Viewing Month: June 1979

Tabell’s Market Letter – June 01, 1979

Tabell’s Market Letter – June 01, 1979

Tabell's Market Letter - June 01, 1979
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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 – June 1, 1979 Tlieo … tost-Uboofn.'refu5aI proViae conviricmg . t buttress either a bullish or bearish case. We pointed out two weeks ago that, having reacted to a closing level of 825.02 on May 14, the Dow Jones Industrials had reached the most plausible downside target suggested by the April- May top and had attained a normally oversold condition. The stage was thus set for a rally, and such an event did indeed ensue. It will not, however, go down as one of the more memor- able upsurges in stock-market history. All that, in fact, took place was a 2t percent advance to a high of. 845. 37 on May 22 over a period of seven trading days with most of that advance compressed into a one-day rally two weeks ago. Nor was the aftermath any more impressive. A bullish case could have been provided by a modest retracement of the decline, some consolidation, and resumption of the upswing. Instead the Dow spent the better part of the last two weeks reversing the whole process, and indeed returned to a new closing low of 822.16 in a lO-point debacle on Wednesday of this week. To date, however, the situation has not really altered that much from the one which existed a fortnight ago. It was axiomatic that, following the April-May decline, a base would have to form, and it is certainly not inconceivable that the last two weeks of trading constitute a part of that base formation process. Indeed, if one expects another attack on the April high of 878.72 — and this continues, for the time being at least, to be our own expectation — a broader base than now exists will be required. We would not, therefore, find it surprising for the present directionless climate to continue through middle or late June. While all this is going on, various market segments pursue their own diverse paths. Since it has been. enjQying its own bull.maxkeLsm.l!ei9H, awar'Lql.Lf–lI–1 the eXistence of tlie American Stock Exchange. However, hie action west of Broadway continues to be, to say the least, exciting. While other indicators were moving ahead modestly, the ASE Market Value Index soared, as recently as Tuesday, to a new 4t-year high of 187.49. Now a great deal of this is due, as we have suggested here in the past, to the fact that the Amex features a large number of dually-listed Canadian issues, and Toronto continues to enjoy one of the better bull markets, especially in oil and gas exploration, that. it has seen since the late 1950's. Nonetheless, we do not think that American Stock Exchange strength can be idly dismissed, any more than it was possible to dismiss the strength of secondary issues which occurred during 1976-1977, while major stocks as represented by the Dow and S & P 500 were moving lower. The current climate, it must be stressed, is not a total repetition of that two-year-ago period. At that point strength was evident, not only on the American Stock Exchange but also among secondary issues listed on the NYSE, as represented by the action of broad-based indicators such as our own Cumulative Index. This particular sort of diversity came to an abrupt end last September. Since that time, the Cumulative Index has demonstrated action no better than the Dow,.albeit, it must be noted, no worse. The current relative secondary strength is a great deal more concentrated and focused in individual groups of stocks such as the north-of-the- border oil companies whiCh are an ASE feature. We are not, incidentally, particularly inclined to view the Amex action with alarm. The bull market there has been long and dynamic, and we have never been subject to the delusion that such advances go on forever. We are also, however, aware that picking tops is a difficult exercise, especially a few days after a high. That the ASE hasbeen in a pha;;e-for- quite some time cannot be gainsaid. The suggestion that the move is over or WIll be so m the near future is more difficult to support. Dow Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (5/31/79) AWTsla 820.69 99.02 729.84 ANTHONY W. TABELL DELAFIELD, HARVEY', TABELL No statement or expreSSion of OPinion or any olher matter herein contained IS, or 's to be deemed 10 be, directly or II'Idorectly, on offer or the solicitatIon of on offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convellcnCe of the subscriber While oNe believe the sources of ow Informa tlon to be reliable, we In no way represent or guorontee the occuracy thereof nor of thc stotements mude herEin Any octlon to be taJEn by the subscnber should be based on hiS own investigation and Informotlon Janney Montgomery Scott, Inc, as a corporation, and ,ts off,cers or employees, may now have, or moy later toke, pos,tlons or trades In respect to any seuntles menhoned In Ih'5 or any future Issue, and such posil,on may be different from ony views now or hereafter ,expressed In Ihu or any other Issue Jonney Montgomery Scott, Inc, which IS registered with the SEC as on Investment adVisor, may give adVICe to lis Investment odvlsory and olhel customers Independently of any slatements made ,n thiS or In any olher Issue Further Informotlon on any security mentioned herein IS available on request

