Viewing Month: July 1973

Tabell’s Market Letter – July 06, 1973

Tabell’s Market Letter – July 06, 1973

Tabell's Market Letter - July 06, 1973
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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 July 6, 1973 With the dismal stock market action of the past six months showing few signs of abating, there has been a-tendency on the -part-ofa number of commentators to-begin ,grasping -at straws. It being,July,. . one of the straws currently being embraced most avidly is the one concerning the likelihood of a so- called summer rally. We did a study of the phenomenon in th,S space just over a year ago and the general conclusion of the study was that the theory of a summer rally had some basis in fact, but that it would be unwise to lean upon it too hard as a market forecasting tool. The following table is an up- date of the one that appeared a year ago, with the changes for 1972 having been included. ONE-MONTH PERIODS TWO-MONTH PERIODS Ending Month January February March Advances 31 26 26 Declines 16 21 21 Avg. Chge. 0.77 0.03 -0.19 Advances 31 26 23 Declines 16 21 24 AVQ. Chge. 2.18 0.79 -0.27 April 27 20 0.95 29 18 0.84 May 25 22 -0.73 29 18 0.46 June 22 25 0.86 23 24 0.08 July 32 15 2.25 30 17 3.07 August 32 15 1.93 September 20 27 -1. 33 October 25 22 -0.52 November 28 19 0.83 35 12 4.35 — '28 19 0.53 , 23 24 -1. 79 29 18 0.37 December Total 36 Jl 330 234 1. 32 0.51 32 …li 2.20 338 226 1.07 peThieoLdtf,;,o-rnbl-l1L9S2h6owtso t1h9e-ha.c'tFioon';oaftchhe pDeroiwd-Jtohnees;I;n;d;busrtrfiall;;A-svtaercai;g'ee iwnheevnetrhy-onaer-mkeofnath-davnadnctewao-a-nmdonth—I declined is shown, together with the average percentage change for the period. A preliminary look at the table, indeed, supports the notion of a probable summer rally. The average monthly advance for the Dow over the period has been. 5 whereas the average performance in July is an advance of 2.25, more than four times as great. Llkewise, the average advance of 4.35 for the two months ended August is four times larger than the average two-month advance. It would, indeed, appear that the expectation of an advancing market during July and August has some solid grounding in fact. Having made this statement, however, a few doubts must be raised. The first factor which needs to be pOinted out is that a large part of the high average advance for the summer period rests on the accident of the 1932 bottom's having occurred at the end of June. Thus, July and August of that year produced the largest two-month advance in stock-market history, an astounding 70 rise. If this single year is eliminated from consideration, the results for July and August are much closer to normal. Secondly, while it is true that July and August do show significant pluralities of advancing months over declining months, it must be remembered that advancing periods tend to outnumber declining ones over the 46 years by almost three to two. When standard tests of statistical significance are applied, the period with the clearest seasonal action is the month of December, which is why this letter has always emphasized the importance of the year-end rally. Likewise, the tendency toward a declining market in September is statistically more significant than that of a rise in July or August. Interestingly enough, none of the other months show any discernible seasonal pattern whatsoever. Lastly, in looking for seasonal patterns, it is wise to examme the most recent data to see if it –seems to'b-,; deviating fromth'e'past and/ mdeed-this is'a'pparent1y;–th-e-case;- The-seven years between 1966 and 1972 have produced two rallies and five declines in July and five rallies and two declines in August, and the two-month period ended August has produced three rallies and four de- clines with an average advance of just 1. Even the familiar December rally appears to have lost its recent reliability, and, interestingly enough, a new seasonal tendency, not heretofore apparent, seems to be emerging–that of a decline in May-June. Every May, from 1965 through 1973, with the single exception of 1972, has produced a declining market,and all two-month periods ending in June have shown declines for the past nine years. The moral of the whole exercise, we suppose, is that the stock market is a difficult and changing beast, and, while certain seasonal tendencies are apparent, they constitute only on factor in what is invariably a highly complex equation. Dow-Jones Industrials (1200 p.m.) 872.14 S & P Compo (1200 p.m.) 101.48 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTrk No stotement or expreslon of opinIon or any other matter herein contOlned IS, or IS to be deemed to be, directly or Indlrectl!. on offer or Ihe soliCitatIOn of on offer to buy or sell any security referred to or mentioned The moiler IS presented merely for the converlenCE of The subscriber Wh, e Ne believe the sources of our Informa lion to be rellClble, we m no way represent or guarontee the accuracy thereof no' of the statements mude herein Any action to be token by the subscriber should be based on hiS own Investlgahon and 'nfOrmallo'1 Janney Montgomery ScOll, Inc, as a corporation, ond ,ts officers or employees, may now have, 0' may later take, positions or trades In respect to any securities mentioned m th,s or any future Issue and such POSition may be different from any views now or hereafter e)'pressed 1M thiS or any other Issue Janney Montgomery Scott, Inc, which 15 registered With the SEC as an Investment adVisor, may give adVice to ,s mvestment adVISOry and othel customers Independently of any statements made 1M thiS or m any other luue Further mformatlon on any settmty mentioned herein IS available on request

