Viewing Month: September 1980

Tabell’s Market Letter – September 05, 1980

Tabell’s Market Letter – September 05, 1980

Tabell's Market Letter - September 05, 1980
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-, TABELL'S MARKET … LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORI( STOCK EXCHANGE. INC MEMBER AMERICAN STOCK EXCHANGE September 5, 1980 – –'-0 loss-or-wliat had been obviously-unsustaim,ble 1!'0I)lentumy!,-s'note(j-in'l,ast wee!'s- letter, stock market behavior continues reasonably satisfactorily on a short-term basis. After the triple failure to move through the 970 level at mid-August, the Dow was obviously in need of some correction or consolidation. Such a correction emerged during the last week of August, with the decline from an intraday high of 969.45 on August 22 to an intraday low of 923.04 a week, ago. This correction abruptly reversed itself in last week's action, which featured a 12-point rally with over 1300 advancing stocks on Wednesday, auspicious action despite the fact that it was halted in Thursday's rumor-clouded trading. What seems to us most encouraging, from a technical point of view, is the point from which the rally began. We had commented last week that the most discouraging possible action would have been for a downward push to the 940-920 area to take place, followed by continued activity in that area. Such a formation would have produced a potential head-and-shoulders top which might have had serious downside implications. The Dow instead reacted sharply from the middle part of that range, suggesting that the next probable pattern may be a base formation with its upper limit around the mid-950's followed, possibly later this month, by another attempt to move through the 970 triple top. This scenario gains further credibility based on the action of other indicators. The Dow Transpor- tation Average, which never had formed all that much in the way of a top, attained both new closing and intraday peaks in Wednesday's and Thursday's trading. So did the American Stock Exchange Index, for which new highs have become the rule rather than the exception. The Dow Utilities which, in a market sensitive to interest rates, had reached their downside objective in early August, also moved ahead sharply on Wednesday and, like the Industrials, moved into the area of overhead supply from their earlier peak around the 115 level, a peak which, in the case of utilities, had been scored back in is the case with the industrials, another attack on — , . , !!p'2ears a likelihood. – – – —– … – — – Perhaps the most interesting technical action over the past couple of months has been shown by the various financial averages which, unlike some other indicators, retreated relatively little in the recent market weakness. The New York Stock Exchange Financial Index had held in a range between a closing low of 65.37 on June 20 and 68.21 on August 15. It was penetrated on Wednesday, with the achievement of a new peak at 68.75. The Standard & Poor's Financial Index has held in a similar lateral formation with a low around 12.80 and a high, to date, around 13.30. That high, in turn, was just about equalled this week. Continued strength in issues could provide a new major area of market leadership. ADVANCES DaIE DJIa DIEE. Meanwhile, breadth action, a cause of possible concern as discussed last week, has been AIJS 15 966.72 4.09 871 855 – 16 satisfactory throughout the entire episode. Aug A'J9 18 19 948.63 939.85 -18.09 – 8.78 217 494 268 51 458 – J6 AU9 20 945.31 5.46 917 897 – !O The table at the left shows the actual number of advancing stocks versus the normal or expected number based on the change in the Dow, AIJ9 !1 955.03 9.72 1044 1187 143 Aug !2 958.19 3.16 853 1007 154 AU9 !5 956.23 – 1.96 696 588 -108 -AIJS 26 953.41 2.82 660 694 34 -Aug 27 943.09 -lO.3! 444 432 12 AU9 28 930.38 -12.71 -AIJ9 !9 932.59 2.21 5,.,. 2 940.78 8.19 363 386 23 800 753 47 987 1049 62- s,.1' 3 953.16 12.38 1137 1355 218 -Sep 4 948.81 4.35 628 795 167 .. a concept which we have discussed in this letter in the past. As the table quite clearly indicates, the number of advancing issues on most days since the market began its decline on August 15 has been not that different from the normal value, and on at least four days, including Wednesday and Thursday, the number of advancing stocks was significantly greater than its expected normal value. Our daily breadth index, meanwhile, has moved extremely close to a penetration of its last benchmark high, achieved last January 28. In short, more evidence appears to be required before it is possible to draw unduly pessimistic conclusions from the market correction since mid-August. Dow-Jones Industrials (12 00 PM) S & P Composite (1200 PM) Cumulative Index (9/4780) 946.33 125.32 993.54 ANTHONY W. TAB ELL DELAFIELD, HARVEY. TABELL AWTld No statement or expreUton of opinion or any other motter herein contolned IS, or IS 10 be deemed to be, dnedly or md,re,'ly, on offer or the 501ltallon of on offer to buy or Sell any SetUrl1y referred to Of mentioned The molTer IS presented merely for the convef'lencs of the subscriber While oNe believe the sourtes of our IIlforma lion to be reliable, we In no way represent or guarantee the accvtaty thereof nor of the statements mude herem Any a,tlon to be tolecn by the 5vbsctlber should be based on hIS own Investigation and ,nformat,on Janney Montgomery 5011, Inc, as a corporation, and Its offICers or employees, may now have, or may later tOKe, positions or trades In resped to any seCurities mentioned In thiS or any future lSue, and such pOSitIOn may be d,FferenJ from any views now or hereafter epressed In thiS or any other Issue Janney Montgomery Scoll, Inc, which Is registered With the SEC as on Investment adVisor, may give adVICe to Its Investment adVisory and othe! wstomers Independently of any statements mode III thiS or III any other Issue Further informatIOn on ony security mentioned herein IS available on request

