TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 May 22, 1992 We find ourselves, It would seem, in an unusual equity market, one beset by cross currents and tom by conflicting forces. In terms of the Dow. yet another new-high was achieved on Tuesday-with a close-at 3397 .99…..-The 'found-number phenomenon has once ….. again appeared, and the Average, for the past couple of weeks, has engaged in a flirtation with the 3400 level, exceedIng that number on an intra-day basis and on a few ticks but not, so far, managing to close there. The Dow's performance, as we and just about every other market commentator on the face of the earth have pointed out, blatantly overstates the bullish case. The S & P 500 did, admittedly, when it reached 418.49 on May 11th, manage to post a new three-month peak. That peak, however, was still below the broader index's 1992 hIgh, achieved back on January 15th at 420.77, at which time the Dow was 150 points under its IDld-week level. Moreover, the S & P has gone back, in the past few days, to underperforming, failing, this week, to better its mid-May high. Almost any measurement one cares to look at suggests the narrowness of present leadership. Not since February has the NYSE been able to produce over 100 daily new hIghS, despite repeated new thrusts by the DRA. Meanwhile a glance at the actual names compnsmg the new-high list suggests an even more dismal picture. Of the 72 new highs posted on Wednesday, 31, or almost half, were Preferreds. an indicatIon. perhaps, of higher bond prices rather than a strong stock market Optirrusts, of course, can point to what can now be acknowledged as an earnmgs recovery We would certainly agree than such a recovery is underway, although its vitality is suspect and probably will remain so, at least until second-quarter earnings make their appearance. Current levels of valuation, though, certainly allow for almost any recovery prospects remotely in sight. It IS arguable that, to use an old clIche, present prices are discounting not only the future but the hereafter. And yet, withal, the market continues to maintam its current levels, making new peaks on the Dow and at least remaining in Sight of those peaks in terms of the broader indicators. Meanwhile, none of the technical negatives cited above should be, by thIs time, unexpected news. The hme is long gone when there were only a few of us labonng 10 the technical vineyard. and the basic concepts of market breadth and leadership are WIdely understood throughout the investment community. Widely heralded signs of technical weakness have, thus far at least, failed to dissuade most buyers of equities. The same is true of valuation factors. It seems to us now to be common knowledge that present levels of pie ratios and yields have, Just about invariably, led in the past to stock-market difficulties—indeed for the most part to major bear markets. Yet we have seen inJust the past t-wo days new highs on- the D-ow Billions of Dollars — 'JIlDoo ….. -'–. There is an old saying that II money makes the mare go , and this IS equally true of the stock market, now perhaps Sales Net Sales Total Assets Cash RatiO as much as ever before. What has kept prices at their current levels, it seems clear to us, is a monster mflux of new nvestment funds. One source of such funds is ObVlOus—equlty AVG 1986 4.819 2.602 148.174 9.67 mutual funds. The table at left shows the average monthly level of Dew sales, sales minus redemptions. total assets and cash AVG 1987 5.974 2.660 205.883 966 ratio for such funds for each year from 1986 to 1991 along with indivldual figures for the first three months of 1992 and average AVG 1988 2.553 0.328 191.579 1031 for the year so far. Note that new sales in 1992 have so far AVG 1989 4.464 1.259 226.768 9.75 been close to three times their level of 1986-7 and almost twice that 0 f 1991. In tenns of net cash Inflow, sales minus AVG 1990 6.013 2.153 246.795 11.81 redemptions. the increase in recent years IS even more startling. Net'Inflow for 1992 so far remams 2-3 times what it had been AVG 1991 8.078 3.595 309.732 9.22 in any year since 1986. On average. a net of some 7 billion a JAN 1992 13.484 7.248 375022 7.92 month has been pounng into eqUIty funds since the beginmng of theyear. FEB 1992 11 373 6.555 387.076 7.99 There exist, meanwhile, other sources of fuel for the market fire which. although less measurable. may even dwarf MAR 1992 15.448 7.914 383.557 8.60 mutual funds in magnitude. A pomter to one of those sources may perhaps. iromcally. be found In the anatomy of a recent AVG 1992 13.435 7.239 381.885 8.17 economic dIsaster, the Olympia & York bankruptcy, which may, along with the empty and half empty office building dotting the country, be taken as a symbol of the current sad state of the real estate market. The point IS, though. that those empty bUlldings were, over the past few years. the consumers of masSive amounts of Investment capital. Whatever one may thInk about the prospects for real estate recovery. 1t appears obvious that any growth In rentals over the next few years will go to filling existing vacancies not to new constructIOn. These dollars represent another aglomeration of funds which bas probably been finding, and may well contInue to find, ItS way into the equity market The future course of this new flow of funds IS of course unclear. How qUIckly could It dry up and thus. If alternative sources did not emerge. engender market weakness Or could the flow—along With econotnlc recovery–increase and thus continue to propel stock pnces to new high levels. We are dealing here. It seems to us. with a phenomenon of human behavior. and as always, technical work Will. we thInk. be helpful in deternuning the course of that behavioral phenomenon ANTHONY W TAB ELL, CMT Dow Jones Industnals (12 00) 3390 18 DELAFIELD. HARVEY. TABELL Siandard & Poors 500 (1200) 41456 Cumulative Index (5/21192) 7374.04 No statement or expression of opinion Of any other matter herein contained IS, or IS to be deemed 10 be, directly or indirectly, an offer or the solicltatton of an offerlo buy or sell any security referred to or menlloned The matter IS presented merely for Ihe convenience of Ihe subSCriber While we believe the sources of our information 10 be reliable, we In no way represent or guaranlee Ihe accuracy Ihereof nor of the slatements made herein Any actlon to be taken by the subSCriber should be based on hiS own Invesllgallon and Information Delafield. Harvey. Tabelt Inc. as a corporation and ItS officers or employees. may now have, or may later take. posrtlons or trades In respect to any secuntles mentioned m thiS or any luture Issue. and such poSition may be dlfferenl 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 FUl1her Information on any security menlloned herein IS available On request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 May 29, 1992 The frigid weather that has been affiictmg the Northeast all thiS week may well cause us to forget the fact that summer is -….. close at hand. The so-lIed .summer rally i, thereforeconce more a topIc-for discussion. Thus wereproduce below the customary table which appears annually in this space at this time of the year, covering 95 years of market history since the Dow was first computed in 1897. One MOnth Periods (1897-1992) ——– ———- ———— End Month Advances Declines Average Chg. ——— ——– ——– ————– January 61 34 1.12 February 47 48 -0.20 March 57 39 0.72 April 52 44 0.90 May 48 47 -0.19 June 49 46 0.62 July 59 36 1.50 August 63 31 1. 64 September 36 58 -1. 