filE COft Walston &- Co. Inc Mernbe,'s New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 8, 1960 After two days of sharp rally, the market sold off m the final two sessions of the week and lost all of its previous gains, plus a bit more. The Dow-Jones Industrial Aver'- age moved above the August high of 683.90 to reach 688.21 on Tuesday. However, the new high was caused mainly by strength in two issues, General Electric and Eastman Kodak. Also, the Dow Industrial average was the only one of the important averages to reach new h1gh territory. I have expressed concern in my last two letters about the poor technical action of Jhe ma,r!et despjte the strength,jn the .averages . lVIost of this concern has been about '-0. the poor breadth-of-the-market behavior.- Strength has been cen'tered in -afew stocks, . while the great majority of issues are moving sldewise or are in downtrends. This indi- cates a loss of upside momentum. Actually, this 1S not an entirely new development. lVIy advance-decline index started to show detenoration as early as April. When the mar- ket turned down in August continuation of this action was to be expected. But since late September the index has failed to turn around with the advance in the market averages, and desp1te the 75-pomt advance on the Dow Industrials, the advance-decline mdex 1S at just about the same point it was when the average was 615. Other breadth-of-the mar- ket indices, such as new highs and new lows, advancing and declining volume show, at best, neutral action. As I noted in recent letters, I had hoped these indices would start to show better action after the turn of the year. So far this has not occurred. These indices must continue to be watched closely. One of the more encouraging bits of technical action has been the above-average action of the Rall average. While the Industrials have 1 advance from the December 31st intra-day low, the Ra11 average at Friday co 1GB. 10 was still well above the December 31st low of 153.36. Thls eth ' . t h i long period that the Rails have shown better action than the Industn n lt inues for a while it may mdicate an important change in earl. pressed group. , As far-at'nhe g'eneral-market is'co e' d, S' alfacts-must'be borne m mind. The advance that started in e fore, subj ect to wide price n. wh\M s ed a mature stage and is, thereadvance starts, the initial move is almost the entire k e here are only a few backward groups. It usually takes abo 0 complete this initial upward surge. After that time period is reac d, th rket becomes more selective and price swings become wider. In past letter ave compared the present market to the 1953-1957 I'lse. On that occasion, a I' the market had ltS initial upswing from September 1953 to March 1955, there were five wide price swings before the move ended m June, 1957 and a 200/0 decline followed. The initlal phase of the present market ended in August of th1S year. Since then, the entire market has failed to participate in advances and price corrections have been wider and 1t has been increasingly more difficult to select advancing stocks. I suggest you read over the reprmt sent you in November of my talk to the Arizona Bankers Convention. In it, I suggested that we are probably in the final phase of the advance that started in 1949. After it ends, it will be followed by a long and lengthy consohdation phase. From here on, wide price swings are to be anti- cipated, Present investment polIcy indlCates'a.graduallightening of accounts durmg, periods of strength. All stocks will not reacli their highs at the same time. l! said in lo.st week's letter that most analysts ippear to be looking for new highs in the 700-750 renge to be made sometime m mlddle or early 1960, followed by a reaction m the latter half of the year. Recent action leaves some doubt as to the ability of the averages to reach the upper level mentiGI'ed o.bo\'c. Dow-Jone's Ind. 675. 73 Dow-Jones Rails 158.10 EDMUND W. TABELL WALSTON & CO. INC. ThiS market letter IS not. and under no Clfcumltnnces IS to be construed as, an offer to sell or n sohcltatlOn to buy any cecurit\CS referred to herem The mformabon contamed herem IS not guaranteed as to accuracy or completenE'!S8 nnd the furfllshmg thereof IS not, and under no CIrcumstances I'; to be construed as, a representa '\ tlon by Walston & Co., Inc All expressions of oplfllon are lIub)ect to change Without nohce. Walston & Co, Inc, and Officers, Directors, Stockholders and Employees theroof, purchase, sell and may have an interest In the secUritIes mentioned herem This market letter is mtended and presented merely as a genera\, … mformnl commentary on day to day market news and not as a complete anah-sls Addlbonal informatIOn 'Ith respect to any securltles referred to herem WIll be upon r e q u e s t ' \\ N 30t I