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Tabell’s Market Letter – September 12, 1980

Tabell’s Market Letter – September 12, 1980

Tabell's Market Letter - September 12, 1980
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. ' ' rw.. t f , TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMSER NEW YORt(. STOCl't eXCHAoNG'i., INC MEMBER AMERICAN STOCK EXCHANGE September 12, 1980 ,.stock,rriarkeLmomentum.has,slowed down somewhat.- This should not be totally surprising in light of a statistic we have investigated in this space-in-tlle past, the fact that the second-most-reliable seasonal pattern in the stock market. ranked just behind the year-end rally, appears to be a tendency toward weakness during the month of September. The following table summarizes the 1004 monthly changes that have taken place in the Dow-Jones Industrial Average since it was first calculated in 1897. It shows, from left to right, the mean percentage change for each month over the past 84 years, the standard deviation (a measure of the dispersion of individual values around that mean), and the number of months in which the Dow was up or down. As the final total shows, the mean of all percentage changes was just over one half of one percent, and, over the 84 years, the Dow has posted 574 up months and 430 down months. , tlooib Jan Feb Mar Apr Ma, Jun JIJI AIJ!! Sep Nov Dec tleao 0.99 -0.47 0.66 0.82 -0.38 0.58 1. 61 1.67 -1.27 0.52 1.41 4.59 4.02 5.59 6.99 5.96 5.79 5.79 5.88 6.30 5.95 4.33 tloot.bsUe 54 39 49 46 42 42 54 57 36 4!i 49 61 tlooibsDowo 30 45 35 38 42 42 30 27 47 38 34 22 0.78 1. 57 0.25 0.51 1. 42 0.12 1. 77 1. 88 2.85 0–.-950.03 1.45 Cbl.Souae 1. 74 3.96 0.05 0.20 1.76 1. 76 1. 74 3.92 6.45 0.12 9.03 Total 0.51 5.69 574 430 The final two columns represent bits of arcana of interest only to statisticians. The two statistics, z-score and Chi-Square, are standard tests of statistical significance. Both attempt to measure the probability of attaining by chance a subset of given characteristics from a larger set of values whose properties are known, in this case the 1004 known values of monthly percent changes in the Dow. The z-test relates to mean and the Chi-Square to fixed attributes, in this case, direction — up or down. In the case of September, we have a record of 83 months with a mean change of -1. 27. In 36 Septembers, the Dow was up for the month, and in 47 it was down. The ,z.test tells us that the chances of choosing a sample of 83 with a mean of -1. 27 by pure chance from the 1004 months are considerably less than 1 in 100, and the Chi-Square figure shows the same thing with respect to choosing a sample with 36 up-and 47 down-months. The table quite clearly shows that, in terms of mean, September shows the highest degree of statistical significance of any month under study and is second only to December in terms of direction. In the light of this evidence I the recent September consolidation should be less than surprising. A couple of interesting sidelights are, perhaps, worthy of note. Part of the downward bias in September stems from its including two of the worst declines of the 1929-32 period, September, 1931, the second worst (after October, 1929) month in stock-market history, and September, 1930. -Recent Septembers have tended not to be all.that bad. The 25 best September -performances show rises ranrring from 1. 6 to 13.5. 14 of these 25 have occurred in the recent era from, 1945. By contrast, only 8 of the worst 25 Septembers are products of the most recent period. Since the market appears to be undergoing a consolidation phase, a September close in the area of the August close of 932.59, would not be an unusual occurrence. — Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (9/12/80) AWTsla 938.65 125.68 993.47 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL No statement or of opinion or any other molter herem conlCllned or IS to be deemed to be, dlredly or Indirectly, on offer or the 101'(lloIIOn of on offer to buy lion to or sell any secunty be relloble we m referred no way to or mentioned The matter IS presented merely represent or guorantee the accuracy thereof nor for of the Ihe converlence of the subscriber statements mude herem Any While oNe believe oc\1on 10 be toke., btyheIhseou5r1c,1bsSCorlfbeorurS 01,1 ke based on hiS own'lnvestlgotlon ond Hlformohon Janney Montgomery Scali, Inc, os 0 corporation, and 115 officers or employees, moy now have, or may loler to e, posiliom or trodes In respect to ony seCUrilleS menlloned In thiS or any fulure Issue, ond such posilion may be different from ony views now or hereoJter thiS or any other Inue Janney Montgomery Scott, Ine , which IS registered With the SEC os on Investment adVisor, may give adVice 10 lIs a visoryon ot er customers ,dependently of any stotemenls mode In thiS or In any other Issue Further Informollon on any seeu'lty mentioned herein IS oValo e on request

