Viewing Month: March 1971

Tabell’s Market Letter – March 05, 1971

Tabell’s Market Letter – March 05, 1971

Tabell's Market Letter - March 05, 1971
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TABELLS MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE MEMBER AMERICAN STOCK EXCHANGE March 5, 1971 As might be expected after a three month rise which moved the Dow up nearly 150 points, . a period of relative lassitude temporarily overtook the stock market. After reaching an intra- .—- ……– …,…- '''. – – . -;- -o… – …,…, — -., – — . . . – ,;' .;;'–..-. '0-.' / day peak of 898.14 on February 16, the Dow put on a minor 2 decline in four days to an intra- day low of 861.99. For the next two weeks, relative firmness prevailed but little or no upside I momentum was generated, and volume dropped off to around the 13-14 million share level vs. the average 20-million share peaks that prevailed in the terminal stages of the advance. Actually, in the past three weeks, the market's internal technical position had improved rather noticeably. The 10-day plurality of advances over declines had, by mid-Tanuary, reached 3847, by any standard, indicative of an extremely overbought condition. 10-day upside volume by mid-February was up to the 120 million share level, a newall-time high and an equally un- tenable figure. For the 10 days ended Wednesday, advance-decline figures had changed to an almost 1600 plurality for declining stocks — a level suggesting a mild oversold condition — and upside volume had dropped off to the 63 million share level. Thus, a substantial amount of internal correction had taken place during the IS-day period of sideways movement. Thus, it was not that surprising when, on increased volume, the Dow burst to a new closing high in Thursday's trading. It is probable that a new minor advance has started which will attempt to carry the index through the next major supply level located at 900-925. The test of that supply will be extremely interesting, for a failure to move through the overhead resistance could possibly result in a distributional top large enough to suggest a more important correction than has been seen for the bull market to date. The present correction potentialities are miniscule. The possible top pattern now -existing suggests not111ng-'n6re1han a downsfde target in the 85'0-845 area It ouldal's-o''C'b-e''''''''''I .. possible for the Dow to continue to move sideways in the 860-900 range and, as it did after a similar consolidation last November, embarking on a straight-line rise through the 900-925 supply. The other downside possibility, as mentioned above, is a broadening of the distri- butional top which would ultimately suggest an objective lower than 850-845. The worst foreseeable action at the moment, therefore, would be either a decline to about 850 in the relatively near future, or dullness at around current levels that might last into the end of March or mid-April. Either of these two possibilities would be consistent with the slope of the uptrend which characterized the market from May of last year to three weeks ago. That uptrend can be mathematically described by a channel some 72 points wide whose upper limit, at the moment, is around 910 and whose lower limit is approximately 837. The upward slope of the channel is approximately one Dow pOint per day so that a decline to 850- 845 any time within the next two weeks would serve to bring the index to the bottom of that trading channel. If the market simply moves sideways, the lower limit of the channel will reach present prices in three to four weeks. Thus, as can be seen, either an immediate correction or a consolidation phase would be consistent with the market's behavior since May. Continued upside action in the upper part of the channel would also confirm the existing up- trend pattern. Meanwhile, the rotational leadership discussed in last week's letter continues with -, , –cyclical groups-in cgeneralcoming'to 'thefore -Thus the DowTones'Traifsp6itation'average;- .. although lOSing momentum, was edging into a new high ground while the industrials were correcting. The defensive, non-cyclical utilities show a different pattern, having essentially edged lower ever since the end of Tanuary. However, the lack of any serious distributional top on the utility index and its closeness to support suggests that this decline may be reaching its terminal phases. Thus, while the immediate future is perhaps clouded, the market remains firmly in the grasp of a long-term uptrend. Investmentdecisions should be made in that light. Dow- Tones Ind. (1100 a. m.) 896.36 ANTHONY W. TAB ELL S&P (1100 a.m.) 98.60 DELAFIELD, HARVEY, TABELL AWTmn No stotement or expression of opInion or any other matter herem contained 15, or 1510 be deemed 10 be, dlrcclry or indirectly, on offer or Ihe sollcitallon of on offer to buy or sell any security referred to or mentioned The molter IS presenled merely for the conver-lenCI; of the subscriber While -Ne believe the sources of our IIlformo- lion to be reliable, we In no way represent or guarantee the accuracy thereof nor of the stotements mude herem Any actIOn to be token by the subscriber should be based on hiS own ITlvestlgolion and IIlformalion Janney Montgomery Seoll, Inc, as a corporation, and Its officers or employees, may now have, or may toter toke, positIOns or trades III respect to any ,ecuntles menlloned III thiS or any future Issue, and such position may be different from any views now or hereofter expressed m thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment odvlsor, moy give adVice to Its IIlvestment adVISOry and othel customers Independently of any stolemenls mode In thiS or III ony other Issue Further Information on any securoty menTioned herein IS aVailable on requesl