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Tabell’s Market Letter – July 13, 1973

Tabell’s Market Letter – July 13, 1973

Tabell's Market Letter - July 13, 1973
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,———————————–, TABELL'S MARKET LETTER J 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF' MEM8ER NEW YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe July 13, 1973 good -. — n … -n ,-..It-was- That-we-must–admih''- …….–' .n n -0-. – We refer, of course, to the action of the stock market over the past five weeks, capped off by the sharp, almost-20-point rally in the Dow which occurred on Wednesday, bringmg that index to its best levels since early June. The performance was, as we said, in many respects impressive. It all began on June 19 when the Dow reached an intra-day low of 868.09 and then posted a modest three-day rally to just under the 900 level intra-day before being turned back. Then, once more, on June 26, the Dow reached 864.46 followed by yet another rally which, by June 29, had attained 900 on an intra-day basis. A third,decline took place and once more the 860 level proved anarea of demand as the Dow attained an intra-day low of 863.49 on Monday, before posting a seven- point rally, followed by an ll-point Tuesday advance, topped of finally by the Wednesday performance. That rally, moreover, provided one of the more exciting breaks in the dreary market cli- mate that has existed throughout 1973 thus far. In terms of points gained, it constituted the second largest rally of the year, and an impressive 1294 issues advanced on the day, the fourth highest number of advances for a single day in the history of the Stock Exchange. Volume expanded significantly, finally reaching 18,730,000 shares by the closing bell, this being the best level achieved in a single session in a month and a half and, in fact, one of the largest volume figures of the entire year. Quite clearly, the battered old stock market was f..tryingtoputon a performance which was suficiently seductive so as to once more allure the investor. — – — — – –. But it wa s not quite good enough. The Wednesday rally reached a closing peak of 908.19 and, on Wednesday, the upper limit of the trend channel which has contained the Dow since January was at precisely at 909.35. It was exactly t this point that the advance once more faltered. A rather curious session on Thursday saw the market decline sharply in the first hour and a half and then make a couple of rally attempts which never really got off the ground. Moreover, when looked at under a microscope, the impressive breadth and volume figures of Wednesday failed, by a razor-thin margin we admit, but nonetheless failed, to meet the standards which would convincingly suggest a trend reversal. 1294 advancing stocks is admittedly an impressive statistic, but unfortunately it constituted only 72 of the total number of issues traded. No fewer than four later-aborted rallies during the 1969-70 decline produced advancing stock percentages of approximately this magnitude. And when true bottom finally occured in May, 1970, it was characterized by 80 of the total issues traded advancing. Volume, in addition, fell just short of convincing levels. Wednesday's 18,730,000 shares constituted 147 of the average volume for the past 25 days. Every major bottom of the post-war period has been characterized by at least one day in which volume increased above its 25-day moving average by a greater amount. Now none of the above should be construed, in any way, as a forecast. The Dow is stilf flirting with the upper part of its trend channel, and may, at anytime, penetrate it decisively. Volume action might develop, which, built on top of Wednesday's rally I would constitute impressive evidence of a turn, and the low of last Monday may turn out, in the light of hind- sight, to be a bottom of some importance. The point is that we do not yet see evidence sufficient to act on the assumption that such is the case. If it is later provided, and at higher levels, we will have missed a portion of whatever upward move ensues. We consider it a small price to pay for insurance in the current uncertain market climate. Dow-Jones Industrials (1200 p.m.) 896.07 S & P Compo (1200 p.m.) 105.03 AWTrk ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stafement Of e)lpreUlon of opinion or any other motter herem contolned IS, or IS 10 be deemed 10 be, directly or indirectly, on offer Of the SOIU;llollon of on offer to bvy or sell any sec;unly referred to or mentioned The molter IS presented merely for the converlenee of the subSCriber While oNe believe the sources of our Informa- Tion fa be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be taken by the subscriber should be based on hiS own InveStlgalian and information Janney Montgomery Scali, 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 different from any views now or hereafter expressed In thu or any other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to liS ,vestment adVisory and othel customers II'ldependently of any slatements made In thl or In any other Issue Further information on ony securoty menTIoned hefeln IS available on request