33 October 51 43 -0.10 November 56 38 0.67 December. 69 26 1.48 Two Month Periods, (1897-1992) — – – ——– – – ——.—– — Advances Declines Average Chg. ——– ——– ——- —— 62 33 2.62 55 40 0.93 47 49 0.44 57 39 1. 66 51 44 0.78 49 46 0.39 58 37 2.11 63 31 3.41 54 40 0.26 41 53 -1. 38 55 39 0.63 66 29 2.03 TOTAL 648 490 0.57 658 480 1.16 As the table indicates, of the 1138 months since 1897, 648—or 57— have been advancmg months, and 490—or 43—- haveshowed declines. Thus,.the normaLexpectatlOn fo,-any giv.enjnonth.wouldJle 52,53adyances and 39,40declines. SiE!ilar figures can be adduced for two-month periods. . From the data above, we have been able to extract four patterns of a seasonal nature which seem to be statistically sigmficant. The one showing the most significance is, oddly enough, the least known, that being 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 94 years, has produced 58 declines and only 36 advances With an average drop for the month of 1.33 . The probability of such a pattern be10g due to random chance IS, standard statistical tests tell us, less than 1 in IOoo. The next most significant pattern has been the year-end rally, illustrated by 69 rismg Decembers m 95 years. Our readers know that we have pubhshed an annual comment on thiS phenomenon around December or January of each year. Another seasonal manifestation, which We have demonstrated based on data since 1926, has been the fact that the direction m which the market moves in November has appeared to be a moderately successful predictor of the market's direction for the follOWing year. We confess to knowing no reason whatsoever why this should be the case, but it is, nonetheless, so. Of the four seasonal phenomena, the least significant is the summer rally, which is due to be examined at this juncture. As the table shows, the 59 advances and 36 declines for July are marginally better than one would expect. August shows an even greater aberration. The percentage advances for July and August, along with that for the two-month period ending in August, are the largest figures 10 the table, although December-January performance is close. DespIte these figures, standard significance tests suggest that the summer rally IS a less reliable phenomenon than the others noted above. It has been even less reliable recently, especially in July. Despite the fact that 1982-1992 has. overall, been one of the better decades 10 stock-market history, half of the ten Julys since 1982 have been down months. For last year three of the four seasonal indicators remained true to form July, 1991 saw a better than loo-pOlOt rise lD the Dow. and August extended the rally September, as might have been expected, produced a mild decline. In addition, the 1991-92 year-end rally not only amved on schedule but remains intact, the Average. at its recent high, standing 18.65 above its December low WIthout an interverung correction of as much as 4. Only the forecast normally produced by the month of November has proved to be off base so far. November of last year saw a fairly sharp decline lD the DJIA, and as noted above, that mdlcator, If not the rest of the market, has rallied since then We stress once more that the summer rally is the least reliable of the seasonal tendencies we have been able to discover but there IS little doubt that summer action does have some tendency to be better than normal. That tendency must, this year, be coupled With the pattern of a strong second balf occumng in an electIon year. There are a number of reasons for skeptiCism regarding the current level of stock prices, but seasonal tendencies, it must be admitted, do not reenforce them. ANTHONY W. TABELL, CMT Dow Jones Industrials (1200) 3416.84 DELAFIELD, HARVEY, TABELL Standard & Poors 500 (12 00) 418.18 Cumulative Index (5/28/92) 7371.01 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 offerlO buyer sell any security referred to Or menl!Oned The matler 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 or guaranlee the accuracy thereof norof the statements made herem Any action to be taken by the subSCriber should be based on hiS own mvestlgallon and mformatlon Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later take, posrtlons or trades In respect to any securrtles mentioned In thiS or any future Issue, and such pOSitiOn may be different from any views now or hereafter expressed m thiS or any other Issue Delafield, Harvey, Tabell Inc, which IS registered With the SEC as an Investment adVISor, may give adVice to rts Investment adVISOry and o1her customers Independently of any statements made in thiS or in any other Issue Further Information on any security menlloned herein IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 June 5, 1992 It IS, to put it sImply. boring. For all of 1992 so far, almost a half-year now, we have witnessed the same sort of stock market. What -has basically been taking place, asthe mediacertainly do-not tire of telling us; is that-the DoW-Jones-Industrial Average has been – moving ahead–although not by all that much–while just about every other market indic;'tor remains in a neutral or downward trend. The record is worth examining. The Dow closed 1991 at 3168.83. On Monday, it reached 3413.21, breaking 3400 on a closing hasis for the first time. (Eventually, one would hope, these crossings of even-hundred-pnint figures will become so ubiquitous that we won't have to menlton them anymore.) At any rate, this constituted an advance of 7.71 , a number which can hardly be called earth- shattering. Periods of comparable length during which the Average has advanced 20 have heen common during the 1980's and 1990's. The rise has, nonetheless, heen a persistent one. For example, there have heen, through Wednesday, 105 trading days in 1992. The Dow has posted a new bull-market high on 22 of them. This works out, on average, to a new high's being posted somewhat oftener than once every five days. ThIs average compares quite closely to the actual experience. There was a thirty-day hIatus between March 3rd and April 14th during which no new high was made. (The total decline involved was only 3.31 ). Ontside of this one period—and one other lI-day gap in April-May- there has been, Ibis year, no period of longer Iban seven days when a new high was not made. We are not trymg here to invent a number Or yet another mtereshng fact not worth knowmg. We think there is a psychologically positive value to an environment in whIch mvestors are able to read in the paper, about once a week, that a new high is being made. This persistence on Ibe upside provides a contrast with the noiddle part of 1991, with which this market has often been compared. There was, at that time, a sinoilar slight upward bias, but Ibe interval between new highs being posted was much greater. Between April and October there were only seven days on which new highs took place with. obviously, extensive gaps in between. Meanwhile, as everyone is aware, the Dow's performance. unexciting as It is, is far superior to the record of just about any other measurement. On Monday, when the Dow closed almost eight percent above its 1991 final figure, Ihe S & P 500 had moved to a level just twenty-one one-hundredlbs of point below ilB 1991 close. We all know the approXImate record of Ibe 500 Its high was aclueved back in January at 420.77, and it has not been able to equallbat peak SIDee, despite those 22 new highs m 1992 for the Dow. Between January and Apnl it fell some 6.24 and, indeed, at its high of Ibis week, was under where it had heen back on May 11th. -Or,-for an example of-even-worse-performance;-let-uscolisider-secondaty-stocks. The OTe-Industrial Index-currently stands- four percent below its 1991 close, and its recent performance actually is not all that bad. Between Its high (also in January) and a low m April, it fell by almost 17 . It has sinee managed to recoup about a quarter of its loss. It has been suggested that part of Ibe reason for the superior performance of the Dow has been the no no fact that it is an Industrial average, and that 1t is cyclical, heavy-industry companies that have prOVIded no no market leadership in recent months. One of the 'b'blP III ,lllll rl I….. 