1Lii.\ IIUE n. n. ' S Lii.\RIE'U' n.1E'U''U'IER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEM8ER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – October 6, 1989 -I—'- ———-.——– ——-''-' Havillg suffered through four weeks of relatively poor short-term action in September, the first week of October has indeed provided a welcome relief. i.e., an 80 point advance in four trading days to date. An interesting and perhaps simplistic way to explain away the poor market action in September is to re-examine a significant seasonal pattern in the stock market—the tendency toward a market decline in the month of September. Since 57 of all months since 1897 have been rising ones, the expectation would be a plurality of advances over declines. However, precisely the opposite is the case for September, which in 92 years, has produced 56 declines, including this year, and only 36 advances with an average drop of 1.28. The probability of such a pattern being due to chance, a chi-square test would reveal, is less than 1 in 1000. However, what has really changed Approximately two months ago on August 8, the DJIA posted a new high of 2699.17, and the advance/decline breadth line also posted a new high, confirming the advance. Since then, the DJIA has posted seven successive new highs, and, in each case, this has not been confirmed by a new high in market breadth. In spite of the 80 point advance in the Dow Jones Industrial Average this week, there continues to exist a negative short-term breadth divergence. Although recent improvement in market breadth is apparent, currently needing 1329 net advances over declines to confirm a continuance of the bull market, a confirmation is still needed. We are fast approaching the second anniversary of the October 19, 1987 major bear-market low. Since that time, the two-year-old bull market has to date scored an impressive advance of 59.5. Having posted a new record high yesterday, it would indicate that this major-cycle upswing has more process, whiCh recent readers room on the upside. That is not to of thiS letter have been alerted to, say can that the begin at atonpypitnIgme.——4 Recent strength in Ihe DJIA has, for the time being, canceled the potential top which previously existed. However, future market action could broaden the potential top. As we have noted from past history, a characteristic of major market tops is that they tend to form over a lengthy period of time. In any case, a significant top were it to develop, still would not be confirmed unless the DJIA were to break below the 2630 level. The clue to the direction of the stock market may still be found in terms of individual stock patterns. While most stocks have been in uptrends prior to this week's market action, minor deterioration had been confined to the formation of short-term tops in defensive-industry groups that have been market leaders over the past year, food stocks being an obvious group, and Coca-Cola, an excellent example. With the action of this week, however, many of these stock patterns have improved dramatically, as in the case of Coca-Cola, posting new record highs. This improvement, coupled with the continued improvement in the cyclical, heavy-industry issues and in the energy sector, is, of course, encouraging. Short-term action, this week, continues to suggest that the current bull market has further to go, and the minor 3.38 decline in September was nothing more than a normal short-term downswing. However, it is also quite clear that upside activity, because of the longevity of the ongoing bull market is becoming more selective. This, together with rotational market leadership shifting into new areas (possibly from the consumer goods area into capital goods), should be monitored closely. Although this week's market action has been most impressive to date, we must not lose sight of the potential problems that were with us in the past few months, as the stock market goes higher. ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (10/5/89) 2787.42 358.35 4962.20 AWTebh No statement or expressIon of opinion or any other mailer herein contained IS, or IS to be deemed to be, directly or indirectly, an offer or the solicllallon of an offer to buy or sell any secunty referred 10 or mentioned The matter 15 presented merely for the convenience of the subscnber While we believe the sources of our Information to be reliable, we In no way represent or guaranlee the accuracy thereof nor oflhe statements made herein Any acllon to be taken by the subscriber should be based on hiS own investigation and information Delafield, Harvey, Tabell Inc, as a corporation and Its officers or employees, may now have, or may later take, posrtlons or trades In respecllo any secuntJes mentioned In thiS or any Mure Issue, and such posrtlon may be different from any views now or hereafter expressed In Ihls or any other Issue Delafield Harvey, Tabell Inc, which IS registered wllh 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 Iflformatlon on any securrty mentlOfled herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091 987-2300 October 13, 1989 –.-, TheJ)-w ',Jones.!,-,dustrial-Average -failedthis-week-!toimprove'onthe .9-point-advance ,,,,,'I.,….. posted the first week in October, Although still flirting with new highs, this mature, ongoing bull market continues to show signs of being tired, as reflected in the recent, poor, short-term breadth of the market action, and. also, the possible long-term reduction in daily volume on the NYSE. As we have previously mentioned, since August 8, a minor. short-term breadth divergence has occurred. To update this series. the net advance/decline index, shown on the chart below, which currently stands at currently -2278, is now 47 days old. During this same time period, the DJIA has posted ten successive new highs. Clearly, the strength in the market continues to be fueled by the participation of fewer and fewer stocks. Average daily volume on the NYSE declined 11.6 in September (151.8 million shares) versus August (171.7 million shares). On the surface, this in itself may not be significant, but looking at the series over the longer term is instructive. A 100-day moving average of NYSE daily volume is shown on the chart above. Historically, the long-term trend of volume has moved in concert with the trend of the market averages. This would make sense as the demand for stock is dependent on volume. From