Viewing Month: December 1975

Tabell’s Market Letter – December 05, 1975

Tabell’s Market Letter – December 05, 1975

Tabell's Market Letter - December 05, 1975
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIYISION OF MEMBER NEW VORK STOCK EXCHANGE. INC MEMBER AMERICAN STOCK EXCHANGE – December 5, 1975 –.;.- – – —— – . –'P- –4 ….,… .-..,…—–. — —'7.,..4 A continuing source of comfort to those who must, of necessity, issue short- term stock market forecasts is the knowledge that Babe Ruth also struck out a lot. We had, last week, in a forecast couched in terms of the Dow, suggested that equity markets might be enter- ing a period of moderately firmer prices. Last week's market action, in which the Dow gave up SOme 35 points over the course of a three-day decline through Wednesday, effectively quashed that particular prospect for the time being as the major averages moved decisively below their lows of last October. The problem in retrospect lay in the dissimilarity of the recent action of the Dow to that of the more broadly-ba sed indices. Last summer's accumulation range on the DnA did, indeed, suggest somewhat higher prices. By contrast, the broader-based indices such as the S & P Industrials and S & P Composite, both of which had led the Dow on the upside on the breakout in mid-September, had, at their November peaks, moved to their upside objectives and had begun to move laterally. Further confirmation of this sort of divergence was provided at the end of last week when, as the Dow moved up through its mid-November high, none of the other averages gave even a semblance of participating in the move, this failure taking place not only in the broad-based indices but also the Dow Transportation and Utility Averages. There have, of course, been numerous periods in the past when the Dow has been able decisively to outperform the general market, and it was our feeling that such might once more be the case. It now 1-.- becom es,apparentthat.the ,broad,,-ba s ed.ind iceswerein ,Jact ,telJi!!gthe.true.Jor.y, ,…,..–, What must be noted at this stage is the fact that last week's decline, in and of itself, constitutes something short of the end of the world. If we are to accept the broad-based indices as accurate market harbingers, as, indeed, they have been since last summer, the downside objective for the S & P Industrials is 94 Versus the present level of 98 and for the 500 Stock Composite, it is 85 versus a current figure of under 88. An equivalent level on the Dow would take that index to somewhere around the 805-800 area. Thus, the immediate prospect is, in our view, not all that disheartening. It is still worthwhile, moreover, to recall the seasonal pattern of the year-end rally. We had expressed the hope in the past couple of weeks that such a rally might, In fact, have begun from the late November low around 840 on the Dow. This, quite clearly, will not now be the case, but probability lies in favor of its commencement at whatever low 1S reached on the current downswing. It is at this pOint that the crucial decision will have to be made. The most valuable indication of technical deterioration has, in the past, not been a series of sharp market declines but one of tepid railies. Quite obviously, In retrospect, the late November strength in the Dow must be placed in this category. We continue to thmk that the present weakness will be halted at the downside objectives mentioned above, where, coincidentally, there-exists .mod erately strong support.. We would, likewise ,.expect that,.from that point, there w111 be a rally of some nature If such a rally fails to display strength in terms of breadth, volume and confirmation by a broad range of indices, prospects for the first half of 1976, at least, might become somewhat glum. If this is going to be the case, however, we would prefer to allow the market to tell its own story rather than to be swayed unreasonably by pamc engendered in the sort of market weakness seen last week. Dow-Jones Industrials (1200 p.m.) 827.14 S&P Compo (1200 p.m.) 87.76 Cumulative Index (12/4/75) 474.20 AWT/jb ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL No totement or expression of opinion or any other moiler herem contained IS, or IS 10 be deemed to be, dHeclly or mdlre(1ly, on offer or the solicltotlon of on offer to buy or sell anr. security referred to or mentioned lhe molter IS presented merely for the conver'lenct of Ihe subscriber WI-nle -Ne believe Ihe sources of ovr mformo lion to be rei lob e, we In no way represenl or guaranlee the accuracy thereof nor of the statements mude herein Any o(1lon to be loken by the sub.cflber should be based on hiS own inVestigation ond mforma/lon Jonney Montgomery Seal!, Inc, as a corporation, and lis officers or employees. may now have, or moy laler take. positions or trades In respect to any secufliles mentioned In thiS or any future Issue, ol'ld such paslhan may be different from any views now or hereafter expressed 10 thu or any other ISsue Jonl'ley Montgomery Scott, Inc;, which IS registered With the SEC as on 10yestment adVisor, may give adVice to liS IOvestmeol adVISOry ol'ld other CUtomers Independently of any statements made In thiS or 10 ooy other Issue Further informatIOn 00 al'ly securlly mentioned herem IS available on request

