Viewing Month: February 1976

Tabell’s Market Letter – February 06, 1976

Tabell’s Market Letter – February 06, 1976

Tabell's Market Letter - February 06, 1976
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— —— – —o– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBEA NEW YORK STOCK EXCHANGe, INC MEMBER AMERICAN STOCK EXCHANGe February 6, 1976 Last week's issue of this letter discussed the fundamental possibilities regarding an ulti- mate upside breakout from the trading range having a rough ceiling around current levels which has – – effectively cQnfinedcthe DQw-Jones.IndustriaLAverage -since themid-19 60s .-It isperhaps. a-ppr-opriate-'i'''' to return this week to our normal role and discuss the same pssibillties from a technical point of view. What, indeed, is the technlca I evidence so far that the present advance constitutes the first phase in a major upside breakout from what has been a 12-year long plateau and a move to a new and higher normal range for the DJIA and stock prices In general It Is tempting to try to draw conclusions from the astounding market strength of January which, incidentally, constituted the seventh strongest single month since 1926 and the strongest month of the postwar era with a 14.41 advance In the Dow being posted. However, it Is precisely the rarity of an advance of this magnitude that makes it rllfficult to draw analogies. The next best month of the postwar era was, Interestingly, January, 1975, with a 14.19 advance. November, 1962, saw a 10 advance and April, 1968, an 8 advance. These all constituted, in effect, the take-off rallies for what later proved to be major bull markets. However, they all came after sharp market de- clines, not, as did the current advance, after a six-month period of consolidation. One must be hesi- tant, therefore, we think, to generalize about future prospects based on the rapidity of the current rise. (An Interesting sidelight, incidentally, is the appearance of the two strongest rallies of the postwar period in the month of January in each of the past two years. Is this a statistical aberration or a new pattern In today' s institutionally-dominated market) If one turns to conventional point and figure analysis, where time, of course, is not a fac- tor, it now becomes apparent that the base for the current advance was formed over the entire second half of 1975, and that the upside objective Is now,in all probability, in the 1030-1080 range. Ability of the Dow to reach these levels would, indeed, constitute an upside breakout from the trading range —!. we are-ta-I-king'aboutton-Y'onLamargina-1 bas1-sandon-ewhtch';'wefeel, vuuw-nor- De rel1ecionYn'Wn–f–. out the accompaniment of additional technical evidence. The significant development in the present market is not, we think, taking place In the averages, whose major components are beginning to reach short-term upside objectives. It Is in the broadening of the advance to include important numbers of secondary stocks, stocks which effectively have been ignorerl in the marketplace for the past four or five years. As we a 11 know, the advance through the end of 1972 featured the development of the two-tier market in which the institutional growth favorites len the parade. This mania collapsed of its own weight in 1973-74, and the leaders of the