Viewing Month: October 1977

Tabell’s Market Letter – October 07, 1977

Tabell’s Market Letter – October 07, 1977

Tabell's Market Letter - October 07, 1977
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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 – October 7, 1977 ;''1c-CT;;he;…s.tock market gave no evidence, in the past week, of wanting to reverse the dreary …;., pattern which has been itShalliiiaJ'overtnepasCyear; Inaeed;-itsrecentaCtion-hasconformeu almost exactly to that pattern. On a minor basis, the Dow-Jones Industrial Average has been moving down ever since July 22, when it closed at 923.42. To the subsequent low on September 28 at 834.72, the decline has been a shade under 10, and that decline can be characterized by a channel some 30 pOints wide, moving down at a rate of approximately 1 1/4 points per day. The upper limit of the aforesaid channel at the moment is just about at- the 850 level. It was, therefore, unsurprising, if disappointing, that the Dow managed to close at precisely 851.96 on Monday of this week before doing an about-face and heading due south in an almost-IS-point drop. ,The ostensible reason was fear of higher interest rates which has become, of late, the handy all-purpose explanation for outbreaks of the market's year-old malaise. In reviewing market action for the third quarter of 1977, it is obvious that a downward . bias was present although there did exist, in fact, a few bright spots. The S & P 500, in the period June 29-September 28, declined from99.30 to 95.31, a drop of 4.02. (The Dow for the same period, it is interesting to note, was down more than twice as much, 8.6. Analysis of the price action of individual components of the 500, however, suggests that many issues turned in reasonably good performances. 139 of the 500 issues in the S & P were actually up or unchanged for the quarter. 211 of the 500 issues did better than the Index itself, declining by less than the 4.02 decline shown by the average. No fewer than 304 of the 500 issues bettered the performance of the Dow, falling less than 8.6. The median decline was 5.9 — in other words, 250 issues declined less than 5.9 or rose, and 250 dropped by more than that amount. I- ….. The,leading &enQ(mef-iIl the I!ldextQt..tbl'qlrter was General Portland, Inc. ,w,.!'it,h'.'a- I 26.8 advance, this magnitude partially attributable,.of course,'to its low price. Second best, under the influence of a tender offer, was Babcock and Wilcox with a 26,5 rise. NCR Corporation rose 26.1. Other leading performers, with 19 or better advances, were Royal Crown Cola, Dr. Pepper, Dome Mines, Columbia Pictures, Franklin Life Insurance, Great Western United and ABA Limited. Examination of the top and the bottom issues in the 500 leads to a few observations. One phenomenon that seems to stand out is the resurgence, over the last quarter at least, of the old-line glamour issues. Prominent among the first 100-or-so stocks in the S & P performers are such names as Burroughs Corporation ( 11. 