Viewing Month: September 1976

Tabell’s Market Letter – September 03, 1976

Tabell’s Market Letter – September 03, 1976

Tabell's Market Letter - September 03, 1976
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– . TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEM8ER NEW VORl( STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – , September 3, 1976 .. -,J\..gI,,-alJ1J.!–c;holarILwork hs been d on the exisence of periodic cycles or waves in stock price action. A numb,;r of the plilillsned woikii1 tl1fs-1l'rea havesee'rr'-ed't6iis'to-be-' of somewhat dubious validity, but there is certainly no doubt, in our mind at least, that a certain amount of periodicity does exist in stock price action. One of the recurring cyclical events which has been studied at some length is the cycle of a bit longer than four years which tends to exist ….., between major stock market lows. The tabulation below which lists the months of major bottoms in the Dow-Jones Industrial Average for the postwar period does, indeed, suggest the existence of such a cycle. As the table quite clearly shows, these major bottoms have occurred regularly at intervals between 43 and 56 months with an average interval of 51 months. If the historical experience is duplicated, there- fore, we can expect the next major stock market bottom to occur sometime between July, 1978, and August, 1979, more specifically, in March, 1979, if the current experience conforms exactly to the average. Months from Months from Trough Date Previous Trough Trough Date Previous Trough June 1949 – Octobe /1966 52 September 1953 51 May 1970 43 October 1957 49 December 1974 June 1962 56 Average 51 The foregoing is, of course, of a great deal more scholarly than practical interest. In a stock market that is a bit more than a month past a new cycle high, we obViously are not par- ticularly interested in predicting the date of the next low. What we would like to know is the 1—I'-'–dddteOf-thecurrentbuUmarket-s.;opeakn-her..,aver–,-..l,srutlyefthe-S.l.month-cy.cl.ehas..a,-..–! few things to tell us. As our readers WIll be aware, we have been incessant in drawing attention to the fact that the stock market, since the middle or late 1960' s, has spent its time locked in a flat, secular trading range as contrasted with the upward secular trend which prevailed from the end of World War II up untll approximately the last decade. Another characteristic of this trading range has been the shifting backward within the 51-month cycle of the date on which the cycle peak occurred. This is shown by the table below which shows the seven market troughs listed above, the associated subsequent peak, the number of months from trough to peak, the total months in the cycle, and the percentage of months spent advancing. Market Trough Market Peak Months Trough to Peak June 1949 January 1953 43 September 1953 June 1956 33 October 1957 December 1961 50 June 1962 February 1966 43 October 1966 December 1968 26 May 1970 'January 1973 32 Tota I Months 51 49 56 52 43 55 Advance 84 67 89 83 60 58 'December 1974 July 1976 19 to date As the table quite clearly shows, in three of the first four cycles, the market spent — over 80 of its time advancing. It could even be argued that 1953-56 is really no excepti,;m since th.Jul)-e ,195!.!Ughs were almost duplicated in July, 1957. In dictrast arerrthe.,I;;.a.;s.ttw…o;;'I'-',- cycles, both of which only spend approximately 60 of their total lives in the advancing phase. The historical data seem to argue against July, 1976 having been a major peak. Were the current cycle to equal the shortest one on record, that of October, 1966 – May, 1970 and spend 60 of its time advanCing, this would still not produce a peak before December of this year. However, a peak at any time between now and the middle part of 1977 would cause the present cycie to look suspiciously like the last two and, thus, suggest that the flat, secular trend remains in effect. Were the market able to continue its advance through or beyond the end of 1977, it might well furnish a sign that an uptrend similar to the one that included the first four cycles above had been mitiated. Dow-Jones Industrials (1200 p.m.) S & P CompOSite (1200 p.m.) Cumulative Index (9/2/76) 607.46 983.05 103.91 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWT/jb No stotement or eprenlon of opinIon or cny other matler heretn contolned IS, or IS to be deemed to be, dIrectly or Indirectly. on offer or the 501'C.totlon of on offef to buy or sell any 5ecvTlty referred la or mentioned The matter Is presented merely for the converlcnce of the subSCriber While we believe the sources of our Information ta be reliable, we In no way represent or guarantee the occvrocy thereof nor of the statements mude herein Any action to be token by the subSCriber should be based on hiS own mvestlgotlon and information Janney Montgomery Scott, Inc, as a corporat.on, and .ts officers or employees, may now have, or may later toke, POSITiOnS or trades In respect to cny seCUrities menlloned In thiS or any future Issue, cnd such position may be different from any views now or hereafter e)'pressed In thl or any other Issue Jonnc Montgomery Scott, Inc, whICh IS registered With the SEC as on Investment adVisor, may give adVice to lis Investment adVisory and othel customers Independently of any statements mode In thiS or In any other Issue Further information on cny security mentioned herein IS available on request

