Tabell’s Market Letter – August 01, 1980

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE August 1, 1980 The stock market advance proceeded in satisfactory fashion this week, with the Dow attaining a new cJos- on .Wednesday.. Somewber.e ,the ad5ance m!!y.laye .lost '!!pass.eDge.!, namely oil industry group whose comPonents have lieerlfeaders during mosf-cifthe 197980-market 'strength 10/3/79 11/7/79 2113/80 3/26/80 7/23/80 7/30/80 DJIA Change S & P 500 Change International Oils Change Ratio to S & P Domestic Oils Change Ratio to S & P Crude Producers Change Ratio to S & P 885.15 109.59 195.02 1. 78 245.3 2.24 455.9 4.16 796.67 -10.0 99.87 – 8.9 183.52 – 5.9 1. 83 239.3 – 2.4 2.40 445.0 – 2.4 4.46 903.84 l3.5 118.44 18.6 233.99 27.5 1. 98 345.5 44.3 2.92 603.7 35.7 5.10 762.12 -15.7 98.68 -16.7 199.63 -14.7 2.02 277.4 -19.7 2.81 470.5 -22.0 4.77 928.58 21. 8 121. 93 23.6 252.85 36.6 2.07 299.4 7.9 2.46 654.7 39.1 5.37 936.18 0.8 122.23 0.2 242.57 – 4.1 1. 98 286.3 – 4.4 2.34 639.1 – 2.4 5.23 The above table shows the Dow, S & P 500, and three major oil industry indices at selected dates since last October. It clearly documents the relative strength of the oils last fall and early this year. All three oil indices declined less than the broader averages in October-November, and advanced by considerably greater amounts on the February rise. In March, however, some weakness set in. Domestic oils and pro- ducers declined by more than did the Dow or the S & P, and the drop in international oils was about the same. On the rise through July 23, domestic oils participated hardly at all, and the rise in the other two was not spectacular. Last week's action showed fairly sharp declines in all three oil indicat9rs as the major averages movea ahead. . — .0 – – -' The table below shows some relevant technical statistics for major international and domestic oil stocks. It documents the fact that 10 of the 15 stocks shown have, so far, been unable to move above their highs of early 1980, and also shows that, at this week's lows, most stocks had moved off fairly sharply from their re- cent highs. Moreover, in the past fortnight, most issues have formed tops or potential tops. Where these exist, the downside objectives of those tops are shown in the table together with the downside breakout point if such a breakout has not already occurred. Early 1980 Spring 1980 High Low Recent High Recent Low Breakout Downside Objective Exxon 67 55 72 69 Gulf Oil 54 35 45 39 38 Mobil Oil 89 57 80 73 70 60 Royal Dutch 92 67 92 87 Standard Oil, Calif. 85 62 81 73 66 Texaco 41 30 39 36 35 32 Atlantic Richfield 53 41 49 42 38 Cities Service 37 29 39 32 30 Conoco 58 41 59 52 48 46 Getty 97 66 90 81 78 68 Phillips 61 38 51 40 38 Shell 38 28 40 34 32 Standard Oil, Ind. 60 46 65 57 Cc 54 48 Sun Co. 45 31 40 37 Union Oil 62 45 61 55 52 45 The point that must be noted is that the tops, so far, are small, and in most cases, existing patterns do not suggest objectives below the lows of last spring. Thus, the worst that can be inferred about oil issues at the moment is that they may continue to show weaker relative action than they did in early 19791980. Were the tops to broaden, however, and large numbers of oil issues penetrate their spring 1980 lows, the technical implications could be a good bit more serious. It must be recalled, for example, that oil and oilrelated issues comprise almost a quarter of the S & P 500. Weakness in this area, therefore, could constitute a heavy drag on the performance of the general market. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (7/31/80) 932.59 121.11 932.18 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL AWTsla No statement or expression of op'nion or ony other maHer herein contolned 1, or IS 10 be deemed to be. directly or indirectly, an offer or the sol,cllol.on of on offer to bvy or sell any secunty referred to or mentrcned The metier IS presented merely fa/ the converlence of the subscriber While we believe Ihe sources of our Information to be rehable, we In no way represent or guarontee the accuracy thereof nor af the statements mode herein Any action to be tolren by the ubscrlber &hould be based on hiS own Investlgotlon and Information Janney Montgomery Scali, Inc, as a corpo'atlon, and Its officers or employees, moy now have, or may later toke, POiltlonl or trades In respect to any seCurities mentioned In thiS or any fulure Issue, and such position moy be different from any views now or hereafter e,.pressed In thl' or any other Issue Janney Montgomery Scott, Inc, which IS registered With Ihe SEC as on Investment adVisor, moy give odvlce to liS Investment adVisory and othet customers independently of any statements mode in Ihll or In any other Issue Further Information on any security menlloned herein IS available on request