6). Philip Morris ( 11.4), Xerox ( 10.4), PepSico ( 9.4), McDonalds Corporation ( 8,4), Coca Cola (7.4) and K-Mart (6.3). fair number of other glamour stocks also managed to turn up on the plus side. On the other hand, cyclical stocks, especially steels, were among the weakest performers, Lykes Corp., Bethlehem Steel and Wheeling Pittsburgh Steel, all posting declines in the 30-40 range and U.S, Steel approaching this figure. Copper companies and aluminum companies were also prominent at the bottom of the list, posting, for the most part, drops of 20 or more. A few industry classifications seem to stand out. As noted above, two soft-drink makers were among the top ten performers. Restaurant companies, including Denny's, Pizza Hut and McDonalds all turned up as leaders. Finance and insurance stocks were also prominent at the top of the list, in most cases advancing by modest amounts in the face of a general market 1- –decline–Food stocks-seetned'for the most'part-to hold-their own or advance;-Oscar'Mayer,-H; – o J. Heinz, Standard Brands, Iowa Beef Processors and Beatrice Foods were among those issues managing to show advances for the quarter. On the other hand, coal, paper and tire-and-rubber stocks were generally among thos e is sues showing above-average declines . Note All comments above are based solely on technical factors and further . information is available on request. Dow- Jones Industrials (II 30 p. m.) 841. 30 ANTHONY W. TABELL S & P Composite (1100 p.m.) 96.12 DELAFIELD, HARVEY, TABELL Cumulative Index (10/6/77) 658.02 AWT/jb No statement Of e,..preslon of opinion or any other motler herem contolned IS, or IS to be deemed to be, dIrectly or Indrrectly, on offer or the sailellarlon of on offer to buy or sell ony security referred to or mentioned The matter .s presented merely for the conver'lence of the subSCriber While we believe the sources of our .nforma' tlon to be rellab!e, we In no way represent or guarantee the accurocy thereof nor of the statements mude herem. Any oct.on to be token by the subscriber shov!d be bosed on h. own mvestlgatlon and Infarmatlon Janney Montgomery Scoll Inc, as a corporat.on, and .ts officers or employees, may now have, or moy !ater toke, POSitions or trades m respect to tiny seCUrities mentioned In thiS or any future Issue, 'and such POSition may be different from any Views now or hereafter e.pressed Ifl thiS or any other Issue Janney Montgomery Scali, !nc, whICh IS registered With the SEC as on Investment odvlsor, may 91ve adVICe to ItS Investment adVisory and other customers mdependently of any slolemenl mode III thiS or III any other Issue further Information on any security mentioned herem IS avoilab!e on request

