Viewing Month: November 1980

Tabell’s Market Letter – November 07, 1980

Tabell’s Market Letter – November 07, 1980

Tabell's Market Letter - November 07, 1980
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 081540 DIVISION OF MEMBER NEW VOAK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE – November 7, 1980 ,- c – If hascometo ourattent;on -tnarthere may nave , developments'last, week which are reputed to have had some effect on the stock market. Such an effect, however, was not particularly apparent in the week's market action. Now we are perfectly aware, from long experience, that we will be absoloutely unable to con- vince the majority of our readership that the above statement is not really intended to be facetious, despite the fact that the statement is almost entirely true. The market's response to the Reagan victory on Wednesday was essentially Pavlovian. There exists a conventional wisdom, probably dating back to the McKinley administration, that the stock market is supposed to go up in the face of a Republican victory, and the market duly did so after the election, before posting fairly sub- stantial declines from some of the bizarre prices which featured Wednesday's opening. This is not intended to argue that there do not exist profound implications for the nation, the economy, and hence, for the stock market, in this week's Republican sweep. Defense companies will undoubt- edly benefit from more ag-gressive military procurement, and oil companies from the possible realization that there exists less political capital than previously supposed in blaming every conceivable social ill on oil-company profits. There is little reason, however, for these developments to have any particular near-term effect on the prices of the oil and defense issues which led this week's upside parade. We would be disloyal to our profession if we did not believe in the essential wisdom of the stock market. We doubt, however, that it is sufficiently wise to assess, at this stage, all the implications of four years of Ronald Reagan's occupancy of the White House. In order to understand the lack of change in the stock market picture, it is only necessary to examine where the market was last Monday, vis-a-vis where it stands today. The market forecasters essential problem can be stated quite simply. Since early last spring, the market moved 1- noticably to wane starting in mid-August, and that waning of momentum created a trading range, expressed, in terms of the DJIA, between, roughly, 920 and 970. It had long been apparent that this trading range was of some technical significance and that the ultimate breakout frdm that range would be meaningful. As of Monday, despite a weak downside attempt late last week, no such breakout had taken place. The post-election frenzy took the Dow up to the top of the familiar trading range from which point it promptly retreated, and, by Thursday afternoon, just about the entire gain had been given up. Except for the record volume, and the fact that it all took place within the space of a couple of days, there was nothing, really, to distinguish this action from the same sort of thing that had occurred on at least three occasions since mid-August. There is, furthermore, little useful knowledge that can be gained from the volatility of Wednesday's and Thursday's trading. The central problem now facing the market forecaster is the exis- tence of a top formation. The identification of tops in an exercise substantively different from that 0 calling bottoms. In the latter case, one-day action, of the selling-climax variety, is often highly meaningful. Tops, however, consist of a cumulative chain of evidence, and in such cases, one-day moves provide only an additional link in such a chain. Our readers will be well aware that we have scrupulously refrained, in our comments of the past few months, from stating that recent market action does definitely constitute a top. For the time being, we continue to avoid such an identification. For most of 1980, and in some senses for long before that, technical action, in our view, has argued overwhelmingly for a fully-committed position with respect to equities. Long positions in falling stocks constitute j t one of the risks involved in equity investments; the other one is failure to participate in a rising ock market. Thislatter risk is one we have not been willing-to undertake, and still think-it rna e a real one. Given a chance to reflect upon the Reagan victory, we think the market will collectively decide how that victory should be reflected in near-to-intermediate-term price levels. When such a decision is made, technical evidence will, we presume, be provided. Even following the momentous events of the past week, such evidence is not yet complete. – — Dow-Jones Industrials (12 00 PM) 933.53 S & P Composite (12 00 PM) 128.99 Cumulative Index (11680) 995.97 AWTsla ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL NQ statement or expreslon of opinIOn or any other molter herein conlOlned IS, or IS 10 be deemed to be, dlreCl1y or Indirectly. on offer or the solicllolton of an oHer to buy or sell ony secIJrlly referred to or mentioned The motter IS presented merely for the convePlence of the subSCriber While -JoJe believe the sources of our Informa- tion to be reliable, we In no wo-y represent or guarantee the accuracy thereof nor of the statements mude nereln Any action to- be token by the subscriber should be based on hl own Investigation and mformotlon Janney Montgomery Inc, as 0- corporation, ond Its officers or employees, may now have, or may later tole, posltlons or trades In respect to ony securities mentioned In th,s or ony future 1Ue, and such posilion may be different from any views now or hereafter expressed In thIS or any other Issue Janney Montgomery Inc, which IS registered With the SEC as on Investment adVisor, moy give adVice to lis Investment odvisory and olhel customers Independently of any statements made ,n Ih,s or In ony other ISsue Further information on any secuflty mentioned herem IS available on request

