of all issues traded were unchanged. Our year-ago letter noted that well over three-quarters of those days had occurred in clusters of 100 days or more. a cluster being defined as a continuous series during which there occurred no two instances more than 25 days apart. The largest of these was 1063 days occurrmg over a SIx-year period between 1939 and 1945, and there was a 342-day string in 1951-1954. The cluster which we identified a year ago has continued since that time. Yesterday was the 200th trading day (the first one was April 27, 1988) on which more than 25.5 of issues traded were unchanged for the day. There are, conversely, long periods when the pattern fails to emerge. The phenomenon of 25.5 of stocks unchanged in a day never occurred between 1958 and 1974. If more stocks are indeed trading unchanged. there is an obvious corollary; there must be fewer advances, fewer declines, or both. TentatIvely, the answer appears to be both. Advancing days over the past couple of years have seemed to feature fewer advancing stocks. but declining days have also produced fewer declines. The following table summarizes some figures. Dow Change -2 or more -2 to -1 -1 to Unch. Unch. to -1 1 to 2 2 or more No. of Cases 1344 6255 7154 1402 482 1 9-.1L6 9-.89 Average of Average of Advancing Stks Declining Stks 13.1 71.3 20.3 61.4 32.3 45.8 45.8 32.2 57.8 23.3 66.4 17.7 L9IUt.L9–1lJ. No. of Average of Cases Advancing Stks -9- 13.9 34 22.8 149 33.4 167 41.9 46 50.7 16 61.7 Average of Declining Stks 68.8 54.3 41.0 32.3 25.5 18.7 — -. The fIrst three columns in the table above cover the entire 64-year period from 1926 to date, whereas the second three columns only cover 1988 and 1989 thus far. We have assIgned each trading day for the two periods to one of six brackets based on the change in the Dow. For each group of trading days, we have shown the average number of advancing stocks expressed 8S a percentage of issues traded and the comparable statistic for declines. Thus, the table shows that, for the 16 days since 1988 on which the Dow advanced 2 or more, the average number of advancing stocks was 61.7 of issues traded. Over 64 years, the advance percentage on such days had averaged 66.4. In the past two years, when the Dow advanced between 1 and 2, just oVer half of all issues traded rose. Over the longer period, 57.8 of stocks changing hands tended to advance when the Dow rose this amount. No year since 1926 has exhibited such a low advancing percentage for this bracket. However, albeit to a somewhat lesser extent, the reverse seems to be true on declining daysw The table quite clearly shows that, during the 1988-1989 period, on days when the Dow declined, there were fewer declining stocks than would be suggested by the 64-year trading pattern since 1926. For the current bull market, it would seem, movement in both directIons has been confined to 8 relatively restricted number of stocks. This can be rationalized in a number of ways, the obvious one being to point to the concentration of upside action in takeover stocks. There is at least one additional possible explanation in the hypothesis that markets today are broader and more liquid than in the past, thus producing a higher degree of short-term price stability. Neither of those explanations, of course, accounts for similar periods in the early 1940's or mid-1950's. It is not clear what implIcations all of this may have for a market forecast. A year ago, we cited evidence to suggest that. over a long period, the implications were bullish. We see nothing in the additional research above to suggest otherwise. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (8/31/89) AWTebh 2756.08 352.92 4934.04 No statement or e)(presslQn of opInion or any other matter herein contained IS, or IS to bedeemed to be, dlrectty or indirectly, an offer or the soliCitation of an offer to buy or sen any security referred to or menhoned The matter IS presented merety for the convenience of the subSCriber While we beheve 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 Invesllgatlon and InformatIOn Delafield, Harvey, Tabelltnc , as a corporation and lIS oH!cers or employees, may now have, or may later take, poSitions or trades In respect to any seCUrities mentIOned In thiS or any future Issue and such 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 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 – September 08, 1989

Tabell’s Market Letter – September 08, 1989

Tabell's Market Letter - September 08, 1989