1',1' .11 . .I'lIII — , ,.100..1111 Il .- II ! rI (relatively) rew stocks that have been appearing of late on the new-high list is, as a typical example, Almninmn Company of America, a Dow component, whose two-point unit, point-and-figure chart appears at left. It can hardly be called a bad chart The base in Ibe 50-74 area formed smce late 1989 and shown by the dashed lines is impressive and the ability to reach ALUMINUM COMPANY OF AMBUCA 2POINT AA new peaks suggests the potentIal for an upside target close to twice current levels. One can, though, be pardoned for wondenng, just what combination of circumstances is going to be required to produce such a figure. For 1991, Alcoa earned 71 cents per share. This was, admittedly, after one of those one-time charges wmch have turned out to be Ihe bugaboo of analysts Thts charge amounted to 2.55. Even after it is removed, though, Ibe pie IS close to 25. Ab, but we have that magIcal recovery in prospect for 1992 which presumably will cause everythmg to come up roses for cyclical companies. Not, apparently. for Alcoa, though. since consensus estimates call for operatlOg results to be flat for 1992. (First quarter earnings were down.) It is perfectly pOSSIble to argue, of course, that. as m any cyclical company, peak earning power for AA is a good deal higher. Indeed eammgs of over 10 per share were posted in 1989 It is less easy to argue that a prenoium multiple should be applied to those eammgs, if as and when they emerge. Indeed, Alcoa's high for 1989, the year m which those earnings were posted, was about the same as today's pnce Now we are, of course, technicians. and. as such, we have a great respect for the market. It is lOdeed quite plausible that. in the chart pattern for Alcoa and in its perSIstent firmness for 1992. the market is telling us that the prospects for recovery are a great deal better than those contatned lD forecasts aV3.11able so far. It would by no means be the first time In financial history that the market has proved to be a better forecaster than many experts. Full valuations and lack of market breadth, though, make the investment outlook in mid-1992 a perplexmg one ANTHONY W. TABELL, CMT Dow Jones Industnals (1200) 3381.06 DELARELD, HARVEY, TABELL Standard & Poors 500 (1200) 412.17 Cumulative Index (6/4/92) 7418.25 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly Of indirectly, an offer or the soliCitation of an offerle buy or sell any security referred to or mentioned The matter IS presented merely lor the convemence 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 Investlgallon and information Oelaheld, Harvey, Tabelllnc, as a corporallon and Its oftlcers 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 Oelafleld, Harvey, labellinc , 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 Fur1her Informallon on any security menlloned herein IS aVailable on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON. NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 9872300 June 12. 1992 It has been widely reported just about everywhere that the Dow Jones Industrial Average is outperfonrung just about every other market-indicator,especiallheS &P- 500. This phenomenon ,0 howerer.;-has-not oftertbeeri'-e'Xaninied in great detall,Land an attempt at – some specrfics.' therefore wIlI'be made here —- I Date I OJI. I I I I I eng S8tP600 fIE, Chg Retlo It is appropriate to start some six months ago. When, on December 10, 1991, the DnA made its most lG-Occ-91 03Jan-92 2863 82 320148 11 79 377.90 41934 1097 1320 1310 recent low at 2863.62. The table at left shows the closing price for the Dow on selected dates since that time and its percentage change since the base date The 13-Jen-92 , 6-J8n-92 318660 326860 11 24 1378 41434 42077 984 11 34 1l.01 1291 same information for the same dates is shown for the S00, and the final column simply shows the ratio of the two–the S & P diVided by the Dow. Of this. more 17-J8n-92 28J8n-92 326498 3272 14 1401 1428 41886 41498 1084 98' 1283 1268 later. The table clearly shows the DnA's supenor performance. Its first rally, to January 3rd, was 31-Jfl1'I-92 322339 1256 40879 8 88 greater, and. by January ISth. the SOO was to score its 12-Feb-92 28-Feb-92 03-Mar-92 08-Apr-92 l1-Ma'f-92 327683 328332 329026 3181 36 339768 1442 1486 1499 1109 1864 41713 41636 41286 39460 41849 1038 99' 926 43. 1074 1273 1266 1266 1240 12.32 high for the year so far, even at that high, being up less than the Dow. The latter continued to new highs on January 17th and 28th, but the corresponding figures for the S & P were lower. After a correction. the Dow, at the end of January, was ahead by half again the 500's 8 rise. The next S & P high was on February 12th, 01-Jun-92 1O-Jun-92 341321 1918 -334322.- 1674. 41730 407,21),. '043 777- 1223 1218 and again the Dow proceeded to new peaks With the braader mdicator fading to do so. By the end of the -next correction-m-Aptil;-the DnA' was-ahead almost twice as much. The Dow scored a significant new peak in early May, and the S & P failed to do so. Finally, an unconfirmed new DnA high took place on June 1st, and, as of Wednesday, that average was ahead 16.74 vs 7.77 for the 500. Naturally the ratio of the two has been steadily declining. The table at nght attempts to provide some explanalton of why this may be so The Dow, remember, is a price-weighted average, so POINT6 CONTRIBUTED TO ADVANCE tN DOW JONES AVERAGE the higher a given stock's price, the more weight It possesses in the index Also, due to Dow Jones method of split adjustment, the divisor is now around .48, which means that every pomt move in a given stock results 1fl something greater than a two-point rise in the Average ltself. In any case, the table shows how many points of the DnA's 480-point move since December 10th each individual stock has contributed. (The numbers do not add up to exactly 480 due to Alcoa 44 Chevron Allied Si1l Caterpillar …..40 Texaco 40 Goodyellr 37 MMM Procter &. G 3' COClI Cola '8 Beth SleeI 8 '8 IBM 8 17 Philip Morris 7 17 Westlnghee 8 '4 Inti Paper , statistical complications, but they are close approximations) The stocks are shown in order of their contribution to the Average's advance. As can be seen, of the first eight stocks In the list, seven are cyclical issues which, as we have been pointing out, have of late been assuming leadership. Those seven stocks have accounted for 239 points or just about half of the Dow's total rise. Meanwhile, the amount Gent MOlars Union Carbide Genl Elec McDonalds 3' 24 23 22 'on Ou Pont Arner Exp Arne! Tel '3 Bo…. 