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Tabell’s Market Letter – July 20, 1973

Tabell’s Market Letter – July 20, 1973

Tabell's Market Letter - July 20, 1973
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. – . ——- -, – –.—-., I TABELL'S I , I (,, MARKET LETTER I 1 l 909 STATE ROAD, PRINCETON, NEW JERSEY 081540 DIVISION OF MEMBER NEW YORK STOCIC eXCHANGE, INC MEMBER AMERICAN STOCk eXCHANGE —— -..- July 20, 1973 …… Since we regard ourselves as market technicians and not as soothsayers, what follows will not be an attempt to explain last week's stock market in the light of the Watergate investigation which now, perhaps predictably, is taking on some of the elements of low comedy. Thursday's performance, in which the market declined , then rallied when Senator Ervin announced that the White House had agreed to release recorded phone conversations, and finally declined when it developed that the good Senator had been hoaxed, must surely be recorded as one of the more curious sessions in recent memolt Yet, in another sense, it was nothing more than still another in the series of vicissitudes which seem to be characteristic of today's stock market—a market where direction apparently shifts daily, if not hourly. It will perhaps be helpful, In a time of much confUSion, to review separately the technical position of various segments of the market. The Averages– At week's end most of the popular indices were scraping along the upper limit of the down-trend channel in effect since January. Readers of recent issues of this letter will be aware that we regard decisive penetration of this channel as an important prerequisite to any forecast of a trend reversal. The Dow-Jones Industrials, on Wednesday and Thursday, actually closed slightly above the upper limits of this channel, but the penetration has not to date been great enough to be considered decisive. We thus find the major market indicators poised for a fairly important upside breakout and yet, so far at least, unable to achieve that penetration. The Vestal Virgins–The institutional growth favorites were also, at week's end, poised at the threshold- of a .breakout of ,someimportanee.-Most of themhaddropped–oH-shar-ply-inMay-and -ear-ly- June, the first sign of weakness shown by these issues in some time. Since that time, as the market strengthened, they have generally been moving laterally and, currently, most are around the upper limits of these lateral trading ranges. It is difficult to forecast that upside breakouts in these issues will actually occur, in that such breakouts would suggest upside moves of proportions which would substantially widen the already huge price disparity between the growth favorites and most other issues. Nonetheless, if the issues were, withal, to achieve upside penetrations we would be required, as technicians, to accept this fact and to take it into account in formulating a market forecast. Oils– The international oil stocks deserve separate comment at this point because (1) they constitute an important segment of the major indices and (2) their current technical pOSition