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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 (609) 987-2300 H, September 8, 1989 ….,..,1—–..We-try I intl1isspace,. to av'Qicrthele-mphition.-W.to-turn- ayunctilarbu-rwecannotchangf.f thef8Gt -0.. that we have been writing financial commentary (and reading it) for more than 35 years. Since there is little new under the sun, it is easy to predict the sort of thing one will hear after the market has been going up for quite a while as is the case at present. As surely as death and taxes, there will emerge pronouncements informing us that the market is in need of a correction. We are not sure why this is so. It may be that there remains buried deep in our psyche Borne remnant of the puritan ethic, which, essentially, holds that it is sinful to have fun. It IS almost as if a rising market constituted a manifestation of illness which could be cured only by periodic doses of unpleasant medicine. However, a look at the facts of market history suggests that protracted. uncorrected rises are, first of all. perfectly normal phenomena and. secondly, tend to be signs of market health rather than sickness. In the present case, the period of time during which the market has failed to undergo a needed correction can be dated back to November 16, 1988. Since then, over exactly 200 trading days, the Dow rose 35 to a high reached a week ago without a single correctIon of as much as 5, the biggest interruption being a three-week hiatus involving a 4.44 correction last March. Since that time, the rise has been even steadier. with the Dow moving ahead 22.69, while the largest correction was a 3.63, five-day affair in June. The point that needs to be made is that this behavior is in no way unusual. Every bull market in modern stock-market history has produced a protracted rally not unlike the present one, and in many instances, that rally has greatly exceeded the current advance in both time and extent. The table below shows some figures. Bull Market Start Start Date Date Jun .13 49 J.un1349 Sep 14 53 Sep 14 53 Oct 22 57 Dec 17 57 Jun 26 62 Nov 22 63 Oct 7 66 Oct 7 66 May 26 70 Jul 7 70 Dec 6 74 Oct 1 75 Feb 28 78 Apr 21 80 Aug 12 82 Jan 24 83 Jul 24 84 Dec 7 84 Oct 19 87 Nov 16 88 LON G EST RALLY Days After Percent Length Bull Market Bull Mkt Start Advance In Das End Date End Date 0 41.32 282Jun12…s.0 –.JanL53 0 60.04 326 Jan 3 55' -Apr 6 56 38 59.31 410 Aug 3 59 Dec 13 61 356 32.06 370 May 14 65 Feb 9 66 0 22.21 145 May 8 67 Dec 3 68 29 42.05 205 Apr 28 71 Jan 11 73 206 28.93 140 Apr 21 76 Sep 21 76 542 28.38 107 Sep 22 80 Apr 27 81 114 21.17 100 Jun 16 83 Nov 29 83 96 59.55 343 Apr 21 86 Aug 25 87 274 35.00 200 ' Days Later 705 318 595 187 373 431 106 149 115 341 – Shown in the table is the longest rally for the ten most recently completed bull markets plus figures for the current one to date. For the purposes of this exercise, a rally is defined as an advance without any 5 correction. Six of the past ten bull markets produced rallies of this type lasting longer than the current one has so far, the longest of these running for 410 trading days, from December, 1957 to August, 1959. Five such rallies produced greater percentage advances than this one has shown so far, including rises of approximately 60 in 1953-1955, 1957-1959, and 1984-1986. The other advances were not too different in character than the current case, the smallest one being a five-month, 21 rise in January – June 1983. Through the mid-1960's there appeared to be a tendency for the longest rally of a bull market to be the first one, starting either from the low or from a test within a couple of months of that low. More recently, the tendency seems to have been for the longest rally to begin much later (viz December, 1957 or July, 1970). This one, having started November 16, 1988, over a year after the October 19, 1987 low, is typical. 1 What,is. perhaps, most -interesting is -that..-inno'casehas ,the-endof'along'rally signified the — – bull market's end. The last three columns of the table show the end date of each upward cycle's longest rally, the actual end date of the cycle, and the intervening number of days. The shortest interval between the rally's end and the bull-market peak was five months in April – September, 1976, and there have been cases where the advance continued for a8 much as two and a half years following the long rally's completion. At the current stage, therefore, although a short-term correction would be consistent with past history, there is no particular reason to expect one. Such a correction, moreover, were it to occurJ would, at worst, constitute an extremely early warning of the termination of the present bull market. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2693.20 S & P 500 (12 00) 346.13 Cumulative Index (9/7/89) 4929.50 No statement Or expression ofoplnlOO or any other matler herem contamed IS, or IS to be deemed to be, directly or Indirectly, an ofter or the sollCltalion 01 an offer to buy or selt any secUrity referred to or mentfOned 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 Investigation and InformatIOn Delafield, Harvey, labelllnc, as a corporation and tts officers or employees, may now have or may later take, poSitions or trades In respect to any securities mentIOned In thIS or any future Issue, and such posrtlon may be dllferen\ from any views now or hereafter expressed In thiS or any other Issue Delafteld, Harvey. labell Inc , 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 menboned herein IS avaIlable on re9uest

