Viewing Month: August 1971

Tabell’s Market Letter – August 06, 1971

Tabell’s Market Letter – August 06, 1971

Tabell's Market Letter - August 06, 1971
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEM8EFI NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE August 6, 1971 – Egui! mrkej)!\lEgLa9iJnearlyadil!.teekwith th 120w.reaching '!.Il. i!l!rad;cay-'I low of 840.10 on Wednesday. Early weakness was stemmed by a mild rally on Thursday -and early Friday. As stock prices plunged to new lows, financial page headlines continued to feature news of the weakness of the dollar in international currency markets. Financial commentators, unfortunately, have an irresistible urge to find reasons for all market movements. It now appears assured that, for better or worse, the current decline will wind up in the history books as being caused by the 1971 dollar crisis. Thus there will come into being yet another firmly-rooted myth to go along with the ones about the 1962 break having been caused by unkind words from the President about U. S. Steel and the subsequent bottom having something to do with the Cuban Missile Crisis. Rational discussion of what is going on in world money markets is difficult — due partially to the fact that these markets constitute a complex phenomenon that few understand coupled with the fact that the views of a great many experts tend to fall into the category of religious belief rather than reasoned opinion. Furthermore, as we attempted to suggest above, we don't think that an exhaustive probe into the world monetary situation is particularly central to the investor's dilemma at this point. We suspect the present weakness is yet another instance of the age-old tendency for the market to do what it is technically ready to do in the first place and to find a plausible excuse as it goes along. We have commented in the last few issues of this letter on the extremely rapid deterioration that had been taking place in the market's ,J.—re—-'i1hntcalcondition'and 'it istothat 'teChniCalcondition;we'thtnx;-wemustluokfor 'clues a s'I to the proper investment stance. We can summarize our own view by saying that 1) we would tend to be skeptical of any rally that took place from current levels, but that 2) we would be willing to make selective purchases into any further substantial weakness. This reasoning can be clarified by a look at the present technical picture. In terms of the Dow (patterns on the other averages are roughly similar) there are two plausible downside objectives, one, relatively conservative, at 840-835, and another, representing the most pessimistic possible reading at the moment,of 760-750. The first objective, of course, had just about been reached at this week's low, and it might, therefore, be a plausible assump- tion that the intermediate-term decline has or is about to bottom around current levels and, that after the requisite period of basing, the market is gOing to move higher. There remains that risk, though, of the pessimistic objective being the correct one and, from the 850 level on the Dow, that risk is substantial. We would, therefore, be willing to watch any current rally from the sidelines and assume the risk of having to rebuy at higher levels were the market subsequently to demonstrate improved internal strength. By contrast, further weakness would produce a number of effects. We would be that much closer to the most pessimistic downside objective and that much further below the level the market could be expected to regain on an upside pullback, thus improving the risk/reward ratio. — Moreover, and this, is probably.the most important factor in our thinking ,.a further decline … would produce an oversold condition, characteristic in the past of major stock market bottoms. Rallies from this sort of oversold condition have proved highly dynamic in the past,and we would be inclined to participate if the same sort of deeply oversold condition were now to occur. It must be stressed, however, that, as of week's end, such a condition had not mani- fested itself,and that such a manifestation would still require somewhat lower prices. Whatever the eventual outcome, the current decline itself signals, quite obviously, that the character of the market has changed dramatically from that which existed between August, 1970 and this Spring when the only plausible assumption as to market action was that of a con- tinuing uptrend. Certainly such an interpretation is not possible at the moment and, in light of this, continued mild skepticism appears advisable until eVidence of improving technical action asserts itself. DOW-Jones Industrial (Noon) 850.54 SSP (Noon) 94.27 ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL AW;C;mQrnent or express!on of opinion or any other matter here'n contolned IS, or IS to be deemed 10 be, directly or ,ndlrectly, on offer or the SOl,Cllollon of on offer to buy or sell cny security referred 10 or mentioned The molter IS presented merely for Ike convellence of the subscriber While we believe the sources of our Informotlon to be reiroble, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be token by the subSCriber should be based on hiS own Investigation and Informallon Jonney Montgomery Seal!, Inc, as a corporation, and Its officers or employees, may now have, or may later toke, poslllonS Of trades In respect 10 any securities mentioned In thiS or any future Issue, and such POSition may be ddferent hom any views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered WITh The SEC as on InvestmenT adVisor, may give adVice to Its investment adVisory end other customers Independently of any statements mode In thiS or In any other Issue Further Informohon on any securoty mentioned herein IS aVailable on requet