is exactly the oppOSite of that of the high growth issues. Oils, in general, are close to the bottom rather than the top of recent trading ranges, and further short-term weakness in this area would not augur well for intermediate-term price action. As suggested above this could have a depressing effect on the widely-followed general market indices. The Second Tier–Here is where, so far at least, the action has been. The largest upside gains in recent weeks have been taking place in issues that are down sharply from their 1972-73 highs, and a feature of the market's recent technical action has been the fact that a fairly Significant minority of such issues have already made substantial progress toward building bases. Indeed, In a still more select group, upside breakouts have already occurred, suggesting further favorable short-term pnce action. This must be conSidered a constructive development representing, as it does, –a broadening ofleadership which had ,been tending.to become.n.arrowcan3..narro.wer. —,,– — The–American Stock Exchange.–The American Stock Exchange Yes, Virginia, there still is an American Stock Exchange, and, unnoticed by many, the ASE Price Change Index has been acting better than most other stock market indicators in recent weeks. It was recently, for example, able to better its high of late May, a feat none of the other major averages have yet been capable of achieving. This sort of development at this stage of a market downswing is without historic precedent, thus further compounding the overall confUSion. As can be inferred from the above, the situation is unclear at best. Time will, as always, clarify it, and we would suggest that reserves be maintained until such time as this clarification takes place. Dow-Jones Industrials (1200 p. m.) 913.61 S & P Compo (1200 p. m.) 107.24 AWTrk ANTHONY W. TABELL DELAFIELD, HARVEY. TAB ELL No statement or eopreSlon of opinion or any otner molter herem contolned 15, or IS 10 be deemed to be, dlredly or cndlrectly, on offer or the 50llcltollon of on offer to buy or sell any security referred to or mentioned The motter IS presented merely for Ihe converlence of Ihe subSCriber WhIle He believe the sources of our Informolion to be relloble, we In no way represent or guarantee Ihe accura!;)' thereof nor of the slotements mude herein Any adlon to be loken by the subSCriber should be based on hiS own Invesllgat,on and infOrmation Janney Montgomery Scott, Inc, as a corporation, ond Its officers 0 employees, may now have, or may later take, poslhons or trades In respect to any secUrities mentioned In thiS or any future Issue, and such paslt,on may be different from any views now or hereafter expressed In this or any other luue Janney Montgomery Scott, Inc, which IS registered wl,h the SEC as an Investment adVisor, may give adVice to lIS Investment advisory and other cuslomers Independently of any statements mode In thiS or In any other Issue Further Informahon on any security mentioned hereIn IS OVOilabie on request

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Tabell’s Market Letter – July 27, 1973