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Tabell’s Market Letter – September 15, 1989

Tabell’s Market Letter – September 15, 1989

Tabell's Market Letter - September 15, 1989
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'1l'IBUE D.D.' S RlIE'1l' D.1E'1l''1l'lElRZ 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 September 15. 1989 – – – – W e .have ..regularly-em8.l'ked,-inthis.s pace .thaLone, ofthefunctionsof the.tech nician.is to – I serve as market historian. In'this capacity, his task is to seek out prior periods of market history which bear some resemblance to the current one and to adduce from subsequent results the elements of a forecast. We have found ourselves discussing history a good deal of late. This is appropriate since it is fairly easy to fit the stock-market scene, 8S it exists in September. 1989, into an historical context. There can be little doubt that October 19. 1987 (or its December. 1987 test) constituted a major bear-market low. We are now approaching the second anniversary of that low. This puts us in an almost two-year-old bull market which has. to date. scored an advance of some 58.2. Now bull markets—and the inevitable bear markets which follow—are not new phenomena. They can be traced back as far as the Holland tUlip market in the 1600's. and we have noted. most recently just three months ago. that there have been 24 measurable bull markets over the past century. Certainly. a study of those 24 previous markets should tell us something about the present case. It does. indeed. do so. but it also suggests some of the limitations of historical analysis. It is quite true that the average length of the bull phase of a major cycle is 30 months and that many bull markets have had lives approaching four years or even longer. Nonetheless. there exists a fair number of recorded cases in which 8 bull market has topped out in 24 months or less. There are, to be exact. ten such instances. although most of them occurred early in the century. We tried to carry historical analysis a bit further last week. when we noted that. since last November. the Dow had advanced for 200 trading days. to September 1. without a 5 correction. The major point we wanted to make was that. following past similar rallies. the first 5 correction had never constituted the end of the bull market. The above, it seems to us, affords an historical framework. We find ourselves in 8 major-cycle upswing which probably has more room—possibly a good deal more room—on the upside. but one where —-the-inevitableoppin grocesscould-begin-a t -any time-' To'determine'whetheroronot-that'process—- has begun, it is necessary to focus more closely on short-term market action. In terms of the Dow. a potential top does exist. with a downside objective of 2560. This top. however. would not be confirmed unless the Dow were to break below the 2630 level. If the downside objective is reached, it would constitute the first 5 correction since last November, an event which should have considerable lead time on a market top. In terms of individual-stock action. which for ten months has been confined almost exclusively to the upside, the market has turned mixed. We track each day using a computer scan, all upside and downside breakouts and reached price objectives for some 5.000 individual stocks. This Wednesday was typical. While the Dow ended that day sharply lower. there were a total of five upside breakouts and two downside objectives attained, or seven bullish events. On the same day seven stocks broke out on the downside and four reached upside objectives. for a total of eleven bearish occurrences. This sort of thing has been continuing for a couple of weeks. For the time being, at least. most deterioration has been confined to the formation of short-term tops in the defensive industry groups that have. by and large. been market leaders over the past year. food stocks being notable examples. At the same time. upside breakouts and ongoing uptrends continue to manifest themselves in cyclical. heavy-industry issues and in energy stocks. This action. interestingly enough. suggests that the market is forecasting a different economic scenario than the