the post-war period until 1966, both NYSE volume and the DJIA moved in a secular rising trend with new highs in average daily volume being confirmed by new highs in the DJlA. The secular rising trend in the DJIA was, however, arrested for approximately 16 years as the DJlA was unable to penetrate the 1000 level, this occurring while new record highs in average daily volume continued to be posted. From the August, 1982 low, the DJIA decisively penetrated the 1000 level, and, again. the DJIA and average daily volume resumed their upward secular trend. However, since the October 1987 decline, for the first time, it appears the secular uptrend of this volume series has peaked and may be, in fact, in a downtrend. If there has never been a major bull market against a declining trend in volume, and if the secular trend of this series has, in fact, turned down this indicator may be issuing a warning. The central theme of this letter, over the past few months, has been one of cautious optimism. Two years ago, on. October 19, 1987, the DJIA closed at 1738.74. Five hundred trading days later, the DJIA is up over 1000 points, or 60.34.1f you assume October, 1987 was a major cycle low. both the percentage advance and the duration of the cycle measured by past cycles, are becoming full grown. This is not to say the market cannot move higher. However, it is important to continue to monitor series such a8 market breadth. and daily NYSE volume, to watCh for potential market weakness. ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2738.93 S & P 500 (1200) 355.03 Cumulative Index (10112189) 4921.08 RJS ebh 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 SOlltltatlon of an offer to buy or sell any secUrity referred to or mentioned The matter IS presented merely for the convenIence of the subSCriber While we believe the sources of our InformatIOn to be reliable, we In no way represent or guarantee the accuracy thereof nor olthe 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 corporation and ItS officers or employees, may now have, or may later take, positions or trades In respect to any securities menboned 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 Delaheld, Harvey Tabelllnc, 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 Of In any other Issue Further information on any security mentioned herem IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 October 13, 1989 — — The DoW-Jon-eslTdustrial oLA verage ….failed–this-Lweeko—improve-'onthe 92 …pointadance posted the first week in October. Although still flirting with new highs, this mature, ongoing bull market continues to show signs of being tired, as reflected in the recent, poor, short-term breadth of the market action, and, also, the possible long-term reduction in daily volume on the NYSE. As we have previously mentioned, since August 8 J a minor. short-term breadth divergence has occurred. To update this series, the net advance/decline index, shown on the chart below, which currently stands at currently -2278, is now 47 days old. During this same time period, the DJIA has posted ten successive new highs. Clearly, the strength in the market continues to be fueled by the participation of fewer and fewer stocks. Average daily volume on the NYSE declined 11.6 in September (151.8 million shares) versus August (171.7 million shares). On the surface, this in itself may not be significant, but looking at the series over the longer term is instructive A 100-day moving average of NYSE daily volume is shown on the chart above. Historically, the long-term trend of volume has moved in concert with the trend of the market averages. This would make sense as the demand for stock is dependent on volume. From the post-war period until 1966, both NYSE volume and the DJIA moved in a secular rising trend with new highs in average daily volume being confirmed by new highs in the DJIA. The secular rising trend in the DJIA was, however, arrested for approximately 16 years as the DJIA was unable to penetrate the 1000 level, this occurring while new record highs in average daily volume continued to be posted. From the August, 1982 low. the DJIA decisively penetrated the 1000 level, and, again, the DJIA and average daily volume resumed their upward secular trend. However, since the October 1987 decline, for the first time, it appears the secular uptrend of this volume series has peaked and may be, in fact, in a downtrend. If there has never been a major bull market against a declining trend in volume, and if the secular trend of this series has. in fact, turned down, this indica tor may be issuing a warning. The central theme of this letter, over the past few months, has been one of cautious optimism. Two years ago, on October 19, 1987, the DJIA closed at 1738.74. Five hundred trading days later, the DJIA is up over 1000points, or 6034.ICyou assume October', 1987 was a major cycle low, both the percentage advance and the duration of the cycle, measured by past cycles, are becoming full grown This is not to say the market cannot move higher. However, it is important to continue to monitor series such as market breadth, and daily NYSE volume, to watch for potential market weakness. ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2738.93 S & P 500 (12 00) 355.03 Cumulative Index 00/12/89) 4921.08 RJS ebh No statement or expression of opInion or any other mailer herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer orthe sohcrtallon 01 an offerlo buy or sell any security referred to or mentioned The matter IS presented merely for the convenience 01 the subscriber While we beheve the sources of our Information to be rellable, 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 InvestlgatlOn and Information Delafield, Harvey, Tabellinc ,as a corporation and ItS oNlcers or employees, may now have or may later take, poSitions or trades In respect to any secun\les mentioned In thiS or any luture Issue, and such poSition may be dlffcrcntlrom 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 ns Investment adVisory and other customers mdependently 01 any statements made In Ihls or In any other Issue Further information on any security mentioned herein 15 available on request