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Tabell’s Market Letter – November 14, 1980

Tabell’s Market Letter – November 14, 1980

Tabell's Market Letter - November 14, 1980
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08!540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE November 14, 1980 The Reagan rally may have lasted for only a couple of hours before second thoughts set in, out tJ1e-stoek marketthis fo'liave' secoii'ifThoughts' regardingThe-' second thoughts. By last Friday, almost all of the gain posted on the morning following the election had been retraced, but Tuesday, Wednesday, and Thursday of this week saw three sharply advancing days which took both the Dow-Jones Industrial Average and the Standard & Poors 500 to new 1980 highs, and, in the process, took the market out of the trading range concerning which we have been prattling in this space since late last summer. As short a time as a week ago, in this space, we counseled in favor of waiting before making any definite predictions of a sizeable decline. In light of this stance, we can afford to be encouraged by this week's action without becoming totally euphoric. There was, as recently as October 30, a marginal downside breakout in the Dow which, we now know by hindsight, was false. Certainly the present upside breakout will have to be confirmed by future price firmness. Continued strength from this point would have important implications. This letter has regularly discussed the pattern of long, four-year cycles in the stock market, and the timing of the present'strength is fairly crucial in the context of cycle theory. The following table shows some relevant statistics for the seven completed major stock-market cycles since 1949,plus data on the present cycle for so far as it has continued. SiP Start Date 500 Date of High No. of S & P Days 500 To High Adv. Total Days S & P in Days End Date 500 Dec. Cycle Adv'cing Jun 13, 1949 13.55 Jan 5, 1953 26.66 987 96.7 Sep 14, 1953 22.71 14.8 1163 85 …,.., Sep 14, 1953 22.71 Jul 15, 1957 49.13 963 116.3 Oct 22, 1957 38.98 20.6 1033 'Jun26-;–i962 -52.32- 27. -U77 93 89 Jun 26, 1962 52.32 Feb 9, 1966 94.06 913 79.7 Oct 7, 1966 73.20 22.1 1080 85 Oct 7, 1966 73.20 Nov 29, 1968 108.37 516 48.0 May 26, 1970 69.29 36.1 885 58 May 26, 1970 69.29 Jan 11, 1973 120.24 665 73.5 Oct 3, 1974 62.28 48.2 1101 60 Oct 3, 1974 62.28 Sep 21, 1976 107.83 497 73.1 Mar 6, 1978 86.90 19.4 863 58 Mar 6, 1978 86.90 Nov 13, 1980 136.49' 682 57.1 To Date We have repeatedly noted that the last three cycles listed in the table above have characteristics very different from that of their four predecessors. The percentage advance in the rising phase of the 1966, 1970, and 1974 cycles was uniformly smaller, and the declining phase, at least for the first two, was considerably greater. Major bear-market declines in the 1950's and 1960's were of an approximately-20 magnitude. The declines which ended in 1970 and 1974 were 36 and 48 respectively. Even more importantly, however, the time spent in the advancing phase of the last three cycles was considerably shorter than has been the case since the middle 1960's. The first four cycles spent 900-1000 days in their advancing phase. The last three spent only 50(-600 days in their rising portion. Thus, through 1966, as the last column in the table shows, 85 or more of each cycle's total life was spent advancing. Subsequently, it has been 60 or less. The key fact is that the present cycle, now 682 trading days old, is beginning to take on some of the aspects of the earlier four cycles rather than those of the last three. With this week's new highs, it has now lasted longer, in terms of trading days, than any of the three previous market phases. although admittedly not yet by an amount that could be considered significant. Its centage advance has already exceeded that of 1966-68, although it would have a good ways to go before it were to equal the sort of increases considered normal a couple of decades ago. This change may even have started to take place with the declining phase of the last cycle which, terminating with a rather mild 19 decline, looked, in one respect at least, a great deal more like a cycle from the earlier part of the past-war period than the latter. The point is that continued strength from these levels, both in terms of time and percentage advance, will continue to make the present cycle more and more similar to those of the 1950's and 1960's and less similar to those of the 70's. Even allowing for the fact that the present advance might be in a relatively mature phase, such an interpretation is profoundly encouraging for the very long term. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (11/13/80) AWT sla 981. 23 136.36 1036.46 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stolement or expression of opInion or any other matter herein contained IS, or IS to be deemed 10 be, dtrectly or indirectly, on offer or the Sollcltotton of on offer 10 bvy tlon to based or be on sell ony securtty referred 10 or mentioned The mOiler IS presented merely reliable we III no way represent or guarantee the acclJrocy thereof nor hiS oWn'tnllesllgohon and Information Janney Montgomery SCali, Inc, for the COnvef'lence 01 the slJbscrlber WhIle oNe beheve of the statements mude herein Any octlon to be token y as a corporation, and Its officers or employees, may now htohvee,5Uorscmonfobyoeur lro5tearu t ke or trades In respect 10 any seCUrities mentioned III thiS or any future Issue, and such pOSlllon may be different from any views now or hereoJter th n thIS or any other Issue Janney Montgomery Scoll, tnc , which IS registered With Inc SEC as on Investment adVisor, may glye adVice to Its a VISOry on 0 III customers Independently of any statements mode In tnlS or In any other Issue Further Informotlon on any security mentioned herein IS OValO e on request

