Viewing Month: October 1972

Tabell’s Market Letter – October 06, 1972

Tabell’s Market Letter – October 06, 1972

Tabell's Market Letter - October 06, 1972
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK eXCHANOE, INC MEMBER AMEFlICAN STOCK EXCHA.NGE October 6, 1972 RadlO soap operas used to conclude each epIsode wlth a pOIgnant question relating to the next day's instaltent '-s-!h. .tockma(kEtP9Sjd ..,juSLqch ,a queshon-last weec .It wa-s, .It Can1.mencan Telephone-.. surVIve Levitz Furniture . Conslder some of the paradoxes of the week just passed. The major averages closed the week moderately lower wIth trading volume contmumg around its recent desultory levels. Meanwhlle, Levitz, whlch had managed to declme almost 14 points In one day on mildly disapPOIntmg news Friday, con- tinued to constItute a major portion of New York Stock Exchange volume, all the whIle headmg in a general southeasterly directIon. On TuesdaY,American Air Filter, WhICh had announced some dlfhultIes In Its CanadIan subsidiary, lost 11 1/2 POInts, or better than 25 percent of its value, In a slngle day's trading. Early In the week Curtiss Wright had managed to loose 11 pOInts In three days, for no reason that was immedlately apparent. While all this was going on American Telephone reached- a new hIgh for the year, In the process postIng an important technical upside breakout, the first real sign of ImprOVIng technIcal actIon In the stock In a number of years. Standard 011 of New Jersey also reached the new high list and also posted a techmcal breakout which suggests higher levels. The message seemed to be that the widows and orphans shall mhent the earth. In a sense, last week's actIon should not be surprisIng since it was a contInuatIon of the sort of thing that had been gOIng on for some time. The relatively good actIOn of the market averages has been maskIng consistent erOSIon of equity prices which has been going on since early summer and which has tended to become obVIOUS only in dramatic cases such as those CIted above. For example, as of Wednesday's close, the Dow Jones Industrial Average was off by a bit more than three percent from its high for the year. Of 1428 common lssues whlch traded on the New York Stock Exchange that day, the average Issue closed down some 21 percent from its year's high, and half of all Issues were off from theIr h,ghs by amounts rangmg from 18 percent to 80 percent. Only 93 stocks were off from – —–th eI-f-,,;-year-! so!..h-lg hby-le 5 5 'than….the-'-Dow whereaS…5-stl csweres ell mg S-oercentr 'lTrore4Yel-owLhelr- ——- 1972 peaks. Clearly the averages have, of late, been outperforming the market. Now on a purely statistical basis, there IS no particular reason why thIS should not be so. Averages are, after all, composed of stocks, and if the stocks contamed In those averages happen to be dOIng better than most, the averages will present a somewhat dIstorted pIcture of what the average stock is dOIng. Such is the case at the moment. The Dow encompasses both Amencan Telephone and Standard Oil of New Jersey, clted above, plus two other mternatIonal OIls and a few other blue ch,ps whIch have been recent upside leaders, The Standard & PoorI s 500 IS largely mfluenced by the Dow-type blue ch,ps plus some of the larger growth favorites which, by and large, have held steady over the past few months. But one salty sage described a bear market by notmg When they back the paddy wagon up to the door, they take out the good girls along with the bad. Clearly for a