Viewing Year: 1981

Tabell’s Market Letter – January 09, 1981

Tabell’s Market Letter – January 09, 1981

Tabell's Market Letter - January 09, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE January 9, 1981 –.;o.- —- — .,.-.- ; – – -e An ancient Chinese curse is reputed to have run, May you live in interesting tim-es. If the first few days of 1981 are any indication of what the stock markef is going to be like during the year, the times should be interesting indeed. The year's first three days saw the continuation of the year-end rally with a vengance, with the Dow Industrials tacking on a total of more than 40 points and moving to a new, post-March1978 high of 1004.69. And then, of course, came Wednesday. There is not that much to be said about Wednesday's trading other than to note it as a monument to the wisdom of Phineas Taylor Barnum. In and of itself, the 23.80-point decline on record volume and its 15-point follow-through on Thursday afternoon did not alter the market's technical position any more than similar past sharp interruptions in ongoing advances have done. The irony, in our view, is that it apparently came in response to an all-inclusive sell recommendation, at a time when this sort of advice (and its converse) has been, from a practical point of view, effectively useless for the past six years. Just about the last time when selling stocks simply because they were stocks would have been a useful policy for the long-term investor was 1972-1974. Since the 1974 lows, the sum-total of stock-market downside activity has been a two-year minor bear market in the averages, during which large numbers of stocks appreciated handsomely, and a series of four short-term corrections which astute traders might have scalped to advantage but which real-world, long-term investors – owould-have-done-best-to-ignore-.—Many-investors,as-isreputed-toobethe.case-withmany-generals-,– — seem to spend a great deal of time equipping themselves to fight the last war. 1972-1974 was the I last period in stock market history when successful market timing would have overshadowed stock selection as a path to investment success. Ever since that time, the opposite has been the case. It can, we think, be documented that, for the past six years, a fully-invested stance — assuming investment in the appropriate areas — has been the proper one for the long-term investor. The current technical picture, in our view, affords some evidence that this sort of market environment may persist. There are, it cannot be gainsaid, unmistakable signs of technical deterioration in the price action of a large number of issues. At precisely the same time that this is occurring, however, an equally substantial number of individual stocks are breaking out of significant base patterns, suggesting that they may be just about ready to embark on significant advances of long-range proportions. In such an environment, both panic selling and indiscriminate buying are likely to be inappropriate, and it is best to concentrate on the more difficult but more rewarding technique of attempting to separate the investment wheat from the chaff. It is, indeed, true that, with many stocks developing distributional patterns as noted above, some pronounced signs of market deterioration are evident. Tuesday's new high in the Dow was not confirmed by a number of other indicators, most notably breadth, which has been in a disturbing downtrend since last summer, a fact which we have been noting in this space with some regu- larity. Furthermore, the o;resent market cycle which bee-an almost three years ago is, as we noted in our year-end forecast, reaching an undeniably mature phase. In view of the market's obvious selectivity, however, we have deliberately chosen to monitor and be aware of these warning signals without substantively acting upon them. Such continue to be our recommended stance. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (1/8/81) AWTsla 964.33 132.75 1026.49 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL 01.No statement or expression of opinion or any other mot1er herein contomed IS, or IS to be deemed to be, directly or mdlrectly, on offer or the OIUllollon of an offer 10 buy or sell secuTlty referred 10 or mentioned The motter IS presented merely for the convenienCE; of the subSCriber While -Ne believe the sources of our Informa- han TO be reI lob e, 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 an hiS own InvestlgoTlon and Informahon Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now have, or may later take, pOSitions or trades In respect to any seCUriTieS mentioned In thiS or any future Issue, ond such POSition may be different from any views now or hereafter expressed In this or any other Issue Janney Montgomery Scali, Inc, which 15 registered WITh the SEC as an Investment adVisor, may give adVice to Its Investment adVISOry and other nlliomers Independently of any staTements made In Thl5 or In any olher Issue Further information on any security me'ltloned herein 15 available on request