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Tabell’s Market Letter – June 08, 1979

Tabell’s Market Letter – June 08, 1979

Tabell's Market Letter - June 08, 1979
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TABELL-S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK eXCHANGE. tNC MEMBER AMERICAN STOCK E)(CHANGE – June 8, 1979 ..,..' -weeK'-s'iil'iil'ket acfionJeaturecLaf8ir–Elmoufieof'strEm-gth–;strengtlPcommencin-g from,a – – level that, from a technical point of view, was not all that surprising. The Dow had spent the last week of May around or slightly below the previous low of 825.02, attained on May 14. On Tuesday, May 30, in a ten-point drop, it declined slightly below that low, and closings for the rest of the week were all in the 822- 821 range. As the new lows were attained, volume dried up, approaching the lowest levels of the past few months. Finally, with an almost classic test complete, a ten-point rally this Tuesday was followed by renewed firmness and sharply expand- ing volume, the NYSE experiencing the highest level of daily trading it had enjoyed since last fall. This sort of action reinforces our current feeling that the Dow, at least, is in a process of base formation, which will ultimately lead to a new short /intermediate-term upswing. It is perhaps ill-advised, however, to focus too strenuously on the Dow Jones Industrial Average. While the venerable indicator is, at most times, an adequate proxy for overall stock market action, there do exist periods when it is less than satisfactorily descriptive. The pres- ent is, we think, just such a period, for most other market indices are demonstrating behavior noticeably divergent from that of the Dow. In this space last week, we focused on the amazing divergence being demonstrated by the American Stock Exchange Index. The extent of this divergence was demonstrated to us in rather homely fashion this week, when the young lady who is responsible for posting our market charts and having them on our desks each morning informed us that the ASE chart was missing, having run off the top of the page. She was, indeed, a bit surprised that such an occurrence should have taken place. However, since her experience is relatively limited, she is to be forgiven. There was a time, we told her, when charts ran off the top of the page with A decade or so-ago-, by defiffitlon, a'stocK'WH6se chartailnotnav cwu UL–a-w ragged pieces of paper glued to the upper right hand corner was demonstrating sub-par per- formance. In any case, what has been going on on the Amex recently demonstrates most of the attributes of a classic bull market. It is worth noting that, at its low of 1974, the American Stock Exchange Market Value Index was under 60. At its most recent level of 194.53, it has more than tripled, demonstrating, at least, that some areas of the stock market have, of late, provided notable investment results. However, as noted above, the ASE is not the only area noticeably outperforming the Dow. The last major benchmark high for the Industrials took place on April 10 of this year at 878.72. At that point the comparable high reached by the Dow-Jones Transportation Average was 235.25. While the Industrials were dropping some 50-plus points into mid-May, the carrier index correct- ed to the 220.88 level in early May and has essentially trended upward without correction since. The April -high was comfortably exceeded at Thursday's close of 239.24, and, as far as this index is concerned, it must be assumed that a short-term uptrend from the early May lows is still in effect. The broadly based S & P 500 has also been considerably stronger than the Dow. At its cur- rent level of 101. 79, it has moved up steadily from its mid-May low of 98.06, and it is extremely close to the April high figure of 103.34. The same is true of our more broadly-based and equally-weighed Cumulative Index which, at 745, is closing in on its April high of 756. The interpretative significance of this, we think, lS that the DJIA's move to new lows two weeks ago gave an unduesuggestion of market weakness which was not reflected by most other indica- tors. Most other averages appear to have undergone only a normal short-term correction in early April-May, and either have already posted -(as in the case of the ASE and the DJTA) new highs or should, in our opinion, shortly do so. The major test for the market will not, in our view, come at the April highs, but at the highs of last September. These peaks are, respect- ively, 907.74 in the Dow, 261. 49 in Transportation Index, 106.99 for the S & P 500, and 830.55 for our Cumulative Index. It is market action at or just below these levels which will test the admittedly debatable thesis that a major upswing from the 1974 lows remains in effect. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL Dow Jones Industrials (12 00 PM) S & P Composite (1200 PM) Cumulative Index (6/8/79) 835.50 101. 48 744.47 AWT sla No statement or expression of Opinion or any other moiler herein contolned IS, or IS 10 be deemed to be, dlrCc1ly or Indirectly, on offer or the SOllCllallon of on offer to buy or sell any referred to or mentioned The morter IS presented merely for the conVeilenCe of the subscriber While we believe the sources of our informa- Tion To be reliable, we In no way represent or guarantee the accuracy thereof nor of the mude herein Any action To be token by the subSCriber should be based on hiS own Investigation and Information Janney Montgomery SCali. Inc, as a corporation, and Its offiCers or employees, may now have, or may later toke, positions or trades In respect to any securities mentioned In thiS or ony future Issue, and such POSition may be different from any views now or hereafter expressed In this or any other ISlue Janney Montgomery Scott, Inc, which 15 registered With the SEC as on Investment adVisor, moy give adVice to Its Investment adVISOry and other customers Independently of any statements mode In thiS or In any other Issue Further Information on any security mentioned herein IS available on request