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Tabell’s Market Letter – November 21, 1980

Tabell’s Market Letter – November 21, 1980

Tabell's Market Letter - November 21, 1980
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TABELLWS MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORk STOCK eXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE November 21, 1980 TIle demonstrated a week ago had a satisfactory follow-through in last week's trading. A 70-million-sl1are advance on Tuesday-fOOK.lheuow lowing a mid-week correction, market strength was renewed late Thursday, and the average reached a closing figure of 1000.17. The S & P 500 concomitantly reached an all-time peak of 140.40. There had been a fair amount of rhapsodizing in the financial press about the market of a fortnight ago, centering around the rather spurious claim that the week ending November 14 saw the second largest stock market advance on record, coupled with the fact that the Dow was approaching the magic 1000 mark which, this week, it finally attained. To the serious student of stock-market history, the week's action, while both commendable and encouraging, was not in the least unusual. To begin with, it was the second largest advance on record only in terms of points gained on the Dow, the 54-point rise having been exceeded only by a 74-point rise in the week ending October 11, 1974. However, as we were all taught in grade school, the proper method of measuring such items is in terms of percent- ages. There have been, for the record, 51 weeks in the past half century in which the Dow advanced by a greater percentage amount than the 5.78 gain scored a week ago. The all-time record was 22.7 for the week ending August 6, 1932, and the modern record of 12.6 was set in October, 1974. Had the latter advance been duplicated, the Dow would have begun this week at 1050, and the former would have taken it to 1140. Sixty-eight percent of all issues traded advanced last week, hardly a startling figure since it has been exceeded 218 times since weekly breadth figures were compiled, including 4 times this year and 49 times in the past decade. Even the 276.7 million shares of volume failed to set a record. Volume was greater as recently as the week ending last September 19, and has been over 250 million shares on the week a dozen times in the past 13 months. What we had, in fact, was a typical, satis- factory component rally in an ongoing bull market. as we have said manrJ!imes before, are we proponents of the belief that numbers ending in three zero-s- h-ave any partICUlar maglC quality-. T fieD-ow;Itls! rue , after ing the 1000 level on a number of past occasions. However, the exact level at which this sort of resis- tance has occurred has never been precise, and we strongly suspect that it has been manifesting itself the trading area with a top at, roughly, 970 which contained the Dow from mid-August to early Novem- ber. None of the above is intended to suggest that the action of the past fortnight is totally without significance. The inability of the averages to make upside headway and the possible implications thereof have been just about the favorite subject of this letter since last summer. It has certainly been impossible, in commenting on the market over the past couple of months, to ignore the fact that many issues, which had lately posted almost vertical rises, had begun