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Tabell’s Market Letter – January 16, 1981

Tabell’s Market Letter – January 16, 1981

Tabell's Market Letter - January 16, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 081540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, INC MEM8Efl AMERICAN STOCK EXCHANGE January 16, 1981 IE)ast week's .isue9f t)Ji leH.e.rJweutiliedthe w.eeJ's.wild .market3l1,lclIBtions as .an,excuse for – – a general discourse on the' subject of market timing. We noted that; in'Our view, 'the ironic aspect of last week's action was that it resulted from the attempt of large numbers of investors to indulge in a market-timing exercise at a point when six years of evidence should have told them that such an effort was likely to be futile. We think that thought is worth expanding on a bit. It has always been true, and it remains so, that there exist two distinct aspects to successful asset management involving common stocks. The first of these aspects is, of course, that of forecasting the general behavior of the stock market, thereby determining what portion of total assets available for investment will be committed to equities as a class. The second aspect is security selection. This con- sists of, having chosen an appropriate asset mix, deciding how the equity portion of that asset mix shall be invested. The two disciplines cannot, of course, ever be completely separated. For example, a market forecast will often be part of the stock selection process, i. e., in determining the relative volatility of the stocks which are going to be held. There is often, however, room for argument as to which of the two disciplines is more important in the achievement of investment success. As we noted last week, there seems to have been a great deal of recent emphasis on the market- timing aspect of management. This emphasis arises, it seems to us, out of a number of traditions. The first is a simple-minded seat-of-the-pants awareness of what bear markets can do. This awareness was stimulated most recently in 1973-1974, but it can be traced back as far as 1929-1932. Even after a half-century, we suspect that the memories of that painful experience color today's investment think- ing. The second tradition which, we think, has helped stimulate the current interest in market timing has been the recent growth in quantitative analysis of the capital market process. A cornerstone of modern portfolio theory has been detailed mathematical examination of the variance of individual secu- rity prices. Such studies tend to suggest that well over half of the variation in individual stock prices tends to be explained by overall moves in the stock market, and only a minor portiQnoLthat –val'laHon by factors intrinsic to the individual stock or industry. – – – – – — – – – — – We are reminded of two aphorisms concerning the investment process. The source of one is a venerable old-time technician who said, When they back the paddy-wagon up to the door, they take out the good girls along with the bad. The second is from one of the founders of modern portfolio theory who warned, B eware the co-variances. Both were, of course, saying the same thing. At this point, a word about our own approach to the twin disciplines of market timing and security selection is in order. As our readers are aware, we expend a great deal of time and effort in the process of trying to formulate a general market forecast based upon technical factors. We are aided in this effort by an extensive computerized data bank which we use to track a large number of general market indicators, some of these conventional, and others, as far as we are aware, proprietary to us. The analysis of these indicators has been and will remain central to our stock-market thinking. We also, however, with a combination of computerized screening and human analysis, track some 2,000 individual issues on the New York and American Stock Exchanges on a weekly basis in an attempt to assess the individual price probabilities, from a technical point of view, for each one of these issues. We noted above that the disciplines of market forecasting and security selection tend to be intertwined. Quite obviously, our own feelings about the general market are going to be, at least in part, derived from that analysis of 2,000 separate stocks. It is this sort of individual stock analysis which, at the moment, prevents us from overemphasizing the various signs of general market deterioration which have been taking place on a progressive basis over the past six months. Inspection of individual patterns unquestionably shows that a number of issues are beginning to reach long-term upside objectives. Many have entered into what may well turn out to be distributional phases. The problem is that a large number of issues remain in confirmed longterm uptrends, some of these issues having recently entered into the initial stages of those uptrends. Now there is little doubt that a great many fewer stocks remain in uptrend phases than was the case, let us say, last summer. Indeed, one way of viewing the market process of the last six months has been that it has consisted of the number of attractive technical patterns being transformed from a distinct majority to a significant minority. Minority though it be, however, that number remains sig- nificant. We think, in other words, as we noted last week, that over the short term, investment success is more likely to be attained by adopting the contrary approach of emphasis on security selection and of decision-making based on individual stock patterns. This approach has, by and large, been successful for a half-dozen years, and our reading of the current technical picture is that it will continue to be so. Dow-Jones Industrials (12 00 PM) 970.31 S & P Composite (12 00 PM) 134.32 Cumulative Index (1115/81) 1034.70 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL AWT sla No stotement or expressIon of opinion Of any other molter hereIn conloll'led IS, or IS to be deemed 10 be, dIrectly or IndHectly, on offer or Ihe soil clIo lIon of on offer to buy or lieU any security referred 10 or mentIoned The matler IS presented merely for the convenienCE of Ihe sublicflber WhIle oNe believe Ihe sources of our Informo tlon to be rel,able, we In no way repreiienl or guarantee Ihe accuracy thereof nor at the statements mude hereIn Any actIon 10 be laken by the subSCriber should be based on hl own Investlgatlan and Informallon Janney Montgomery call, tnc, os a corporatIon, and Its offICers or employeeli, may now have, or may later toke, posItIons or trades In respect to any securllles mentIoned In Ihls or ony future Issue, and such posItIon may be dIfferent from any vIews now or hereafter expressed In thlli or any other Issue Janney Montgomery Scotl, Inc, whICh IS regIstered WIth The SEC as on Investment adVIsor, may gIve adVIce to Its Investment adVIsory and other customers IndependenTly of any statemenlii mode ,n thIS or In any other 15SUC Further informatIon on any senility mentioned herein IS avaIlable on request