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Tabell’s Market Letter – August 13, 1971

Tabell’s Market Letter – August 13, 1971

Tabell's Market Letter - August 13, 1971
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—————————————————————————————————————- TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORk STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE August 13, 1971 Anyone who looks only at the popular stock market averages has a fairly well-defined idea as to just what the stock market has done over the past year. From May, 1970 through April, 1971, the Dow scored 'I – ,anac'lvcmce of,jusLover50candhas,. in the.past three .monthsretracedoj!lsLbouJ the ,clasir ,i. of that advance. A closer look leads to two conclusions, (I) that the recent advance was, in actuality, more dynamic than that shown by the averages and, (2) that the subsequent decline has been, to date, a highly diverse affair. The following table shows the action of 99 S &P Industrial group averages In terms of their percentage advance from their 1970 low to their 1970-1971 high and the percentage of that advance retraced at recent levels. As the table shows, 69 of 99 groups have chalked up better advances than the averages. In terms of subsequent retracement, some groups have retraced their entire advance and are selling at new lows while others, so far, have hardly been affected by the one-third retracement in the averages. It Is an old Wall Street saw that the stocks to buy on a market tum are those which have gone down the most and those which have gone down the least and, like all such adages, it has an element of truth. Those naturally inclined toward bargain hunting can find numerous candidates in the table. On the other hand, those groups which have shown above-average strength in both the rising and falling cycles could, if that strength continues throughout the decline, be outstanding performers on the next market advance. !etrace- !etrace- Retrace- Adv. ment Adv. ment Adv. ment Aerospace 82 49 Meat Packing 65 6 Restaurants 144 12 Air Freight 126 49 Fackaged Foods 31 31 !etail Strs-Comp 72 19 Air Trans port 147 52 Forest Products 32 72 Department 82 19 Aluminum 32 Atomic Energy 95 93 Gold Mining 76 8 12 Home Furnishings 100 20 Discount Strs Food 133 5 39 4; Auto Parts 68 Alto Truck9-f6rts 79 Brewers 47 Distillers 28 Soft Drinks 55 Bldg Comp 50 Air Cond 39 Cement 63 Heating-Plumb 25 Roof-Wallbrd 63 Cbnt-ilk1al-Glas s 35 Cont-Paper 64 Copper 23 v m, 13 Lead-Zinc 18 91 28 Leisure Time 137 13 20 Machine Tools 55 53 41 J\;jricultural M3.ch 53 55 10 M3.chirery-Comp 24 15 27 Cbnst-Mat'l 71 30 19 Industrial 60 25 44 M1Serv 01 Well 109 11 149 Specialty 58 26 23 9eam Gen EqJip 119 26 72 M9talFabricating 78 41 40 M9tals Misc. 24 123 101 Mobile Homes 203 9 mau v.uc. Variety Shoes Soaps Steel Suga!'-Comp Beet Refiners Cane Refiners Sulphur Thxt-.'