substan- tial number of issues bear market condItions already eXlst. Thus the questIOn of whether Telephone can survive LevItz, Can we continue with a market where the averages hold steady and the speculative favorites are, one by one, shot from the sky–a phenomenon that mIght be described as rotatlonal collapse It is, of course, a questIOn WhiCh, from an investment policy pOInt of vIew, may not have to be answered. We have reached the pOint where high-grade, dividend-paymg companies, sellmg at historically low levels on an earmngs basis, compnse a liberal portlon of those stocks showmg the most dynamIC technical actIOn. Clearly, if a serious decline IS In the offing, the mvestor will feel more comforhble throughout that decline with stocks of the Telephone- Jersey genre. Technical work strongly suggests that the Investor in these stocks WIll also possess above-average capItal gains opportunities, should the market turn up Yet It must also be noted that, hlstoncally, relatively strong performance by high-grade issues vafollowlnganextended 'ad nce- h-as tendedTo–denoteth-eternunal' phase of iha(a'dvance . Yhls may be surprising to some whose memory of bear markets extends only to the most recent one, 1968-1970, In that decline, the blue-chIp-dominated averages topped out early, while a minonty of Investment and speculative favontes continued to move to new hIghs after the Dow had been headed downward for almost a year. If one goes back to prevIOUS downswIngs, however, the reverse has tended to be true. Most of the speculatlve favontes of the 1958-1961 advance made theIr h,ghs In late 1960 or early 1961, whereas the averages reached their peak In November-December 1961. It IS also worth noting that in the subsequent bull market, begmnIng in 1962, hlgh-grade Issues were leaders on the upside. General Motors, for example, reached ItS peak in December, 1961 along with the averages, and, in the subsequent downswing, declined only 2/3 as much as the average. From Its 196210w ithad, a year later,moved up some 80 percent and stood a healthy 30 percent above its 1961 hlgh. All of th,s makes the case In favor of quality at the present Juncture rather compellmg. Note Comments on Indlvld- uallssues are based on technical factors only. Further informatlOn is avaIlable upon request. Dow-Jones Industnals 200 p.m.) 935.20 S&P 02.00 p.m.)l08.40 AWT'rk ANTHONYW. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other motter herem conto,ned 's, or 1 to be deemed to be, directly or rnd,rectly, on offer or Ihe Sol,c,totlon of on offer to buy or Sell any secunty referred to or mentioned The moiler IS presented merely for the converlenCe of the subscriber While we beheve Ihe sources of our Informo- han to be reliable, we ,n no way represent or guarantee the accuracy thereof nor of the statements mude herem Any action to be tok.en by the subscflber should be ba5ed on hiS own rnvestlgohon and infOrmation Janney Montgomery Scott, Inc, as 0 corporat,on, and Its aff,cers or employees, moy now have, or may later lok.e, positions or trades In respect to any securities mentioned In thiS or any future ,5sue, and such pesltlon may be different from ony views now or hereafter epressed In Ihls or any other Issue Janney Montgomery Scoll, Inc, wh,ch '5 registered wllh the SEC as an mveslmenl adVisor, may give adVice to lIs mveslmenl adVisory and other customers rndependently of any stolements made In IhiS or In any other Issue Further ,nformatlon on allY security mentioned herem IS available on request