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Tabell’s Market Letter – March 12, 1971

Tabell’s Market Letter – March 12, 1971

Tabell's Market Letter - March 12, 1971
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———-'———————————————————————- —- TABELL-S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE MEMBER AMERICAN STOCK EXCHA.NGE March 12, 1971 Following the three-.eek period of torpor,. a weeJ ago, volu.me has, returned, t; .the …, –'-''- vhich elidd — – ' ..0,.- . – – – —— —-…; st)('m1i1'ket,–althOugh;tnis-time;-the frenetic -pace of trading has been accompanied by a good deal – .-less upside progress. Most comments on the week's tradmg activity seemed to center around the attempts of the Dow-Jones Industrial Average to break the 900 level, a price level repeatedly attained during the week on an intra-day basis, but which, through Thursday at least, could not be achieved at the close . . A good deal of talk about 900, of course, was based on nothing more than the theory, which has always been somewhat incomprehensible to us, that a three-digit number ending in two zeros some- how has more significance than any other. It does, however, happen that the general area around 900 in the Dow does have more than passing importance and the reason for this importance is worth discussing. The reason the present price area is of considerable Significance is that it represents the most important level of overhead supply with which the 1970-1971 bull market has had to contend in its short nine-month life. The concept of overhead supply is, of course, basic to technical analysis. The theory states Simply that when a stock — or an index — trades at a given price level for a protracted period of time and then moves lower, any subsequent attempt to penetrate the original price level will be met with some difficulty. The reason for this lies firmly grounded in human behavior. A stock- holder who sees his stock hold between, say, 45 and 50 for some time and then break sharply to 30 is going to berate himself for not having taken the repeatedly-offered opportunity to dispose of his holdings above 45. It fOllows that any return to that level may well stimulate him to sell, and, if a 1- ..dsiurf-feiectiernptronpuemrtbioenr 'ao-fl.i.tnov4eshteoarmsouancttothfitsrwaadyi,ngs'utphparlytoits5kthpursaccereaattlende, 'oarnidgltnhael amount of su j)i'lce level. pT;p';ll1hy,e-it;sli;e-'o-ry-',…,….. operates in exactly the same way on an average such as the Dow. Now, for the three years, 1967-1969, during which the distribution leading to the 1969-1970 declIne took place, the Dow held in a range between 760 and 990. The following table breaks this range down into IO-point brackets and shows the number of trading days and the total volume in millIons of shares which changed hands at each of these various price levels. The numbers speak for themselves. The market spent more time trading in the 900-910 range and