subsequent bull market have, of course, been the cyclical issues contained in the DJIA, which, in a sense, have been recovering from the abnormally low comparative valuations placed on them at year-end 1974. The growth favorites of three years ago, interestingly enough, are not participating to any great degree in the current advance (averages of major growth stocks are the only ones at the moment not posting 1975-76 highs). What is taking place is that seconrlary issues are now apparently completing base-building formations and slowly moving into what may be major uptrends. We examine each week some 1500 individual issues and total the number in major and minor up and down trends. The nadir of investor confidence was attained at the end of 1974 when fewer than 2 of all stocks remained in major uptrends and 90 were in major downtrends. By July of last year, this situation had improved to the point where 21 of all stocks were in major long-term uptrends, and around 58 remained in major downtrends. That figure, interestingly enough, did not increase signif- icantly during the consolidation of late 1975 reaching a peak in October of only 60. As of thiS week, we had returnedjusalout theevels of last July Jp termof.percentg!,, of ,tck.. w!!ic!',have. broken out into major uptrends, the sort of uptrends which tend to suggest newall-time cyclical highs. What is also significant is that the number of stocks in major downtrends has now been re- duced to just over half the list indicating that base-building, on a longlange basis, is continuing. It is the continuance of this sort of process, if, indeed, it does continue, that will give us the final piece of evidence that a new market era has, indeed, begun. If the present advance IS to be sustainable on a long-range basis, It must broaden to include not only the large institutional favorites but a wide range of listed issues. The fact that such a broadening could now be well underway is, to us, the single most encouraging facet of recent market history. Dow-Jones Industrials (1200 p.m.) 960.96 ANTHONYW. TAB ELL S & P Compo (1200 p.m.) 99.87 DELAFIELD, HARVEY, TABELL Cumulative Index (2/5/76) 585.79 AWT/lb No statement or expre5slon of OpinIon or Clny other motter herem contolned IS, or IS 10 be deemed to be, dlrealy or indirectly, on offer or the SOllCIlolion of an oHer to buy or sell any security referred 10 Or mentioned Tne molter I presenled merely for tne conver-leneE of tne sublcrlber Wnlle 'lie believe tne sources of our informa- tion to be relloble, we In no way rep-esent or guarantee tne accuracy tnereof nor of tne statements mude herein Any oclion to be taen by Ihe subscflber snould be bosed on hts own Investlgotlon and Informolton Janney Montgomery Scolt, Inc, os 0 corporat.on, and lIS officers or employees, may now hove, or moy loter toke, posttlons or trodes In respect 10 ony S!Kurlhes menttoned In thiS or any future Issue, and such pOSition may be different from OilY VieWS now or hereafter expressed In thiS or ony other Issue Jonney Montgomery Scali, tnc, which IS registered WIth the SEC os on Investment adVisor, moy give adVice to ItS tnVestment adVisory ond othet customers Independently of any slotements mode In thiS or In any other luue Further Information on any security menttoned herein IS aVailable on request