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Tabell’s Market Letter – October 13, 1972

Tabell’s Market Letter – October 13, 1972

Tabell's Market Letter - October 13, 1972
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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 October 13, 1972 – The, stockmarket stubbornlYlefus ed,.,.inla st-week1s-tradIng7to,resolve- the.-,j i-lemma noted – – in this space two weeks ago. At that time, we pOinted out that the Dow had reached its downside objective in the 930's. A week ago, on Friday, the index declined to that level again and then, in one of its typical responses to Mr. Kissinger's peregrinations, rallied sharply, thus creating, in effect, a double bottom. The rally, however, failed to follow through and peaked late Tuesdav. The slide continued through most of the week, and by mid-clay Friday the pre vvi ou s low had been penetrated by a fairly significant margin. This failure to hold would suggest that the thrice-tested low around 917, penetration of which would signalize a major downtrend, will be assaulted again. Anticipating breakouts is somethingthattechnicians, historically, are loath to do, but the continuing distributive action in more and more individual stocks tends to suggest a downSide rather than an upside resolution to the impasse. We are continuing this week with our review of major industrial groups. Comments are based on technical factors only, and further information on all issues is available upon request. OILS – In an atmosphere of general technical deterioration, this is one of the few groups showing dynamic upside action. This is probably attributable to a number of factors, including growing demand due to the energy shortage, resolution of political difficulties in the Middle East, and the fact that the stocks remain historically cheap on an fI'TliI1s and yield basis. The international, segment of the industry has shown the most outstanding action,and many issues in this group 9,QntinJ,letopp.earasattractiye.pur.chas,e-.candidatesAmongattractlvely-sHuatedst0C';sare- Phillips Petroleum (37), Standard Oil of California (72), Standard Oil of New Jersey (83), and Texaco (36). Pacific Petroleum (45) continues an attractive participation in the growth of Canadian oil and gas production. PAPER – As a group, these issues have tended to remain on dead center. Most are close to support and appear to present little downside risk from current levels. Relative strength has been average. Thus, while defensive quality and very long-range potential is good, they are probably best avoided until some sign of improving relative action manifests itself. PUBLISHING – This group as a whole has been turning in a below-average performance since the early part of 1972. Downside objectives are beginning to be reached, suggesting that the worst part of the decline may be over, but improving relative action will be necessary before they can be suggested as capital-gain vehicles. RADIO-TV BROADCASTERS – These issues have moved up sharply until recently, and it is highly possible that this loss of momentum indicates distribution. We would suggest consideration of profit-taking in this area. RADIO-TV MANUFACTURERS – Patterns in this group are mixed. Motorola (115) couldberebasing around current levels, and the ability to hold above 110 would be constructive. Magnavox (27) has reached its downside objective,but a period of basing w ill be required. RAILROAD – As a group, these issues appear to present only average attraction at the present time. RAILROAD EQUIPMENT – Such issues,as General American,Transportation(4J), Jullman(4!Land …;;.. 'U . S. Freight (28) recently retd i–dwnside objectives without destroying what have been favorable long-term patterns. They could well be attractive as purchases on weakness. RETAILING – This group, long considered a conservative and defensive area, has shown precious little in the way of defensive qualities so far in 1972, and most issues in this group have been trending downward, both relatively and on an absolute basis, since the beginning of the year or before. The notable exceptions have been such industry leaders as 1. C. Penney (84) and Sears (106), and even the latter is now beginning to show some signs of deterioration. Many grocery chains are selling at or close to ten-year lows and no sign of basing action is particularly apparent. In general the group appears best aVOided at the present time. Dow-Jones Industrials (1200 p.m.) 929.41 S & P (1200 p.m.) 107.77 AWTrk ANTHONYW. TAB ELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any otner motter herein contained IS, or . 10 be deemed to be, directly or mdlrectly, on offer or the sollcltallon of an offer to bvy or sell any secunty referred to or mentioned The motter IS presented merely for the conver'lence of the subSCriber. While we believe the sources of our Informa lion to be reliable, 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 Informollon Janney Montgomery Scott, Inc, as 0 corporation, and lIs officers or employees, may now have, or may later toke, positions or trades In respect to any ecurltles menlloned In thiS or any luture Issue, and such pOSition may be different from any views now or hereafter expressed In thn or ony other Issue Janney Montgomery Scott Inc, which 15 registered With the SEC as an Investment adVisor, may give adVice to Its Investment odvlsory and othel customers Independently of any stateTients mode In thiS or 11'1 any other Issue Further information on any security mentIOned herem IS avalloble on request

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Tabell’s Market Letter – October 20, 1972