one generally pictured in the financial press. That particular world-view is greatly concerned with making distinctions about hard and soft landings and seems confident that the authorities have inflation well under control. In the meantime, the market's shift in leadership suggests that the economy has no intention of landing at all. but intends to fly for a while longer. It also suggests that the expanding inflation figures for the f,rst five months of this year are more indicative of the outlook for the price level than the smaller increases shown for June and July. , – – In summary, the first significant correction in over ten months appears to be, at least, a possibility. Such such a correction would be unlikely to signify the end of the bull market and should be followed. if it occurs. by a move to new highs. Concomitant with this action. upside activity should become less broad as market leadership shifts into new areas. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (9/14/89) 2666.60 342.52 4884.65 AWTebh No statement or expreSSion of oplmon or any other matler herein contained IS, or IS to be deemed to be, directly or Indirectly, an offerorthe soliCitation of an offerlo buy Of sell anysecurrty referred to or mentioned The matter IS presented merely for the con'lemence of the subSCriber While we belie'le the sources of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by the subscnber should be based on hiS own investigation and Information Delafield, Harvey, Tabeil Inc, as a corporabon and ItS offICers or employees, may now have, or may laler lake, poSitions Of trades In respect to any secuntlas mentJoned m 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, Har'ley, Tabellinc , which IS registered With the SEC as an Investment adVIsor, may gIVe adVice to Its rnvestment adVISOry and other customers mdependently of any statements made In thIS or In any other Issue Further mformatlOn on any security mentIoned herein IS available on request

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Tabell’s Market Letter – September 22, 1989

Tabell’s Market Letter – September 22, 1989

Tabell's Market Letter - September 22, 1989
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T J.ii.\1mIEn.n.'S J.ii.\ R IlllET n.lETTIER 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 – September 22, 1989 -f —As .pwl'lDrth'l8sCp,.epres,-iobe buJLeted byh-lr-,1al1e,JI-,!go,a few s.10rllL.ql.o,uds-lu9kilyno,t,….,..,.., of hurricane'strength—are appearing on the stock-market scene. It seems clear that the market – has lost some of the ebullience that had characterized it until early August. It was on August 10, six weeks ago, that the Dow first moved above 2700. There have been subsequent moves to new highs, carrying the Average above its 1987 peak, but they have been somewhat sporadic. Meanwhile, twelve trading days have elapsed since the all-time-record peak achieved on September 1 at 2752.09. This is, interestingly, the longest gap between new highs since mid-April While all this has been going on, a minor breadth divergence has appeared, with no new high being posted by our daily breadth index since August 8 despite a series of new peaks for the Dow. It may be, of course, that we are seeing nothing more than yet another iteration of the seasonal pattern for September. This pattern, which, based on recent history, is the strongest one currently extant, calls for a decline during that month. So far, the market seems to be conformlng. with the bull-market peak. as noted above. having been attained on September's very first day. It may be worthwhile to recapitulate the evidence for this pattern. Since the first computation of the Dow in 1897, there have been 622 up and 476 down months. In other words, some 55 of all months in the past 92 years have been up ones By contrast, of the 91 Septembers during the period, only 36 have produced a rise in the Dow, and 55 have produced lower prices at month's end, the average decline for the month being 1.28. If anything, the tendency has been exaggerated in recent years. Since 1969, there have been only three Septembers which showed rising prices. Set against this background. we have witnessed the relatively rapid formation of distributional tops, first in a few individual stocks and now, potentially at least, in the market averages. The Dow, as noted above, first moved above 2700 in early August. It then pulled back to as low as 2640 on August 15 and, after reaching new highs, has moved back again into the –'2650-2700area.-If–thisformatiorr–is-to4eeadsa'-distributional-top.theownside—target.