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Tabell’s Market Letter – December 12, 1975

Tabell’s Market Letter – December 12, 1975

Tabell's Market Letter - December 12, 1975
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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 – December 12, 1975 I–''''''–,e''''''-''''- W e'suggested 'In'la stoweek' s Cletter-that -the–Bow' Jones'-Industrlal-Average'might'be' pa inting– a more bullish picture of what was taking place In equity markets than were broader-based indices, such as the S & p sao. It now appears that it is possible to carry this analogy one step further and suggest that even the S & P Index and similar averages may have been outperforming the average stock since the highs of last July. To do this, it is necessary to refer back to our old friend, the Cumulative Index which, readers will be aware. we have often referred to m this space. Briefly, the Cumulative Index is a geometric per- centage change average, covering every stock on the New York Stock Exchange and begun with a base date of May 1,1964, using as the base the Dow on that date, 817.10, a figure not too different from today's price. By contrast, of course, the Cumulative Index, reflecting the action of all stocks on the NYSE, is now, at 470.31, almost 350 points lower than it was 11 1/2 years ago. We have pointed out in the past that, in our view, the Cumulative Index more accurately re- flected what was truly taking place In the marketplace In a number of market epochs. Over the 1966-68 period, the Dow moved, roughly, from 1000 to 750 and back up to 980, failing to make a new high, while at the same time, the Cumulative Index moved from 1100 to 800 and on to a new high of 1430, more accurately reflecting obvious bullish market conditions that then existed. From 1968-70 both indices moved down, the Dow from 980 to 630 and the Cumulative Index from 1400 to under 700, but unlike the Dow, the Cumula- tive Index failed to make a new high in late 1972 and plunged precipitously far below its previous low In 1973-74, reaching a bottom of 347.85 last December. The purpose of this letter is to detail the recent ac- tion of the Index In an effort to pOint out more clearly what has been happening since the lows of a year ago. The following table gives the levels of the Dow, the Cumulative Index and the S & P 500 for nine selected dates over the past 14 months. Date DTIA – -10/4/74 -584.56 S & P 500 62.34 Cum. Index – 355; 9 r – 10/D2at3e775 ';,D85T5I'AE.17'6-eoSi9&1.3cPii81s'a1o0C;7;;;'i22)-C-u4!m'i9.'dI7n.0d;'ex-7,…,….J- — 12/6/74 7/15/75 9/16/75 577.60 881.81 795.13 65.01 95.61 82.09 347.85(12/23) 11/17/75 856.66 559.60 11/28/75 860.67 463.74(9/17) 12/5/75 818.80 91.46 91.24 86.82 494.21 492.81 467.78(12/9) 10/11/75 784.16 82.93 464.76 To begin with, the bottom of a year ago was, it will be recalled, a double one with two im- portant lows taking place in early October and early December. The Dow low was made in the December phase,but the S & P 500 held above its October low in December. The Cumulative Index, by contrast, con- tinued to drift off throughout December, not making its ultimate low until December 