\pparel Mfrs Thxt-&ynth Fibers Text Products Tire-Rubber 1bbacco-Cig Mfrs 114 79 49 16 63 54 90 75 68 56 38 45 75 13 21 0 112 40 50 31 62 43 27 81 22 21 Cosmetics 63 Drugs 42 Eectrical Equip 61 Elatron M3j Cbs 78 Elec Hmse App 73 Electronics 89 Finance Cos 49 fuBll Loan ecs– 84 30 Motion Pictures 95 51 Toys 88 22 Office Equip 57 47 Truckers 128 21 Offshore Drilling 173 15 Vending Mach 87 33 Oil-Comp 54 27 Electric Cos 24 8 Crude Producers 125 6 N'lt'l Gas-Dist 30 48 DomIntegrated 5220 N'lt'l Gas-Pipe Ln 43 40 Int'l Integrated 49 29 Telephone 32 -33-Paper–' -'2!i-71–BankS-NYC – – – 38 63 0 8 46 32 38 69 – 60 Food-Composlte 35 Biscuit Bakers 42 Bread-Cake 120 Canned Foods 36 Com Refiners 35 Dairy Products 47 17 Pollution Control 92 21 27 Publishing 94 37 56 Fadio-1V-I3rdastelS 103 14 I Fadio-'lV-Mfrers 133 30 54 Railroad Equip 49 27 19 Real Estate Chemicals 79 42 52 63 Bituminous Coal 117 35 B.s-Outside NYC Sav-Loan bId Cbs Ins – Life Ins-Multi Line Ins-Prop-Liab Investment Cos Confectionery Conglomerates 44 88 50 50 90 24 60 95 32 39 21 12 6 54 21 41 The stock market made Its most convincing attempt so far to reverse the Intermediate downtrend with the Dow rallying from midweek to reach the 860 area early Friday. The deep oversold condition reached on Wednesday, the steepness of the rally, and the fact that one downside objective had been reached at the week's lows make an Intermediate term bottom at least plausible. In any case, however, a period of base building will be required, and we would prefer to observe this period before stating with certainty that the decline from the April highs had been permanently stemmed. Dow-Jones Industrial (1100 a. m.) 859.67 ANTHONY W. TABELL SeeP (lliQQ a;FR.) 96.99 ;QJ5LnJ'IEJ.Q, IIl\Wl'f, TABEbb AWeoT11ftement or expression of opInion or any oTher matter herein contained 1, or IS to be deemed to be, directly or indirectly, on offer or the sollcllol10n of on offer to' Ettiy or sell any secvrlty referred 10 or mentioned The moiler IS presented merely for the convenience of Ihe subscnber While we believe the sources of our Informa- tion to be rehable, we In no way represent or guarantee thc accuracy hereof nor of the statements mude herem Any aelion to be taken by the subSCriber should be hosed on hiS own investigation and mformatlon Janney Montgomery Scott, Inc, as a corporation, and Its offICers or employees, may now have, or may later fake, POSitiOns or trodes In respeel to ony secuntles mentioned In thIS or ony future Issue, ond such position may be different from any views now or hereafter expressed In Ihls or any olher Issue Janney Montgomery Scott, Inc, which 1 registered With the SEC as on Investment adVisor, may ,live adVice to lis Investment adviSOry and other customers Independently of ony statements mode In thiS or In any other luue Further mformatlon on any secuflfy mentioned herein IS avo liable on request