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Tabell’s Market Letter – January 23, 1981

Tabell’s Market Letter – January 23, 1981

Tabell's Market Letter - January 23, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW .JERSEY 08540 DIVISION OF MEMBER NEW YOAK STOCK EXCHANGE, INC MEMBEA AMERICAN STOCK eXCHANGE January 23, 1981 – – Wehavetried to -focusin cthelast-twolssues-f..thiseHer-onthe dichotomy'sho;vn by the bhavior of -the widely-followed marketaverages and that of individual stocks. -We -have -suggested- that the loss of market momentum has been an ongoing process evident to the most casual observer ever since last summer. a point underscored by the fact that the Dow at today's level is about at the same level as during the first week of last August. We have also noted, however, that individual stock analysis reveals the fact that a certain degree of rotating leadership is indeed present, with possible new major uptrends emerging to replace the ineVltable number of stocks dropping by the wayside. This sort of environment makes a market forecast particularly difficult since so much depends on accidents of timing. If all those stocks which have entered into corrective phases begin moving toward their downside objectives at the same time, the result in terms of the averages is unlikely to be pleasanL If, however, corrective moves turn out to be slower and are combined with upside achon on the part of emerging new leaders, the ;oular indices could well give a good account of themselves. In terms of the general market, the action of the Dow ever since last August has essentially consi5ted of a series of ever-widening upward and downward swin!,s (of which more below). The last high attained was at 1004.69 on January 6, the third trading day of the new year. Through Monday of this week, it had found support m the mid-960's, but in the latter part of the week, that support level was penetrated, and an hourly low of 937,as of this wrtting, representing a 6.7 downswing from the January 6 high, has now been attained. This action has at least some of the earmarks of a correction well within the bounds of normality. How- ever momentous the trading action during the first week in January may have appeared, there was not sufficient time in that week, and in the weeks which preceeded and followed it, to form that important a distributional top. Such a top as exists may be dated as having begun to form on December 22 when the Dow went up 20 pOints to 958 and was terminated by the sharp market break this Tuesday. On the implica- tions of that formation alone, there is very little reason to expect the market decline to carry much further than it has already done. The ability to hold current levels overthe next few weeks, therefore. would have – -t.,- be interpreted as bullish evidence – –.- — .., , – – – – — – .. – – – .- – All this, however, must be viewed in a long-range context, and, as noted above, to do this, one must go back to last August. On August 15, the Dow reached a high of 966.72, 27 above its level at the starting point of the rally on March 27. Durtng that whole advance, there were only three corrections of any magnitude, the largest being 4 and lasting for 6 days. The major swings which have occurred in the Dow since that time are documented in the table below. Date DJIA Change Date DJIA Change Aug. 15, Aug. 28, Sep. 3, Sep. 8, Sep. 22, Sep. 29, 1980 1980 1980 1980 1980 1980 966.72 930.38 953.16 928.58 974.57 921. 