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Tabell’s Market Letter – June 15, 1979

Tabell’s Market Letter – June 15, 1979

Tabell's Market Letter - June 15, 1979
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TABELL'S MARKET LETTER' . 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF cfoll1ly Jim,;;;;.!! Y/tt JnC. MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER .AMERICAN STOCK EXCHANGE June 15, 1979 summer rally.' As time readers of this are aware, we- have this phenomenon for some years. The following table updated through 1978 shows the number of advances and declines for the one-and two-month periods ended each month of each year from 1926 through 1978, together with the average percentage change for the period. One-Month Periods (from 1926-1978) Two-Month Periods (from 1926-1978) Ending Month January February March April May June July August September October November December Advances 34 28 29 30 27 26 34 34 22 28 31 40 Declines 19 25 .24 23 26 27 19 19 31 25 22 13 Average Chg. 0.96 -0.07 -0.07 1.10 -0.83 0.88 1. 88 1. 38 -1. 36 -0.45 0.43 1. 34 Advances 35 29 25 32 31 25 33 36 31 25 31 Declines 18 24 28 21 22 28 20 17 22 28 22 17 Average Chg. 2.36 0.90 -0.23 1.11 0.50 0.02 2.71 3.42 -0.02 -1. 77 0.01 A preliminary look at the table, indeed, supports the notion of a probable summer rally. The average monthly advance for the Dow over the period has been .43, whereas the average performance in July is an advance of 1. 88, more than four times as great. Likewise, the average advance of 3.42 for the two months ended August is a good deal larger than the average two-month advance. It would, indeed, appear that the expectation of an advancing market during July and August has some solid grounding in fact. There exist a few reservations. The first factor which needs to be pointed out is that a large part of the high average advance for the summer period rests on the accident of the 1932 bottom's having occurred at the end of June. Thus, July and August of that year produced the largest two-month advance in stock market history, an astounding 70 rise. If this single year is eliminated from consideration, the results for July and August are much closer to normal. ' Secondly, while it is true that July and August do show significant pluralities of advancing months over declining months, it must be remembered that advancing periods tend to outnumber declining ones over the 52 years by almost three to two. When standard tests of statistical Significance are applied, the period with the clearest seasonal action is the month of December, which is why this letter has always emphasized the importance of the year-end rally. Likewise, the tendency toward a declining market in September is statistically more significant than that of a rise in July or August. Interestingly enough, none of the other months show any discernible seasonable pattern whatsoever. As we approach summer, 1979, however, We are more inclined than usual to think that the summer rally may, this year, materialize. As we have been pointing out in recent issues, the Dow Jones Industrial Average has been forming a pattern which' has many of the characteristics of a base formation preceding a short term advance. These characteristics include a twice-tested bottom around 820, sharp up-and-down moves, and expanded volume On rallying phases. In addition, as we noted last week, most indicators other than the Dow have moved into short-term uptrend phases suggesting that the eventual DJIA breakout will be on the upside. This pattern appears to be nearing completion as June comes to its end. We think that this phenomenon, in conjunction with the summer-rally tendency, suggests July- August strength. Dow Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (6/15/79) 843.73 102.29 752.96 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTjt No statement or e)prenlon of opinion or ony olher matter herein contained IS, or IS to be deemed to be, directly or ,ndirectly, on offer or the SOllCllollon of on offer to buy or sell any security referred to or mentioned The moiler IS presenTed merely for the conveflience of the subSCriber While Ill' believe the SOurces of our Informo han to be rehable, we In no woy represent or guorantee the occurocy Ihereof nor of the mude herein Any action 1-0 be by the subSCriber should be based on hiS own InveStlgOllon and Information Janney Montgomery Seoll. Inc, 0 a corporation. and 11 offICers or employees, moy now have. or may 10lCr lOire. pOllhons or Irodes In respect fa any secuntlel mentioned In thiS or any future Issue. ond such pOSition may be different from ony Views now or hereafter In thn or any other Issue Janney Montgomery Scott, Inc. which IS regiStered With Ihe SEC as on Investment adVisor, may give adVice to Its Investment adVIsory and othel customers mdependently of any stotements mode m thiS or In any other Issue Further mformalon on any secunty mentioned herem IS o'/otiable on request

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Tabell’s Market Letter – June 22, 1979