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Tabell’s Market Letter – August 20, 1971

Tabell’s Market Letter – August 20, 1971

Tabell's Market Letter - August 20, 1971
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—– ——– ———- -c—- – I TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – – u . -W '…. p s. August-20,d-971,……– A number of years aqo Charles E. Wilson, then Secretary of the Treasury and previously of General Motors Corporation, was heard to utter the phrase What's good for General Motors is good for the country. He was, thereupon, castigated soundly in the nation's press. The criti- cism was, to a degree, unfair since it was obvious that Mr. Wilson really meant the phrase to be turned around — to say, in other words, that General Motors was an important institution in the U. S. and that thos e developments which advanced the U . S. economy had, of neces sity, inure toG M' s benefit. The criticism, however, had a tiny core of validity, for it is always danger- ous to identify parochial interests with those of the nation at large. Those of us associated with the stock market are as prone to this weakness as anyone else. We tend to feel that what is good for the country is good for the stock market and vice versa. Over the long range there is no doubt that this is true. But the stock market, for all its importance, is not the country or even the economy. It is thus at least as important to look at the stock market itself rather than at the economy in order to forecast the stock market's behavior. The above preamble is, of necessity, a long and windy one, but it is appropriate, we think, to what happened in the stock market last week. Let no one underrate the importance of last weekend's economic mes sage to the long-range future of the U . S. economy. It is our own belief that, when historians ultimately come to view the chain of events which President Nixon's actions on the dollar last week will set off, these events will constitute one of the most important econo- -mic..turning..points0f..the2 OthGentury.We .tb j nktbevision.shown.b–theadministration.in .this – step is so far reaching as to be almost breathtaking, and, in the long run, the sort of economic climate the new monetary policy will engender must be benign for future stock markets. Having thus indulged ourselves in pontificating, we must climb down off our cloud and address ourselves to the less glamourous task of guessing what the stock market is likely to do. The conventional wisdom quite clearly believes that the importance and drama of the Nixon speech is, in itself, sufficient to stem the market decline in effect since last April and to set prices off again on a new upward course. The facile comparison is with 1968 when PreSident Johnson's decision not to seek reelection set off the April Fool's Day Rally which led, in turn, to six months of a highly dynamic equity market. The case is a plausible one, and we would not care vehemently to dispute it. We beg forgiveness, however, for a timorous desire to await more evidence before embraCing the conventional doctrine wholeheartedly. It is absolutely true that rallies of the breadth and magnitude of last Monday and Tuesday have invariably, in the past, been associated with m a j 0 r , albeit occasionally temporary, stock market bottoms. It is likewise true, that 840 on the Dow, the point at which the market turned even before this week's rally, constituted one downside objective for that index. Nothing that has happened over the past week or two has been at all inconsistent with a market ready to re- sume a sharp upward trend. And yet a number of the problems that were facing the market before last weekend are still there following the President's speech. We have noted before that the central dilemma.facing ie;;..- -Ulemarket was tiiElevidentPul;iiC(iise;chantentwlth reis far too early to tell whether the confidence in President Nixon's new economic policy is going to reverse that tide of disenchant- ment. Thus we had, in July, the third consecutive month of net mutual fund redemptions. It will be mid-September or mid-October before we know whether this trend and other indications of public disinterest in equities have, in fact, been reversed. It would take very little, we admit, to convince us that the stock market tide had, in fact, turned — at least for the near-to- intermediate term. Continued basing action in the 875-900 area could, in our view, forge the last link in a persuasive chain of evidence suggesting that the market indeed had begun a new upward leg. It is our intention, however, to wait for that last final link to be forged. Dow-Jones Industrial (1200 Noon) 879.89 S&P (1200 Noon) 98.23 AWTmn ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL No statement or expresSIon of opinion or ony other matter herein cont(lIned 1, or 1 10 be deemed 10 be, directly or Indirectly, em offer or the 011(1Iollon of on offer to buy or 5e1l ony security referred to or mentioned The motter IS presented merely for the converolence of the subscriber. While- 'He believe the sources of our Informo tion to be reHoble, we ,n no way represent or guarantee the accuracy thereof nor of the statement!. mude herem Any action to be taken by the !.ubscnber should be based on his own Investlgallon and information Janney Montgomery Scoll, Inc, as 0 corporation, and Its officers or employees, may now have, or may loter take, positions or Irodes In respect 10 any securities menhoned 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 Janney Montgomery Scott, Inc, which IS reglered With the SEC as on Investment adVisor, moy give adVice 10 lis Investment adVisory and othel customers Independently of any stotements made ,n thn or In any other ISsue Further mformatlon on any seevrlly mentioned herein 1 available on requesl

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Tabell’s Market Letter – August 27, 1971