/- FILE Walston &Co. —–Inc —– Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 15,1960 The market declined sharply on the first three days of the week and regained only a portion of the losses by the end of the week. At the week's intra-day low, the Dow-Jones Industrials reached 653.11, which is a declme of over thirty-five pOints from the all-time high of 688.21 reached on the first trading day of the new year. The decline in the Rail average was less severe. From a high of 160.90, it declmed to a low of 155.51. Referrmg to my letter of December 30th, it 1S a discouragmg fact that the DecemJ;ler 10ws..9f 658.48 .on the R'LI'Jopes the Standard&- Poor's IndustriafIndex were both January 12th, the earliest in the past twenty-five years that such a breakout has taken place. The low of the previous De- cember was broken in twelve of the past twenty -four years. In each case, the down- side breakout occurred in the early months of the year, mostly in January or February. In most cases there was a fairly substantial decline from the earlier h1gh of the year. In the worst case, it was 46 1/2/0 in 1937. In 1956, the subsequent decline was only 5/0. The average of the twelve years was a decline of 200/0 from the high to the low. However, the sharpest declines were in the seven cases prior to 1947. In the five declines since then the average decline from the high to the low has been 12/0. In seven mstances, the market closed lower on the year, but in four cases a subsequent rally from the lows resulted in a higher closing for the year and in one year the market was unchanged. In the worst decline (1937) the market fell 43/0, and in the best of these years (1938) the market was able to record only an 11/0 advance. These flgures are all based on Standard & Poor's 0 On the more encouraging side of the mar;Mt w s th the Rail average. I mentioned this in last week's letter ont' a to show above average action during the past week. The rails hoi; a portlOn of their advance from- the December-31 st–1owof-15 thWa y-4th' hlgh-of-1-60790 .'—'. This, of course, is only or sitlve action would be the ability to push above the high O\JIh nt technical pattern of the rails is most interesting. It 1S 1t is possible that the pattern has long term 'v Ab1lity to hold around present levels would glve indic '0 to tltude toward this unfavored group might be changing. There 1S, of rse, no change as yet in the breadth-of-the-market action which has be giving unfavorable warning Signals for the past few weeks. Until these indications change, I would contmue to adopt a very cautious attitude toward the market and lighten commitments on strength. It is also imp0rtant to watch the relative strength action of each mdividual group. During declines like the past week important clues to the identity of the leaders of the next rallymg phase are quite often given. The stocks that show the best downside resistance or relative strength',even though they are declining, are more often than not the leaders of the next advancing phase. For example, in 1957, durmg the early stages of the decline, the favor- able relative streI1gth of gr2'lPs as the food, chai);!!!, foods and tobaccos, indicated that they might be the leaders of the next rallying phase. It mIght be a bit early to select comparable groups for the present, but if the favorable relatlve strength of the rails continues, they will be among the candidate s. Dow-Jones Ind. – 659.68 Dow-Jones Rails – 157.98 EDMUND Vl. TABELL WALSTON & CO. INC. This market letter IS not, nnd under no circumstances 15 to be construed 8S, an offer to sell or a sohcltatlOn to buy any securities referred to herem The mformatlOn contamed herem 18 not n.s to nccuracy or completeness and the furnlShmg thereof IS not, and under no Clrcumsto.nces IS to be sonstrued as, a representa- bon hy Walston & Co. Inc All expressIons of opmlOn are to change WIthout Walston & Co, Inc., and Officers. Directors, Stockholders and Employces thereof, Pllrchn'le, sell and may have an mterest m the securltJes mentioned herem ThIS mnrket letter IS mtended and presented merely as general. \vUmformal commentary on day to da)o market ncws nng not as a complete analYSIS AdditIOnal information With respect to any secul'ltJes referred to herein I furnished upon request.