——- ———————————————-. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 October 20, 1989 .-…T.w..oim,p-ortan t … mar,ket…..e. vents…occur.red i ntheJ'-pastweekThe f-ir-st, -and.for J obvious-reasons .'—-'– -,,-. the most Widely'remarked, was the unpleasantness of last Friday afternoon, during the course of which the Dow fell by almost 200 points on near-record volume. The ensuing weekend. unsurprisingly, produced an outburst of comparisons with the break of October 19, 1987, The week's second noteworthy event was the anniversary of that crash yesterday, which the market celebrated by staging a fairly impressive 39-point rally, It is perhaps useful to consider the former event in terms of the latter. Let us, then, recall some data conceming the 1987 crash. It involved a percentage drop for the Dow of 36.13, and there can be no doubt that a fall of this magnitude enables us to regard the decline as a major bear market. However. as bear markets go. that percent decline is not particularly impressive. On the list of major bear markets of this century J it ranks somewhere in the middle. Looking at fairly recent history, we find that 'the bear market of 1973 – 1974 produced a much larger percentage deciine—45.08. 1968 – 1970. during the course of which the Dow fell 35.94, was almost as great a fall as the current one. The 1987 bear market, in other words, is not especially noteworthy for the amount by which it declined; it is remembered for the speed with which that decline, compressed into 38 trading days. took place. That time period was the shortest for any decline of 20 or more in this century. Now let us look at the past week. What happened, reduced to simple numbers, is that the Dow fell 7.96. This figure is hardly impressive. It fails to qualify as a full-scale intermediate-term decline, and. indeed. has been exceeded by two short-term drops within the current bull market—in January, 1988, and in April – May, 1988. Like 1987, it is important not for its extent but for its timeframe, the entire fall having taken place in just four trading days with the bulk of it occurring on the final day. There have been shorter declines of the same approximate magnitude. but not many-. Only nine falls of greater than 5 have been completed in three days or less, seven of those having , —GCCurred…. in–the-l920tsnd96's. Sjilce-th–eeen, sinceI926721-S–sliCnaecime-s. last – – week's ranks pretty high on the list. In other words. we saw in 1987. a cycle bear market compressed into an all-time-record short timeframe. We saw in mid-October, 1989 a short-term downswing similarly compressed into a unusually short period of time. There exists, in our view, an explanation as to why two such events should have occurred within just two years. and that explanation involves the current structure of securities markets. It is a subject too complex to go into here, and we intend to consider it in a later essay. What is important to remember at this point is that we have seen, so far, nothing more than a fairly typical short-term decline. The crucial question centers around whether or not it will develop into something worse. We think it is possible that it might do so, but feel it is unlikely to turn into anything a great deal more serious. Downside objectives in the mid-2400's for the Dow remain, and these objectives, if reached, would extend the decline to a bit over 10, the usual benchmark for a fall of intermediate-term proportions. The occurrence of such a drop in the mature stage of a bull market would hardly be without precedent. Typical examples would be August 1956 – September 1957, May – June 1965, or September 1967 – March 1968. In all of these cases, the Dow declined by a bit more than 10 and then went on to equal or exceed its level at the start of the decline, although not by significant amounts. This, we think, is the most likely scenario today—a test of Friday's lows, perhaps involving modestly lower lows, followed by a resumption of the bull market exceeding the 2791.41 high of October 9. The plausibility for this scenario CQuld, of course, be altered by later events. The broadening of existing tops, could, if it occurs, convince us that the bull market indeed ended a fortnight ago, a conclusion W!!wedo,not tink .. theevidencjustifies.at-thistime …. On the ,.. other side, strong rebasing action could easily persuade us that new lows over the short term are less likely than they appear to be at the moment. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (12 00) Cumulative Index (0119189) 2674.79 347.02 4844.47 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 oHer or the soliCitation of an oHer to buy or sell any seCUrity 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 rehable, 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, Tabellinc , as a corporation and Its 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 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 Its investment adVISOry and other customers Independently of any statements made In thiS or In any other 1ssue Further Informallon on any secunty mentioned herein IS available on requesl /

,——————————————————————————- TABELL-S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 October 20, 1989 '- – –rwo impotanLmar-ket..,..,.e.vent8 -occurred……in…. the Lpast—week. –T-he-f-irstrsnd for'-Obvious-'!oreasons, – – the most widely remarked. was the unpleasantness of last FrIday afternoon, during the course of which the Dow fell by almost 200 points on near-record volume. The ensuing weekend, unsurprisingly, produced an outburst of comparisons with the break of October 19. 1987. The week's second noteworthy event was the anniversary of that crash yesterday, which the market celebrated by staging a fairly impressive 39-point rally. It is perhaps useful to consider the former event in terms of the latter. Let us, then, recall some data concerning the 1987 crash It involved a percentage drop for the Dow of 36.13, and there can be no doubt that a fall of this magnitude enables us to regard the decline as a major bear market. However. as bear markets go. that percent dechne is not particularly impressive. On the list of major bear markets of this century. it ranks somewhere in the middle Looking at fairly recent history, we find that the bear market of 1973 – 1974 produced a much larger percentage decline—45.08. 