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Tabell’s Market Letter – October 14, 1977

Tabell’s Market Letter – October 14, 1977

Tabell's Market Letter - October 14, 1977
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————————————————————————————————————. TABELL'S MARKET LETTER ,, I ! I I I 909 STATE ROAD, PRINCETON NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE -I October 14, 1977 I – – t – – – – -… –Th eongoing process ,of stock -rna rket -d.ecline-Y'hich until. recently., .ha d cbeen .more -' I disquieting than painful, finally began to 'pinch a bitthi-week. One of the characteristics of the drop, as we documented statistically a few weeks ago, has been its relatively slow down- side momentum. Last week's trading, however, failed notably to fit into that mode. Such items as three consecutive 8-point daily declines in the Dow, 104 new yearly lows on Wednesday and 128 on Thursday, along with 1200-plus declining issues are hardly the hallmarks of a slow re- treat. Rather, they bring to mind the familiar and uncomfortable spectre of a bear market. Furthermore, if we examine the extent to which the Dow has been marked down over the past year, we now begin to get uncomfortably close to what we recognize historically as bear-market numbers. Since September 21, 1976, the Dow-Tones Industrials have declined by 19.4, and the drop measured from year-end 1976 is 18.6. Since we have beenacustomed in the past to using a 20 threshhold as the definition of a major bear market, it can be seen that the present downswing comes close to enjoying that dubious appelation. It is necessary, therefore, to address ourselves to the prospects of yet further decline. In such a discussion, the issue which must first be raised is the location of any possible sup- port level. Support, of course, is one of the more abused terms in the technical lexicon, and we have been hearing in the financial press for quite some time now about various support levels. These seemed to start around 880 and dropped slowly as the market pushed lower. Despite all this rather facile use of the term, there does, indeed, exist an area of support, support being properly defined in terms of a broad area rather than an absolute level. The existence of this support should be apparent to anyone with access to a chart of the Dow covering the last — -two-years' oftra ding!Afterreach1ng'itskpreviouslYear'marketlowill.late19'Z4i!tS80 ;-the' Dow.–,…..-I advanced in early 1975 in a four-month spurt that took it to over 830 by mid-April. Subsequent- ly, it peaked at just under 890 in mid-Tuly, 1975, declined to touch a low around 780 in October and, then, spurted again to over 1000 in early 1976. Nine months of trading in the latter part of 1975 took place in the 780-880 range. This should, in theory, constitute an area of demand, and it is, indeed, this area to which the Dow has now returned. The second factor which must be considered is the magnitude of the original top which preceded the current decline. That top is now clearly defined as the trading range between, roughly, 950 and just over 1000 which characterized all of 1976 trading between early February and mid-September. Analysis of this top suggests a downside target somewhat below the pro- jected support levels with objectives. centering around the 760-740 range. We have in the past been skeptical of these numbers,since individual stock patterns did not seem to support them. They now appear, however, remote, to be a possibility. It is, finally, necessary to consider whether, on a short-term baSiS, condltions(exlst for a market turn. This has not been, until recently, the case. The market has been declining, as we know, since mld-Tuly. However, the decline has been slow enough so that at no point, on a short-term basis, has its internal condition reached a stage which by standard definition could be called oversold. However unpleasant it may be, the action of the past few days is beginning to change this. Without in any way suggesting an immediate upside reversal, most short-term indicators are approaching levels at which the preconditions for such a turn, at anleast, are presenL – Tlie-marketTs, in surWrY'7in … ……….-. – ' area of general support, and the level of the most pessimistic readable downside targets is not terribly far below current prices. We have, mqre- over, for the first time since the middle of last summer, reached the sort of oversold condition from which a rebound attempt might be expected to take place. Under these conditions, it would appear Inappropriate to allow oneself to be panicked over the admittedly poor current action which erupted last week. Dow-Tones Industrials (1200 p. m.) S & P Composite (1200 p.m.) Cumulative Index (10/13/77) AWT/jb 820.17 93.58 642.99 ANTHONYW. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other maHer herem contained 15, or IS 10 be deemed to be, directly or ,ndirectly, an offer or the 50licltollon of on offer to buy or sell anr, security referred to or mentioned The matter IS presented merely for the convel'lenC!I of the subscriber While we beheve Ihe sources of our Informahan to be rehab e, we In no way represent or guarantee the accuracy thereof nor of the statements mude herem Any acllon to be token by the subscriber should be based on hIS own Inveshgal10n and Informallon Janney Monlgomery Sc01l, Inc, 0 0 corporotlon, and 11 officers or employees, may now have, or mcy loler toke, POSitions or trades In respect to any seCUrities menhoned In thiS or any future Issue, cnd such poslhon may be dlfferenl from any views now or hereafter exprCSed m thrs or any other ruue Janney Montgomery Scott, Inc, whIch IS registered wllh the SEC os on rnve51ment adVIsor, may give adVice 10 Its rnvestment adVisory and othel Clltomers independently of ony stolements made in thiS or m cny other Issue Further mformol1on on ony securrty mentioned herein IS OVOllab!e on request