—-…- would be approximately 2540. This target would not become effective, it must be noted however, until the 2640 level is penetrated. The patterns for all of the averages appear to be remarkably similar. Objectives for the various indices—recent levels are in parenthesis—are as follows Dow Jones Industrials (2682), 2540; Dow Jones Utilities (217), 206; Standard & Poor's Financial (33.00), 31.30; Standard & Poor's Industrials (396), 375; Standard & Poor's 500 (346), 328. All of these targets involve drops of around 7 from recently attained highs and of a bit under 5 from current levels. They would, furthermore, become effective only if the mid-August lows, comparable to 2640 on the Dow, were penetrated. As we noted above, the currently visible storm clouds are hardly of hurricane proportions. At the moment the worst-case scenario calls for nothing more than the first minor correction following a 200-day, uninterrupted, bull-market leg. We noted in our letter last week that such corrections have not, in the past, tended to constitute the end of the bull markets in which they occurred. They have, rather, tended to be the initial elements of protracted topping processes, which have often taken many months (in some cases well over a year), and have, invariably, involved new highs in the averages. There remains, of course, still unexorcised, the ghost of 1987. As we have pointed out in this space, the characteristic feature of August-September during that year was the unprecedentedly rapid build-up of distributional top formations. As tops build up with similar rapidity almost exactly two years later, the spectre of a replay of that grim scenario must loom large in the analyst's thinking. We do not think it will occur. Based on current evidence, we think that the topping-out process for this bull market is likely to be the conventional, lengthy one, involving levels areabove—possibly well above—the -iit-variably-corifounds thosewho 2752 peak already attained on the Dow. The market looking for it rephiyoCrecent historY-Thus, the almost cur-r e nt— – – – – I – – market will, we think, either hold above the mid-August lows and proceed expeditiously to new highs, or—as outlined in the scenario above—break those lows and embark upon a minor correction. That correction should be just deep enough to awaken, in timid souls. the memories of 1987. For the courageous, it will constitute a buying opportunity. Dow Jones Industrials (I2 00) S & P 500 (1200) Cumulative Index (9/21/89) AWTebh 2677.24 345.74 4885.12 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 directly or Indirectly, an offer or 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 beheve the sources of our information to be reliable, we In no way represent Of guarantee the accuracy thereof nor of the statements made herein Any action 10 be taken by the subscriber should be based on his own Invesllgatlon and Information Delafield, Harvey, Tabell tnc, as a corporation and Its officers or emptoyees, may now have, or may later take, positions or trades In respect to any securities mentioned In thiS or any future Issue, and such poslbon may be different 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 to Its Investment adVISOry and other customers Independenlly 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 – September 29, 1989

Tabell’s Market Letter – September 29, 1989

Tabell's Market Letter - September 29, 1989
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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 609) 987-2300 September 29, 1989 The Dow Jones Industrials, staging a sharp, mid-week rally, continued to hold above the 2640 -……,… – – level-;–wtlich-represents'-the …-low reached-in- Au gus t–'and-..-w hich-would. constit u te-'-a–downsidereako1J.t . from what now must 'be considered a fairly important potential top Continued ability to hold in this range without breaking 2640 (or 342 for the S & P 500) could only be construed as bullish and would indicate that the present interruption in the advance which began last November would be completed with only a consolidation rather than a correction. Unimpressive breadth and volume, however, continue to suggest the likehhood of a downside breakout eventually taking place. The downside targets for such a decline, were it to occur, are not, at the moment. all that serious—centering around the low 2500's. The problem would be to fit it into a longer-range scenario. As technicians, we are, of course, committed to the belief that market patterns repeat themselves and that bull and bear markets tend to follow similar rules of behavior from cycle to cycle. There are, of course, just enough exceptions to this rule to make life interesting, but until evidence to the contrary accumulates, it is wisest to treat the exceptions as being just that. Up until a few years ago, at least, there existed a reliable rule of thumb concerning