23. There followed the happy period of the rally which continued to mid-July. Here the Cumulative Index suggested that both the Dow and the S & P were affording an accurate description of market behavior, advancing 61, versus 53 for the Dow and 47 for the S & P sao. Smce that time, however, its action has diverged markedly from the other indices. All three indices moved down sharply following their July peaks and, again, a double bot- tom of some importance took place in mid-September and early October. As the table shows, the S & P and Cumulative Index made their lows at the first bottom while the Dow moved lower on October I. -What is in- teresting, however, is that the total decline in the Dow was only 11, while In the S & P it was 14 and extended to 17 in the Cumulative Index. The advance from the October low had three separate peaks, at the end of October, mid-November and the end of November. The Cumulative Index peaked out in late October after a 7 rise, while the S & Prose 11 Into mid-November, and the Dow continued for a 10 ad- vance in late November. Subsequent to that, all three indices posted lows on December 5th, the Dow down 14.9,-the S & P down 5.1 and.the Cumulative Index.(wh!9h c9ptinued mov!ng.lower,until this ruesday). ……. down 5.9. As all of this clearly shows, the average stock ha s, since the July pea k, been performing conSiderably worse than the major indices. At their lows of early this month, the Dow was down 7. 1 from its July peak, the S & P 9.2 and the Cumulative Index 16.4. Compared to their lows of September, both the Dow and S & P were four to five per cent above their September bottoms, while the Cumulative Index was within 1 of it. The Dow had retraced 21 of its early 1975 advance, the S & P 26 and the Cumulative Index almost half of the entire move,or 45. In short, the Index clearly tells us that what has been gOing on in the marketplace since last July is a good deal more serious than the more widely-followed Indices would lead us to believe. Dow-Jones Industrials (1200 p.m.) 828.72 S & P Compo (1200 p.m.) 87.47 Cumulative Index (12/11/75) 470.31 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT/jb No statement or expression of opInion or any other motter herein contolned IS, or IS 10 be deemed to be, directly or Indirectly, on offer or the SollCllotlon of on offer to bllY or sell any securlly referred 10 or menhoned The motter IS presented merely for the convellenc of the subCrober While we believe Ihe sources of our Informa t,on to be reliable, we ,n 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 Investlgallon and Informallon Janney Montgomery Scoll, Inc, as a corporation, and Its officers or employees, may now have, or may later toke, positions or trodes 1M respect to any seCUrities menlloned In thiS or any future Issue, ond such pOSition moy be different from ony views now or hereofter epressed In thIS or any other Issue Jonney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, moy give adVice 10 lIs Investment adVisory and other customers Independently of any statements mode 1M thl5 or 1M any other Issue Further ,nformatlon on ony securIty mentioned herein IS OVOIlable on request