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Tabell’s Market Letter – February 13, 1976

Tabell’s Market Letter – February 13, 1976

Tabell's Market Letter - February 13, 1976
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DtVISION OF MEMBER NEW VORK STOCK eXCHANGE, INC MEMBEA AMERICAN STOCK EXCHANGE February 13, 1976 February has I so far I featured a somewhat- more modest stock market performance than the dynamic rise of 1976's first month. Mter a modest decline a week ago, the Dow-Jones Industnal Average rallied – – 'aga in 4n-the-early-part of this-week- and,breadth–led-the-ma,kehon -the upsideppostlng-a new high'at-mid-.-. week, despite the fact that, at that time, the averages had not yet moved to new highs. Although modest potential tops in the averages and a few issues exist, it has, historically, proven unwise to expect any se- rious correction at such an early stage of a market advance. Thus the short-term outlook continues positive. We noted last week that, in our view, the most encouraging feature of recent market action has been the development of leadership in secondary issues. To obtain a representative list of such issues, we sub- jected the 1500 issues we follow on a regular basis to a rather rigorous screening. We required in this screening process that the issue be both in a major and minor uptrend, the only exception being issues in major neutral or sideways trends where the minor upside objective suggested a breakout from that trading range. We required, in addition, that a definable upside objective be readable in the pattern and that that objective be a minimum of 50 higher than the current price. We then eliminated from the list all issues appearing in a list of 745 major companies, essentially based on the S & P 500 stock index plus appropri- ate additions. The process produced the following list of 77 issues shown below, together wIth Wednesday's closing price and the possible upside objective. Needless to say, the list is based on technical factors only and additional information is available on request. Stock Price Objective Stock Price Objective Airborne Freight Corp 16 20 – 32 Mich Seamless Tube 20 22 – 30 American Dist Tel NJ 27 46 Microdot Inc 21 37-45 Ametek Inc 23 37 Midland Ross Corp 22 44-57 Arcata National 13 22 – 25 Molycorp 24 32 – 44 Arkansas Louisiana Gas 24 29 – 44 Nalco Chemical Co 32 51-67 Arvin Industries Inc 13 25 National Chemsearch 40 52 – 76 , yech Aircr Corp , – BlOCK H & R Inc 19 30 19- . – O Northrop Corporation NCo;p' -24225584U– CTS Corp Ces sna Aircraft Co Colt Industries Inc Compugraphic Corp 22 39 – 47 26 38 – 58 36 44 – 60 30 57 Pacific Petro Ltd Petrolane Inc Pickwick Int! Pizza Hut Inc 29 35 – 46 25 29 – 46 19 39 28 31 – 44 Crouse Hinds Dennison Mfg Deseret Pharm Eckerd Jack Corp Eltra Corp Emery Industries Inc Entex Corp Envirotech Corp Fieldcrest Mills Florida Gas Co General Cinema Graniteville Company Great Northern Iron are Hammermill Paper Co Harris Corp Helmerich & Payne Hos pita I Corp Amer 'Host International Humana Inc Inmont Corp James Fred S & Co Jorgensen Kane Miller Corp Kennametal Inc Manpower Inc McLouth Steel Corp 23 41 28 35 – 48 17 31 – 44 29 56 41 60 – 68 13 24 26 29 – 50 28 46 – 59 19 32 – 40 17 26 – 33 22 34 – 56 15 20 – 25 15 24 23 34 – 46 40 62 34 70 27 43 14 30 13 22 – 34 12 21 15 32 34 40 – 60 16 30 22 34 14 30 21 24 – 38 Purolator Sea Conta iners Sheller Globe Simplicity Pattern Skaggs Companies Inc Smith International Southern Nat Res Inc Stone Container Corp Stop & Shop Cos Studebaker Wrthngtn Suburban Propane Gas Tenneco Inc Tyler Corp USM Corp Wall-Mart Stores Inc Wang Laboratories 'Aheelabrator Frye Zale Corp Buttes Gas & Oil Can Sup Oil Amalgam Dome Petroleum Fox Stanley Photo Prod Inter'l Couriers Corp New England Nuclear Pall Corporation Shenandoah a,l 40 54 – 76 18 37 13 26 19 38 39 60 34 58 53 78- 118 18 26 – 37 23 36 – 48 45 60 – 72 19 30 28 43 29 45 28 44 13 22 17 30 – 34 21 34 22. 36.- 47 25 35 – 42 42 64 – 69 33 46 – 54 11 25 21 29 – 47 31 48 28 30 – 48 27 44 Medusa Corp 21 Dow-Jones Industrials (1200 p.m.) S & P Compo (1200 p.m.) 32 963.32 100.03 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (2/12/76) 598.56 AWT/jb No statement or expression of opmlon or ony ofher motter herein conlOlOed IS, or IS to be deemed 10 be, directly or indirectly, on offer or the sollCltotlon of on offer 10 buy or sell any security referred to or menlloned The motter IS presented merely for the convellence of the subscriber. While we believe Ihe sources of our Informo tlon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the stotements m..,de herein Any action 10 be token by the subSCriber should be based on hIS own Investigation and information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now have, or may loler toke, pOSltlon 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 epressed In Ih,s or any other Issue Janney Montgomery Scoll, Inc, which IS registered With the SEC as on investment odvlsor, may give adVICe 10 lIs Investment adVISOry and olhel customers Independently of ony statements mode In thiS or In any other Issue Further information on ony security mentioned herein IS aVOIloble on request