major tops and major bottoms. The former generally built up over'a protracted period of time as a given advance slowly ran out of steam. accompanied by deteriorating measures of market momentum. The latter. by contrast, could be identified by obvious selling climaxes, sharp declines and recoveries on increased volume compressed into a short time frame. Past major lows—June 1949, September 1953, October 1957, May – June 1962, October 1966, May 1970, and October – December 1974—all were identifiable by such climaxes. In the past 15 years, bottoms have emerged in a quite different form. February 1978 and August 1982 (also July 1984, if one chooses to treat it as a major cycle bottom) displayed a new set of characteristics. They began with a slow drift to lower levels on decreasing volume and then, out of the blue, put on an upside explosion. The older pattern of a selling climax was conspicuous by its abThseeclimnacctic ebot.tomreturn7edwith avengeance onOc-tober121l7l911'7o' but, follOWing thetest–''-'I of the climactic lows in December, 1987, the market displayed behavior quite different than that shown following earlier climaxes. Between 1949 and 1974, after the low (and its test if there was one) had occurred, there ensued a long rally, generally the strongest one of the bull market. This, as we all recall, was not the case with the current upswing. It spent most of the year 1988 swinging back and forth in a trading range with a moderate upward bias, and not until last November did we witness the characteristic bull market extended leg, a phase which which mayor may not have ended on September 1. Interestingly, another recent market cycle, 1978 – 1981, behaved in more or less the same fashion with a protracted trading range running from February 1978 through Silver Thursday in April 1980, at which late date a long upside leg developed. Thus 1987-89, in this respect at least, behaved in the modern fashion. What about the characteristics of market tops, which are now what we should be concerned about following a two-year advance. As we noted above. we had learned, over the years, to expect tops to form over a lengthy period of time and, during that time, to provide the analyst with a battery of evidence for detecting them. Then, of course, there occurred August – September, 1987, whose salient characteristic, as we have noted many times. was the amazing speed with which tops built up. The only historical parallel for this, was the summer of 1929, and, as far as the break was concerned, we did indeed have a replay of 1929. The aftermath, of course, was quite different—for which blessing we may all be truly thankful. The interesting question, of course, is whether 1987 was an exception to the rule or constituted the first exemplar of a change in the pattern for market tops, much as 1978 seems to have initiated a change in the typical bottom formation pattern. For the time being, at least, we remain inclined to treat it as an exception, and it is our current view that any short-term correction which might -occur over-the near term …would be nothing more than a correction. As we indicated.last.week. we.do not think that the ghost of 1987 has been laid to rest in the minds of investors, and we think that any noticeable decline at this stage, which, as noted above. we consider probable, would bring recollections of 1987 to the surface. For the time being, at least, we remain convinced by the historical evidence which suggests the current bull market stil! has further to go, and, unless the current top broadens, it remains our view that a short-term downswing represents the worst-case scenario at this time. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S P 500 (12 00) Cumulative Index (9/28/89) AWTebh 2704.21 349.56 4901.15 No statement Or e)(presslon of opInion or any other matter herein contained IS, or IS to be deemedto be, dlreclly or Indirectly, an offer or the soliCitation of an offer to buy or sen any secunty referred to or mentioned The matter IS presented merely for the convenience of the subscnber While we beheve the sources of our information to be rehable, we In no way represent or guarantee the accuracy thereof nor of Ihe statements made herein Any action to be taken by the subscnber should be based on hiS own InvesligatlOn and information Delafield, Harvey, Tabelllnc, as a corporation and ItS officers or employees, may now have, or may later take, poslliOns 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 8)(pressed In thiS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With Ihe SEC as an Investment adVisor, may give adVice 10 liS -Investment adVISOry and olher 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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