Tabell’s Market Letter – April 30, 1976

Tabell’s Market Letter – April 30, 1976

Tabell's Market Letter - April 30, 1976
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TABELL'S MARKET LETTER – 909 STATE ROAD, PRINCETON, NEW JERSEY 08!!40 DIVISION OF MEM8ER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE April 30, 1976 I)s ifficu)ttosaywith any certaintyat this pointjust how the past two months of trading clear– will finto stock -markethlStoryonce-the1;Tsticai-patt;mtiniiliY-becOme Perhaps the onfy-O- guess that can be ventured at this time is that it will be remembered as the period when the magic1000 figure on the Dow-Jones Industrial Average finally lost its magic. In the past eight weeks, the 1000 level, which many people had firmly believed would signify a new era when finally achieved, has been penetrated on the upside on five separate occasions only to be repenetrated on the downside on four of those occasions. The torpor of the last penetration, which occurred at midweek this week, left little in the way of confidence that still a fifth move back down into the 900's might not be in the offing. The present stock market era can be dated with some accuracy now as having begun on February 25, when our daily breadth index scored its high and the Dow posted a peak at 994.57. Since that time, as we have pomted out with perhaps sickening regularity, breadth has failed to score a new peak despite successive new highs in the Dow, and our Cumulative Index, reflecting the action of all NYSE isses, has also drastically underperformed the averages. Recognizing these and other signs of loss of m6mentum, many of our colleagues have seized upon the opportunity to take a somewhat bearish stance. Our own position, as readers will be aware, has been to pOint out that, while market action during the period can hardly be described as good, it is hardly all that bad either. Let us try to quantify a few of the phenomena that have actually taken place since February 25. For one thing, volume has decreased dramatically. During the period of the meteoric rise from December 5, 1975, to the end of February, average daily volume was 25.7 million shares, with a rec- ord 44.5 million share day being recorded. Since the late February benchmark date, it has decreased to under 22 million shares, and, since March 29, it has virtually dried up to an average daily figure of–1R. 7 milUonshares. ,Whileall thtswasgoingol1hQ'Never ,JllOr ,t()QkWj3Sa RPrenJIysrnging hands on the upside than the downside. Volume 0;'\ days that the market advanced averaged i3. 2 million shares and on days when it declined, only 20.9 million. As measured by QUOTRON, the average trad- ing day during the period saw 9.7 million shares of upside volume and 9.3 million shares of downside volume. If the market has spent more trading activity going up than gOing down, it has, in contra st, spent more time on the downside. It advanced on 20 days during the 45-day period in question and declined on 25. Similarly, on average, more stocks have been going down than up, although hardly by a shattering plurality. The average number of advancing stocks for the 45 days has been 702 and the average number of declining stocks 777. However, in very few cases has a decline been serious enough to drag a falling issue back to its 1976 low. On 38 of the 45 days, new highs for 1976 have exceeded new lows, and, on average, each trading day has seen seventy-two 1976 highs versus only fourteen 1976 lows. In terms of average percentage change for all stocks, the underlying figures show noticeable but not overwhelming weakness. On 28 of the 45 days, the average downside percentage change was greater than average upside percentage change. However, the actual levels of percentage change in each direction were fairly close. The problem with all these numbers, as we said above, is that they are bad but by no means overwhelmingly bad. Contrary to popular opinion, market forecasters do not like being on the fence, and we confess we would be a great deal happier if we could take an unreservedly bearish or bullish positlOn. Our assessment of the numbers at this time just does not permit us to do so. – On'the other handtime is slowlybeginningto runoutfor themarket insofar.asupside ac.,. -….-,- tion is concerned. Periods of trading within a restricted range such as the one that has existed since late February do not, historically, last all that long, and, if the current trading range is not to be ul- timately viewed as a penod of distribuhon, it will have to be penetrated with some decisiveness on the upside before too much more time has elapsed. If this does not happen, the desultory action, which we have tried to enumerate above, will have to be, m our view, regarded with a bit more peSSi- mism than we find ourselves now able to derive from it. Dow-Jones Industrials (1200 p.m.) S & P Compo (1200 p.m.) Cumulative Index (4/29/76) 599.47 AWT/jb 999.29 101.88 ANTHONY W. TABELL D ELAFIEW, HARVEY, TABELL No stotement or c)(preUlon of opinion or any other matter herem contolned IS, or IS to be deemed to be, directly or indirectly, On ofler or the soliCltotlon of on offer to buy or sell any sec\lflly referred 10 or menhof1ed The matter IS presef1ted merely for the COf1verQef1CC of the! ,ubscrlber. While we believe the sources of our mforma flOf1 to be reliable, we In no way represef1t or guaraf11ee the accuracy thereof nor of the stotemef1ts mude herem Any action to be taken by the subSCriber should be based on hiS own Investigation and Infarmatron Janney Montgomery Scali, lf1c, os a corporation, ond Its officers or employees, moy now have, or may later take, posltlof1S or trades In respect to ony securities mentlof1ed In thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or ony other Issue JOf1ney Montgomery Scott, Inc, wh,ch IS registered with the SEC as on Investment adVisor, may give adVICe to Its Investment adVisory and at he. CUSTomers mdependently of any statements made In th.s or In ony other Issue Further mformatlon on any security mentioned herem IS available on request

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