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Tabell’s Market Letter – February 20, 1976

Tabell’s Market Letter – February 20, 1976

Tabell's Market Letter - February 20, 1976
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVIStON OF MEMBER NEW YORK STOCK eXCHANGE. INC MEMBER AMERICAN STOCI( eXCHANGE February 20, 1976 We have been remarking in past issues of this letter on our view that the signifi- ca,ntelemenLin -the1976, maketadancewa s- nots ().muGhthe'r-ise,of,the, a,verages,,a s.dynamic',a s that advance, in fact, has been, but the fact that leadership was broadening to include large numbers of secondary issues, stocks not included in the major market mdices. We included last week a representative list of such issues which had above-average technical patterns. It is also possible to document the widening leadership in the market by referring to market breadth statistics. As most readers of this letter will be aware, these statistics relate to the number of stocks which advance and decline on a given day. The norma 1 use of breadth statistics is in the forecasting of market tops,and they constitute one of the most valuable tools for this purpose. Inferior breadth at a time when the averages are making new highs has been a generally useful indicator of impending market weakness. Breadth figures can also be used, however, to document the dynamics of an advance and they are, indeed, doing so in the present instance. In the follOWing table, we have taken the two most recent market periods, that of the second half of 1975, when the market was undergoing a consolidation, and that of the rise from January I, 1976, through last Wednesday. We have divided the trading days in the two periods into five categories, those days on which the Dow was up 10 points or more, those on which it was up 5-10 pOints, those on which it was up under five points, days when it was down five points or less and days when it was clown five points or more. For each of these five categories, we have averaged the number of advances and the number of declines. As the table quite clearly shows, the difference between the two periods is striking. 1……. ,BJIk-…..,kUo1..;;5;;.';;-;D;e;cAAV3g1.',I;;75;….,,.,.,.,.,…,..,,……..,,..,Jka;,I;',IA9V7g;6,;Feb;;.!.1;9;;6…….,..,-,I…. Change 10 or more 5 to 10 Unch to 5 -5 to Unch -5 or more Days Adv. Declines Days Adv. Declines 10 998 388 8 1236 353 18 918 466 8 lOll 503 29 711 644 5 1007 524 27 633 715 4 760 742 36 405 982 8 619 901 In the second half of 1975, days which had 10-point or greater rallies in the Dow averaged less than 1000 advancing stocks, and only five of the ten such days actually showed better than 1000 rising issues. For 1976, 10-point-advance days produced from 1038 to 1466 ad- vancing issues. It is further interesting that during the 1976 period all days when the Dow was' up averaged in excess of 1000 advances, and there was no day where a rising Dow failed to pro- duce 900 advancing stocks or more. By contrast, in later 1975, days when the Dow increased but more issues declined than advanced were a fairly common occurrence. The record of 1976 has been even more spectacular when we look at declining days. The four days this year when the Dow was off by five points or less actually averaged more ad- vances than declines ,and even on those eight days so far this year when the average declined by five points or more, the breadth showing was fairly good, with an average number of advancmg issues of 619 and an average number of declines of 901. There were, indeed, two days in the latter category on which advances actually exceeded declines and, on the worst day of 1976 so far;-February5, – when 'theDow-droppen 'oy-ll-'r4 pofnts76respectaoleif80 'issues'closen higher on the day. What breadth figures quite clearly show at this point is that,regardless of what the averages may do, a Significant number of stocks are performing extremely well on the upside. As long as this sort of action continues, it would be unwise, in our view, to take an overly cautious attitude toward the stock market. Dow- Jones Industrials (12 00 p. m.) 986.38 S & P Compo (1200 p.m.) 102.18 Cumulative Index (2/19/76) 614.76 AWT/jb ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stalement Of e)(prcslon of opinion Of ony other molter herein contOlned IS, or 1 10 be deemed 10 be, dHec1ly or IndHectly, on offer Of Ihe sollcltotlon of on offer to buy or sell ony security referred 10 or mentioned The molter IS presenled merely for the converlencs of the subscriber While oNe believe the sources of our informa- tion to be reliable, wc In no way represent or guarantee the accurocy thereof nor of the statements mude herein Any action to be token by Ihe subscriber should be based on hiS own Investlgahon and Information Janney Monlgomery Scoll, Inc, as 0 corporation, ond Its officers or employees, may now have, or may later lake, positions or Irodes In respect to any 5.Ccuntles mentioned In thiS or any future Inue, and such posllion may be different from any views now or hereafter copressed In thiS or any other Issue Janney Montgomery Scolt, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to 11 Investment odvlsory and other customers Independently of any statements mode In thu or In any other Iue Further information on any security mentioned herein IS available on request

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Tabell’s Market Letter – February 27, 1976