Tabell’s Market Letter – October 20, 1972

Tabell's Market Letter - October 20, 1972
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCI( eXCHANOE, INC MEMBER AMERICAN STOCI( eXCHANGE 'r– October 20, 1972 The downward slide, which has characterized recent equity markets, abated, at least temporarily, in last week's trading as the Dow-l'ones Industrial Average, after reaching an – intra -day -low 'of '91'7,;-.Q,7On T'uesday iadvanced 'sharply-late' Tuesday 'and 'early 'Wednesda'Y'. ' Again the impetus was peace rumors, and again the damper thrown on those rumors at noon Wednesday halted the advance. We have pOinted out in this space innumerable times in the past that the stock market has a long history of finding excuses for what it was going to do in the first place. Readers will forgive our cynicism if we voice some doubts as to whether the fundamental trend of stock prices really depends on where Mr. Kissinger happens to show up on a given morning. More- over, while remaining devoutly desirous of a cessation of Vietnam hostilities, we feel compelled to suggest that a number of problems currently facing the equity market will not necessarily be resolved by that cessation. ' Yet, to those bullishly inclined, it must be conceded that, once again, the market decline halted in just about the right place. The low 900's on the Dow have represented an important demand area throughout most of the latter part of 1972. The importance of that area would be reaffirmed by the ability to hold around current levels. We complete this week our review of the technical position of major industrial groups. Comments are based on technical factors only, and further information on all issues is available upon request. RUBBER – Major tire companies moved up relatively little during the 1970-71 advance and have since retreated, generally, halfway to their 1970 lows. The trading ranges thus formed have substantial upside potential, but recent relative action does not suggest the imminence of an – ups-idebreaKom. l I SAVINGS AND LOANS – This is one of the few groups that was able to break through to new high territory in the face of decisive general market weakness. Most indiVidual issues have now retreated from their highs and are fairly close to good support. First Charter Financial (30) Great Western Financial (30) appear attractive. SOAPS – Both Colgate(80) and Procter & Gamble (99) had been upside leaders, before their uptrends flattened out in the early part of this year. While relative action has continued good, upside objectives had been reached at recent highs, and at least partial profit-taking might be cons idered SOFT DRINKS – The same comment made above applies to this group. Relative action has been good, but the stocks have advanced sharply from their lows and objectives have been reached. STEEL – Steel stocks, baSically dormant for more than ten years now, possess a huge amount of technical potential, but also give no indication that that potential is likely to be realized at any time in the visible future. Some of the smaller companies such as Carpenter Technology .llll and Lukens (20) have appeal as long-range speculations, but the larger companies still appear uninteresting. – — '. . . ——– — .. -, — –TOBACCO— -Recent -ac.t.io.n.o.f-t,his group has been highly di-sappo-in-tin-g-. -However, the-sto-c-k-s—-I are off sharply from their highs and have reacted back to the major demand level around the top of their 1962 -71 trading ranges. Some rebasing will undoubtedly be required, but they appear interesting for purchase on weakness, ,in particular Reynolds Industries (51). UTILITIES – It is interesting that,while the Dow Industrials are headed lower, the utilities, by contrast, are flirting with their six month's high, probably the most positive relative strength pattern developed by the group since early 1971. This is interesting, since many issues are still available at historically low prices and provide relatively generous returns. Gas pipe lines suchas Rlnhanclle Eastern Pipeline (40) and growth issues such as Texas Utilities (33) appear most interesting for the relatively aggresive Investor at the present time. Dow-l'ones Industrials (1200 p.m.)932.57 ANTHONYW. TAB ELL S & P (1200 p. m.) 108.19 A1AT Cork DELAFIELD, HARVEY, TAB ELL No statement or exprenlon of opinion or Clny olher moMer herem contamed 1, or 1 10 be deemed to be, directly or Indirectly, on offer or the sohcltotlon of on offer to buy or el' cny security referred to or mentioned The motter Is presented merely for the convef1lence of the subSCriber While we believe the sources of our Informa- tion to be relloble, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any octlon to be token by the subSCriber should be based on tm own Inveshgotlon ond information Janney Montgomery Scali, Inc, as a corporation, ond Its officers or employees, moy now have, or moy loter toke, positions or trades In respect to any seCUrities mentioned In thiS or ony future ISSue, ond such posillon may be different from any views now or hereafter expressed In thiS or ony other ISsue Janney Montgomery SCali, Inc, which IS registered with the SEC as on InvUlment adVisor, may give adlce to 115 Investment adVISOry ond athel customers Independently 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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Tabell’s Market Letter – October 27, 1972