2 13 Woolworth 2 Me.ek ., .EMtman Koct subtracted from the Average's performance by such consumer-nondurable issues as Coca Cola. Philip Morris. and Merck has been relatively Disney Untd Tech JP Morglln '3 smalJ. The picture for the capital-weighted S & P 500 is qUite different No fewer than seven drug issues, for example, are among the thirty stocks having the largest weight an the Standard & Poors Composite, and all are actually down for the period. These issues alone have managed to subtract almost three points from the broad index's total rise of Just under thirty points. The ratio of the S & P to the Dow, shown ill the table at the top of the page, is as good a measure as any of the former's relative underperformance. It has declined from 13 20 to 12.18, a drop of 7.S8 m 126 trading days. Such underperformance is a fairly rare event. Since 1937, there have only been five instances in which the decline in the ralto was greater than seven percent over a penod of comparable length. Interestingly, a couple of these have, contrary to widely held belief, occurred around major bottoms. One case was from June to August 1970, and another from July through September 1984. There exists a Wide body of work which suggests that underperfonnance by the S & P is bearish, but there may well be an exception in extreme cases such as the present. We Intend to examine this issue further in future letters. ANTIIONY W. TABELL. CMT Dow Jones Industrials (1200) 3370.18 DELAAELD,HARVEY,TABELL Standard & Poors SOO (12.00) 411.30 Cumulative Index (517/92) 7325.16 No slalamenl or expression of opInion or any other matter herein contained IS, or IS to be deemed to be. dlrectty Of indirectly, an offer or the soliCitation of an offerlo buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subscnber While we beheve the sources 01 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 Informallon Delafield. Harvey, Tabell Inc as a corporation and lis officers or employees, may now have, or may later lake, pOSllions or trades In respect to any seCUrities mentioned In thiS or any fu1Ure ISSUe, and such pOSItion may be different from any views nowor 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 Independently of any statements made In thiS or In any other Issue Further InformatIOn on any securrty menlloned herein IS avallabte on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091987-2300 June 19, 1992 June has brought, along with roses and boneysuckle, what may be 1992's most serious market weakness to date, at least msofar as theDJIA is conpemed. Not that it is Iy aJj that. serious. The-'a..erage wasdown,asof ,esterdaycs CIose4.08 ..hardly an 4 earthshaking amount but, nonethelesS, the Year- deepest drop so far. Historicaliy;-weIlave looked for markets to move 5 or more before being willing to recognize a minor trend. However, the last downturn of 5 or greater took place over six months ago—the 6.93 fall in the Dow between October and Deeember of 1991. The previous one was the August-October 1990 bear market, and prior to that the last greater-than-5 drop was in October 1989, more than 2 112 years in the past. We mention this only by way of suggesting that market weakness has been a fairly rare commodity of late, and we therefore feeJ we owe our readers an assessment of the prospects of further weakness following what we might have regarded in the past as nothing more than a minor blip. At any rate, the current ten-point , P & F pattern for the Dow is shown at left. In many ways the exhibit can be said to be an embarrassment for the classical point- and-figure chartist, at least insofar as 1992 action is concerned. After its initial runup, which was over by mid-Januaty, the DnA stalled at 3290 remaining between that level and 3200 for three months, with a heavy level -DOW JONES-INDUSTRIALS – of trading activity producing the broad, tradingrange pattern shown at the middle of the chart. thirty-two points, closing at 3181.35 and touching a level some forty points below that on an intra-day basis. That action produced a downside breakout from an almost textbook version of a top. . A less likely top, though, could hardly be imagined. Starting the following day, the market put on six consecutive advances with the Dow moving ahead a total of 185 points, reaching 3366.50 on April 16th, crashing through to the upside of the massive trading range. Ironically, what seems to be taking place now is the formation of a pattern similar to the one which formed in Januaty-April. The latest Dow advance stalled just above 3400, and a toppy-looking trading range has ensued. Wednesday's forty-two-point drop looked very much like the false breakout of April 8th. Is the aftermath of this downswmg going to be another explosion into new high territory and, if so, should we forget about point-and-figure charting altogether We doubt it. False breakouts have occurred in the past, recently, it would appear, with increasing frequency, and will undoubtedly occur again. We think, though, that the trading ranges on the chart above show important levels of denumd and supply for stocks. One such area, in the upper 34OO's has proved, for the time being at least, to be unsustainable. 3300-3200, having turned out not to be a top, now shapes up as an important area of demand. Not coincidentally, the most recent putattve top formation suggests a move into it, roughly to 3210. It will be important for 3200 to hold. The first breakout below It may have proved false, but we would not be inclined to dismiss a second one. Even were such a breakout to take place, however, another area of demand would be encountered. We can observe this by enlarging the scale of our P & F chart to the 50-pomt unit shown at the right. On that one, the two recent ranges, shown by the arroWS, look tiny t but the next area of demand which eXlsts at, roughly, 3000-2900 shows up to be, in comparison. truly masSIve. Even Were the worst-case scenario to emerge and the 3300-3200 support prove ,, DOW JONES INDUSTRIALS MID 1987 50 POINT ephemeral, this lower trading area should provide massive support. It must, in addition, be DOted that even a deep penetration into that area would constitute nothing more than a drop of approximately 15, one we are used to calling nothing more than an intermediate-term decline. We are, It seems to us, in the midst of a market pattern that is stIll unfolding. As this pattern slowly matures, the areas of demand for the Dow, outlined above, will prove useful benchmarks as we try to assess probabilities. AN1HONYW. TABELL, CMT Dow Jones Industrials (1200) 3298.73 DELD,HARVEY,TABELL Standard & Poors 500 (1200) 404.08 Cumulative Index (6/18/92) 7286.32 No statement or expression of oplnton or any other matter herein contained IS, or IS to be deemed to be,dlrectly or Indirectly, an offer or the solicitation of an offer to buy or sell any secunty referred to or mentioned The matter IS presented merely for the convenience of the subscriber Whllo 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 acllon to be taken by the subSCriber should be based on hiS own investigatIOn and information Delafield, Harvey, Tabellinc , as a corporation and lIs officers or employees, may now have, 01 may later take, poSitions or trades In respect 10 any secunbes menlloned In thiS or any future Issue, and such POSition may be dlfferen! from any views now Of hereafter expressed m !hJS or any o!her Issue OeJafJeJd, Harvey, TabeJJ Jnc, 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 Informal!on on any security mentioned herein IS available on request