traded more volume at that level than any of the others. And, in fact, 38 of the tradmg days and 39 of the volume in 1967-1969 was spent inthe area between 880 and 930, precisely where the average is today. As the market attempts to chew into this supply, it is logical to expect heavy offerings and thus high volume with little upside progress — precisely what is, in fact, taking place. Price No. Days Vol. This of Tot. of Tot. Level This Level Level Days Volume Price Level No. Days Vol. This of Tot. of Tot. This Level Level Days Volume 760-770 770-780 I 1 12.840.14 11.88 0.14 0.15 0.14 880-890 890-900 56 57 621.37 666.86 7.70 7.84 7.48 8.03 780-790 11 132.07 1.51 1.59 900-910 64 738.97 8.80 8.89 790-800 8 88.54 1.10 1.07 910-920 49 597.65 6.74 7.19 800-810 17 190.63 2.34 2.29 920-930 55 646.75 7.57 7.78 810-820 17 168.20 2.34 2.02 930-940 40 472.28 5.50 5.68 820-830 830-840 27 278.45 3.71 44 469.11.-.,6,,05 3.35 940!950 26 333.04 3.58 4.01 5. 65 ……….950,-96026 349-;-683584–21- 849.J'850 56 567.59 7.70 6.83 960-970 20 291.10 2.75 3.50 ,.s50-860 42 428.21 5.78 5.15 970-980 11 180.78 1.51 2.18 ,,,860-870 48514.426.60 6.19 980-990 4 61.980.55 0.75 870-880 47 486.70 6.46 5.86 TOTAL 727 8308.36 100.00 100.00 As we have suggested before, we expect the present test ultimately to be successful, at least in- sofar as the averages are concerned. We are, however, more skeptical of the ability of a number of stocks to penetrate comparable overhead supply and believe that, as this supply is reached, the market will enter a much more selective stage. The past nine months, dunng which almost all stocks shared, to a greater or lesser degree, in the general ebullience, are unlikely to be repeated. Dow-Jones Ind. (1l00 a.m.) 897.18 S&P (1100 a.m.) 99.25 AWTmn ANTHONY W. TAB ELL DELAFIELD. HARVEY, TABCLL No statement or eypreSSlOn of opiniOn or ony other moltl!' herein contolned IS, or IS to be deemed to be, dtrectly or indirectly, an offer or the sollltctlon of an offer to buy or sell cny security relerred to or mentlaned The matter IS presented merely far the canvellence of the subscnber While we believe the sovres of avr Informahon to be reliable, we In no way represent ar guarantee the aC(uracy thereof nar of the statements mude herein Any action to be taen by the svbscreber shovld be based on hiS own Inveshgallon and information Janney Montgomery (;Oit, Inc, as a corporation, and lis officers or employees, may now hove, or may later tal.e, pOSItions or trades In respect 10 any secvrmes menl10ned In thiS or any Ivture Issue, and svch position may be different from any views now or hereafter expressed In thls or any other Issve Janntly Montgomery Scott, Inc, whICh IS registered With the SEC as on Investment adVisor, may give adVICe 10 liS Investment adVisory and othel cvSlomers Independently of ony statements made In thIS or en any other Issue Further Information on any securety mentioned herein IS ovalloble on request