1968 – 1970, during the course of which the Dow feU 3594, was almost as great a faU as the current one. The 1987 bear market, in other words. is not especially noteworthy for the amount by which it declined; it is remembered for the speed with which that decline, compressed into 38 trading days, took place. That time period was the shortest for any decline of 20 or more 10 this century Now let us look at the past week. What happened, reduced to simple numbers, is that the Dow fell 7.96. This figure is hardly impressive It fails to qualify as a full-scale intermediate-term decline. and, indeed, has been exceeded by two short-term drops within the current bull market—in January, 1988, and in April – May, 1988. Like 1987, it is important not for its extent but for its timeframe, the entire fall having taken place in just four trading days with the bulk of it occurring on the final day. There have been shorter declines of the same approximate magnitude, but not many. Only nine -occufrarllesd'oif ng-rtehaet4e.rjjth2a0n's5nhdav1e93b0e'esntcnommnplle'tieedrein- htahvreee bdeaeyns, or le sifice ss, seven nr26-;-2T8 osfUchthdoe;s;-ec;h;laT.vini;n;-ge's;;-,-jl';a';s'-t–'–II week's ranks pretty high on the list. In other words, we saw in 1987 I a cycle bear market compressed into an all-time-record short timeframe. We saw in mid-October. 1989 a short-term downswing similarly compressed into a unusually short period of time. There exists in our view I an explanation as to why two such events should have occurred within just two years. and that explanation involves the current structure of securities markets. It is a subject too complex to go into here, and we intend to consider it in a later essay. What is important to remember at this point is that we have seen, so far, nothing more than a fairly typical short-term decline. The crucial question centers around whether or not it will develop into something worse. We think it is possible that it might do so, but feel it is unlikely to turn into anything a great deal more serious. Downside objectives in the mid-2400's for the Dow remain. and these objectives. if reached. would extend the decline to a bit over 10, the usual benchmark for a fall of intermediate-term proportions. The occurrence of such a drop in the mature stage of a bull market would hardly be without precedent. Typical examples would be August 1956 – September 1957, May – June 1965, or September 1967 – March 1968. In all of these cases, the Dow declined by a bit more than 10 and then went on to equal or exceed its level at the start of the decline, although not by significant amounts. This, we think, is the most likely scenario today—a test of Friday's lows, perhaps involving modestly lower lows, followed by a resumption of the bull market exceeding the 2791.41 high of October 9. The plausibility for this scenarIO could, of course, be altered by later events. The broadening of existing tops. could. if it occurs, convince us that the bull market indeed ended a fortnight ago. a conclusion which we do not thinkthe.evidencejustifies at ..thisatime.On….the'- otherside. strong rebasing action -could easilypersuade us that new lows over the short term are less likely than they appear to be at the moment. ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL INC. Dow Jones Industrials (12 00) S & P 500 (12 00) Cumulative Index (10/19/89) 2674.79 347.02 4844.47 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 offer or the soliCitation of an offer to buy or sell any security referred to or mentioned The matler 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 01 the statements made herein Any action 10 be taken by the subSCriber should be based on his own mvesllgatJon and InformatJon Delafield, Harvey, labelllnc, as a corporation and its officers or employees, may now have, or may fater take, pOSitionS or trades In respect to any securities mentIOned In thiS or any future Issue, and such poSition may be different from any vle-vs now or hereafter expressed In Ihlsor any other Issue Delafield, Harvey, Tabelllnc, 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 m thiS or m any other Issue Further mforma1lOn on any security mentioned herem IS available on reques!

. TABELL-S MARKET LETTER 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 October 27. 1989 1 – – – -MondIafy-t hreecnoovwer- iyn;faimnoiusoma5a rDkeert2(ojf Fr-Idtanyent h-ew,1tla3 t'thfooc ko n-psltai tcuet ed a -this ' mTiuneis-Oaacytocboeurld19–.be1-9-t8e7r'm(aelnldathe;..eo-.. mini-January 23. 1987. On that day. for those who have forgotten. the Dow was up 64 points around 2 o'clock. down 50 an hour later. up 10. and finally down 44. Tuesday thus constituted a microcosm. the DJIA having been minus 85 points shortly after 1030. down only 32 at 11 o'clock, then. after losing about half this recovery, spurting to plus territory shortly before the close. All this provided reams of medIa COpy. There have been few market stories OYer the past couple of weeks which have not contained the words program trading somewhere in the vicinity of the lead paragraph. It was easy for the press to find quotable comments on this newly controversial issue. and most of them then tended to come down at one or the other polar extreme. The traditionalists' comments tended toward the apocalyptic, mixed with expressions of longing for a return to the good old 1950's. when the only things traded in Chicago were grown on farms. Remarks by the new era's apologists took a pious tone, with current academic buzzwords such as market liquidity and risk transfer being bandied about. A market technician is, after all, supposed to know something about markets, and. since the entire financial community has, by now, gotten into this act, we modestly add our own two cents' worth. The key word in the paragraph above is, it seems to us, market. In the perfect market we all learned about in Economics 1. lower prices tend to attract buying and diminish selling. and higher prices produce the reverse effect. Such, of course, is not always the case, as technicians implicitly discovered a century ago. when they first started talking about upside and downside breakouts. It has to be admitted. however, that a market worthy of the name must ultimately conform to the classic rules of supply and demand. To the extent that lower prices attract not buying, but, rather, additional selling, the entire market mechanism breaks down. -IL.iscer1ain4'al(uab1e.,-thatsuchacondltion—OQC.ill.r-ed-twwlsag.-anI–again–n-'r-\lesday'—-…,..