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Tabell’s Market Letter – December 19, 1975

Tabell’s Market Letter – December 19, 1975

Tabell's Market Letter - December 19, 1975
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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 December 19, 1975 Regular readers will be aware that it is our custom to devote the last two letters of December ato a forecast, insofar as it is possible to envision one, of the year ahead. The first part of this fore- . ca'st gen'ei'ally-consrSts'ofareview'6f fuasl year sa 'oacKgroUi'inor-fTiiii1g the-feirIo-wlng year' 5 'O\;t- , look into historical context. Thus, according to tradition, it is our present task to review market ac- tion during the year 1975. Any such review, it seems to us, must touch on three separate market phases. The first of these is the slough of despond from which 1975 began, the second is the rally which ended at a peak of 881.81 on the Dow on July 15, and the third is the desultory market that has prevailed ever since that July high. As regards the first, we noted in this space a year ago that any review of 1974 had to be an exercise in masochism. By the end of the year, disillusionment with equities as an investment vehicle was approaching an historical zenith, and we said at the time, The multiple under six times earnings now being applied to the Dow has never been exceeded, since earnings figures for the average have been available. That sort of climate was obviously the stuff out of which major market bottoms are made, and such, in the first part of 1975, proved to be the case. The upswing which occupied essentially the first half of the year was, in many ways, a con- ventional phenomenon. It took the Dow from 577.60 on December 6, 1974, to its July peak of 881.81 for 53 total advance. Thus, in this respect, it was similar to the 63 advance which initiated the 1957- 61 bull market, the 51 advance which was the initial phase of the 1970-73 upswing and many similar periods in the recent past. What was astonishing was not the percentage advance, especially consider- ing the deeply oversold position of the market at year-end 1974, but the time span into which it was compressed, both in terms of the rapidity with which the base formation was completed and the speed of the advance once the upside breakout took place in early January. Thus, in our last year's forecast, – – we-suggestedanimproved outlGek40r—securHy-pr-iGesin-1975-but-suggestedthat-the.first-hali-might ,be -.' consumed by the base formation process with a rally beginning in the latter part of the year. As short a time later as January 10, we were forced to revise this thinking and to note that if one viewed the double bottom of October-December as a base, the logical upside target would be around 850, such an advance constituting the normal first phase advance of a bull market. Six short months later, that tar- get had been attained. The end of an initial bull-market phase is generally characterized by the first full-scale intermediate-term decline which occurs, and it is here that the 1975 advance presents its problems for the analyst. The initial phase of 1957-61, for example, occupied 554 trading days, that of 1966-68 242 trading days, and that of 1970-73,234 trading days. It is necessary to go all the way back to the 1930's to find an advance as steep as that of December-July, which took the Dow ahead the aforemen- tioned 53 in the short space of 151 trading days. Despite its compressed time span, however, it is our feeling that most evidence suggests that the early 1975 rally was, indeed, a conventional first bull-market phase. If we are willing to accept the first half of last year as a primary bull-market phase, then it naturally follows that the second half can be categorized as a secondary, or distributive phase, a phase probably still in progress. We noted above that the transition from the primary to the secondary phase of a bull market is marked by the first intermediate-term correction and this, in our view, took place with the 11 decline in the Dow from July 15 to October 1, a decline which extended, as we pOinted out last week, to 17 in terms of our Cumulative Index,reflecting the action of all stocks on the New York Stock Exchange. We have noted in the past that, historically, the ending of the primary phase do.esnot necessarily signal the.end. of a bull market in terms of time,.pointing .opt that,theulti mate high of past upswings has been reached between nine months and two years after the peak of the primary phase was attained. We also noted, however, that experience shows that the ultimate high which is attained on any upswing is very often not substantially greater than the high attained on the primary phase. Here we have, then, the three background ingredients essential, in our view, to a 1976 forecast first, a deeply oversold condition with all the attributes of a major market bottom; second, a rally constituting a primary bull-market phase, a phase which, it is likely, was completed six months ago; and third, an ongoing trading range with many of the characteristics of a distributive bull-market phase. It is against this background that the outlook for 1976 will be assessed, Dow-Jones Industrials (1200 p. m.) 848.71 A VERY MERRY CHRISTMAS TO ALL S & P. Compo (1200 p.m.) Cumulative Index (12/18/75 AWT/jb 89.18 476.73 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No talemenl or expression of opinion or cny olher motter here, contolned Is, or IS 10 be deemed to be, dlredly or indirectly, en offer or the sollloilon of on offer to buy or sell any security referred 10 or mentioned The molter IS presenTed merely for the converlence. of the subSCriber WhIle oNe belIeve the ources of our mformo- hon to be relloble, we m no woy represent or guorontee Ihe accuracy thereof nor of the statement& mude herein Any action to be taken by the subscriber should be based on hiS own mvestlgat,on ond mformatlOn Janney Montgomery Scott, Inc, os a corporation, and lIS officers or employees, may now have, or moy loter tolre, positions or trades In respect to any seCUritIes mentioned In thiS or ony Future issue, ond such position may be different from ony VieNS now or hereofter expressed Ifl thiS or ony other Issue lanney Montgomery Scott, Inc, which IS registered With the SEC as on mvestment adVisor, moy give adVice to Its Investment adVisory and other customers Independently of any stotements mode In thiS or In ony or her Inue Further Information on ony ecJflty mentioned herein IS available on request

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Tabell’s Market Letter – December 26, 1975