t;r Walston &- Co. FILE CO Inc Members New YOk Stock Excilange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 22, 1960 The market continued its decline in the early part of the week and the Dow-Jane Industrial average reached an intra-day low of 641.40. The RaIl average, at the week's low of 154.42 was stlll above the December 31st low of 153.36 and is the only one of the four Dow-Jones averages that is higher than the year-end closmg. The Industnal average is down over thirty paints. The market appeared to develop some resistance as the week ended. As I wired early in the week, there is a support zone at 640-630 which should furnish at least temporary resistance. Also, a number of leading issues have reiched or are approaching downside potentials for the shader term. There is no chang as yet in the unfavorable breadth of the market, but this will take time to develop. A few groups are beginning to show improvmg relative strength, but this also will take time to develop. Aircrafts, mining and smelting and natural gas are showing improvmg patterns. There is quite a divergence between individual issues in each group, however. The stocks mentioned m my recommended list for long term 'holding are also showing divergent relative strength patterns. The following are showing the best longer term relative strength action Butler Bros. (375/8), Cluett Peabody (58 1/4), Coca Cola (154), Consolidation Coal (36), Electric Storage Battery (60 1/4), Fansteel (63), Ferro Corp. (46 3/8), Fruehauf Trailer (26 1/2), Great Northern Paper (50 7/8), Great Western Sugar (31 3/8), Heinz (86 1/2), Kaiser Aluminum (49), Magnavox (36 1/8), Monsanto (49 1/2), National Distillers (33 1/4), Rayonier (25 7/8), Singer Mfg. (55 1/2), U. S. Foil B (41 5/8), West Virgima Pulp & Paper (52), Westinghouse Elec. (103 1/2) and Wilson & Co. (40 1/8). The last stock, Wilson & Co., has been held of its plants. It would appear that a full operation of pla t i troubles at some probabIlity and that the growth trend in earmngs will be resUd.,Af e urr abor trouble is ended shortly, it would appear that earnings of 5.p01 share Id be possible for current year ending October 31st. cause of labor problems and a flre ur' t s ,in\tM' 1 iscal year were cut ber probably cost the company 25 a share in earnings. Earnin s ar 1959 of 3.85 were well above 1958 earnings of 3.10. In Limited (18 1/8) also appears to be an interesting p ki of its South Am 'c 0 u more speculative than WIlson because selling around six times estimated earnings of 2.80 to 3.00 fo . Other issu s i list have been showing less favorable relative strength, but appear to be ne ownside potentIals. Amencan VIscose (40) may work a bIt lower into the 39-35 support levels, but should be a good long term holding. Earnings will be somewhat lower because of the tlre yarn price war, but are estimated at 4.00 to 4.50 a share for 1960. The aircrafts have shown poor long term relatIve strength action, but the shorter term Implications are Improving. Northrop Corp. (30) and Rohr (16 1/2) could rally from present levels. The oils have been below average performers, but Royal Dutch (43 3/4) has been showing some improving technical actlOn. Would switch Shell Transport (21 3/4) and Union Oil (38 5/8)into Royal Dutch (43 3/4). Getty Oil (17 1/2) can be held for a rally. The airlines are approaching downside potentlals and appear oversold. Northwest AIrlines (27) which reached its technical downside potentlal of 24, appears more attractive tha-n Pan American (20 1/8). Chicago; & Pacific (24), m the group, has shown better technical action recently and merger possibilitles with Rock Island indIcate the stock still has most interesting long term potentials. Newport News Shipbuilding (35 1/2) and Schenley (31 3/4) are near support levels, but may be slow. Dayton Rubber, International MinErnls and Pennsalt Chemical are showmg average relative strength, but I am removing them from the list in favor of the group m the second paragraph. EDMUND W. TABELL Dow-Jones Ind. – 645.85 V;C;,LSTON & CO. INC. Dow-,rone s Ralls 155,63 Thl mnrket letter IS not, and under no clrcumstl\Tlces IS to be const-rued as, an off!' to sell or a sohCltution to buy any 8ccunbes l'.efcrrcd to herein The informntlOTl contamed herem 15 not gunrnntccd as to aCCUl'ncy or completeness nnd the furnlshmg thereof IS not, and under no Circumstances is to be construed as, a rcprC'lentahon hy \\'alston & Co., Inc All e'tpresSlOns of opinIOn nre subJect to change Without notice Walston & Co, Inc., nnd Officers, Directors, Stockholders and Employees thereof, purchase. sell and may ha\'e an mtcrest m the SecUritIes mentIOned herem ThiS market letter IS Intended and presented merely as a Itencrnl, mformal commentary on fin)' to ilay market news and not as a complete analYSIS AdditIOnal mformntlon With respect to any securities rderred to helIn furm;hed upon request. – —-….-.;;