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Tabell’s Market Letter – September 10, 1976

Tabell’s Market Letter – September 10, 1976

Tabell's Market Letter - September 10, 1976
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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 September 10, 1976 As this letter has tried to show in the past, the historical record strongly suggests long trading,.ra,nge,s,,suchi'!.Uhe current,one, ,turning out to be consolidations rather than reversals. A re-examinatio- of the curent tacligangeis lnsttit'e';;;e ag'Ean'approacl1the mysti'CT(rOUlevel7 – The lowest price at which the Dow-Jones Industrial Average-bas recently sold is 958.09, first reached on the 7th of, June. The highest recent price, and the peak for the entire bull market, has been 1011.21, a figure realized on July 12th. This represents a 5.54 range from low to high. Having established these levels. we can look backwards into market history utilizing our computer data bank and find the last date this year on which the Dow sold above 958.09 and never subsequently sold be- low it. The date was February 18th, 142 trading days ago as of today. The Dow has. in other words. spent 142 consecutive trading days locked in a 53 .12-point range. The following table (Exhibit I) documents the swings that have taken place within this trading range since the end of February of this year. Included in the exercise are February 25th (994.57) and September 8th (992.94) since the average did, indeed, post intraday highs above 1000. EXHIBIT I EXHIBIT II ONE-MONTH PERIODS' Date Closing D)1A Ending Month Advances Declines Avg. Chg. 2/25/76 994.57 January 33 17 0.97 3/4/76 3/11/76 970.64 1003.31 February March 28 22 0.05 27 23 -0.13 3/15/76 974.50 April 28 22 0.95 3/24/76 4/2/76 1009.71 991. 58 May June . 26 24 24 26 -0.78 0.89 4;'5/.1.6 4/9/76 0,0,L09 968.28 . — ATuulYgust- 33 17 1.98 33 17 1, 5'2 4/21/76 1011.02 September 21 29 -1. 42 5/5/76 986.46 October 28 22 -0.19 5/10/76 1007.48 November 29 21 0.44 6/7/76 958.09 December 37 13 1.28 7/12/76 1011.21 Total 347 253 0.46 8/26/76 960.44 9/8/76 992.94 We have stated that trading ranges statistically favor a consolidation pattern and have – defined the current trading range. Assuming a consolidation pattern, when will this trading range be penetrated The question may remain unresolved for at least a while as there is a seasonal pattern which we found to be significant — the tendency toward a decline in the month of September. As shown above (Exhibit II) in the 50 years beginning with September, 1926 through 1975, the Dow advanced 21 times in September and declined 29 times, and the 50 years have shown an average per- centage change on the month of -1.42,September being the only month which shows an average decline of greater than 1. Of the 600 months in the 50-year period, 347 showed advances and 253 showed declines. Standard statistical tests can be applied to give us the probability of finding a group of 21 advances and 29 declines in such a population on a purely random basis. The chance of doing so is well under 5, thus suggesting that there may well be, indeed, some validity to the September phenomenon. If,we.examine.the.Septemberrecord.more.closely-,itis.rather.interesting,.The.month.has produced declines of 30 and 13 back in the 1930's, and the biggest advance it has ever produced is 13, also in the 1930's. In the postwar period, the largest advance has been 6.71 in 1973, and the largest decline, one of 10.42 in 1974. It is also interesting to separate the Septembers into periods identifiable by hindsight as bull and bear markets. 34 Septembers have fallen within bull- market periods, and, although, by definition, in such a period there is a strong tendency for the market to be up, the score is just about even, with 18 advances and 16 declines. In the 16 years identifiable as bear-market years, there have been only three advancing Septembers and 13 declines. Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (9/9/76) RJS/jb 986.62 104.41 611.22 ROBERT J. SIMPKINS, JR.' DELAFIELD, HARVEY, TABELL No statement or expreslon of opinion or any other matter herein contained IS, or 15 to be deemed to be, dlredly or ,ndirectly, on offer or the sollCltotlon of em offer to buy or 5ell ony security referred 10 or menhoned The motter IS presented merely for the converlenc/ of the subcrlber While oNe believe the sources of our information to be rehoble, we In no way represent or guarantee the accuracy thereof nor of the statements mude herein Any action 10 be loen by the subSCriber should be bosd on hiS own investigation and information Janney Montgomery Scoll, tnc, os 0 corporotlon, and Its officers or employees, may now have, or may later toke, pas IOns Of trades In respect to ony securities mentioned In thl or any future Issue, and iUch position may be different from any views now or hereafter expressed In II-us or any olher Issue Janney Montgomery Scoll, Inc, which IS registered wl!h the SEC as on mves!ment adVisor, may give odvlce to Its Investment adVISOry and olhel customers Independently of any statements mode In thiS or In any other Issue further Information on any seOJrlty mentioned herein IS ovoilable on request