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Tabell’s Market Letter – September 19, 1980

Tabell’s Market Letter – September 19, 1980

Tabell's Market Letter - September 19, 1980
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'. ,. TABELL'S MARKET – …… LETTER 909 STATE ROA.D, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VORl( STOCK EXCHANGE. INC MEMBER AMERICAN STOCI( eXCHANGE September 19, 1980 We have been noting the slowdown in market momentum following- the sharp rise of,spring–summer 1980, and there is a natural tendency to infer from this loss of momentum a degree of downside vulner– alllifty .- A'-close- analysIs of .many however; 'fails -to suPP'!. this view. Indeed-, many such indicators are behaving as they would normally tend to do in the early to middle stages of a rise. One such device is the Group Participation Index which is simply the percentage of Standard 81 Poors industry group indices expanding over a ten-month period. The history of this indicator over the past 20 years is shown in the chart below. Major market tops are indicated by the dashed, vertical lines. DJ1R I I I I I II I'S60 I'S61 l,s62 I'S63 iIS6 iIS6S iIS66 iIS67 1,968 iIS69 iI97P iI971 I'S72 iI973 iIS7 I'S75 iI976 iIm I'S78 1,979 iI980 The general pattern of behavior for this index is that it tends to rise above 90 during major ad- vances and then begin a decline well in advance of tops in the averages. By the time this decline has passed through 70, indicated by the horizontal line on the chart, a cautionary signal is indicated. This drop through 70 occurred very shortly after the market peaks of 1961, 1968, and 1976, and considerably in advance of the peaks of 1968 and 1972. In all cases the major portions of the bear markets in question took place after the index had declined through the 70 figure. The indicator's record in the sharp declines of the past couple of years is more mixed. It tended, in general, to show the same sort of action, but coincidentally with market declines rather than in advance of them. To our mind, the crucial fact about this indicator at the moment is the fact that it has been rising since April. Furthermore, a close analysis of the action of individual groups suggests that such a rise is likely to continue until at least early next spring. At that time, we will be comparing individual indices against their April lows, and everyone of the S & P group indices at the moment is above its April low . In order to suggest vulnerability, the Group Momentum Index must first complete its rise and then begin to decline. As suggested above, this sort of action is highly unlikely at any time prior to mid- 1981. Dow-Jones Industrials (1100 AM) 959.13 S 81 P Composite (11 00 AM) 128.75 Cumulative Index (9/18/80) 1016.89 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL AWTsla No slatem(lnt or expression of opinion or any other motter herein contained or IS 10 be deemed to be, directly or indirectly, on offer or the SOllCllotlon of an offer 10 buy or sell any security referred to or mentioned The moiler IS presented merely for Ihe converlence of Ihe subscflber While Ne believe the sources of our Informa- lion to be reliable, we In no way represent or guarantee the occurocy Ihereof nor of the Slo'ements mude herein Any action 10 be Token by the Subscflber should be based on I'll! own Invesllgal10n and Information Janney Montgomery Scott, Inc, as a corporation, and 115 offICers or employees, moy now hove, or may 'aler lake, poltlons Of 1M respect 10 any seCUrities mentioned In thiS or ony future Issue, ond such pOSITIon may be different from any views now or hereofter c-.;pressed III IhlS or ol'ly olher lSue Janney Montgomery Scali, Int. whlth IS registered With the SEC as on IOvestment adVisor, moy give adVice 10 Its Investment adVisory and olhel customers II'Idependently of any statements made 11'1 Ihls or In ony other Issue Furlher mformollon on any secunty mentioned herem IS avollable on request