-I–I morning. An analogy can perhaps be found in the post-I929 discovery that organized bear raids could. in fact, produce lower prices. The response to this was the uptick rule for short sales. It is worth noting that this particular rule was not the result of Solomonic wiSdom on the part of regulatory authorities, but. rather, evolved over nine years. A short-sale rule was first promulgated by the NYSE in 1930. The SEC was not given authority over such sales until 1934, and did not use it until 1938, when an extremely stringent rule was enacted. This rule was modified a year later to roughly its current form. The second point which needs to be made is that blaming program trading (or. correctly. index arbitrage. one form of program trading) for all existing ills may be a bit too facile. It is akin to blaming the man who sees a 50 bill lying on the sidewalk for bending over to pick it up. The aforesaid is not necessarily intended to be a defense of index arbitrage. Any institution, if it is to exist, must be able to justify its social utility, and we find ourselves having some difficulty so justifying this particular practice. However, to the extent that a problem exists, the root cause lies in the spreads between futures and what used to be called the market, now demoted to the cash market. Paradoxically, it can be theorized that such spreads could be eliminated by either one of two opposing approaches. The first would involve the elimination or effective crippling of derivative markets, and the second would focus on deepening and strengthening those markets so that arbitrage index spreads would have less tendency to appear and disappear more quickly when they did. We are dealing, let it be remembered. with what may simply be a structural flaw in the market mechanism, and such flaws are often -solved by purely technical changes. One recalls the triple witching-hour, which was engendering so much breast-beating a couple of years ago. The simple basing of settlements on opening rather than closing prices effectIvely eliminated the problem. In other cases, incremental experimentation and ongoing debate were necessary,,-,as .-exemplified by the history of short-sale 'rules in the 1930's. —-. …. – –,- Such experimentation has already begun with the so-called circuit breakers. and these devices mayor may not prove effective in decreasing intra-day volatility. The solution, however. is not likely to be found in ukases promulgated by authorities far removed from the marketplace, just as it is unlikely to be solved by pious incantations suggesting that everything is fine just as it is. More pragmatism and less extremism should, it seems to us, be -the order of the day. ANTHONY W. TABELL DELAFIELD. HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (10/26/89) AWTebh 2594.06 336.75 4797.69 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 offerla buy or sell any secunty referred to or mentioned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our information to be rehable, we m no way represent or guarantee the accuracy thereof nor of the statements made herem Any action to be taken by the subscnber should be based on hiS own Ifwestlgatlan and Information Delafield, Harvey, TabeUlnc, as a corporation and ItS officers or employees may now have, or may later take, positions or trades In respect to any secuntles menliOned 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, Tabelllnc, which IS registered With the SEC as an Investment adVisor, may give adVice to tts 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 NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 October 27. 1989 If the now-infamous market of Friday the 13th constituted a mini-October 19. 1987 (and the Mondayrecovev, a mfnl-()ctooer ZO)7then what took place-tfifsTuesaay ()Qul!rfe termed a mini-January 23. 1987. On that day. for those who have forgotten. the Dow was up 64 points around 2 o'clock. down 50 an hour later. up 10. and finally down 44. Tuesday thus constituted a microcosm. the DJIA having been minus 85 points shortly after 10 30. down only 32 at 11 o'clock. then. after losing about half this recovery. spurting to plus territory shortly before the close. All this provided reams of media COpy. There have been few market stories over the past couple of weeks which have not contained the words program trading somewhere In the vicinity of the lead paragraph. It was easy for the press to find qUotable comments on this newly controversial issue, and most of them then tended to come down at one or the other polar extreme. The traditionalists' comments tended toward the apocalyptic, mixed with expressions of longing for a return to the good old 1950's. when the only things traded in Chicago were grown on farms. Remarks by the new era's apologists took a pious tone. with current academic buzzwords such as market liquidity and risk transfer being bandied about. A market technician is. after all. supposed to know something about markets. and. since the entire financial community has. by now, gotten into this act, we modestly add our own two cents' worth. The key word in the paragraph above is. it seems to us. market. In the perfect market we all learned about in Economics 1. lower prices tend to attract buying and diminish selling, and higher prices produce the reverse effect. Such. of course. is not always the case. as technicians implicitly discovered a century ago. when they first started talking about upside and downside breakouts. It has to be admitted. however. that a market worthy of the name must ultimately conform to the classic rules of supply and demand. To the extent that lower prices attract not buying. but. rather, additional selling, the entire market mechanism breaks down ….