Tabell’s Market Letter – May 25, 1979

– TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY OB540 DIVISION OF MEMBER NEW VORK. STOCk EXCHANGe, INC MEMBER AMERICAN STOCI( eXCHANGE – May 25, 1979 r – —- exhibited a certain fascination with the various benchmark high and low points which have been established by the various market averages. There are, for example, three major high points stretching back to last fall which, from a technical point of view, possess some significance. The first of these was the highest of the three, establishing the peak to date for the move from the lows of February, 1978. It was scored on September 8 last year at 907.74 in terms of the Dow Jones Industrials. The second peak of some importance was the initial recovery high of 859.75, attained on January 26 this year. Finally, the most recent benchmark peak must be assumed to be the closing high of 878.72, last April 10. Each of these highs has been followed by a low of equal significance. The September high was followed by a triple bottom in October-December with the lowest closing within this forma- tion at 785.26 in mid-November. January's rally was followed by a February low of 807.00. Most recently, the decline from the April high reached a closing bottom of 825.02 two weeks ago. The resulting formation, of course, is somewhat irregular. The three lows posted to date have taken place at successively higher figures. The last two short-term highs have been at higher peaks, but neither has yet equalled the peak of last September. We have dwelt in the past on what we conceive to be the implications of these levels for the general market. However, while the averages have been following their unexciting course, individual stocks and industry groups have been following divergent paths. We recently took the opportunity to examine the highs and lows for 96 Standard and Poors industry group in-, dices at points comparable to the highs and the lows for general market indicators. The table – 1979-,- – — and March to mid-April, 1979. Also displayed are the fall, 1978 lows, the January lows, and the lowest points attained for each index from April 18 to date. In terms of highs, six groups have qualified for membership in a market elite by posting successively higher peaks at each of the three benchmark points mentioned. These groups are Aluminum, Distillers, Copper, Electronics, Miscellaneous Metals, and Office Equipment. Five of the six have managed to confirm long-term uptrends, despite the market's sideways action, by also showing successively higher lows at each of the three recent major low points. By contrast, 29 groups have demonstrated below-average relative strength by posting suc- cessively lower highs at each of the three market periods in question. Of these 29, three (Cosmetics, Foods, and Soap) have posted series of lower lows, thus suggesting rather dramatic weakness relative to the general market. In terms of recent lows, it is perhaps of more than passing interest that no fewer than 61 of the 96 industry groups under study have been able, along with the major averages, to post successively higher bottoms, first last fall, then in January, and finally over the past month. Some two-thirds of the market, therefore, has been able to maintain the same shred of momentum that has been kept up by the Dow Jones Industrials and S & P 500. Of the 35 groups failing to post higher low points, only four (the three mentioned above plus Offshore Drilling) have posted a series of three lower lows. ' On an overall basis, it certainly cannot be asserted that recent leadership has been as broad as in earlier stages of the advance, but individual group studies fail to show any evidence of unusual underlying weakness. By and large, since last September, individual industries have managed to follow their own divergent paths and, in general, provide worthwhile opportunities for the alert investor. . Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (5/25/79) 836.28 99.99 734.13 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTsla No llalemcn! or cxpreSlon of op,nIon or any other motler herein contamed IS, or IS to be deemed 10 be, directly or mdlrectly, on offer or the SOI'Cllotlon of on offer 10 buy or sell ony secunty referred to or mentIoned The moiler 15 presented merely for the ConVllllenCt of the subscrIber Whdll we bllllevll the SOU'CIlS of our infOrma- tIon to be reliable, we In no way represent or guarantee the accurocy thereof nor of the stotements mude hereIn Any actIon to be token by the subSCriber should be based on hIS own lJIveshgatlon ond InformatIon Janney Montgomery SCali, Inc, as a corporatIon, and lIs offIcers or employees, may now have, or may later lake, POSItIonS or hades In respect to any secUfltl(!S mentioned In thIS or any future Issue, and such positIon may be dIfferent from any vIews now or hereafter Ilxpressed In thIS or any othllr Issue Janney Montgomery Scott, Inc, whIch IS regIstered WIth the SEC as on mvestmllnt adVIsor may gIve adVIce to lIs Investment adVIsory ond other ('Ustomers Independently of ony stalements mode lJI thIS or 1JI any other IHue Funher InformatIon on any secuflty mentIoned hereIn IS ovallable' on request AEROSPACE ALUMINUM AUTOMOBILE AUTO — EXC GEN MOTORS AUTO PARTS — AFTER AUTO PARTS–ORIG EQUIP AUTO TRUCKS & PART BEVERAGES — BREWERS BEVERAGES — DISTILLERS BEVERAGES–SOFT DRINKS BLDG MATRLS — AIR COND BLDG MATRLS — CEMENT BLDG BLDG MATRLS–ROOF/WLBD BUILDING MATRLS — COMP CHEMICALS COAL — – CONGLOMERATES– — CONTNRS — METAL/GLASS CONTNRS — PAPER COPPER COSMETICS DRUGS ELECTRICAL EQUIP ELEC/ELECTRN–MAJOR COS ELECT — HOUSEHOLD APP ELECTRONICS ELECTRONICS (SEMI/COM()) ENTERTAINMENT FERTILIZERS FOODS — COMPOSITE FOREST PRODUCTS GOLD MINING REAL ESTATE HOME FURNISHINGS HOSPITAL MGMNT COS. HOSPITAL SUPPLIES HOTEL/MOTEL LEISURE TIME MACHINE TOOLS MACHINERY — AGRIC. MACH–CONST/MATRL MACHINERY – IND/SPEC METAL FABRICATING METALS MISC MOBILE HOMES OFFICE EQUIPMENT OFC EQUIP — EXCL IBM …… …. OIL CRUDE PROD. OIL DOMESTIC INTEG OIL INTL INTEG OIL COMPOSITE OIL WELL EQ & SVC PAPER POLLUTION CONTROL PUBLISHING PUBLISHING (NEWSPAPERS) BRDCASTRS — RADIO/TV RAILROAD EQUIP. RESTAURANTS RETAIL STORES — DISC. RETAIL STORES — DEPT. RETAIL STORESDRUG RETAIL STRS–FOOD CHNS GENERAL MERCHANDISE CHAINS RETAIL — COMPOSITE SHOES SOAPS STEEL STEEL — EXCL US STEEL FOOD; SUGAR TEXTLS — APPAREL MFRS TEXTILE PRODUCTS TEXTILES–SYNTHFIBR TIRE & RUBBER GOODS TOSACCO/CIGARETTE MANU TO'fS VENDING MACHINES ELECTRIC POWER – — -N1\TUR.4L GAS NATURAL GAS–PIPELNS TELEPHONE TELEPHONE — EXCL AT&T AIR TRANSPORT RAILROADS TRUCKERS BANKS — NEW YORK CITY BANKS — OUTSIDE NYC INSURANCE — LIFE INSURANCE — MULTI LN. INSURANCE — PROP/LIAS SAVINGS & LOAN ASSOC. FINANCE COS PERSONAL LOANS INVESTMENT COS REAL ESTATE INV TRUSTS THREE HIGHER HIGHS DR LOWS HI GH5 LOW 5 MAY 31 1978 DEC 22 1978 MAR 7 1978 SEP 13 1978 J.4N 24 1978 APR 11 1978 SEP 20 1978 JAN 31 1979 .4PR 18 1979 DEC 20 1978 FEB 28 1979 MAY 23 1979 125.42 116.11 103.25 113.00 81.45 72.65 29.70 26.52 17.25 16.04 16.76 15.64 54.71 44.30 41.98 37.47 131.97 139.86 127.36 116.66 30.73 32.61 35.53 31.48 91.64 76.37 77.45 64.70 65.86 58.38 57.98 55.25 37.60 T 19.3-0 – 17.72 41.31 35.35 166.47 154.89 28.48 28.98 75.56 