93 -3.76 2.45 -2.58 4.95 -5.40 Oct. Oct. Nov. Dec. Jan. Jan. 15, 30, 20, 11, 6, 22, 1980 1980 1980 1980 1981 1981 972.44 917.75 1000.17 908.45 1004.69 940.44 5.48 -5.62 8.98 -9,17 10.59 -6.40 To the technician, the most outstanding feature of this five months of action is the fact that it is a broadening formation. Inspection of the first five lows shown in the table, from the correction low of August 28 to the bottom of December 11 from which point the year-end rally began, reveals that each one of these lows is successivelY lower than the previous one. With two exceptions, the peaks of September 3 and October 15, precisely the same is true in the opposite direction for the highs. Each high has tended, during this period, to take place at a higher level. For the analyst, formations of this sort are ground on which it is necessary to tread with extreme caution. As the lateral formation progressed, one has had to resist the temptation to cry wolf at each successive downside breakout or to become bullish as each new -high was made. The continuing divergence in individual stock patterns has, of course, been one factor that has helped to resist this sort of temptation. It is well to remember that no market environment goes on forever. At some stage, a breakout from this fIve-month trading range will take place, and it will be real. That trading range has now produced enough fluctuation and sufficient volume so that such a breakout, when it occurs, and if it can be properly identified, will be meaningful in whatever direction that breakout takes place. We do not ourselves possess the prescience claimed by some of our colleagues which would enable us to predict the direction of that ultimate breakout with any degree of certainty. Indeed, we see the evidence as not bemg completely in, and we think it is precisely that condition of uncertainty which market action has been reflecting since mid-August. It will be the task of this letter in future weeks to try to identify the resolution to this dilemma just as early as is honestly possible. Dow-Jones Industrials (12 00 PM) 939.59' S & P Composite (12 00 PM) 130.11 Cumulative Index (1122181) 1025.82 AWT sla ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or epreu.on of op.n.on Of any other motter here.n contcltned 'S, or .s to be deemed to be, d.rectly or IOdHectly, on offer or the SOI'C.totlon of an offer to buy or sell cny security referred to or mentioned The mailer IS presented merely for the conve,,1enct of the subscriber While we believe the sources of our informa- tion to be reliable, we In no way repreenl or guarantee the occvrocy thereof nor of the swtements mude herein Any acllon to be token by the subscriber should be based on his own investigation and Information Janney Montgomery Scott, Inc, as Il corporation, and Its offICers or employees, may now hoe, or may loter toke, positions or trodes In respect to any seCUflhcs mentioned In thiS or any future Issue, and such position may be different from any views now or hc'eofter exprened In HilS or any other .nue Janney Montgomery Scoll, Inc, wh,ch IS reglste'ed with the SEC as on Investment odv.sor, may gIVe adVice to ,ts mvestment adVisory and othe. customers Independently of any statements mode In thiS or In any alher Issue Further miormtlOn on any security mentioned herem IS avollable on request

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Tabell’s Market Letter – January 30, 1981