fiLE COpy Walston &Co. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADElPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER January 29, 1960 The market continued its declme for the fourth successive week. At Fnday'se intra-day low of 619. 51, the Dow-Jones Industrial average was off 69 points from the- all ,time high of 688.21 reached on January 4th, the first trading day of the year. The Industrial average appears to be approachmg a test of the September intra-day low of 613.30. The Rail average has a somewhat different pattern than the Industrials. The Rail average reached its low in late November at 145.19, and while it has reacted, the decline has been mild as compared to the Industrials. The week's intra-day low was 1509 ' The breadth-of-the-market index,whlch has been the main source of my concer I.' about-tlfemarket' since'late-Decembe'r; unfav'orable actioh'IChas reached'- ) low below the level reached in September despite the fact that the Industrial average is still above Its September high. The main function of this breadth-of-the-market index i to give warmngs of a possible change m trend. When both the averages and the index a moving in the same direction, the trend then in force is liable to contmue. In the Nove ber-December rise, this typeDf action did not occur. The Industrial average rose fro a November low of 630.99 to over 680, but the breadth-of-the-market failed to rise wit the average and thus gave a cautionary signal. Now both the average and the index are in gear and are both moving downward. The next signal of a change in trend of more tha short term sigmficance will probably be given by the breadth-of-the-market index. If i can reverse its downtrend, whIle the average is still moving down or sidewise, a signal of intermediate significance would be given. I have several other indices of market breadth besides the one mentlOned above that also mIght give change of trend signals. These other indices are all either unfavorable or neutral at the moment. The fact that these signals give no indication at the moment of a chans'n does not preclude the chances of a good techmcal rally m rna et pr sent decline could be reaching a temporarily oversold p osition eh' rally could occur. The type of reversal signal given by the breadth- – e-ma index would be of inter,- mediate reaches new lows. The table when the Industrial – – ,. me of trading on the days in January five pOints. Januar January 1 th January 1 V 3,760,000 3,020,000 3,100,000 660.43 653.86 645.07 6.73 5.82 8.79 January 5th January 28th January 29th 2,790,000 2,630,000 3,060,000 639.07 629.84 622.62 6.78 7.83 7.22 It WIll be noted that volume has not increased on the declme, indicating a drying up of buying rather than heavy llquidation. This does not preclude a day or two of heavy volume for a selling climax. Relative strength patterns are also important to watch at this stage. The groups and individual issues that show abIlity to resist a downtrend are usually the leaders of t e next advancing phase. Relative strength group figures for the past week are not yet avai – able at thIS writing, but if the reader wishes to check near term relative strength actio he might take his Sunday newspaper, or-Barron's, on-Monday and check the week's ran e of prices and note the issues that either closed higher on the week or had only moderate declmes. If volume was heavy – so much the better. Watch the subsequent action of thes stocks over the next week or so as compared to the averages. In a market such as this, investor confidence or lack of it is probably the most i portant influence on prices. This factor is dIfficult to evaluate.A technical approach to t e problem is probably the best method to gauge the investor confidence factor. What h most optimistic and the most pessimistic potentials on technical graphs for the foresee future On the upside I see a potential 700 and a less llkely 750. On the downside proje ion I see 600 and a less llkely 550. This range could hold the market for a year or two. vestment policy should be to lighten commitments in below-average issues as the upper limits are approached, and to add to commitments in issues with a favorable outlook wh the lower limits are approached. In more understandable price terms, the market now selliflg at eg has B de ovflsiae 56tential 6 68 65 ana ali ap!ieie 156tcntiai of 1'8 1'5. ry'he 1 a t tiflt, of OPinIOn are subJect to chanKe Without nollce Wnlswn & Co, Inc, and Officers, Directors, Stockholders and may hu\c an interest In the securities mentioned presented merely as n general, oemformnl commentary on clay to clay mtlrket news and not as n complete analysis Addlbatr.4.Hri-fe/rhinltlior'…. ltH f\f)O t. referred to herein ''.Ill he \\ N 301 e