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Tabell’s Market Letter – March 19, 1971

Tabell’s Market Letter – March 19, 1971

Tabell's Market Letter - March 19, 1971
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———————————————————————————– TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE MEMBER AMERICAN STOCK EXCHANGE March 19, 1971 The stock market last week continued to display the same sort of strength and vigor that has be- come its hallmark since last November. Monday's trading, commg after a week of sideways action, sa1(l',theSO0.Jevelonthe DowfinaU-penetratedwithalh–alm0st-IO-point'UdvanGe-to-aclo singhigh of 908.20. This advance was further extended in early trading Tuesday before reaction set in which continued through noon the following day. Then the tide was abruptly reversed and what had started as a seven-point decline turned into a day of almost no change. The advance continued on Thursday as a new bull-market high of 922.30 was reached. The action of the Industrials was mirrored in the Transportation Index which, early in the week, also reached a new peak, although here the followthrough was not quite as vigorous. Of more importance was the strength shown by the Utility Average which reached an intra-day peak of 125.70 on Thursday. Unlike the broader averages, the Utilities have been in a downtrend since the last week of January. An ability to reverse that trend would be constructive, and such a reversal would probably be signaled by a penetration of 126.50 on an intraday basis. The most recent phase of the rise, the one which began in mid-February, has, it must be admitted, displayed somewhat less vigor than some of the earlier stages. For the first time, breadth has begun to lag a bit behind the averages, and the new highs in the major indices posted a week ago were not confirmed by advance-decline action until this week's move. Also, as pOinted out two weeks ago in this letter, high-low indices continued to show some deterioration. None of this, we hasten to add, constitutes anything more than evidence that the bull market is approaching a vigorous middle age. Confirmation of a new high by market breadth normally lags in all but the very early stages of a bull market, and the action of this week can be interpreted as nothing more than an indication that the bull is growing old gracefully. It would, furthermore, be logical to expect some minor weakness i/Llljewo.f,Jh e,sgppl .factors..mentioned….,n.Jhi.s..J.etteI-Jast..week-F-lI'thervid enee o.of4h e cexistenGe of that supply could be adduced from the late tapes which prevailed during the week's trading, suggesting an abundance of small offerings being absorbed as the market moved ahead. While the bulk of technical analysis, in our opinion, should consist of sound statistical reason- ing, there must be, it seems to us, a good deal of the subjective attached to the analyst's thinking. One of the subjective evidences of the market's strength, we think, is the fact that worries about the end of the bull market still persist. A question we are asked frequently runs something like this. We know you are bullish, but what would the market have to do in order to make you change your mind The question is always a difficult one to answer. We have a difficult enough time as it is analyzing the lines already on our charts. The analysis of lines that mayor may not be there six months from now is almost impossible. The first thing, paradoxically enough, that the market would have to do to show deterioration would be to post a decline of some magnitude — something it hasn't done in over six months. We would then have a bench mark and the subsequent rally could then be viewed in the light of that decline and its ability to continue to a new recovery high. This, after all, is what technical work going back to the Dow theory is all about. It would not work, of course, if the market, after it preCipitately moved to a new high, dropped off with equal sharpness. However, markets, historically, have not behaved that way. Declines of major proportions are invariably preceded by top formations and it is the job of the technician to recognize those formations when they occur. Portfolio. management ,in ,a.bull.market ,it.seems.to.us ,ds.muchlike,driving.acar.at-night.The – headlights allow a limited vision of the road ahead and, as long as it is clear, the traveller proceeds in relative serenity. Quite obviously he remains alert, but, were he to continually worry about obstacles just beyond the range of the headlights, he would turn himself quickly into a nervous wreck. At the moment, all technical signals suggest that the stock market road ahead is clear, and the investor who worries about what might happen beyond his field of vision is dissipating a good deal of intellectuql energy that could better be applied elsewhere. Bull market conditions have been defined as conditions under which the investor, with application and skill, can achieve respectable results through selection of indiVIdual common stocks without regard to what market conditions might do to otherwise sound stock values. Such conditions, quite obviously, exist at the moment,and it is to the process of stock selection that the investor should devote his energies. Dow-Jones Ind. (1l00 a.m.) 916.28 S&P (1l00 a.m.) 101.07 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stat to buy han to ement or eprcsslon or sell any security be relIable we In of optnlon or any o referred /0 or mentio na way represent ar ther maN ned The guarante er here'n contOined IS, or mottcr IS presented merely e the accuracy thereof nor IS to for of t be the he deemed to be, dnecl!y or Indirectly, converlenCE of the subSCriber While statements mude herem Any actIon t on oNe ob offer or belIeve e taken bttyhheethseo0u1srucl(bllssoclroIl0fbneoruorfshoonunflooftfbeer based on hIS own'mvestlgatlon and InformatIon Janney Montgomery Scott, Inc, as a corporatIon, and lIS offIcers or employees, may now have, or moy later take, pOlhons or trades In respect to any seCUritIes mentioned In thIS or any future Issue, and such posItIon moy be different from any vIews now or hereoJter expredsedhm thIS or any olher Issue Janney Montgomery SCali, Inc, whIch IS regIstered WIth the SEC as on Investment adVIsor, may gIve adVICe 10 Its mvestment a visoryon at el ClJslomen mdependently of any statements mode In thIS or In any other Issue Further informatIOn on any security mentIOned here, IS avaIlable on request

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Tabell’s Market Letter – March 26, 1971