—– —–o— – – – – – – – – – – – – – – – – – – TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – , June 26, 1992 Most of the week's-marlcet action featured.u'OCovery attempt-from the decline which bad-reached a closing DJIAJow of – 3274.12 last Thursday. There occurred a couple reasouable advancing days-over 1000 advancing issues last Friday and this Thesday. The Dow, however, pulled back as it touched 3300 at mid-day yesterday. 'This w.. not surprising. 3400-3300, the area of the original top on the Dow constitutes fairly heavy overhead supply, and a great deal more demand than bas so far beeu manifested i. going to be required for that supply to be penetrated. II remains our suspicion that the present test of the overhead will be unsuccessful and that the curreut short-term decline will press on to new lows probably somewhere in the low 32OO's. As we noted last week, we think the ability of the 3200 level to hold will constitute Ihe next important markel test. Meanwhile, the familjar pattern of the Dow's outperforming jusl iIbout everything else in sight continues, and the other indices continue to form their own patterns. As recently as Thesday, the Dow Transports moved to a now low below 1300, suggesting an ongoing downtrend. 'This drop, moreover, takes the DITA below its bottom of April 8th, a figure which the Industrial., whose April low was 3181, have not yet breached. The Transports are now down some 12 from their February closing high of 1467.68. As i. the case with the Industrials, it would appear that the DITA is about to test major support, the demand level for this indicator occurring, roughly, at the 1250-1100 area. The exi.ting top would suggest that a good .iud thrust into this support area 'llight take place. As is the case with the DJIA, a break below this support could have .erious consequences. The Dow Utilities have, for whatever reason, the best pattern of all the major averages. An outstanding very-long-term patlern developed when, in early December oflast year, this index moved above the 220 level. Since that time its relative action has been poor, and it has nol been able to po.t a new high in 1992. Indeed, in March-Apnl il moved down into the low 200'., testing an area of strong support. At the moment, the Utility Average's ability to move above 215 would ,uggest thaI an attempl al thaI late-1991 peek IDIght be made. A break below 210 would po.tpone this but would, at the moment, call for nothing worse than another probe into the strong support. The S & P Induslrial. and the similarly-onfigured NYSE Industrials are now close to important tests. Their price patterns both look vulnerable and are-close-to.importanldownside.breakouts.-For-theS&-P-indica\or the-dowoside-breakoul-levelwouJdbe 470 vs. a— close last oighl of 474.81. The NYSE Industrial Average, noW at 274.73 would break down at 272. Given downsIde breskouts, the prospecl for both averages would be a tesl of support, al 460-440 for the Standard and Poor's Index and al 270-260 for the New York Stock Excbange Indicator. If utility averages, as suggested above, bave the best long-term potential patterns, the best immediate relative strengtb i. being shown by financial indicalors. The S & P Financial Index was attsining new high, earlier thi. month above the 35 level. It has since pulled back only modestly from those highs. Moreover the ability to break above 32 early this year strongly suggests that the post-1989 tradiog pattern might have heen a head-and-shoulders base with ultimate targets in the high 40's. When we come to discussing the patterns for those averages covenng secondaJy stocks, some interesting issues arise. Let us begin with the OTC Industrials. 00 February 12th of this year that index reached a high of 741.90. It was, at that point, up 115 from its October, 1990 low. 'This was a rise betwOOD two and three times as greal .. thaI of the S & P 500, which rose only 41 over the ssme period. However, since thaI February high, il bas moved down to a low of 584.80 last Thursday, a fall of 21.18, one whicb, if il had taken place in one of the major averages, we would bave to call a major bear market. The important question i, how much of this recenl weakness is of cycle proportions and how much is simply due to the greater volatility of OTC .tocks. True, the 2O-plus decline so far this year is more than four times as great as the comparable Standard and Poor 500 drop of a bjt under 5. However, even at its low of last week the over-the-counter indicator is ahead 70 from its 1990 low while the Composite is up only about 35. What would be truly useful to know is whether, on a long-term basis, we have ended the long era of underperformaoce by secondarY stocks and embarked upon a cycle-length period of outpcrformance. As our readers know. it IS our own view that this is the case, and that a new era of better action by secondary issues began in 1990. None of this, however, is to deny that wide swings in secondaries will not continue or that such issues will not continue highly wlnerable in weak markets, as has been the case of late. Laslly, il is n….sary to consider the queslion of breadth. As could well be expected, with the DRA strongly outperforming mo,t broader averages, it has also been outperforming all breadth indicators. Our own daily breadth index made its high 00 February 12th–back in that January-March period when most non-DRA av.rages were reaching their peaks.. It reeched a new low and Its maximum divergence from the Dow in mid-April. ThaI mid-April low, intereslingly, was broken lasl week. It i. now 92 days since breadth reacbed its high, and, when the Dow peeked back on June lst, the divergence was 75 days long. Breadth divergences have lasted longer than this, but the index is now a sufficient distance below its high that ultimate confirmation, while not Impossible, seems unlikely. What are we to make of an this We seem, in summary, to be seeing a market which, from a tcchnical point of view, as been growing progressively weaker since early this year-that weakness to some extent being masked by strength in the sort of issues which dominate the Dow. The weakness has not yet extended to the point of being fatal. It is, however, given absence of renewed demand, to become terribly excited about the immediate upside possibilities in today's equity market. ANTIIONY W. TABELL, CMT Dow Jones Induslrial. (1200) 3287.49 DELAAELD, HARVEY, TABELL Standard & Poora 500 (1200) 403.39 Cumulative Index (6/25/92) 7290.48 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or Indlreclly, an offer or the 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 olthe statements made herein Any action to be taken by the subscnber should be based on hiS own investigation and Information Delafield, Harvey, Tabelllnc, as a 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 herealter 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 III any other Issue Furlher Information on any secUrity menilOned herein IS avaltable on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091 987-2300 lillY 2, 1992 . . . ' – . ' . . .