Tabell’s Market Letter – January 30, 1981

Tabell's Market Letter - January 30, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK eXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – January 30, 1981 The stock market's reaction to a new President in office and the hostages being freed has been, to date something oLa nonevent. ILis.as if the.market.issaying to-us,–n;-;–7I-,am-from .Missouri– You've got to show me. 1/ .. 1… ..; . . ' ' – – – – – – – . -;– – – – – – – — – – The action of the Dow-Jones Industrial Average in recent months has been contained in a trading area, albeit volatile, which was established from the December 11 low of 908.45 on the DJIA, to the recent closing high of 1004.69 on January 6 of this year. The significance of the December low, which we have discussed in recent market letters, becomes an important reference point to watch when trying to study the familiar seasonal tendency of the stock market for the year. Also the closing high for this year must certainly be viewed as an important benchmark, as it represents the fourth time within a period of 15 years that the Dow-Jones Industrial Average has broken the 1000 'level and been unable to significantly sustam the move. Penetration of this trading area, therefore, may well give us a clue to the direction of the market and must be monitored closely. Of the many crosscurrents present in the market today, the one most obvious to fOllowers of the stock market is the weakness in the oil-related groups. The Crude Producers, Integrated Domestic, and Integrated International Oil companies that make up the S & P Oil Composite represent 22.4 percent of the S & P 500. Obviously the current weakness ill these stocks has had a depressing effect on the averages. 52-week 1981 Percent 52-week 1981 Percent High Low Change High Low Change Oil Crude Prod. Oil Integrated Dom. General Amer. Oil 61.00 43.50 -28.69 Atlantic Richfield 74.38 58.75 -21.01 Louisiana Land 63.75 42.25 -33.73 Cities Service 61.25 40.75 -33.47 Mesa Petroleum 69.25 52.63 -24.47 Conoco 73.00 59.00 -19.18 – — Superior'Oil-25eOt\O1'85;OO6;29'-'Getty 'Oil''-'rO25,'—o82'7(JO2-25– Houston Oil & Min. 57.88 49.13 -15.12 Phillips Petroleum 62.88 51.63 -17.89 Shell Oil 65.50 48.38 -26.14 Oil Integrated Inter. Exxon Gulf Oil 8R.75 54.50 75.50 -14.93 40.00 -26.61 Standard Oil Ind. Sun Co. Union Oil Cal. 99.50 59.63 56.50 70.88 40.75 39.00 -28.76 -31. 66 -30.97 Mobil 89.50 74.75 -16.48 Royal Dutch 112.25 91. 68 -18.33 Standard Oil Cal. 117.50 Texaco 54.38 92.00 -21.17 41. 25 -24.14 As the exhibit above shows, substantial percentage declines from the stocks' 52-week intraday high to their 1981 intraday low have uniformly taken place. This across-the-board correction has done serious long-term technical damage to the oil-related group. The ability of these stocks to hold above the 1981 lows listed above would indicate the start of a possible consolidation phase, however, penetration of these lows 'WOUld reestablish the existing downtrends. Offshore Drilling, Canadian Oil and Gas, and Oil Well Equipment and Services, not included in the above study, reflect similar percentage declines. Within the framework of a general market that has been moving laterally for a period of five months, the oil-related stocks have corrected their impressive gains, while not disturbing other sectors of the market place. In other words, these bearish oil-related groups have, in fact, been offset by bullish groups in other sectors such as the Chemicals, Drugs, Papers, Steels, and interest-sensitive groups, to name a few. This rotation of leadership is constructive for two reasons. First, it has a tendency of limiting the downside risk of the general market by having groups in different stages at different times, and second, it takes the pressure away from a group like the Oils which, until recently, has performed extremely well. However. it must be noted that the majority of these stocks started their impressive rise from the 1974 lows, and it would seem logical not to expect them to continue to lead the market in the next advancing phase. . As previously stated, a trading range has been defined in the Dow-Jones Industrial Average. While contained in this area, rotation of leadership continues from group to group. At some point, an upside or downside breakout of this trading area will take place. Being unable to identify the direction of the breakout at this time, we must continue to aSsume a show me attitude. Dow-Jones Industrials (12 00 PM) 955.80 S & P Composite (12 00 PM) 130.85 Cumulative Index (1/29/81) 1029.08 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL RJS sla No slolernen! or expren!on of opmlon or any other moiler heretn contained IS, or ., to be deemed 10 be, directly or Indlfeclly, on offer or the SollCltollon of on offer to wy 01 r,ell any set\mly rehn!!O 10 or menlooned ihe mOer IS -presented merely for the Convel'lenCe of lhe subscTlber While we beheve the lOu/cer, of our mfa/rna ttOn 10 be rel,oble, we In no woy represent or guarantee the occuracy thereof nor of thc statements mde herein Any action to be tohm by the subSCriber should be bosed on hts own investigation and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, moy now have, or may later toke, positions or trades In respect to ony securlt.es mentioned In ihls or any future Issue, and such pOSition may be dlfferenl from any views now or hereafter expressed In thiS or ony other tssue Janney Montgomery Scali, tnc , which 15 registered wlh the SEC as on If1veltmenl adVisor, may give adVICe to 115 If1vestment adVisory and other tUstomlHS mdependently of any stolements mode In thiS Or In any other Issue FUrlher information on any security menhoned herelf1 IS available on request