Tabell’s Market Letter – July 27, 1973

Tabell's Market Letter - July 27, 1973
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I I TABELL-S I MARKET LETTER L — 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBEA NEW VORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE July 27, 1973 —– '– – . ;.—….- –….;.- .–'',.. o-'– …,.!!…,….2.– —……… ….—-. – -; Market forecasters are often accused, perhaps rightly so, of hedging but, as we have pOinted out in the past, the exigencies of the situation often require a complex answer to a fairly simple question. In the light of rapidly improving stock prices, the most commonly asked question of last week was whether the 1973 market downswing had seen its lows. It is unfortunately a question that cannot be answered simply. Most recent comment on the market of the past three weeks has centered around the sharp recovery of the Dow which now, having reached an intra-day high of 944.08 on Thursday, is up over 80 pOints from its low, scored earlier this month. Yet to us, the most interesting facet of recent market action has been not the extent of advance but its character. As we have been pOinting out consistently over the past six months, the popular averages of stock market performance, such as the Dow and S & p 500, have given a false impression of strength in contrast to the action of the average stock as mea- sured by unweighted indices such as our own cumulative index. The rally from November 1972 to January of 1973 looked quite dynamic in the Dow but in terms of our cumulative index was scarcely a ripple, and, after the market topped, while the Dow decllned only 17, the cumulative index fell by an amount that qualifies as a major bear market by any standard. It is precisely this discrepancy that has been reversed on the recent market rally. The following table tells the story 1973 High 1973 Low Decline Close 7/25/73 Adv. Dow-Jones Industrial Average 1067.20 863.94 19.0 933.02 8.0 S&P500 121.74100.44 17.5 109.64 9.2 ;pmuh,e.!nd. . . .1066.91 \i46.01.– 9 …5. .22.66.,.. 1;;;l;-o.9,,,c1 As the table shows the Dow and the S & P were off by a relatively modest amount in 19-73. At the — same time the cumulative index was posting an almost -40 decline. Yet on the recovery through Wednesday, the advance posted by the popular indices was measurably less than that shown by the cumulative index. The same phenomenon can be illustrated by showing the action of four popular growth favorites and four representative severe ca sualties of the bear market. The growth issues strongly outperformed the others on the market decline, but, on the recent rally, a sharp form reversal was evident with the bear market casualties having turned in a far stronger performance through last week. Decline Advance Decline Advance 197J.,3 High-1973 Low 1973 Low- 7/25/73 197J.,3 Hlgh-1973 Low 1973 Low-7/25/73 IBM 19.2 8. 1 Tropicana Products 73.5 79.7 Xerox 18.8 14.7 Skyline Corp. 81.8 66.7 Avon Products 21.4 6.6 Northwest Airlines 67.3 32.0 McDonalds 32.6 28.8 AMFInc. 67.8 29.5 Forces as powerful as this, once set into motion, are often difficult to reverse and we would expect the better performance on the part of second-tier issues to continue, even going so far as to offer this prediction as a forecast on which investment policy can be based. We can carry it even further to say that there is now a high degree of probability that unweighted indices, such as our cumulative index, may well have seen their effective lows—this not precluding a test of these lows at some later date. weThe trouble is that this does not help us very much in formulating a forecast for the popular aver- ages. As said-abOVe, -we wOilldex-pect' the—–gapb.rtWeen these -aVerages -andun;;;eighted indiceS, – a gap which had been widening for a couple of years and has just now started to narrow, to continue to narrow even further. The problem is that it is difficult to say at the moment whether this resolution will take place on the upside or the downside. The answer to this question requires further evidence. The present probable market pattern allows time for such evidence to accumulate. It is probable that future leadership will come from those issues which have been the severest casualties of the 1973 bear market. Many of these issues have already risen sharply from their lows and will need a further period of base formation before embarking on long-term advances. Future policy should be directed toward accumulation of such issues as the individual stock patterns become clearer. Dow-Jones Industrials (1200 p.m.) 933.70 S & P Compo (1200 p.m.) 109.64 AWTrk ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement Of expression of opinion or ony other matler herein contOlned 15, or IS to be deemed to be, directly or ,directly, on offer or the SOllCllotlon of an oHer to buy or sell any seCUrity referred 10 or mentioned The matter IS presented merely for the conver'lenCE; of the subscriber While -He believe the sources of our ,formation to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action to be taken by the subscriber should be based on hu own ,vestlgahon and Informahon Janney Montgomery Scott, Inc, as a corporation, and Its offICers or employees, may now have, or may iater loke, poslhons or trades In respect to any secunltes menttoned In Ih,s or any future Issue, and such paslhon may be different from any views now or hereafter expressed ' thIS or any alher Issue Janney Monlgomery Scali, Inc, which IS regIstered wtlh the SEC as on Investment adVisor, may give adVice to lIs Investment adVISOry and athel customers Independently of any statements mode, thIS or In any other Issue Further Informahon on cny securtty mentIoned herem IS avaIlable on request

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