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Tabell’s Market Letter – October 21, 1977

Tabell’s Market Letter – October 21, 1977

Tabell's Market Letter - October 21, 1977
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TABELL'S MARKET LETTER 909 STATE RO…. D, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YOAK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – October 21, 1977 Thomas Wolfe wrote a novel called You Can't Go Home Again, and the proscription – -embodied in that—title-has-a,paralleLfor,investors ,towjt—ygucanLlradg,at.y.!l.te-,clays ,!lrices, or at last month's or last year's prices either. . .- ,- , The maxim is worth recalling at a time like the present. In all too many cases, in- vestors are prone to remember the recent price history of stocks which they own and to allow that price history to influence their decision as to what ought to be done with the security in question at the moment. In the current instance, when prices have lately been falling fairly sharply, many security-holders will recall the fact that, a few months ago or a year ago, they could have sold stocks at higher prices and will allow this factor to color their decision as to whether or not to sell today. Like W. S. Gilbert's Flowers that Bloom in the Spring, this has nothing to do with the case. If probabilities favor the market heading lower by a sufficient amount, then stocks should be sold at today's prices regardless of where they may have been over the past year. By contrast, if stocks are attractively priced at current levels, they should be bought, and fears en- gendered by the fact that the market has been trending downward for nine months should be ignored. The above bromide is easy to expound in market letters but difficult to follow in practice. It is further complicated at the moment by the fact that individual investors' percep- tions of reality will vary depending on which sector of the marketplace their present portfolio most closely resembles. The Dow-Jones Industrials are now down 20 from their highs of September, 1976, the lowest level, as the newspapers are fond of pointing out, in over 24 months. Thus, if an investor's portfolio performance has recently resembled that of the Dow, he has watched his capital erode for the past 13 months and is poorer, theoretically, than' he has been at any time —durin'g the past two years. The DoW, however, — we reiterate theIact once again — -,Silot the onlysegment- – of'the market. We have referred to our Cumulative Index, which, we believe, is a fair measure of the action of all NYSE issues. In contrast to the Dow, it reached a new peak as recently as July 22, three short months ago. Since that time, it has declined along with all the other market indicators, but it is off by only 8.1 from its high and sold for its current price as recently as April and May. Quite obviously, perception of recent market history is going to be colored by which index more closely represents portfolio performance. A portfolio down 20 to a two-year low is likely to engender quite different feelings than one which has moved 8 off its high over 90 days and is stUl, roughly, within the confines of a six-month trading range. And, yet, as we noted above, It should all not make the slightest Iota of difference. The question — Indeed, the only question — concerns whether a strong probability exists that well-chosen equities will, in the future, trade Significantly below their prices at this precise point In time, October 21, 1977. Despite the dismal short-range behavior of the market, which has not improved any since we discussed It at some length last week, there are reasons to suggest that such is not the case. A glass can be either half-empty or half-full, and, while the fact that the Dow is already down 20 is not, as we noted, a circumstance calculated to generate wild enthusiasm, it does suggest that a fairly substantial degree of correction has already taken place. The fact that 20 has been a sufficient threshold to define major bear markets prior to 1970 should at least give one pause. It is arguable, of course, that in the current case the Dow has merely led the rest ' ….. – of themarket and, that 'eventually,the bulk of -stoeks .. represented' by the Cumulative -Index , wlll' ;- play follow-the-Ieader into the abyss. The above-average technical action which characterized the broad-based Indicators up until July Is, unfortunately, no longer a fact of market life. Yet, it must be noted that analysiS of individual patterns does not support this likelihood either. In all too many cas es, downs Ide obj ectlves of previously-formed tops are being reached and support levels are being attained. We are inclined to think, based on analysis of the present rather than on looking at the past, that precipitous sales of equities would, at this stage, be unwise. Dow-Jones Industrials (1130 a.m.) S & P Composite (1100 a. m.) Cumulative Index (10/20/77) AWT/jb 808.99 92.38 636.96 ANTHONYW. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of op'nion or any other matter herein contolned Is, or IS to be deemed to be, directly or indirectly, an offer or the lollcllollon of on offer to buy or sell any ecvnty referred 10 or mentioned The molter IS presented merely for the conve,ence of the subSCriber Wh,le Ne belreve the sources of our Informo f,on fO be rei, able, we m no way represent or guarantee the accuracy thereof nor of the statements mude herem Any aC1lon to be faken by the subSCriber should be based on hiS own Investigation and ,nfOrmaIIO., Janney Montgomery Scott, Inc, as a corporation, and 115 officers or employees, may now have, or may lofer toke, poslhons or trades in respect to any secur,IIes menlloned In thIS or any future ISSUe, and such POSition may be different from any views now or hereafter e)(presed In thiS or any other Issue Janney Montgomery Scott, Inc, wnlch IS reglslered With the SEC as on Investment adVisor, may give adVice 10 115 Investment adVisory and oThe. customers Independently of any statements made ,n thiS or In any other Issue Further Information on any seo.Jrlly menlloned herem IS available on request

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Tabell’s Market Letter – October 28, 1977