-,1….,..,,….,..It.. …. .crtainlyarglJable .tha.t….sucha…..condition'-OOC-Urred–t.w-G . . week8 .. ag-o;–andagam—(n-4uesday' —I… morning. An analogy can perhaps be found in the post-I929 discovery that organized bear raids could, in fact. produce lower prices. The response to this was the uptick rule for short sales. It is worth noting that this particular rule was not the result of Solomonic wisdom on the part of regulatory authorities, but. rather. evolved over nine years. A short-sale rule was first promulgated by the NYSE in 1930. The SEC was not given authority over such sales until 1934. and did not use it until 1938, when an extremely stringent rule was enacted. This rule was modified a year later to roughly its current form. The second point which needs to be made is that blaming program trading (or. correctly. index arbitrage. one form of program trading) for all eXIsting ills may be a bit too facile. It is akin to blaming the man who sees a 50 bill lying on the sidewalk for bending over to pick it up. The aforesaid is not necessarily intended to be a defense of index arbitrage. Any institUtion, if it is to exist, must be able to justify its social utility. and we find ourselves having some difficulty so justifying this particular practice. However. to the extent that a problem exists, the root cause lies in the spreads between futures and what used to be called the market. now demoted to lithe cash market. Paradoxically. it can be theorized that such spreads could be eliminated by either one of two opposing approaches. The first would involve the elimination or effective crippling of derivative markets. and the second would focus on deepening and strengthening those markets so that arbitrage index spreads would have less tendency to appear and disappear more quickly when they did. We are dealing. let it be remembered. with what may simply be a structural flaw in the market mechanism. and such flaws are often solved by purely technical changes. One recalls the trIple witching-hour. which was engendering so much breast-beating a couple of years ago. The simple basIng of settlements on opening rather than closing prices effectively eliminated the problem. In other cases, incremental experimentation and ongoing debate were necessary, as exemplified by the history of' snort.-sale rules in the 1930's. …….. ,- Such experimentation has already begun with the so-called circuit breakers. and these devices mayor may not prove effective in decreasing intra-day volatility. The solution, however, is not likely to be found in ukases promulgated by authorities far removed from the marketplace. just as it is unlikely to be solved by pious incantations suggesting that everything is fine just as it is. More pragmatism and less extremism should. it seems to us. be the order of the day. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials 02 00) S & P 500 (1200) Cumulative Index 00/26/89) AWTebh 2594.06 336.75 4797.69 No statement or expression of opinion or any other matler herein contained IS, Of IS to be deemed to be, directly or mdlrecUy, an offer or the sollcitaboo of an offer to buy or sell any security referred to or mentioned The matter IS presented merely lor 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 herem Any aetlon to be taken by the subScriber should be based on hiS own mvestlgatlon and Information Delaheld, Harvey, Tabeiline ,as a corporation and ItS officers or employees, may now have, or may later take, positions or trades 11'1 respect to any secUrities mentIOned 11'1 thiS or any future Issue, and such posilion may be different from any views now or hereafter expressed m this or any other Issue Delafield, Harvey, Tabelllnc, which IS registered with the SEC as an mvestment adVisor, may give adVice to Its mvestmen! adVISOry and other customers mdependently of any statements made In thiS or In any other Issue Further mforma\lon on any security mentIOned herem IS available on request

r——————————————————————————————————————– . TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543,5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 November 3, 1989 In the uncertain business ,of forecasting the stock market, refreshing elements of certainty ——-occasionally….pl'eSeittthemlv.-es1 t was-;–f6rexarfip1e—-PQssible on Oct-offer '97Urss- than 8month…a- ago. to say that we were still in a major bull market, the Dow on'that day 'having posted a new high in its 60 rise from October 19, 1987. Just four days later, this certainty had evaporated. By that time, the DJIA had retreated almost 8, the largest fall in over a year, with the vast bulk of the decline occurring on the single day, Friday the 13th. The low reached on that day, 2569.26, has turned out to be the low so far. Although uncertainty was introduced with the market retreat, October 9 still remains a reference point. That date, quite simply, will either come to be known as the high of a 1987-1989 bull market or it will not. Our readers are aware that we have taken the latter position We maintain this position at the moment despite obvious changes in the market climate. Breadth has been abysmal since early September, at which point the Transportation Average, recently 22 under its high. began its own mini-bear market. Over the past two months, the inspection of individual stock patterns has revealed an increasing number of uptrends being destroyed. The amount of distribution which has occurred, though. does not yet seem to be of bear-market proportions. and we are, in addition, relying on the historical fact that major tops generally have taken a fairly long time to form. Start Date Jul 31 23 Nov 13 29 Jul 8 32 Mar 31 38 -, r 28 42 Jun 13 49 Sep 14 53 Oct 22 57 Jun 26 62 Oct 7 66 May 26 70 Dec 6 74 Feb 28 78 Aug 12 82 Jul 24 84 Oct 19 87 Start DJlA 86.91 198.69 41.22 98.95 92.92 161.60 255.49 419.79 535.76 744.32 631.16 577.60 742.12 776.92 1086.57 1738.74 High Reached 2 Yrs Later 136.50 294.07 110.74 158.41 14Jt.,9.1 263.13 482.90 678.10 830.99 956.68 971.25 1014.79 907.74 1287.20 1909.03 2791.41 Ultimate High Date 381.17 Sep 3 29 294.07 Apr 7 30 194.40 Mar 10 37 158.41 Nov 12 38 2. 50May29,…A6 293.79 Jan 5 53 521.05 Apr 6 56 734.91 Dec 13 61 985.15 Feb 9 66 985.21 Dec 3 68 1051.70 Jan 11 73 1014.79 Sep 21 76 1024.05 Apr 27 81 1287.20 Nov 29 83 2722.42 Aug 25 87 No. of Months Later 74 – 19 32 – 16 25 19 6 26 19 2 7 -3 14 -8 13 of Move ComEleted 17 100 45 100 40 77 86 82 66 88 81 100 59 100 51 Change From 2 Yr High 179 75 50 12 8 9 20 3 9 13 43 The above table is a simple-minded, yet instructive, illustration. It lists the 15 bull markets which have occurred since the 1920's. with their start date and the Dow level on that date shown in the first two columns. The third column is the crucial one. It shows the highest point which was reached up to the second anniversary of the bull-market start. the peak analogous to the 2791.41 level which was the high point of the period October 19, 1987 – October 19, 1989. The table goes on to show the ultimate high for the bull market and the date on which that high was attained. The point of the exercise is that, in 11 of the 15 cases, that high occurred after the two-year anniversary. as shown in the next column. which gives the number of months lag on