Tabell’s Market Letter – October 27, 1972

Tabell's Market Letter - October 27, 1972
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——- TABELL'S MARKET LETTER I I J 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCk EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE October 27, 1972 Just four weeks ago, we used the following language in this letter. To begin with, the popular averages have remained, essentially, locked in trading ranges since the early part of ,1972. 'ktllcase ofotheDow, the,top ofthis.trading JangEl isataroundthe9aOleyel on an-, intra-day basis, this figure having been approached in Apnl, May- and again -inAgut. The lower part of the range is at around 917, intra-day, which level was touched in early May, June, and again in July, with a couple of days of July trading actually moving somewhat below that figure. Since that time a great deal has happened in one sense and very little in another. In coltrast to the Wars and Rumours of War referred to by St. Matthew, we have had rumours of peace and now, perhaps, thankfully, peace itself. As negotiatIons with the North Vietnamese pro- gressed, we were incessantly reminded by any number of commentators that the course of the stock market would depend upon the outcome of these negotiations. The market itself continued to behave in almost Pavlovian fashion–duly rising whenever the peace outlook appeared to improve and declining when it dimmed. And yet let us examine what happened in light of the above paragraph. The last peace rally began from an intra-day low of 917.07 reached by the Dow-Jones Industrials on Octmer 17. It continued right through Mr. Kissinger's announcement of the probable success of peace negotiations on Thursday reaching an intra-day high of 962.45 in the rally directly following the announcement of the Kissinger press conference. Precisely at that pomt, the advance duly subsided and the market moved lower in late Thursday's and early Friday's trading. It is once more time, we suppose, for us wearily to deliver our familiar lecture On the utter irrelevance of news events to the course of stock prices. We say wearily, because, despite all the evidence to the contrary, there are still those who persist in believing that the 1962 bear '–nrarket-was-caused -by'anlltercation-jyetwe-en'the'Pres1uents-of'theUn1ted43tates-and'the-United States Steel Company, and that the subsequent bottom had something to do with the resolution of the Cuban Missile Crisis. LikewIse, if equity markets do tum up from here, these same historians will inevitably brand the advance as a peace rally. The fact is that the intermediate- term course of the stock market is determined by factors largely related to supply and demand and that news events seldom do anything more than to make latent supply/demand forces manifest, perhaps speeding up a course of action which might otherwise have been delayed. In the present instance, all that the peace negotiations have accomplished, msofar as the stock market is concerned, is to reinforce the conclusion that there is a demand area around the low 900's in the Dow which has managed to contain every decline since early this year, and there IS, likewise, a supply area at 950-970 which has managed to stem every advance that has occurred since that time. It is almost futile to try to predict with any degree of certamty the intermediate- term course of eqUIty prices until such time as one of these two areas is decisively breached. The argument that the ultimate penetration is likely to be on the downside rests largely on historical factors. Since March ,the popular stock averages have been holding steady or making new highs at a time when the bulk of issues were actually declining. In the past, periods of this sort of action have tended to lead to ultimate general weakness, spreading through the entire stock list. The counter argument, if one IS to be made, must be based on the apparent leadership shift as individual stock patterns develop. In recent months, as pointed out in th,S letter, we have witnessed strong accumulation In a number of quality, defensive, cyclical and semi- , – cyclical-;-ssue-s– the Oils ,- Finance Copanies; Ban-ks and, more rece;rtly, Utilities being ca ses in pomt. Moreover, most recently, we have seen downside objectives reached or approached in a number of other groups selling at substantial discounts from their 1972 highs, where the fundamentals appear to have changed relatively little. Cases in point would include the Airlines, Leisure Time, Mobile Home, and Tobacco groups. It is conceivable that these two catagones of issues, taken together, could, eventually, provide the leadership for a new upward leg on the advance. The conclusion of all this is that we are not yg ready to suggest that there should be a dramatic shift in our recommended investment policy. We have for the past six months favored the mamtenance of oaffi reserves, and we feel those reserves should be maintained or, perhaps partially scheduled to accumulate stocks in the second category mentioned above on weakness. We have suggested that invested funds be concentrated in the first group above, and wewould suggest that this continue to be the case. Any change in this policy will be dictated by the market's technical action and not b DoV\lla JG9Q& cLnd,au;stJi.ia'lq Jn2-;-QQ,. PheJ'Tlr.. 19- 9-501r2 ntomed IS, or IS to be deE! t , Iy r .nd H e r or the sollcltotlon of on offer torPuf'JOf)!linv-..se';flt'h rrfJ.rn-d 01or mentioned The moiler IS presenled merely for the conc Tscrl!tgf1\ '6'lIIt' brb,veth 10urces of our inlorma- S &..uon toJ.Ml-6b,'M t r6J..j,bt resent or guorantee the accuracy thereof nor of the stateLr'eW-de.Ifl!oU.l A''aIIt&be tlIiH-'erLfoH!! subSCrIber should be AW-bt.rJt on hu own Investigation and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now have, or may later toke, positions or trades In respect to any seCurities mentioned In thiS or any future ISSue, and such position may be d,l/eren) from any views now or hereafter e'l(pressed In thiS or any other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC 05 on Investment odvlsor, moy give adVICe to Its investment adVisory and othel customers Independently 01 any slotements mode In thiS or In any other Issue Further ,formatIOn on any seeurrty mentioned herein IS ovoiloble on request

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