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Tabell’s Market Letter – September 26, 1980

Tabell’s Market Letter – September 26, 1980

Tabell's Market Letter - September 26, 1980
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———————————————————————————————————— ,—–. TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER New VORK STOCK EXCHANCle, INC, MEMBER AMERICAN STOCK EXCHANGE September 26, 1980 We occupied this space two weeks ago by engaging in one of our periodic analyses patterns in the stock market. This was occasioned by the fact that we had arrived at September, and previous studies had shown that September, statistically, tends to be the weakest month of the year insofar as the stock market is concerned. We pointed out in that letter that an analysis of 1004 monthly changes in the Dow-Jones Industrial Average showed that the mean monthly change for all Septembers since 1897 was -1. 27. This contrasted with a mean monthly plus change of just over one-half of one percent in all of the 1004 months under study. In the 83 years, September had produced an up market only 36 times and a down market 47 times. Barring major disaster in the next two days, it appears that September, 1980 will be an exception to the usual pattern, and the Dow-Jones Industrial Average will close up from its August figure of 932.59. We were curious to see if this phenomenon, an upward September, had any particular significance as far as subsequent change was concerned and, as long as we were examining September, it was relatively easy to perform the same examination for all 12 months of the year. We, therefore, undertOOk the following exercise. For each of the year's 12 months, we isolated those years since 1897 when the Dow moved up in the given month. We then analyzed the subsequent change in each of these cases for 12 different periods ranging from 1 to 12 months. The results turned out to be of some interest. An upward September, in the 36 past occasions when it has occurred, unfortunately shows little in the way of predictive significance. However, we did come up with a phenomenon of — the…YJillle of the month .of November as. a m.arket indicator. For example, there have been 49 upward Novembers since 1897. These 49 upward Novembers were followed by an upward December 35 times and by a downturn only 14 times, a combination with odds of about 1000 to 1 against chance occurrence. The market's moving upward in November appeared to have at least some statistical significance for all subsequent periods ranging from one to ten months. It occurred at a confidence level of 95 or greater for five of the ten periods; one, five, eight, nine, and ten months. The average percentage change in the Dow for the 49 nine-month periods following an upward November was almost 9. This compares with an average for all nine-month periods of 4.8. In other words, the average market advance following a rise in November was over twice as great as might have been expected. There are some interesting minor Sidelights to the study. An upward move in August, for some strange reason, appears to increase the likelihood of a downmove in September. The same is true for the 2-month period, August-October. It is perhaps worth reiterating,.as pointed out above, that, in contrast to the usual pattern, August, 1980 was not an upward month. Other findings include the following. January is similar to August in that an upmove in that month appears to foreshadow a correction. There is some indication that the likelihood of the traditional summer rally is increased by strength in May and June. Upmoves in either of those two months increase the probability of the summer advance slightly. And finally, July action, while showing little for the near term, tends to have some predictive value for the remainder of the year.. An upward July has foreshadowed a July-December upmove 39 of the 54 times it has occurred, with an average advance from the July close of 4.7, almost twice as great as would be expected. This phenomenon may be of some interest in the light of July's strength this year. Dow-Jones Industrials (12 00 PM) 947.78 S & P Composite (12 00 PM) 127.45 Cumulative Index (9/25/80) 1015.93 AWTsla ANTHONY W. T ABELL DELAFIELD, HARVEY, TABELL No 510iement Of expression of opinion or ony other motler herein contolned IS, or , to be deemed to be, directly or ,nd,rectly, on offer or the SOl,Cllotlon of on offer to bvy or lell anI. security referred to or menhoned The matter 1 presented merely for the converllcnc() 01 the subSCriber While oNe believe the sources of our Informa- tion to be rei lob e, we In no wo,/ reprelent or guorolllee the accuracy thereof nor of the statements mude herem Any action to be token by the subSCriber be based on hIS own investigation and information Jonney Montgomery cotl, Inc, as 0 corporation, and 115 off,cers or employees, may now hove, or may loter toke, positions or lrodcs In respect to ony seCUrities mentIoned In thiS or ony future ond such pOSition moy be different from ony views now or hereafter epressed In Ih,s or ony other ,SS\J!;! Janney Montgomery Scott, Inc, which IS registered With the SEC 0 on Investment odvisor, may give adVice to ItS Investment adVisory and other customers ,ndependently of ony statements mode In thiS or ,n any other Issue Further Informotlon on ony securIty mentioned hereIn IS aVailable on request

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