Tabell’s Market Letter – May 25, 1973

Tabell’s Market Letter – May 25, 1973

Tabell's Market Letter - May 25, 1973
View Text Version (OCR)

TABELL'S MARKET LETTER — – – – – – – – – – – – – – 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBEA NEW YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANoe May 25,1973 We indicated in last week's letter a degree of skepticism regarding the application ofthe , – term fetl1ng'clim1lX'to-th'''i'm'iHi ta11y'wh1ch took place-on'MaY''15 and 1'6e-We -have'no doubt-that' the term will be dragged out again to describe the much more impressive performance on Thursday of this week when the Dow chalked up an almost 30-point advance. Climax is one of those technical terms that tends to get tossed about rather glibly, so it will perhaps be worthwhile to look at past selling climaxes in order to get s orne idea of just what a real one looks like. We know, by hindsight, that major selling-climax bottoms occurred in October 1957, May 1962, August 1966, and May 1970. The following table gives some pertinent market statistics for these periods including the Dow-Jones Industrial Average, pOints change, percentage change, and volume. In order that the volume figure be meaningful, it is related to a 25-day moving average of volume and the ratio of actual volume to that figure is given. The comparable stattstics for the past five market days are presented at the bottom of the table. Date Oct. 21, 1957 Oct. 22, 1957 Oct. 23, 1957 May 25, 1962 May 28, 1962 May 29,1962 May 31. 1962 DJIA 423.06 419.79 437.13 611.88 576.93 603.96 613.36 Pts. Chg. -10.77 – 3.27 17.34 -10.68 -34.95 27.03 9.40 Chg. -2.48 -0.77 4.25 -1. 71 -5.71 4.68 1.55 Volume 4,670,000 5,090,000 4,600,000 6,380,000 9,350,000 14,750,000 10,710,000 25-DayVol. 2,440,000 2,584,000 2,707,000 3,911,000 4,156,000 4,624,000 4,919,000 Ratio 1. 91 1. 97 1. 70 1. 63 2.25 3.19 2.18 Aug. 26,1966 780.56 -11.81 -1.49 8,190,000 6,527,000 1.25 –Aug; 29 ,196-6' -'16'f'03- – ' -.; n. 53'(; – -10,900';'00''''0-''……,E-'6','';'6'''81''','''''OOO 1'63'';';-'''-1 Aug. 30,1966 775.72 8.69 1.13 11,230,000 6,826,000 1. 65 Aug. 31,1966 788.41 12.69 1.63 8,690,000 6,930,000 1. 25 May 25,1970 641.36 – 20.81 -3.14 12,660,000 11,178,000 1. 13 May 26,1970 631.16 -10,20 -1.59 17,030,000 11,520,000 1.48 May 27,1970 663.20 32.04 5.07 17,460,000 11,787,000 1.48 May 28.1970 684.15 20.95 3.16 18,910,000 12,102,000 1.56 May 18, 1973 895.17 -16.55 -1.81 17,080,000 14,639,000 1.17 May 21, 1973 886.51 – 8.66 -0.96 20,690,000 14,890,000 1. 39 May 22, 1973 892.46 5.95 0.67 18,020,000 15,157,000 1. 19 May 23, 1973 895.02 2.56 0.28 14,950,000 15,242,000 .98 May 24,1973 924.44 29.42 3.28 17.320,000 15.379,000 1. 13 A glance at the numbers enables one to draw some fairly obvious conclusions. In terms of market change, the tendency has been for climax bottoms to be characterized by a large percent- age of change on the downside, occasionally one day of intra-day reversal such as October 22, 1957 and May 26, 1970, followed by an equally sharp reversal to the upside. The present instance. by contrast, showed a sharp drop on May 18 followed by three days of rather desultory action before the market was able to mount a strong rally on May 24, which, for all its vigor, was of considerably lesser magnitude than October 23, 1957, May 29, 1962 or May 27, 1970. Equally noticeable about the current market is the lack of volume buildup. As can be seen, past climax bottoms invariably featured a rise in volume toat least-l '1/2 'times the 25-'day– – – , moving average. Volume on Thursday was only 1.13 times recent volume levels based on a 25-day average. Now forecasting remains an uncertain business, and we would hesitate to state, on the basis of the figures above, that the low of May 21 did not, in fact, constitute a bottom of some import- ance. Quite obviously bottoms can occur without the accompaniment of classical climax condi- tions. We think, however, on the basis of the above, that it would be advisable to await additional evidence before stating with any finality that a Significant low had taken place. Dow-Jones Industrials (1200 p.m.) 922.94 S&P Compo (1200 p.m.) 107.01 ANTHONY W. TABELL AWTrk DELAFIELD. HARVEY, TAB ELL No statement or expression of opinion or any other motter herein contained IS, or IS to be deemed to be, directly or mdHec1ly, on offer or the sollcltotlon of on oHer to buy or sell any security referred fo or mentioned The mOiler 1 presented merely for the converlence of the subscriber While 'lie believe the sources of our information to be reliable, we In 1'10 woy represent or guorantee The accuracy thereof nor ot the statements mode herein Any action to be token by the subSCriber should be based on hiS own Investlgotlon and Informatlon Janney Montgomery Sca1t, tnc, as a corporation, and Its officers or employees, may now have, or may IOler take, pOltJOns or trades In respect to any securities mentioned In thiS or ony fuTure ISSUe, and such position may be different from any views now or hereafter e..-pressed In thiS or any other Issue Janney Montgomery Scali, Inc, which IS registered With the SEC as on II'IvestmenT adVisor, may give odviCe to lis Investment adVisory (md other customers II'Idependently of any statements mode IJl ThIS or 11'1 any other Issue Further informatIon on any security menhoned herein IS aVailable on request

Download PDF