Tabell’s Market Letter – June 22, 1979

Tabell's Market Letter - June 22, 1979
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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 – ….,.,.,,- June 22, 1979 There has been repeated comment in this space on the behavior of the American Stock Exchange Index, behavior widely at variance with other market indicators based on larger and more heavily capitalized issues. The AMEX Index, it will be' recalled, has been moving regularly ahead to H-year bull market highs, while other averages have been languishing. This has led, in turn, to expressions of sanctimonious disapproval on the part of some commentators, especially those of bearish persuasion, suggesting the presence of rampant speculation and warning of the ultimate consequences thereof. Now, we are as able as anyone else to observe the activity in gambling issues and rumored takeover candidates, and we share the gut feeling that speculative juices are indeed flowing in the marketplace. Its actual extent, however, is difficult to quantify by historical standards. Many years ago, one of the simplest and most reliable indicators of speculative activity was the relationShip between American Stock Exchange and New York Stock Exchange volume. Generally, whenever ASE volume reached 50 of NYSE volume (here and throughout we will be referring to 4-week moving averages), it was a fairly reliable suggestion that the speculative activity was unusual, and that a top might not be too far away. There have been only 11 periods since 1945 when the 50 figure was reached. Such periods took place prior to the 1946 decline, the 1960 ,drop, the ,majorbear mar!ets of 1961-1962 and .1966, li68-1970. All other cases preceeded at best, consolidation periods. In most instances, lead time was ample. The difficulty has been, of course, that, since 1968, the level of AMEX volume has begun to dry up on a secular basis. Prior to that time, it had remained in the range of 30-60 of NYSE volume. It has more recently declined, generally, to the 9-15 level. Quite obviously, the old standards are inappropriate. We have done some preliminary work on reVlSlOn of this indicator to see if it could be made more applicable to today's trading and have begun with the approach of examining the ASE-NYSE volume ratio in relationship to its own 52-week moving average. If one accepts the criterion of AMEX volume percentage reaching 1. 5 times its own 52-week moving average for a bearish signal, some interesting results are attained. It is found, for example, that this occurred in 9 instances between 1945 and 1968, and that 8 of these instances coincided with the old measurement of 50 as an indicator of excessive speculation. Interestingly, however, there are two additional cases where this has occurred. The first was in March, 1976, during the early stages of the 1976-1978 market decline. The second occurred in mid-September, 1978, just prior to the short, but vicious decline in October. This approach, it seems to us, may, therefore, have some validity under today's conditions. AMEX volume has been rising recently, but not to the extent where this indicator would suggest caution. For the past 4 weeks, it has.averaged 15, versus an average of 13.8 over the past year. Weekly ASE voluffi-e has-most recently been 30 million shares, around -' 6 million shares a day. At current levels of NYSE activity, it would have to increase and remain consistently at around the 7! million share level for this device to turn negative. This has not yet taken place, ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow Jones Industrials (12 00 PM) S & P Composite (1200 PM) Cumulative Index (6/21/79) 844.85 102.43 757.86 AWT ld – No statement or expression of opinIon or any other matler herein contolned 15, or IS to be deemed to be, directly or mdrrectly, on offer or the sollcltotlon of on offer to buy or sell any seCtJnty referred to or mentioned The matter IS presented merely for the of the subscriber While -ne believe the SOl,lrces of our informa- tion to be relloble, we In no way represent or guarantee Ihe accuracy thereof nor of the statements mude herein Any ochon to be taken by the subscriber should be bosed on hiS own invesTigation and infOrmation lonney Montgomery Scott, Inc, as a corporation, ond Its officers or employees, moy now hove, or may lotcr toke, poslhons or Trades In respect to ony seCtJrltles mentioned In thiS or ony futurc Issue, ond such pOSition may be different from ony v,ews now or hereafter expressed In thiS or any other Issue Janney Montgomery Scotl, Inc, which 15 reglsered With the SEC as on Investment adVisor, moy give odvlce to lIS Investment adVisory and other customers Independently of any statements mode In thiS or In any other Issue Fl,Irrher Information on any security mentioned herein IS aVOIlable on request

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Tabell’s Market Letter – June 29, 1979