to move laterally, forming what might have been considered potential tops. The significance of the past two weeks is the fact that most, although, it must be duly noted, not all, of those potential tops were destroyed in the recent market strength, as the issues involved broke out of their individual trading ranges and moved ahead to new highs. Such action was notable in the area of Energy stocks and a fair number of High Tech- nology issues, many of which demonstrated that they may be ready to embark on new upside legs. As noted, however, potential tops still exist, and it would, moreover, be optimistic to expect Energy, High-Technology, and other leading groups totally to carry the burden of market leadership in the same fashion that they have been carrying it for the past two years. In other words, if the bull market is to be adjudged an ongoing phenomenon, more stocks must be able to post upside break- outs from their recent trading ranges, and new leadership must emerge. Signs of such possible leadership were beginning to become evident this week in such areas as Chemicals and Forest Products. What last week's action does is reinforce the presumption that the bull market that began in March, 1978 is a continuing and present phenomenon. We devoted last week's letter to trying to fit that bull market into the context of normal cyclical patterns and concluded- that it would not be historically un- …….. usual for it to have another year of life remaining. We also noted that a fairly substantial advance from current levels would not be totally out of historical context. Such a normal cyclical advance would take the Dow to somewhere in the area of 1200 which, coincidentally, happens to be one of the more plausible intermediate upside objectives based on the existing pattern. We are proceeding on the assumption, in other words, that another 6-12 months of a strong stock market is the most likely of all possible environments. Subsequent action may invalidate this particular thesis, but, until such action occurs, a continued aggressive attitude toward equities appears warranted. Dow-Jones Industrials (12 00 PM) 994.97 S & P Composite (12 00 PM) 139.55 Cumulative Index (11/20/80) 1051. 65 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL AWT sla No stolement or e;o;presslon of opinion or Clny other matter herein contained IS, or IS to be deemed 10 be, directly or indirectly, on offer or thll solicitation of on offer to buy or any security referred to or mentIoned The mottm IS presented merely for the 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 statements mude herein Any achon to be token by the subSCriber should be based on hiS own investigation and InformatIon Janney Montgomery Scott, Inc, as a corporatIon, ond Its offIcers or employees, may now have, or may loter take, positions or trades In respect to any SeCUrities mentioned In thiS or any future Issue, and such position may be different from any VIews now or hereafter expressed In this or any other Issue Janney Montgomery Stoll, Inc, whICh IS regIstered With the SEC as an Investment adVIsor, moy gIVe adVice to lIs Investment adVISOry and othel C\lstomers ,ndependently of any statements made In Hus or In any other lSue Further information on any secuflty mentioned herein IS available on request

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Tabell’s Market Letter – November 28, 1980