the high date. The next two figures show the percentage of the total move that had been completed by each bull market's second anniversary and the percentage advance from the two-year high to the ultimate high. The good news in the table, of course, is that most bull markets tend to keep on advancing well beyond their two-year-high point. The bad news 'is that …… since World War I1at lesst-;-theseTadvances have not tended to be very great.. The last bull market, 1984-1987. is an exception to this rule, having completed only half its ultimate advance in the first two years and, at its peak, having moved 43 above its two-year high. However, all the other bull markets since 1949 completed a major portion of their total rise in the first two years, and in most cases, the upside potential remaining at that time was rather small. Thus 9 while it makes sense at the moment to look for a new high, it would be unrealistic to expect that high to be much above the almost-2800 peak already attained. This sort of scenario appears consistent with individual stock patterns at the moment. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (112/89) AWTebh 2638.11 338.44 4779.15 No statement or expression 01 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 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 herein Any action to be taken by the subscriber should be based on hiS own Investlgallon and Informallon Delafield, Harvey, Tabelilnc , as a corporation and Its 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 position may be different from any views nowor hereafter expressed In thiS or any other Issue Detafleld, Harvey, Tabell 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 mentioned herein IS available on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALER, INC (609) 987-2300 November 3, 1989 In the uncertain business of forecasting the stock market, refreshing elements of certainty occasionally presenC themserves.It-was. – for example ,- possibleonOctoSef' 9 71ess than a moriffi'a'g-o-,-'-' to Bay that we were still in a major bull market, the Dow on that day having posted a new high in its 60 rise from October 19, 1987. Just four days later, this certainty had evaporated. By that time, the DJIA had retreated alost 8, the largest fall in over a year, with the vast bulk of the decline occurring on the single day, FrIday the 13th. The low reached on that day, 2569.26, has turned out to be the low so far. Although uncertainty was introduced with the market retreat, October 9 still remains a reference point. That date, quite simply, will eIther come to be known as the high of a 1987-1989 bull market or it will not. Our readers are aware that we have taken the latter position. We maintain this position at the moment despite obvious changes in the market climate. Breadth has been abysmal since early September, at which point the Transportation Average, recently 22 under its high. began its own mini-bear market. Over the past two months, the inspection of individual stock patterns has revealed an increasing number of uptrends being destroyed. The amount of distribution which has occurred though, does not yet seem to be of bear-market proportions, and we are, in addition, relying on the historical fact that major tops generally have taken a fairly long time to form. Start Date Jul 31 23 Nov 13 29 Jul 8 32 Mar 31 38 Apr28A2 Jun 13 49 Sep 14 53 Oct 22 57 Jun 26 62 Oct 7 66 May 26 70 Dec 6 74 Feb 28 78 Aug 12 82 Jul 24 84 Oct 19 87 Start DJIA 86.91 198.69 41.22 98.95 9.2.9.2 161.60 255.49 419.79 535.76 744.32 631.16 577.60 742.12 776.92 1086.57 1738.74 High No. of Reached Ultimate Months 2 Yrs Later High Date Later 136.50 381.17 Sep 3 29 74 294.07 294.07 Apr 7 30 – 19 110.74 194.40 Mar 10 37 32 158.41 158.41 Nov 12 38 – 16 L40.9112.50y946 25 263.13 293.79 Jan 5 53 19 482.90 521.05 Apr 6 56 6 678.10 734.91 Dec 13 61 26 830.99 985.15 Feb 9 66 19 956.68 985.21 Dec 3 68 2 971. 25 1051. 70 Jan 11 73 7 1014.79 1014.79 Sep 21 76 – 3 907.74 1024.05 Apr 27 81 14 1287.20 1287.20 Nov 29 83 – 8 1909.03 2722.42 Aug 25 87 13 2791.41 of Move ComEleted 17 100 45 100 40 77 86 82 66 88 81 100 59 100 51 Change From 2 Yr High 179 75 50 12 8 9 20 3 9 13 43 The above table is a simple-minded, yet instructive, illustration. It lists the 15 bull markets which have occurred since the 1920's, with their start date and the Dow level on that date shown in the first two columns. The third column is the crucial one. It shows the highest point which was reached up to the second anniversary of the bull-market start, the peak analogous to the 2791.41 level which was the high point of the period October 19, 1987 – October 19, 1989. The table goes on to show the ultimate high for the bull market and the date on which that high was attained. The point of the exercise is that, in 11 of the 15 cases, that high occurred after the two-year anniversary. as shown in the next column. which gives the number of months lag on the ,high date. The next two figures show the percentage of the total move that had been completed by each bull market's second anniversary and the percentage advance from the two-year high to the ultimate high. The good news in the table, of course, is that most bull markets tend to keep on advancing well beyond their two-year-high point. The badnews'isthat;- since WotldWar II at'least-tneseadv-ances have not tended to be very great. The last bull market, 1984-1987, is an exception to this rule, having completed only half its Ultimate advance in the first two years and. at its peak, having moved 43 above its two-year high. However, all the other bull markets since 1949 completed a major portion of their total rise in the first two years, and in most cases, the upside potential remaining at that time was rather small. Thus, while it makes sense at the moment to look for a new hlgh. it would be unrealistic to expect that high to be much above the almost-2800 peak already attained. This sort of scenario appears consistent with individual stock patterns at the moment. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials 02 00) S & P 500 (1200) Cumulative Index 01/2/89) 2638.11 338.44 4779.15 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 offer orthe solicitation of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subSCriber While we believe the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subscnber should be based on hiS own Investigation and Information Delafield, Harvey, Tabel! Inc., 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, Tabelllnc , 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 securrty mentioned herein IS avaIlable on request