Tabell’s Market Letter – March 26, 1971

Tabell's Market Letter - March 26, 1971
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TABELLS MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE MEMBER AMERICAN STOCK EXCHANGE March 26, 1971 Two weeks ago in this space w scuss, at some length, theheavy oved supplywhich- – . 'exTstea-arotind'the gel area- of'890930intlffiboWJOn'es Indli'rtriai'S.- -SInCe that t!m'e, the- oe' – — havior of the market, as it traded in the supply area, has been absolutely typical of an overwhelming demand for stock running head-on Into an equally powerful level of offerings. In this l1gh—r;–last week's performance was absolutely normal. On March 18, the Dow reached its high to date at an intra-day figure of 922.30. Three successive days of mild decline finally led to a lO-point rout in Wednesday's trading, and this continued early Thursday as the 900 level was repenetrated on the way down and an intra-day bottom of 889.03 was reached. Then demand reasserted Itself and the market recovered almost all of its earlier losses in Thursday afternoon's activity, continuing the advance back up through 900 on Friday morning. The most logical market expectation, at least for the near term, is more of the same, It is our belief that, at present levels, the market is undergoing what is, by all odds, Its most important test since the rise began last May. In a sense, what has happened over the past 10 months is that the market has removed the element of irrational fear that became a part of the stock price structure during the terminal phase of the 1969-1970 bear market. The bulk of stocks have now returned to what could be called a normal price level — one which does not include fear of what lies ahead but which, conversely, does not reflect undue optimism about the future. In other words, for the first time the advance has reached a stage from which It could be turned back. We emphasize could, because we do not think it will be — this optimism being based on the view that the economy is improving to a greater degree than the cynics would have us believe, It is this improvement, we think, that is not yet reflected In the price structure, and, if, as, and whe!1 ,.nimprovin9sn.9my.mat.!'rializes, !t ,can ,weJ.btl!.I,..ReJ-Lect,-i,j)1 btjI..sg\lltY.llrjes . …, In such-an environment, -attractlv-e inestment opportunities Can- be found in those areas where a good deal of fundamental optimism is, in fact, justified. Such is the case, for example, among a broad spectrum of Issues which are In a position to benefit from the drastically-changed monetary climate of the past year. Many investors, especially those who have been concentrating on the amazing performance of the stock market, failed to note the equally dynamic drop of interest rates, especially short-term rates. Three-month treasury bill yields have dropped from over 8 in January, 1970 to under 3.5 recently, and federal funds from 9 to 3. All of this has, of course, been a reflection of the huge infusion of money into the economy, and a sluggish demand for loans, which has produced a meteoric rise in bank reserves and in the monetary base. Paradoxically enough, the most Important beneficiaries of this trend will be money lenders. Despite the fact that the interest rates which they charge for loans are declining, banks will benefit from widening profit margins due to even greater reductions in borrowing costs and the availability of additional funds which will enable them to handle the credit needs of secondary as well as prime clients. Also in a position to benefit from the greater availability of credit will be savings and loan issues. A high rate of savings gives the S & L's more money to lend, and lower interest rates, which have the effect of reducing monthly mortgage payments, make more families eligible for mortgage credit — all this taking place during a period of huge pent-up demand for housing, Insurance com- panies also, enjoying capital gains from their stock and bond portfolios, should do well under anti- cipated conditions of continued monetary ease. A number of financially-oriented stocks have attractive technical patterns. In the banking area, Chase ,Manhattan Corporationv(57) .has ,a -nearterm -objective of.77.followed .-by higherlevels with —-I strong support in the low 50's. Chemical New York CorpOration (66), with support at 60, has a 90- 104 price target. Among savings and loans, the quality issue in the industry, First Charter Financial (48) has an Intermediate-term price target of 70 with support at the 45 level. Great Western Flnancial (27) also appears technically attractive with a preliminary 40-50 price target. In the insurance field, Aetna Life &.Casualty (58) has an 80-92 objective and Travelers Corporation (37) has a 50-80 poten- tial. We think that financial stocks should form an important part of conservative investment port- folios in 1971. Dow-Jones Ind. (1100 a.m.) 905.19 ANTHONY W. TABELL S&P (1100 a.m.) 100.04 DELAFIELD, HARVEY, TABELL AWTmn No stalement or expression of opinion or any other motter herein contomed IS, or ., to be deemed to be, directly or indirectly, on offer or the sollCltahon of an offer to buy or sell any security referred to or mentloncd The mailer IS presented merely for the conVCllcn. of Ihe subSCriber Whde -Ne believe the sources of our tnformatlon 10 be rellcble, we In no way represent Of guarantee Ihe accuracy thereof nor of the statemenls mlde herein Any odlOn 10 be token by the subscriber should be bosed on hiS own Investlgahon and Information Janney Montgomery Seoll, Inc, as a corporation, and ItS officers or employees, moy now have, or may later toke, poslltons or trades In fesped to any securilles mentioned In Ihl5 or ony future .ssue, and such pOSition may be different from any views now or hereofter eypressed In thu or any other Issue Jonney Montgomery Scoll, tnc , whICh IS reglltered With the SEC as on Inveslment adVisor, may give adVice 10 lIs InvestmCnt adVISOry and othel customers Independ!!nt!y of any statements mode In thiS or In any other Issue Further Information on any security mentioned herein IS available on request

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