Tabell’s Market Letter – November 28, 1980

Tabell's Market Letter - November 28, 1980
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK eXCHANOE, INC MEMBER AMERICAN STOCK eXCHANGE November 28, 1980 -' fact that we -pronounced ,.,.skepticism 1000 level on the Dow-Jones Industrial Average, it is inevitable; we suppose, that-we offer some comment on the fact that this most widely followed of all market indicators closed at the figure of 1000.17 on November 20. For the record, this constitutes the last of five distinctly separate oc- casions which have found the Dow in a flirtation with four digits, these occasions having been spaced over a period of no less than the last 15 years. The average's first attempt at the 1000 level was in January-February, 1966 when, in two in- stances. it managed to post intraday highs above the magic figure, for the first time on January 18 and the second time on February 9. It was never able to post a closing above 1000 before the 1966 bear market took the index much lower. The second attempt on 1000, almost three years later in December, 1968, never saw anything but an approach. with an intraday high of 990.99 having been attained on December 3. The first actual close above 1000 was on November 14, 1972, initiating a three-month period during which the average reached its all-time high of 1051. 70 on January 11, 1973. No approach to this level was again made for another two and a half years. At that point, the Dow spent a full nine months moving back and forth through the magic number between March and December of 1976, but it was never able to close higher than 1014.79, a level reached on September 21. Finally, four years later. we have the 1000 figure again being attained. this for the fifth time. PERIOD – Dec 1968 Nov 1972-Jan 1973 Mar-Dec 1976 Nov 1980 CLOSING HI G H S DJIA S & P 500 iJ95..15 — 985.21 1051.70 1014.79 1000.17 94.06 108.37 120.24 107.83 140.40 Cumulative Index 1095.03 1455.59 979.97 660.89 1045.62 The table above shows the closing highs for the Dow, the Standard & Poors 500, and our own Cumulative Index for the five periods involved and shows in succinct form, we think, how little real meaning attaches to the present figure. The S 8. P 500, as the table shows, has been in a slightly upward trend over the five highs involved and is now at an all-time high some 50 above its level at the time the Dow first touched four figures. Our Cumulative Index, a truer measure of what all stocks have done over the period in question, is like the Dow, just about where it was 15 years ago. However, in the interim, it has traveled as high as 1455,and its low in the 1974 bear market was 355. It is in an indicator such as this that the true volatility of the stock market over the past decade and a half reveals itself. In a highly inflationary economy, the fact that the DJIA has topped out around the same level for 15 years is,. of course, an indication of the realtively poor performance of common stocks, in real-dollar terms, over the period. If we take the four highs subsequent to 1966 and adjust them to their level in 1966 dollars, the 1968 high was the equivalent of 900. the 1973 high. 735. and the 1976 high, 555. The recent high in 1966 dollars is just over 400. This sort of reasoning has been used in a number of forums as an argument against the owner- ship of common stocks. It is. however, in our view. nothing more than a hindsight affirmation of the fact that many stocks were drastically overpriced in 1968 and that others. notably the glamour issues, were equally overpriced in It has' long been the argument in this space that much of what we saw in the 1970's constituted a correction of that overpriced condition. Indeed, when measured from their 1974 lows. all three indicators tabulated above have moved upward at a rate in excess of general price inflation. the Dow, at an annual rate of 9H. the S 8. P 500 at 14H, and our Cumulative Index at an almost-20 annual rate. The real argument for or against common stocks in an inflationary environment must, it seems to us, finally rest on their relative value vis-a-vis other financial assets. We think that, in these terms. a strong case can be made for equities. That case is, we feel. indeed strong enough to make it only a matter of time before 1000 on the Dow-Jones Industrial Average becomes an historical arti- fact rather than a barrier to be breached. ANTHONY W. TAB ELL Dow-Jones Industrials (12 00 PM) 986.35 S & P Composite (12 00 PM) 139.95 Cumulative Index (11/26/80) 1046.55 DELAFIELD, HARVEY, TABELL AWTsla No stalement or expreSSion of opinion or any other moHer herein contolned IS, or IS 10 be deemed to be, directly or ,ndirectly, on offer or the soliCitation of on offer 10 buy or sell any security referred 10 or mentioned The mOiler 15 presented merely for Ihe conver'lence of the subscriber While oNe believe the sources of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements 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 lIS officers or employees, may now have, or may later take, p051tlons or trades In respect to any securities mentioned In this or any future Issue, and such pOSlhon may be different from any Views now or hereafter expressed In this or any other Issue Janney Montgomery Scali, Inc, which IS registered With the SEC as an Investment adVisor, may give adVice to Its Investment adVisory and othel customers Independently of any stalemen's made In Ihls or In ony olher Issue Further Information on any security mentioned herem IS avaUahle on requesl

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