- Wednesday's nilly pushed the averages deeper into the overhead supply than we would have aoticipated but did not, by itself, chaoge the technical market outlook very much. Two days (Monday and Wednesday) with over 1200 edvaoces were a bappy surprise, but a great deal more evidence of intemal strength will be mJUired to suggest that strength cao be anything more thao transient. It has been pointed out maoy times, here aod elsewbere, that the action of the Dow, whicb reacbed the latest in a series of new highs on Iune 1st, subsequently corrected a modest 4, aod bas now recovered over half the ground lost, is untypical of the general market. It is regularly noted the S & P made its high back in laouary aod that secondary stocks are down sbarply. In a diverse market the question of what stocks have done what and to what extent is never an easy one. However, in an effort at clarification, we looked this week at the action of 3699 stocks. We examined for esch issue its high for the first three months of 1992, a period wben the S & P, early on, achieved its all time pesk aod the Dow, by early Marcb, bed approacbed the 3300 level. We compared this price with eacb stock's low for the second qusrter, when both averages made their deepest pullback for the bull market so far. The results are shown in the table below. The simplest ststistic is that the average decline for all the stocks in PERCEllTAGE DECLIIlES OF I..IVIDIIAL ISSUES – Ist-2rd IlllARTERS 199Z the survey is 27.3. This is a fairly large number wben one compares it to NYSE ASE OTe TOTAL X Stocks X of Stocks X of Stocks X of Stocks X of Dee. Total Total Total Total the relatively small drops in the averages, even allowing for the fact that we are tslking about different timeframes for individual issues. The 0-10 346 21.9 40 10.5 198 11.4 584 15.8 mediao decline for all issues is 10-20 506 32.0 89 23.4 360 20.7 955 25.8 somewhat less, and there is a reason for this as we sball see presently. 34 20-30 30-40 346 21.9 179 11.3 84 22.0 349 20.1 779 21.1 — 62 16.3 288 16.6 529 14.3 of all issues are down 36 or more. Wbenane breaksthe-study—' – down into NYSE, OTC, aod ASE 40-50 95 6.0 41 10.8 219 126 355 9.6 issues, there emerges an even clearer 50-60 62 3.9 35 9.2 161 9.3 258 7.0 60-70 26 1.6 17 4.5 95 5.5 138 37 picture of market weakness. The average aod mediao declines for ASE and OTC issues are in the 30 area. 70 20 1.3 13 3.4 68 3.9 101 2.7 48 of all OTC stocks are down 30 or more. Total 1580 381 1738 3699 There is an interesting Avg. Decline 22.2 30.1 31.3 27.3 sidelight to all this, though, and it casts some light on the composition of Median Decllne 18.6 30.2 28.9 235 today's equity market. It turns out that a goodly portion of the decline figures, especially for secondary issues, is accounted for bY the fact that maoy of these issues are low in price. We decided to try eliminsting from the study those issues selling for under 20 per sbare. This produced some rather interesting results. It turned out tbat a surprisingly large number of tbe stocks under study Were under the 20 price level. Overall 2420 of the 3699 stocks, almost two-thirds, were low-priced. This might be expected for OTC issues aod for these stocks, indeed, 1335 of 1738 or 77 of all the NASDAQ stocks in our survey were, as of Iune 26th, selling for under 20. Similar percentages obtained on the ASE. Surprisingly, though, 775 of 1580 NYSE .Iocks we studied, very close to half of them were low-priced. Eliminating these stocks changed the results dramatically. Taking ouIy higher priced stocks the average fall for all issues was only 17.4. Furthermore, the three exchaoges were much closer in average results. The mean drop for NYSE issues was 16.6. For ASE stocks it was 17.7 and for OTC stocks 19.0. Almost all the extreme declines-those in tbe 50-r-greater range occurred in low priced stocks. There were, on the NYSE, only 5 issues that dropped more than 50, 1 on the AMIDe aod only 14 over-the- counter. Another interesting facet of the survey was in the dates on which highs aod lows were made. The various highs seemed to be scattered rather evenly throughout the first quarter of the year As far as the low. were concerned, though, the results were quite different. For the S & P 500, the lowest closing level of the quarter was 394.50, posted at the very beginning of the three-month period on April 8th. Two subsequent drops in late April and mid-May beld well above this level in the 410-408 area. The June 18th bottom was at 400.96, still well above the early April figure. For individual stocks, however, almost half posted tbird-!usrter lows in the period May 28-June 26. This figure held true pretty much across the board and there was very little difference in the patterns for the three excbanges. We have hed then, in the first six months of the year, sizeable corrections in a large number of individual stocks. These severe corrections, though, were concentrated in lower-priced issues, maoy of them traded in the ASE aod OTC marts. The decline for investment-grade stocks, the figures suggest, bas been less pronounced. ANTiiONY W. TABELL, CMT Dow Jones Industrials 3330.29 DELAAELD,HARVEY,TABELL Standard & Poors 500 411.76 Cumulative Index (7/1192) 7397.30 No statement or expreSSion of opinion or any other matler herein contained IS, or IS to be deemed to be, directly Or indirectly, an offer or the soliCitation of an offer to buy orsett any security reterred Co or mentioned The matter rs presented merely (or the convenience of the ubscnber While we beheve the sources of our rnformatlon 10 be reliable, we In no way represent or guarantee the accuracy thereol nor of the statements made herem Any achon to be taken by the subSCriber should be based on hiS own mvestlgahon and Information Delafletd, Harvey, Tabett Inc, as a corporation and lIs officers or employees, may now have, or may later take, poSitions or trades In respect to any secuntles mentioned In lhls or any future Issue, and such posilion may be dlHerent 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 Independently of any statements made In thiS or In any other Issue Further Information on any secunty mentroned herein IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 085435209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 July 10, 1992 Reacting to the June employment figures released late last week, the Federal Reserve cut the discount rate to a thirtyyear low of 3 percent, which in tum signaled a cut in the Federal funds rate. This was followed shortly thereafter by cuts in – – . the prime rate to 6percent lead by New Yoljc City.moneynterbanks. Bond price.,not surprisingly,advanced. ALthe same time the Dow Jones Industrial Average continues to move ahead and continues to outperform all other broad based indicies, masking a picture we feel is clearly not representative of the overall stock market. One exception to this picture is the interestsensitive sector of the stock market, which would include the financial and utility groups. The discrepancy of the interestsensitive sector Versus the general market can best be shown by examining daily breadth of the market data. The chart below shows the behavior of daily breadth in a different manner from the traditional total issues trade breadth index, and enables us to examine this important segment of the market. CUlUATlVE 11m I'tIUtRUD STOCK BlttAIU 11100 tUU..olUYI! IfrS COIIICIM UOOC IItUDTK IIIDU The NYSE, for some SIXty five years, has recorded the advances, declines, and uncha'lged of all issues traded. More recently, breadth figures have become available for common stocks only. This new series, constructed as a breadth index (advances minus declines divided by total issues traded), is shown in the middle third of the chart above. As expected, this common stock index behaves in a similar manner to that of the traditional total issue breadth index. By subtracting common stock issues from total issues traded, we are also able to develop a preferred stock breadth index, representing approximately one-fifth of the total issues traded. This interest-sensitive index is shown above in the upper third of the chart. Both of these breadth indexes are compared to the DJIA in the lower tlurd of