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES. DEALERS, INC (609) 987-2300 November 10, 1989 I – The,market..staged, JhiS\!'M. aesL ofi!QcJ2-b!'-.l3.,!Q)Yalld!haJ.!est haJl, .t2..cI!,je, be;e;;n;.-…..,,…. successful, albeit not particularly impressive. Last Friday's closing low of 2-596.72-was-well-above – – the 2569.26 level reached earlier in the month. The same kind words cannot be said. however of the Dow Jones Transportation Average which, at Friday's bottom was down over 22 from its peak posted back on September 5. The fact that the Transportation Average high was made in September is not without interest. The Dow Industrials topped temporarily at 2752.09 on September 1 and exceeded that high on October 9 at their all-time closing high of 2791.41. The Transportation Average. by contrast, failed to better its September peak in October. This action produced a phenomenon known to technicians as a Dow theory non-confirma tion;O The Dow Theory, stemming as it does from the writings of Charles Dow around the turn of the century J can be said. in many ways, to be the antecedent to much of today's technical analysis. Dow's recognition that the market could be divided into short, intermediate, and long-term waves was seminal for the later development of trend analysis and. indeed, extended to its logical conclusion, can be called a precursor to the science of chaos, at the leading edge of contemporary mathematics. Since the theory was conceived at a time when railroads constituted a major portion of the American economy, its original proponents insisted that the Rail (now the Transportation) Average confirm moves in the Industrials. The early writers are a bit obscure on the subject of just what a lack of such confirmation might mean, but agree that, at least. it produces uncertainty and may even be downright bearish. We all know. of cour!le. that the latest manifestation of Transportation weakness is a product of the collapse of airline-takeover speculation. For the technician, though. this should be irrelevant to the study of the Average itself, and we therefore decided, this week, to conduct an investlgation of past weak relative action by the Transports. It was obviously necessary to develop a methodology for quantifying weak DJTA action, and, for better or worse, We decided on the following, best – -ilIustratedby-example.–Ten-dtlys-ago;-the'l'ransports—atA-l99.-32, -wePeaW-8-.-m–Gt'–t-heirbullmaket– high of 1532.01. On the same day, the DJIA closed at 2653.28, or 95.05 of its previous high. Subtracting this number from the similar 'statistic for the Transports, produces a figure of -16.77. This is the lowest recent figure. We were able to compute this measure of Transport underachievement back to 1949. Interestingly enough, the current low levels for this number are by no means a record. and the Transportation Average has often shown a great deal worse relative action in the past. The record low for the figure, posted in July 1973, is -28.59. The question at hand is, of course, whether or not low levels of Transportation performance have any significance for the future course of the market. Rather arbitrarily. we defined -10 as being a significantly low measure of underperformance. We found 20 relatively uninterrupted runs of days with a more-than-l0 reading. These runs ranged in length from a single day to 570 trading days, covering over two years from June 1972 to October 1974. The latest instance began when the underachievement percentage dropped below -10 on October 16, and this run has now lasted 20 days. Contrary to what one might believe. low levels of Transport performance have often occurred at major market bottoms. There was, for example, a 10-day run ending at the absolute low of the market in June 1949 and another lasting a full eight months, to the market low in October 1957. Similar instances terminated at the lows of 1970, 1974, and, most recently, August 1982, and July 1984. Obviously, there is difficulty in interpreting relatively long runs. The 1972-1974 case cited above did, indeed, continue approximately through the 1974 low, but it included the entire 1973-1974 bear market. It is difficult in such cases to define the precise point at which one should become bullish. Compounding these dIfficulties, are the many instances where Transport weakness occurred in the vicinity of market tops or, at least, intermediate-term declines. Two such cases occurred in 1956-1957, and two also occurred early in 1968 with a fair lead on the peak for that bull market. Most often, though, the action proved to be a harbinger of intermediate-term weakness rather than of 8 major 'top. – — – — – — – – —- . – – – …. 7- .. This manifestation, at least, is interesting. since our own current market scenario identifies the current poor market action as being part of an intermediate-term correction rather than the start of a bear markeL The historical study shows, at least. that current DJTA underperformance is consistent with such 8 theory. The long record. however, may explain why early Dow theory writers were ambivalent about the meaning of a non-conflrmation. Transport weakness, our recent study shows, is at best an uncertain indicator of future market action. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials 02 00) S & P 500 (12 00) Cumulative Index (11/09/89) 2617.01 338.62 4718.35 AWTebh No statement or 8)(preSSIOO of opinion or anyolher malter herein contained IS, or IS to be deemed to be, dlrecllyor Indirectly, an offer Ol'the soliCitation of an offerlo buy or sell any secunty referred to or mentIOned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our Information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any acllOn to be taken by the subSCriber should be based on hiS own Investlgallon and Information Delafield, Harvey, Tabelllnc, as a corporallon and Its officers or employees, may now have, or may later take, positions or trades In respect to any securities mentioned In thiS or any future Issue, and such posilion 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 Its Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Information on any secunty mentioned herem IS available on request