67.44 18.04 16.70 31.00 28.62 96.10 82.15 163.29 132.65 25.86 26.64 22.92 20.n 182.03 167.01 12.59 10.79 79.48 71.98 2L06 21.54 116.80 107.12 27.02 20.60 24.78 24.46 0.00 0.00 42.37 36.80 74.46 56.74 35.89 28.61 65.01 55.99 78.30 73.96 43.14 41.20 125.56 111.96 162.55 141.25 50.75 52.71 73.03 53.96 124.93 126.99 26.42 25.42 57.01 28.40 27.58 175.46 172.26 159.09 154.70 167.81 163.09 10B.03 104.26 247.42 225.19 32.71 27.14 28.90 29.12 27.67 24.47 50.29 45.22 74.63 62.09 30.06 24.74 21.09 16.21 150.80 128.35 26.41 21.39 62.25 54.58 9.18 7.39 91.06 75.83 56.55 49.56 177.06 167.91 50.03 45.50 50.17 46.61 22.34 19.10 31.56 30.79 53.96 41.25 58.76 56.09 132.93 126.84 81.75 77.01 13.58 12.68 32.55 8.44 35.07, ….,32.90 79-;S7 144.10 13u.77 28.02 28.23 43.51 42.01) 65.18 50.46 49.37 45.14 117.15 77.02 49.43 45.00 116.70 103.61 23.10 20.45 16.67 15.43 120.51 106.09 31.62 26.01 67.85 58.74 93.18 83.10 49.84 47.28 2.28 2.02 110.67 X 1 98.19 117.86 . 74.47 1 'I 95.85 68.28 26.70 1 23.41 16.29 1 14.76 15.81 1 14.24 47.31 36.22 X 1 I 41.18 34.18 149.01 . 108.19 X 1 I 120.68 106.54 32.54 I 28.39 32.96 I 25.41 83.01 , 67.74 69.29 1 58.09 61.63 1 51.73 57.88 1 50.27 36.37 -1838 I 36.66 1 —-,27 . 21..-5 79 33.57 169.98 1 144.26 33.61, 25.20 61.82 X 1 64.21 16.25 X 15.17 27.74 X 1 26.50 82.61 1 77.52 140.45 I 123.53 28.19' 20.37 1 I 22.59 18.21 164.97 X 12.78 I I 138.72 9.40 70.31 X 23.32 I I 68.94 18.61 115.24 1 89.44 24.91 23.93 X 1 I 15.83 23.09 0.00 34.30 X 1 I 0.00 33.89 60.97 I 43.88 27.90 X 1 25.05 64.04 76.17 1 I 48.01 65.63 41.02 X 117.22 148.93 I I I 36.98 98.56 116.57 57.76 47.41 X 129.23 1 I 1 44.84 45.08 106.97 25.35 X 1 22.14 ….. ..;.1—-……… -.- 31.99 1 23.56 198.25 166.00 1 I 160.83 148.58 180.94 I 155,06 114.31 I 94.34 242.27 I 202.82 26.94 X I 25.15 27.00 I 23.34 24.03 X 1 22.82 42.46 X 1 42.27 62.17 23.52 X 1 I 57.30 23.30 18.58 I 13.40 128.92 I 121.90 21.72 I 20.87 61.40 I 50.03 7.57 78.60 50.43 158.95 X 46.46 1 I I I I 7.19 73.12 44.53 159.27 39.97 49.13 I 41.18 22.81 1 16.57 32.26 49.45 1 I 27.68 38.98 61.34 1 51.26 124.60 X 1 111.43 76.47 X 1 73.90 11.86 t 10.63 27.38 X I 25.12 32.57 X I . , 31.47 147.56 27.93 40.88 X 46.09 X 49.91 84.17 44.77 X 103.36 X 21.06 16.49 120.10 26.86 65.92 81.45 X 45.68 X 2.14 1 1 1 I 1 1 1 1 1 1 1 1 1 1 1 1 118.69 27.10 39.66 44.02 42.06 69.59 42.2 97.25 19.27 13.23 98.43 23.12 54.42 76.49 42.78 1.89 102.14 107.10 68.20 24.31 14.57 14.66 42.10 35.69 132.17 107.04 31.60 29.27 72.84 62.17 56.13 51.89 3106 . 33.68 153.58 29.77 60.27 15.52 26.84 76.88 126.57 25.13 18.24 153.14 11.15 68.77 21.09 103.35 18.78 22.68 0.00 31.67 46.63 25.66 52.91 71.15 38.89 108.50 134.48 52.89 46.51 120.53 22.71 27.31 168.71 152.68 161.31 99.77 218.14 25.71 25.52 22.96 42.41 57.52 21.32 15.15 121.77 19.58 54.51 7.12 74.06 47.44 158.19 41.93 43.80 17.52 30.44 39.88 53.02 118.39 73.00 11.79 22.15 17783 129.22 27.54 40.33 4u.23 43.79 74.64 40.92 96.15 19.31 14.46 104.20 23.39 58.36 78.72 42.38 2.00 101.14 111.59 . 72.64 25.04 . 14.73 15.43 . 46.65 33.31 140.38 . 97.79 31.50 30.26 . 79.19 . 67.64 . 59.67 . 53.00 17.79 . 35.60 147.40 30.45 58.02 X 15.61 . 26.77 80.39 136.97 . 25.52 19.30 . 149.64 12.11 . 66.59 X 21.99 106.58 24.84 . 23.02 0.00. 32.86 54.05. 23.20 61.27 . 71.22 37.09 114.7u . 139.20 50.25 41.45 124.83 24.53 . -,43.89 -X.,.-…. 30.88. 190.99 . 158.85 173.75 110.13 232.51 . 24.64 25.81 22.54 41.53 61.35 22.90 18.01 128.38 20.97 56.24 7.14 74.85 . 49.52 153.97 X 42.93 . 46.03 . 21.12 . 31.47 46.14 54.30 117.58 74.84 13.82 25.69 . 81-;-22 …… 140.26 25.98 39.75 41.25 79.66 43.84 99.96 20.18 15.41 115.08 25.88 . 60.44 81.07 43.74 2.07 X THREE LOWER HIGHS OR LOWS