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Tabell’s Market Letter – September 17, 1976

Tabell’s Market Letter – September 17, 1976

Tabell's Market Letter - September 17, 1976
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—— —- ————cc——————————c—– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VOl'll( STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE September 17, 1976 One of the reasons that technical analysis w1l1 always have certain aspects of an a t erath eLtha n.a. S cienc e,isdha Lthebehavior,coftechnica I.indica tors .verycLoften.tends.tocha ng e I over time. One market characteristic that has distinctly altered its behavior in recent years is the action of volume as related to stock market tops. It has long been our practice to study upside volume (volume on days where the market advances) separately, and we smooth the curve of the statistic by taking a 25-week moving total of the figure. From the 1920's to early 1960's, a fairly consistent pattern emerged. Upside volume generally declined dramatically during market downswings but, almost invariably, this decline began well before the market reached its peak and was largely underway at the time of the market's high. Upside volume was, thus, a leading indicator, extremely helpful in the advance recognition of market tops. The following table shows the date, the Dow, and the upside volume total in mlllions of shares for various bear markets in the past, showing each at the time of the peak of upside volume, the time of the peak in the Dow and the time of the Dow's ultimate low. As can clearly be seen, through 1961, upside volume tended to peak out as much as a year before the Dow did so and well before the Dow reached its high. Upside Volume Peak DJIA Peak – DJIA Low Date DTIA Up Vol Date Up Vol Date DTIA Up Vol Feb. 2, 1929 319 307 Sep. 7, 1929 381 235 Jun. 4, 1932 45 74 Mar. 7, 1936 157 181 Mar. 13, 1937 194 156 Apr. 2, 1938 107 66 Feb. 21, 1946 204 – 135 May 31, 1946 212 107 Nov. 30, 1946 165 69 Apr. 29, 1955 430 260 Apr. 6, 1956 521 167 Oct. 25, \957 423 115 Ma r..l 3 1 96J4..,..,2 9.7 .Tan.8,,,,,l9JiD 16B5–169 Dct .2K,19 60,5J.2,,,,…..LH 4 May 26, 1961 702 375 Dec. 29, 1961 731 – '226 Jun. 29, 1962 '536 – 188 Feb. 11, 1966 995 578 Feb. 11, 1966 995 578 Oct. 14, 1966 754 335 Sep. 20, 1968 924 891 Dec. 13, 1968 981 785 May 29, 1970 641 539 May 26, 1972 971 1326 Tan. 12, 1973 1051 1080 Dec. 13, 1974 579 762 As the lower half of the table shows, however, this behavior changed dramatically starting with the 1966 bear market. In 1966 upside volume peaked in the same week as the Dow and declined coincidentally with the market's fall. There was a slight lead in 1968, but not enough for forecasting purposes, and the action in 1972 was ambiguous. Upside volume began to