Tabell’s Market Letter – August 27, 1971

Tabell's Market Letter - August 27, 1971
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r ———————– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGe, INC MEMBER AMERICAN STOCK EXCHANGE – – August27, 1971 We confessed in last week's letter the desire to v;,ait for ii- bit more evidence befcir pron-eo'u..,n–….-.-… — cing the market totally recovered from its pre-Nixon debacle. We must admit that last week's performance went a long way toward providing that evidence. In a powerful extension of the rally on Monday, Tuesday and Wednesday, the DJIA chalked up a 27-point advance before turning irregular at week's end. In the process, the blue-chip index penetrated the trading range between, roughly, 840 and 900 which had contained it since mid-June and which can, we think, be proper- ly assumed to be a base. The rally since the August low has, moreover, been accompanied by highly satisfactory breadth. Our breadth index moved above its comparable late June peak on Wednesday — the same day on which the Dow scored its upside penetration. This coincidental confirmation is generally the precursor of a reasonably healthy rally. If we are convinced that the path of least resistance is upward, harder questions such as How Far and For How Long are immediately raised. In attempting to find answers, it is well to recall that we cannot erase past history. It is a fact that between April 28 and August 10 the Dow posted a 11.7 decline. It is a fact which we will have to keep in mind regardless of what the market does from here on out. Let us try to clarify this. Short-to-intermediate-term market downswings are often called, in technical parlance, corrections. The term is semantically unfortunate. The implication is that somehow, having undergone a decline of some magnitude, the market has mysterious ly purged itself and is thus in a better technical position than it was before. This is like saying that a man who has recovered from a near-fatal disease is a better health risk than fie was Defore the–c,…d disease's onset. The stock market has just proved that it was vulnerable to a llO-point decline. That vulnerability has to be kept in mind in the future. This is precisely what we had been trying to suggest statistically before the Nixon rally re- versed the intermediate term downtrend. A month ago we pointed out that a reading of the record showed that declines of the present magnitude had seldom, iJ ever, occurred in the early or middle stages of bull markets. They were, indeed, more characteristic of top formations and/or bear markets and, to the extent that they occurred within the context of major upswings, tended to occur late in those upswings. The recent improvement in the market's technical condition has not changed the statistical evidence. With this background, then, we can approach the question of trying to forecast upside targe1S. The base referred to above, at 840-900, indicates an upside potential of 940-945 0 nth e Dow. in other words, a return to approximately the level of the April high. In order to forecast higher levels, it is necessary to go back to the original base from which the 1970-1971 rally commenced. This base, as we pointed out as long ago as last Fall, has a possible potential of 1065. The reading, although called into some question by the action of this Summer, is still a valid one. To put it into perspective, however, it should be recalled that such a move could be produced by a rise of as little as 9 points in each of the 30 Dow stocks. What we are saying in terms of individual issues, of course, is that the rise, as it continms, – – mustinevitably 'develop 'iJre-ater' sele-ctivity;- Th-e-re-cent 'market'weaknes s infUcted' damage-on -,,- – –' the technical patterns of a great number of stocks. In some cases, that damage has been or will be repaired. In others the injury is unquestionably more permanent. It is possible at almost any time, other than in the final throes of bear markets, to find, among individual stock patterns, a number of reasonably attractive ones. Such is the case at the moment. The difference between the early and later stages of upswings is not so much in the existence of attractive patterns but the fact that, in the former case, almost no patterns at all indicate any substantial degree of downside risk. This is most emphatically not the case at present. The presence of this sort of risk in a number of issues is what we mean when we use the much-abused catch word, selectivity. Dow-Jones Industrial (1100 a.m.) 909.02 ANTHONY W. TABELL S&P (1100 a.m.) 100.58 DELAFIELD, HARVEY, TABELL AWTmn No stotement or e)(pre,slon of opinion or ony olher motter herCln contolned IS, or IS 10 be deemed 10 be, directly or indirectly, on offer or the solicitation of on offer to buy or seU ony security referred to or mentioned The motter IS presented merely for the conver-lence of the subscriber. While Ne believe the sources of our information to be reHable, we In no woy represent or guorontee the otcuroc;y thereof nor of the staTements mude herem Any octlon to be token by the subscriber should be based on hiS own Investigation and mformotlon Janney Montgomery Stott, Inc, os 0 corporohon, ond Its offlters or employees, may now hove, or moy lofer take, positions or trades In respect to ony securities mentioned In thiS or ony future Issue, and such POSition may be different from any VICWS now or hereafter C)(pressed In this or ony other Issue Janney Montgomery Scott, Inc, which IS registered with the SEC os on mvestment adVisor, moy give odvlce to Its mvestment adVISOry cnd othel customers Independently of any statements made In thiS or In any other Inue Further mformahon on any secunty menhoned hcrem 15 available on request

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