the chart from the August 1982, low to date. In the ten year period examined, the uruverse of preferred stocks listed on the NYSE has remained relatively constant. However, a secular increase in common stocks traded on the NYSE exists with recent additions havmg some uruque characteristics Those would mclude American Depositary Receipts (ADR), Closed-end Mutual Funds and, more recently, Preferred Equity RedemptIOn Certificates (PERC), to name a few. A clasSiCal breadth divergence can be pointed out on the chart above where the common stock breadth index spent most of the second half of 1983 declining, wlule the DJIA went on to new highs in October 1983, This divergence was followed by a correction, 15.59 percent, in the DJIA, lasting until July 1984. The preferred stock breadth index during this period, however, went to a new high, reflecting the ongoing strength in the interest-sensitIVe sector dunng the general market declinmg. By hIndsight, we also know a breadth divergence occurred prior to the October 1987 correction; i.e., breadtb reached a high in March 1987 while the DJIA went on to further highs which were not confirmed by breadth. A siDlllar divergence was registered pnor to the October 1990 low. As the preferred stock index continues to move into new high temtory, it becomes more apparent the mterest-sensitive sector of the market, representmg a major component of the stock market, has been relatively outperfonning the market. However, the common stock breadth mdex currently is still well below its high achieved last February. Were the short-term strength in the DJIA to continue to new high, a breadth divergence of over 100 days would then eXlst, a confirmation of a new high in common stock breadth becomes difficult, Dow Jones Industrials (1200) Standard & Poor's 500 (1200) Cumulative Index (7/10/92) RJSaa 3326.51 414.58 7006.00 Robert J. Simpkins, Jr. Delafield, Harvey, Tabell Inc. No statement or expression of op'nion or any other mailer herein contained IS, or IS to be deemed to be, directly or Indirectly, an oHer orthe soliCitation of an offer to buy or sell any security referred to Or mentioned The matter IS presented merely for the convenience 01 the subsCriber While we believe the sources 01 our Inlormatlon to be reliable, 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 investigation and information Delalield, Harvey, Tabellinc as a corporation and its officers or employees, may now have, or may laler take, posItIOns or trades In respect to any secun\les mentioned In thiS or any future Issue, and such pOSition may be different from any views now ur hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With the SEC as an Investment adVisor, may 9,ve adIJlce to rts 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

TABELLS MARKET LETTER 5 VAUGHN DRIVE. CN 5209. PRINCETON. NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC 1609) 987-2300 – July 17, 1992 We recently found ourselves in a mild dispute with a local professional gentleman regarding the amount of his fee. Basically, the practitioner was asking for a sum exactly twice-;'ha(Weared appropriate–fenseltii1siti;n-. noted that the-o we thought reasonable had been the going rate as long ago as 1986. That claim initiated, on our part, an entirely unrelated train of thought. Quite obvIOusly, our antagonist considered it absolutely normal that a fee being charged today, in 1992, be double that charged as recently as six years ago. The implicit assumption was that most prices bad doubled in those six years. It was an assumption of which, had we chosen to put on our economist bat, we could have disabused him. The latest figure for the Consumer Price Index, which uses 1982-1984 as a base of 100, is its June level of 140.2. The corresponding figure for June, 1986 is 109.5. The overall price level for the past six years, therefore, has increased, not by 100, but by 28.04. The magnitude of this difference becomes even more apparent when one converts the six-year change to an annualized percentage rate. A 100 increase over six years translates to an annual rate of increase of 12.24. The actual increase over the sixyear period was at an annual rate of 4.2 . In other words, an educated, literate citizen was implicitly assuming the mflation rate over the past six years to bave been almost three times what it had actually been. The difference between the two approximate rates is particularly significant when one projects them over an extended period of time, say ten years. At a four-percent rate, prices will increase by a bit under 50 over a decade. This can hardly be called stability, but it is a great deal better than the tripling of prices which would take place at an annual inflation rate of twelve percent. Now tbis may simply be taken as an example of what mathematician John Allen Paulos has called, in tbe title of his book, Innumeracy. There are, however, other implications. Most of us know, indeed, that the rate of inflation in recent years has been approximately four percent. If asked, this is probably tbe answer we would give. Is it poSSIble, though, that imprinted in our thinking, albeit unconsciously, is the implicit assumption of a higher rate There is some reason for such an imprint. We have, on occasion in the past, experienced double..figit infiation—12.2 in 1974, 13.31 in 1979, and 12.4 in 1980. These, however, are tbe only years since tbe end of World War IT that greater-tban-lO -i;C7.;;s.;s iDtheCPI have occurred-. -The rate has-been under five percent in all but one of the past ten years anQio30-yearsiritie pasf 44. Nonetbeless, the thought seems to persist in the minds of many that a lugh rate of inflation has reguarly been the case in the past andlor is likely to be tbe case in the future. AJI this raises the question of whether many investment decisions may in fact be being made under unconscious assumptions that, rationally, we know not to be true. The current steepness of the fixed-income yield curve may be an example of an unconscious assumption regarding inflation. Investors, at the moment, demand an interest rate for 30-year bonds more than twice the current rate on Treasury Bills. Certainly there is, in tlus sharply positive slope, an assumption of some sort regarding a future high rate of inflation. Indeed. as far as interest rates are concerned. investors seem to be operating on a number of assumptions which are contrary to most recent experience. In terms of an historical framework, current long-bond yields-seven-plus percent for governments. correspondingly higher for high-grade corporate debt–are on the high side, suggesting the existence of a built-in assumptIon that the long-term trend of interest rates is upward and of bond prices, therefore, down. Yet over the past ten years precisely the opposite has been tbe case. For the decade of tbe 1980's, tbe total return on long-term corporate bonds was actually slightly greater than tbe corresponding return on common stocks despite the fact that the decade saw one the the great common-stock bull markets of tbe century. Somewhere in the investor's mindset, in other words, is the assumption that normal bond market behavior is that of the 3S years through 1980, dunng which time, a generation long, bond prices beaded generally south. Sidney Homer, of course, pointed out years ago that the most recoglllzable Interest-rate cycle is the very-long-term one—twenty years or more. Yet bow many analysts have forecast tbat the bond market trend of the past ten years is likely to continue in