decline in May, seven months before the market peak but then bottomed out and began to rally in the late fall. What is perhaps interesting at the moment is the action of upside volume over the past two years. Between July 11, 1975 and January 2, 1976, upside volume dropped almost 50 from 1676 million shares to 892 million shares. During the latter half of 1975, it will be recalled, the market remained essentially flat. The same phenomenon seems to be repeating itself today. During the agonizing trading range which has characterized 1976 since February, upside volume peaked at 1750 million shares on June 25th and has 'declined so far to 1183 million shares. Various interpretations may be placed on this phenomenon, but one of the more plausible runs as follows. It has been demonstrated that, since 1966, at least, a decline in up- slde volume iiqllt..witll.,C!rrectio–ill!ry.P12sJ'. Sllchdeclins.,toQ.!;, place,during .bea rmar,, ' -kets, but one also took place in late 1975. We now know, since the market advanced sharply in early 1976, that late 1975 was, in fact, a correctionary phase and that the coincident upside- volume decline fitted the normal post-1966 pattern. It certainly is conceivable that the similar action of upside volume at the moment is telling us that the present trading range is, likewise, serving as a correction to the early 1976 advance and that the ultimate resolution will be another upward leg in the bull market. Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (9/16/76) AWT/jb 992.35 105.70 614.14 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any olher moIler herein contolned 1, or Is to be deemed to be, directly or Indirectly, on offer or the solicltotlOn of on offer to buy or sell any S8CIJrlty referred to or mentioned The motter IS presented merely for the converlenCG of the subSCriber While …..e believe the !.Curces of our mforma1101'1 to be reliable, we In no way -represent or guarantee the accuracy thereof nor of the statements mude herein Any actmn to be token by the subscriber should be based on hiS o …..n Inveshgotlon cnd ,nformat,on Jonney Montgomery Scott, Inc, as a corporeflen, and Its officers or employees, may now have, or may Icter toke, POSitions or trades ,n respect to any Secufltles mentioned m thiS or eny future Issue, al'ld such posltmn moy be different from ony views now or hereofter epressed In ttHS or any other Issue Jonney Montgomery Scott, Inc, which IS registered With the SEC os on Investment odvlsor, may give adVice to Its Investment adVISOry end othel customers ,ndependently of any statements mede In this or In ony other Issue Further Ihforrnellon on any security mentioned herem IS available on request

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Tabell’s Market Letter – September 24, 1976