Tabell’s Market Letter – June 29, 1979

Tabell's Market Letter - June 29, 1979
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON NEW JERSEY 08540 DIVI910N OF MEMBER NEW YORK STOCK eXCHANoe, INC MEMBER AMERICAN STOCK EXCHANGE r– June 29, 1979 …. Interms. the,significt — the Dow'-Jories fa the venerableindicator since .. – 1959. Chrysler and Esmark left the Index and were replaced by IBM, America's largest enter- prise in terms of market value, and Merck & Company. A third change, which would have taken place anyway, was, ironically, statistically more important. Du Pont had been the !1lost heavily weighted component of the Dow, comprising in excess of 10t of the total weight of the Index. Its 3-for-1 split, effective today, brings that, weight below 31, a change which affects the average more than either of the two additions. IBM will now comprise just under 6 of the total weight in the Dow, comparable to its 6.4 weight in the S & P 500. It will not, however, be the largest Dow component as long as Procter & Gamble continues to have a higher price. Merck, with a 5.32. weight, will be the next largest component. The weights of some of the other larger components will continue to be similar to their respec- tive weights in the Standard & Poors. Exxon will account for 4.25 of the Dow versus 3.48 of the S & P, and General Motors for 4.81 and 2.52 respectively. It is interesting that the two additions almost exactly offset the du Pont split plus the two removals, thus necessitating only modest weight changes in the 27 other components. The following table shows the price with the old and new weights in the Dow and their changes for the 32 securities involved. (It is calculated as of Wednesday's close and will, there- fore, be modestly different from the official calculation made as of Thursday's close.) ST0C K —-' ALLIED CHEMICAL CORP ALUMINUM CO OF AMER AMERICAN BRANDS AMERICAN CAN CO AMERICAN TEL & TEL BETHLEHEM STEEL CORP CHRYSLER CORP DU PONT DE NEMOURS EASTMAN KODAK CO ESMARK INC EXXON CORP GENERAL ELECTRIC CO GENERAL FOODS CORP GENERAL MOTORS CORP GOODYEAR TIR & RUBBR INCO I BM INTERNATNL HARVESTER INTERNATIONAL PAPER JOHNS MANVILLE CORP MERCK & CO INC MINNESOTA MINING MFG OWENS ILLINOIS INC PROCTER & GAMBLE SEARS ROEBUCK CO STANDARD OIL CALIF TEXACO INC UNION CARBIDE CORP UNITED STATES STEEL UNITED TECHNOLOGIES WESTINGHOUSE ELECT WOOLWORTH FW CO PRICE 35.000 52.000 59.000 38.625 57.500 21.500 9.625 127.250 58.000 26.750 52.250 50.000 31. 