Tabell’s Market Letter – February 27, 1976

Tabell's Market Letter - February 27, 1976
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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 February 27, 1976 Now that the meteoric rate of advance which started in 1976 has slowed somewhat, it is perhaps worthwhile to step back a bit and attempt to assess, in broad perspective, the meaning of the ,It;,eforhe, !,o.n9,-tElITl1JJl,!.ll..'of, thS!sJ,ock, n,art ,.J9al th..sroadPERty -!U!W1\ s.trl!,c , , more what we have repeatedly emphasized as the most important single technical fact regarding stock mar- ket action over the past decade — the flat secular trend of the equity market. As we have repeatedly noted, in these letters, since the middle 1960's, more than 10 years now, the bulk of trading on the Dow-Jones Industrial Average has centered between BOO and 950 with occa- sional excursions to around 1000 as in 1966, 1972 and the present and occasional equally temporary dips to the 600-700 range as in 1970 and late 1974. The trend of the Dow since 1966 can be described as being flat with a slight downward bias, while the trend of the more broadly based indices has been flat with an equally slight upward bias. All this is in marked contrast to the period 1942-1966 when the Dow, on a secular basis, advanced at an average rate of B.9 per year. It must be stressed that what we are talking about here are not bull and bear markets in the conventional meaning of the term. There have been plenty of both in the last decade including some doozies in both directions. What we are referring to is the broad, secular trend against which bull and bear markets are played out. The central question at the moment, therefore, is whether the current strength is a harbin- ger of the end of this decade -long secular trend and the forerunner of a move to a new and higher basic level of equity prices. Nothing is permanent, and the market climare which characterized the late 1960's and 1970's undoubtedly will end some day. The dilemma that faces us at the moment relates to whether' it has ended already or is about to do so. We hasten to assure our readers that we are not, at this pOint, about to issue a firm pro- nouncement on this question. Technical analysis, in our view, does not consist of blinding flashes of light which enable the analyst to leap euphorically from his charts to proclaim the beginning of an era. – It-Gons,ists,,4at-her,,-ofpa-ins,ta kinglyeighing, evid enceasltunfolds ,and4heastoundlngs trength .of. th,e-; first two months of 1976 does not, in and of itself, provide the evidence to cancel a decade of history. There are, at this moment, arguments that can be marshalled both for and against the proposition that a new stock market era is upon us. On the positive side, we have the chart configuration that exists for the Dow (although, interestingly, not for the broad-based indices) for the period from mid-1973 to date. The DJIA, it will be recalled, traded back and forth between BOO and 900 in late 1973 and early 1974 before breaking below 600 in October-December, 1974. The rise of the first half of 1975 took it back to the BOO-900 range where it spent the second half of that year before breaking decisively out of this range on the upside in the past two months. It should be evident that what we have described above is the familiar head-and-shoulders formation, and if the Dow's trading since mid-1973 is thus interpreted, an upside objective as high as 1650 becomes readable. Obviously, a move to anything re'sembling that level will signalize a very dif- ferent sort of stock market era from the one we have been in. Bullish arguments are further buttressed by the broadening of leadership which we have been drawing attention to in this space for the past month. Renewed public participation in secondary stocks after what has been essentially a la-year absence of such participation could fuel the fires sufficiently to make a much higher level of stock prices conceivable. And yet there are negative arguments. The first of these is the fact that the base forma- tion of late 1975 does not permit setting of objectives much above the 1030-1080 level in terms of the Dow. Such a move to marginal new highs would fit squarely within the context of the flat, secular trend of the past 10 years were the upmove to end there. And there is a further negative which, to our mind, carries even more weight. That is the fact that a great many issues, having now risen sharply from their depressed levels of late 1974; are beginning to encounter the overhead supply from their trading levels – previous to the 1973-74 bear market. This supply is, in many cases, truly massive and may well con- stitute an effective barrier to further advance until further reaccumulation and base-building takes place. The weight of technical evidence is thus, in our view, divided,and we think that the in- telligent attitude is to be aware of the upside possibilities without feeling a compulsion to proclaim loudly that the millennium has, indeed, arrived. If the overhead supply at current levels proves to be less of a barrier than might otherwise be anticipated and if market leadership continues to broaden, there will be plenty of time to recognize this fact. The wise course, we think, is'to enjoy the current advance for how- ever long it may last and to await the accumulation of further evidence before aSSigning it its place in the jigsaw puzzle of long-term stock market history. Dow- Jones Industrials (12 00 p. m.) 974. Bl S & P Compo (1200 p.m.) 99.90 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (2/26/76) 622.14 AWT/jb No statement or expreslon of opInion or any other matter herein Contained IS, or 1 10 be deemed to be, dHedly or indirectly, on offer or the sol'Cltatlon of on oHer to buy or sell ony security feferred 10 or mentioned The molter IS presented merely for the converlencc of the subscriber While He believe the sources of our Informa tlon to be reliable, we In no way represent or guorantee the accuracy thereof nor of the statements mude herein Any actIOn to be taken by the subscllber should be based on hiS own InVesligatton and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, moy now hove, or moy later take, pOSitIOns or trades In respect to any seculltles mentioned In thiS or any future Issue, and such POSition may be different from any views now or hereafter eypressed In thiS or any other Issue Janney Montgomery Scoll, Inc, which IS registered wllh the SEC as on Investment adVisor, may give odvlce to It Investmlmt odvlsory and other customers Independently of any statements mode In thiS or In any other Issue Further information on any secuflty mentioned herein IS ovadoble on request

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