Tabell’s Market Letter – December 26, 1975

Tabell's Market Letter - December 26, 1975
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON NEW JERSEy 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHA.NGE, INC MEMBER AMERICAN STOCK EXCHANGE December 26, 1975 We reviewed In last week's letter the facts of 1975 market history which we believed relevant toa 1976cforeCast-Herewith that forecast.–1976,' we think i-Is likely to'assume lh-e-approxl – – mate shape of an inside year, one in which neither the 1975 high or the 1975 low is exceeded. Before going to the rationale for this forecast, it Is necessary to reiterate once again the overriding fact which must constitute the background to any market prediction for the 1970' s. That overriding fact, one to which we have been calling attention for five years in this space, Is the flat secular trend which has been the dominant feature of the U.S. equity market since the middle 1960's. Since that time, the market, In terms of the Dow, has spent the bulk of Its time in trading centered around the 800-900 range, precisely the range in which it finds itself today with occasional fluttering and temporary excursions somewhat outside of that range, to the low 600's in 1970 and 1971 and to around 1000 in 1966, 1968 and 1973. Indeed, the very existence of this secular trend makes our inside- year forecast a more plausible one, but one point must be noted. At some pOint, we have no doubt, that trading range will be violated, and our firm belief Is that this violation will take place on the up- side. Such an upside breakout will signal, from a technical point of view, a massive change In the market structure that we have COme to recognize over the past eight years, and, when It takes place, a good deal of stock-market thinking will have to be radically revised. In issuing a forecast with a limited time horizon, however, it is necessary to at least attempt a guess as to when that upside break- out will take place. We think it unlikely that'it will take place at least in the first half of 1976. We pOinted out in last week's letter what we thought were the important facts to note of our market action during 1975. We said, Here we have, then, the three background ingredients essential, in our view, to a 1976 forecast first, a deeply oversold condition with all the attributes of am-ajor market b-ottom;secona7'a-rallycorislitutlrig'a'prrrifarYDullmarketpnase;-a-pnasewnlch; it– is likely, was completed six months ago; and third, an ongoing trading range with many of the charac- teristics of a distributive bull-market phase. The first of these factors constitutes the basic reason that we do not expect the 1975 low to be violated during 1976. We think that the panic condltlonsof late 1974 had all the earmarks of a major cyclical bottom and we are unable to see any of the eVidence apparently perceived by some analysts that the market has embarked on a deflationary downward spiral similar to that of 1929-32. While a short and temporary test of the 1974 lows remains an outside possibility, we do not foresee anything worse on the downside than this. The upside possibilities are the reason we used the word approximate in the first paragraph. As noted above, the available evidence is that we have now entered into a secondary bull- market phase. In such a phase, it is possible, nay, Indeed normal, for the high of the primary phase (881.81 last July) to be exceeded, but market history teUs us it is unlikely to be exceeded by very much. Thus, It would be quite possible to see a new peak during the next year, probably in the first half, without destroying the essential shape of the Inside-year pattern. What Is to be expected following such a high While it is pOSSible, we do not at the moment foresee an Immediate attempt at the sort of upside penetration referred to above. We feel It, first of aU, unlikely that such a penetration would occur in a buU market already evidencing signs of maturity. We find, also, hundreds of Individual stock patterns where the first attempt to move Into the overhead supply existing under previous peaks has hurled prices back sharply, suggesting, In our view, that further consolidation or base-building is necessary before a sustained attack on previous nowpeaks can be mounted. Thus, we would expect, perhaps, during the middle part of the year, a period ofconsolldation -and/or te,lporai'y weakness In 'which partiaUy-cOiiiPleted 'bases can reach a-more mature stage. Once this stage is complete, the second half of 1976 could present a much brighter picture and this, indeed, would be consistent with the historical pattern of Presidential election years which have shown a consistent tendency toward strength In the latter six months. Such strength In the latter part of the year, taking place after stocks have had more time to build meaningful ba ses , might well be a prelude to a move out of the stultifying trading range which has entrapped the st'ock market over the bulk of the last decade. WE WISH YOU ALL A HAPPY AND PROSPEROUS NEW YEAR Dow-Jones Industrials (1200 p.m.) 854.06 ANTHONY W. TABELL S & P Compo (1200 p.m.) 89.68 DELAFIELD, HARVEY, TABELL Cumulative Index (l2/24/75) 481.35 AWT/jb -, No statement or expresSion of opmlon or any other motter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of on offer to buy or sell any security referred to or mentioned The matter IS presented merely for the converlenCE of the subSCriber While we believe the sources of our Informa- tion to be reliable, we m no way represent or guarantee the accuracy thereof nor of the statements mude herem Any octlon to be token by the subscriber lihould be based on hIS own mvestlgatlon and information Jonney Montgomery Scott, Inc, as a corporotlon, and liS offICers or employees, may now have, or moy later take, poslilons or Irade m respect to any secU'llles mentIoned In thIS or any future Issue, and such posItIon may be dIfferent from ony v,ews now or hereofter expressed JT\ thIS or any other Issue Janney Montgomery Scott, Inc. whICh IS registered WIth Ihe SEC as an Investment odv.sor, may gIve adVIce to Its Investment adVIsory and other customers .ndependently of any statements mode In thiS or In any olher Issue Further information on ony security mentioned herein IS available on request

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