500 59.125 16.250 20.750 73.500 39.125 45.250 24.375 65.500 56.500 19.000 77.000 19.000 47.875 26.625 37.625 21.750 37.125 19.625 26.625 OLD WEIGHT 2.89 4.29 4.87 3.19 4.74 1.77 0.79 10.49 4.78 2.21 4.31 4.12 2.60 4.88 1. 34 1.71 0.00 3.23 3.73 2.01 0.00 4.66 1. 57 6.35 1. 57 3.95 2.20 3.10 1. 79 3.06 1. 62 2. 20 NEW WEIGHT 2.84 4.23 4.80 3.14 4.67 1. 75 0.00 3.45 4.71 0.00 4.25 4.06 2.56 4.81 1. 32 1. 69 5.97 3.18 3.68 1. 98 5.32 4.59 1. 54 6.26 1. 54 3.89 2.16 3.06 1. 77 3.02 1. 59 2.16 CHANGE -0.04 -0.06 -0.07 -0.05 -0.07 -0.03 -0.79 -7.05 -0.07 -2.21 -0.06 -0.06 -0.04 -0.07 -0.02 -0.02 5.97 -0.05 -0.05 0.03 5.32 -0.07 -0.02 -0. 09 -0.02 -0.06 -0.03 -0.04 -0.03 -0.04 -0.02 -0.03 Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (6/29/79) AWTsla 840.96 102.62 724.76 ANTHONY W. T ABELL DELAFIELD, HARVEY, TAB ELL No ,Iclement or expreulon of opinion or any other matter hereH) contolned IS or 1 to be deemed 10 be, directly Of indirectly an offer or the soitcltatlon of on offer to buy or sell any security referred to or mentioned The matter presented merely fOf the converlence of the subscriber While '/Ie believe the sources of our mlormot,on to be reliable, we ,n no way represent or guarantee the occurocy thereof nor of the statements mude herein Any action to be taKen by the subscflber should be based on hIS own Inveshgotlon and Informahon Janney Montgomery Scott, Inc, 05 a corporation, and lIS offICers or employees, may now have, or 'nay laler tOKe, POSitions or trades In respect to any seCUrities mentioned m thiS or any future Issue, and such pOSition may be different from O'1y views now or hereafter expressed In thiS or ony other Issue Janney Montgomery Scott, Inc, whICh IS registered With the SEC as on mvestment adVisor, may give adVice to ItS mvestment adVisory ond othel I;I.Istomers mdependently of any statements mode m thl! or m any other hsue Further mformotlon on any security mentIOned herein IS available on request

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