Tabell’s Market Letter – September 12, 1980

. ' ' 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