Tabell’s Market Letter – September 24, 1976

Tabell's Market Letter - September 24, 1976
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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 September 24, 1976 It had to happen sooner or later, and finally, in this week's trading, the Dow-Jones Industrial Average moved out of the constricted trading range which had retained the index in its —grasp-sincBearlythisyear-In'theJsharpest'advancein'over–ayear-;,,-theBow,-after-ahesitant'—I start on Wednesday morning, moved ahead more than 20 pOints to close at 1014.79, the highest level that has obtained in 44 months. Volume expanded on the rise to over 30 million shares and increased to almost 33 million shares In Thursday's trading. Pessimists and nitpickers can, and undoubtedly will, find a number of things to fault as far as the rally is concerned. On a short-term basis, for example, breadth action was definitely below par, in direct contrast to the manner in which breadth had outperformed the Dow in the latter phase of the trading range. Wednesday's market, it is true, showed 1132 advancing stocks, but this number, on an historical basis, is not all that impressive for a day on which the market moved up as much as it did. It is also easy to criticize the lack of follow-through. The Wednesday rally extended itself on Thursday morning to reach up over the 1020 level in the afternoon but then succumbed to profit taking and closed almost unchanged on the day with advances and declines about even. Intermittant attempts to extend the rally on Thursday fizzled with the average closing moderately lower on the day, and the weakness was extended with a broad drop on Friday morning. For all this, we are inclined to trust.the week's upside breakout as being a valid one. We have been noting, in past issues of this letter, a number of factors that seemed to favor an eventual upside penetration of the trading range and a further extension of the bull market. Among these -h8Vebeen the-fact fhat narrow trading ranges in Hie pastnave tended more often than not to be consolidations rather than reversal phenomena and the fact that the second half of election years had, in the past, generally tended to produce upward markets. We had also noted the improvement in breadth action since last July. In a sense, the Dow's final move Into hew high territory had been forecast by the broader-based indices,such as the S & P and NYSE indices, all of which had forged their way into new high territory some time ago. The final clinching factor in favor of higher prices, in our opinion, however, is the almost total absence of truly poor patterns in individual stocks. Of individual NYSE issues, there were only a bare handful of stocks that had, as of last week, formed any noticeable tops, and in these cases, the tops invariably were small or downside objectives were close to being reached. The vast majority of issues, when viewed on a long-term basis, were either in unimpaired uptrends or in some stage of a base formation process. There exists some difficulty in trying to pinpoint the extent of any upside move from these levels. A standard forecast seems to be develoing calling for a relatively minor move to, perhaps, the 1050 – 1100 range. A conventional reading of the recent trading range as a base formation supports this thesis, yielding a price target in the vicinity of 1130. We confess that we find this issue academic at the moment. ,…,- -0 -;…. — .o- v ………………. -.c- 1'!l –;..- The point to keep in mind, we think, is the fact that the market's recent action plus the action of individual stocks clearly suggests a favorable climate for equity investment over the near term. It is a fact of stock market life that deterioration can set in at any time, and the job of the technician is to call attention to that deterioration when it occurs. At the moment, precious little deterioration has occurred, and that which has taken place is relatively minor In scope. The burden of proof, in other words, falls on the bears. Pending the develop- ment of further market weakness, we think that investors should operate on the assumption of probable higher prices. Dow-Jones Industrials (1200 p.m.) 1009.64 S & P Composite (1200 p.m.) 106.81 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Cumulative Index (9/23/76) 622.02 AWT/jb No stolement or expression of opinion or ony other moNer herein conlOlned IS, or 15 to be deemed 10 be, dlrelly or md.rec1ly, on offer or the sohltahon of on oHer to buy or sell ony secvnly referred 10 or menlioned The molter IS presented merely for Ihe conVe(llenCE of the subscflber While we believe Ihe sources of our Informo- lion 10 be reliable, we In no woy represenl or guarantee Ihe occurocy thereol nor of the statements mude herein Any action to be taken by the subscriber should be bosed on hiS own IIwestlgatlon and Informallon Janney Montgomery Seal!, Inc, as a corporohon, and lis officers or employees, may now hove, or moy loter toke, POSitions or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such position moy be differenT from anv views now or hereafter epressed In Ihls or any other asue Jonney Montgomery SOOtT, Inc, which IS registered With the SEC as on Investment adVisor, may give odvlce to Its Investment odvlsory and athel customers Independently of ony statements mode In th or In any other 1Ue Further ,formation on any 5ecunty mentioned herein IS available on request

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