Tabell’s Market Letter – October 28, 1977

Tabell's Market Letter - October 28, 1977
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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 October 28, 1977 We have, in the past, characterized the stock market's behavior as being good but not good enough.- ThisAdescription, unfortunate1y,fitted theperformance oLlas t,w eek ' '…,' I…- Admittedly, if nothing else, last week's gyrations relieved the boredom of the past few months. Ever since last summer, we have become accustomed, it seems, to the Dow dropp1ng about two points a day on an almost daily basis. Recent action, at least, serves to wake us from the sort of lethargy that this behaVior tends to engender. The fireworks began on Tuesday when; having skidded to a new low and broken the 800 level, the Dow managed to put on a dramatic rally in the last half-hour which erased most of the day's loss and brought the indicator back up above 800 on a closing basis. This was followed by a series of fits and starts on Wednesday morning, during which process the Dow by midday was back under 800 once more. From that point, an advance began, carrying for an almost-12-point gain on the day, one of the Average's best performances of the year. The strength continued through noon on ThursdaY,with an intra day high of 825.71 being reached before mild profit-taking set in. All this was impressive, although, as we suggested above, not sufficiently impressive when viewed in an historical context. Undoubtedly, in describing last week's market, the phrase rebound from an oversold condition will be heard. The question is just how oversold a condition was, in fact, reached, and the answer, apparently .. is not the sort of condition that has character- ized major bear-market bottoms in the past. Probably the most commonly-used technique in measuring short-term oversold and over- bought conditions is to add the total of net differences of advances and declines on each of the previous 10 days, a procedure which, obviously, tends to produce large negative values when the -1'–''m'a'rKet nas oeen aOWiiSharply. By-itSeII1J1'isfigure Is wortflless for long-range historical coni'' parisons, since the number of stocks traded on the NYSE has risen historically for many years. It is, however, easy to put the basic figure into historical perspective by expressing it as a per- centage of the total number of issues traded. On Tuesday of this week, the total excess of declines over advances for ten days was 4,lBB. As a percentage of issues traded for the same ten days it was 22.4. It is possible to put this figure into focus by noting the fact that it is the B7th occasion since 1946 on which the ten-day excess of declines over advances reached 20 or more of the total of issues traded. Whatever relief last week's performance may have provided, it was hardly a jewel of great rarity. The 22 figure, furthermore, is not one which has been associated in the past with important bottoms. Almost invariably, the oversold nadir at such bottoms has exceeded 25 of issues traded and, in most cases, it has managed to move above the 30 figure. Such was the case, for example, in October, 1974, May, 1970, October, 1966 and June, 1962, and the condi- tions were little different at major lows going back into the mid-1940's and 1950's. Another point which must be raised is that the present occasion represents only the second time in the past 12 months of decline that a comparable oversold condition has been reached, the last one being more than a year ago in October, 1976. Previous major drops have been characterized by multiple and separate occasions on which the 10-day advance-decline total dropped below the 20 figure. The bear market of 1973-74 had no fewer than 11 such occurrences, and that of 196B-70-had.seven–Most-important;downswIngs inthe past haveincludedat least– five. It is not our intention, with the above, to assume an overly pessimistic stance and our readers are familiar with the fact that such a stance is not characteristic of our current feelings about the stock market. Indeed, the market's ability to pull itself out of its lethargy and to begin to demonstrate difference of opinion among its participants by putting on Wide swings in both directions is to us a constructive sign. The historical record would seem to suggest, however, that what we saw last week was the beginning of such a process rather than the end of it. Dow-Jones Industrials (1200 p.m.) 819.30 ANTHONYW. TABELL S & P Composite (1200 p.m.) 92.43 DELAFIELD, HARVEY, TABELL Cumulative Index (10/27/77) . 633.13 AWT/jb No statement or expreion of opinion or any other matter herein contolned IS, or IS to be deemed to be, directly or Indirectly, on offer or the ollcltotlon of on offer to buy or sell any security tion to be relloble, we In referred no way 10 or mentioned The mOiler I presented merely represent or guarantee the occuracy thereof nor for of the the (onverlence of the subSCriber statements mode herein Any aCWhohniletooNbeebteolieevne btyhetheousrucbeSs Corfiboeru rhinoufoldrmbae- based on hiS own Investlgallon and Information Janney Montgomery Scott, Inc, os a corporation, and lis officers or employees, may now hove, or may later tae, 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 thl or any other Inue Janney Montgomery Scott, Inc, which IS registered With the SEC os on iflvestment adVisor, may give odv.,e 10 ItS Investment advlSOry ond othel cvstomers Independently of any statements mode In thiS or In any other Issue further mforma/lon on any security mentioned herein IS available on request

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