Tabell’s Market Letter – August 24, 1979

Tabell’s Market Letter – August 24, 1979

Tabell's Market Letter - August 24, 1979
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MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBEFI New YORk STOCK EXCHANGE, INC MEMBER AME RICAN STOCK EXCHANGe August 24. 1979 We began last week a discussion of the so-called four-year-cycle pattern of stock market . ap exam.inatio.n Wltflln the contextoftliat pattern. – TO'set the stage for'future discussion O'f this hypothesis. we are setting out below our own interpretation of the cycle pattern for the 20th Century. This particular interpretation is. we admit. partially subjective. although it is largely grounded on a series of specific and rigorous assumptions. The table shows the dates and the Dow-Jones Industrial Average at the high and low points of 22 cycles we identify since 1896. (Monthly average prices are used.). The key is the third column which shows the number of months between each cycle low and the previous low. The obvious average cycle length of just under four years gives rise to the familiar name. The final two columns show the number of months each cycle spent in an advancing phase and the percentage of total cycle length within that phase. The wide variation in this last column shows that while the cycles. measured from low to low. were of similar length. their shape has varied widely. DATE OF LOW DJIA MONTHS LOW LOW-TO-LOW DJIA HIGH DATE MONTHS OF HIGH LOW-TO-HIGH AVERAGE Jun 1896 Jan 1901 Nov 1903 Nov 1907 Oct 1911 Mar 1915 Dei 1917 !!.ug,1921 Jul 1923 Nov 1929 Jul 1932 Sep 1934 Apr 1938 Apr 1942 Nov 1946 Jun 1949 Sep 1953 Dec 1957 Jun 1962 Oct 1966 May 1970 Dec 1974 Mar 1978 26.94 55.02 Apr 1899 44.91 54 55.98 Jun 1901 31. 81 34 72.52 Jan 1906 40.35 48 71. 90 Nov 1909 55,94 47 67.32 Dec 1912 53.27 41 107.71 Nov 1916 69.61 33 113.94 Oct 1919 66.!l1L 44 104.30 . .Mar-1923 89.30 23 364.93 Sep 1929 232.60 76 288.17 Apr 1930 46.19 32 107.26 Feb 1934 90.54 26 188.40 Mar 1937 112.85 43 151. 96 Nov 1938 97.79 48 207.32 Jun 1946 168.94 55 191. 05 Jun 1948 165.59 31 288.44 Jan 1953 261. 90 51 514.64 Jul 1957 436.92 51 728.44 Dec 1961 572.64 54 985.93 Jan 1966 778.10 52 968.39 Dec 1968 691. 96 43 1026.82 Jan 1973 596.50 55 994.37 Sep 1976 756.14 39 867.94' Aug1979' 33 61 5 15 26 54 24 57 12 29 20 61 22 50 19 83 74 97 5 16 19 73 30 70 8 17 50 90 19 61 43 84 46 90 48 88 43 83 26 60 32 58 21 53 17' 'TO DATE It is apparent that placing a cycle low in March. 1978 is not wildly out of the context of the pattern. As we noted last week. its length is relatively short compared to recent cycles. but not that far out of line with the entire 80-year history. What is more significant is that the alternative interpretation seems to be running out of time. 56 months have now passed since the low of December. 1974. If another cycle low is yet to be made. the length of the present cycle has already exceeded 20 of the 21 swings,listed above. The only cycle longer than 56 months was the one which culminated in 1929. Not being a proponent'of disaster chic. we think that com- parison of that partiCUlar swing to the present one is specious. Our interpretation has interesting implications. A cycle low at 756.14 would provide the first reversal in the series of three lower lows at 1966-1970-1974. The next key question is whether the advancing phase can exceed the four previous cycle highs clustered around the level of just under 1000 on the Dow. The fact that only 17 months have been spent advancing so far would suggest that some time may remain within the framework of the current swing to make that attempt. The ultimate length of the advance will provide some crucial interpretations of the over- all pattern as well. and we shall be discussing these in future issues. Dow-Jones Industrials (12 00 PM) 876.54 S & P 500 (12 00 PM) 108.15 Cumulative Index (8/23/79) 810.66 ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL AWTsla No ltotement or e)(pre5SIOn of opinion or any other molter herein contolned IS, or IS to be d!!emed to be. dHecily or ,ndlrectly, en offer or the 501,C.tollon of on offer to buy or sell ony secuflty referred 10 or menlloned The moller IS presented merely 'for Ihe converlence of the subscriber While Ne believe the sources of our Informo lion to be reliable, we In no way represent or guaranlee the accuracy Ihereof nor of Ihe slotcmenl mllde herein Any action to be 10k en by the subSCriber should be based on hiS own Inveshgatlon and Informahon Jonney Montgomery ;011, Inc, as a corporatIOn, and 11s officers or employees, may now hove, or may later toke, positions or trades In respect to any seCUrities mentioned In Ihls or any future Issue, and such position noy be different from any views now Of hereafter expfessed In Ih,s or any other Issue Janney Montgomery Scott, Inc, which IS registered With Ihe SEC 0 on Investment adVisor, moy gIVe odvlce to Its Investment adVisory and othel customers Independently of any statements mode In thiS or In any other Issue Funher mfo'motlon on any secu'lty menl10ned herein IS ovoilable on request

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