the same direction for the next ten What implicit assumptions, then, are being made regarding the stock market It is certainly a matter of common knowledge that, on an historical basis, current equity prices are at record levels vis-a-vis present earning power. There certaInly exists an assumption here of Increasing earnings and a conventional recovery from the recession. ThJs indeed may yet take place. but its likelihood is not supported by the most recent data. S&P 500 earnings declined for nine often straight quarters through the end of 1991, rose only marginally in the first quarter of this year and are not expected to increase all that much in the second quarter. Investors are willing to pay prices for common stocks which strongly suggest that the trend of the last two-and-a-half years j, about to be sharply reversed. To be fair, this argument can be turned around. The current high valuallon levels for equities do not constitute a new phenomenon. They have been in effect for some years now. There is at least some justification to the view that supply-demand factors currently justify higher price levels for stocks than those that have prevailed in the past. II has been said that the market discounts and, at times, appears to display foreknowledge of future events. There is also evidence, though, that it tends to ignore recent history, continuing to believe that what has been true for long periods in the distant past will continue to be thte in the future, despite an abundance of contrary evidence. ANTHONY W. TABELL, CMT Dow Jones Industrials (1200) 3327.59 DELAAELD,HARVEY,TABELL Standard & Poors 500 (1200) 414.16 Cumulative Index (7116/92) 7514.68 No statement or expressIon of oplmon or any other matter hereIn contained IS, or IS to be deemed to be. dIrectly or indIrectly. an offer or the sohcltatlon of an offer to buy or sell any secuflty referred to or menlloned The matter IS presented merely for the convemence of the subSCriber WhIle we believe the sources of our InformallOn 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, 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. Tabell Inc 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 avallabte on request ,. 1

TABELL9 S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 July 24, 1992 The DIIIrlet over the past couple of weeks has begun to show some-very tentative-signs of technical improvement. After – reacbing itS all'time-high of 3413;21 on June lsI;-the Dow bouomed at 3274.12 on-June-18th.-That low was successfully tested on July-' ,,- 8th at 3293.28, and, at Wednesday's close of 3277.61 , was tested again -with, indeed, a subsequent rally. This series oflows seems to be probing the strong support at 3300-3200. Meanwhile breadth has held well above its mid-June level on both July lows. I I I I IFTSE The decline producing this week's test was ostensibly the result of DAX SloP weakness on European DIIIrlets, engendered, most recently at least, by 1987 Low 64 60 66 central bank efforts to support the dollar. Indeed, since late May, London's FrSE Index is down 12.4, and the German DAX is off by 10.3. These 1990 HIgh 101 125 110 drops greatly -exceed the 4.2 fall of the S & P in May-June to a low 1991 HIgh 110 109 1t 8 (400.96) that it finds itself, at the moment, comfortsbly above. In simplest terms, this can be seen as nothing more than a 1992 HIgh 1 t2 115 125 continuation of the U.S. DIIIrlet's long-term outperformance of European July 23 1992 98 103 marts, a phenomenon that has been going on since 1987. The table at left 122 shows the British, German and U.S. DIIIrlet averages indexed to make their respecltve 1987 highs equal to 100, giving each average's high for 1990, 1991 and 1992, together with yesterday's close. It is apparent that, since 1991 at least, the American market has clearly been the better performer. It is interesting that, at Thursday's close, the FrSE was actually below its 1987 peak and the DAX not much above it. (The 1987 high for the DnA, remember, was 2722.42.) It is not yet, in our view. time to predict disaster for the two major European indices, 2750 …despite their recent sharp corrections. In many r ..ways, indeed, their patterns are much like our ii.own. They have recently posted highs on which .. ..they have been unable to follow through, – -comparable-to -tbe -June -I—close-above-3400'on-the ……. …..DJIA, and tbey are at th. moment testing prior …..important lows. The London pattern is depicted Z500 2250 2000 1150 1500 ' I,I. I ,' … u , XI Jhh lUJI h ,I II III g B!!;u i ;. I ! i,'–,- hlI ,,I I. ' hu.i ,;.. h hh, . – , , I …. ..on the 50-point-unit cbart at the right. As can be ..seen, a break below 2300 would be necessary to ..complete a top formation. Such a break has not 12.50 ,, ,, 1000 yet taken place. Moreover, as can be seen, strong support eXlsts from just below current levels all ' the way down to 2000. The DAX pattern, shown at left below, is SO. 14p AN etfAN B1 4N 8e PAN 11'1 PAN 90 AN 91 AN 9 not unlike that of London. It did, recently, break below a short-term top wben it fell below tbe 1800 FTSEl00 INDEX 50 POINT level, but tbe downside target of that top, at 1600, bas just about been attained. As is the case witb Great Britain (and, for that matter, our own market) powerful support is found close to present prices, at 1600-1500. Unlike the case in the U.K., though, tbere remains heavy overhead supply left to penetrate from the substantial top formed during 1990. However, more than is the case in London (and .lOOO m'. .iinoD II , I, 1&00 ii !i! ,1.1I 110D 1800 ISOO 1'00 III!ii! I , I'ihl Ihllll! ….,.. – – .r– ! hll pl 'I I ''1I.,'1,.,10I .n.!'' I'lillii' 1IIIHIh…. ,I' . …. -.- II' ! p p I;' UOO also more than with our own indicators) there exists an important post-1990 base which indeed suggests significantly higher levels– possibly as high as 2400 or 50 above current prices. A .break below 1500 would, of course, call this pattern into question. We have not mentioned the most important overseas market–the one which li off our Pacific rather than Atlantic coast. We sbowed a chart of the Nikkei back in March suggesting that the then downside breakout (to 20,000) 'looks .AN .N 82 like a killer.' Following today's close around OAX INDEX (Garmany) 20 POINT 15,500, the lowest level since April, 1986, tbe chart does not look any better. Indeed the disturbing feature of the TokYO DIIIrlet is the minuscule volume suggesting a terminal decline whicb could be serious and protracted-as was tbe case with our own market in 1930-32. Technical work continues to suggest the advisability of approacbing prospective Japanese equity investment with extreme caution. ANTIIONY W. TABELL, CMT Dow Jones Industrials (1200) 3290.31 DELAAELD,HARVEY,TABELL Standard & Poors 500 (1200) 411.35 Cumulative Index (7123/92) 7444.86 No statement or expression of oplnlon or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offeror the soliCitation of an offerlo buy or sell any secuflty referred to or mentioned The matter IS presented merely for the convenience of the subscrtber Whtle we beheve the sources of our Information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herem Any acllOn to be taken by the subsCriber should be based on hiS own Invesllgahon and Information Delafield, Harvey, Tabellinc as a corporation and lis officers or employees, may now have, or may later take, positions or trades In respect to any securl!les 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 Informallon on any secuflty menlloned herein IS available on request