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Tabell’s Market Letter – February 06, 1981

Tabell’s Market Letter – February 06, 1981

Tabell's Market Letter - February 06, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCI( EXCHANGE February 6, 1981 We have been drawing attention for some time to the narrow trading range which has contained -the-Dowsince'last-August.,….. Thattradingcrange-reached a-timespan-of six months,at the end of Janu ary. At month's end, the Dow had held, for a six-month period in-a 10 59 percent ;-low-to-nign', trading range delimited by the January 6 high of 1004.69 and the December 11 low of 908.45. This marks the 32nd instance since 1940 where the Dow has first reached a month-end at which the past six months of trading have been confined to a range narrower than 11 from low to high. There appears to be a widespread belief that such trading ranges are invariably the harbinger of distributional tops. This is not necessarily the case, as the table below shows. MONTH M1iRT940 OCT 1943 .JAN 1944 OCT 1944 MAR 194 DEC 1947 SEP 1948 APR 1949 JUN 19,,1 JAN 192 APR 19;) JUL 193 SEP 19'3 MAR 19'7 MAR 19'8 OCTY99– JUL 1960 JUL 1961 JUL 1963 MAY 1964 DEC 1964 MAR 1966 JUL 1967 APR 1968 SEP 1968 FEB 1969 JUL 1971 JUN 1972 JUL 1976 JUL 1977 JUN 1979 DJIA CLOSE H7.9' 138.27 137.40 H6. ,,3 1,,4.41 181.H 178.30 174. H 242.64 270.69 274.7 27'.38 264.04 474.81 446.76 6T6.60 616.73 70;.37 69'.43 820.'6 874.13 924.77 904.24 912.22 93,.79 90;.21 8;8.;3 929.03 984.64 890.07 841. 98 SIX-MONTH TRADING RANGE 7. 49 8.82 9.40 9.81 10.93 6.86 9.76 10.91 10.10 7.98 8.72 10.'6 9.63 9.82 – -10.97 -10'; 9. ,,7 10.82 10.19 10.42 8.30 9.23 8.72 10., 8.94 9.49 10.7; 9.23 6.38 8.96 8.89 PERCENT CHANGE AFTER 6 MONTHS -10.3 9 MONTHS 12 MONTHS -11. 37 -17.0' -1.48 6.34 12.91 17.68 4. ,,8 -0.67 .67 6.64 11.16 24.93 -1. ,,8 -6.10 .97 11. 84 27.3, 29.36 -2.13 2.36 8.83 1'.86 23.07 10.96 11. o 13.03 3.28 0.39 6.18 14.95 -3 ;90 -0. 4 6.42 b.96 26.32 -8.24 7.0; 16.23 26.34 36.,2 -.. 91 19.10 30.24 -6.94–''-'-4–62 34.68 . 10-24 '.10 -0.76 12.93 10.0; -;.68 16.,9 14.37 -1'.23 20.9 6.69 -0.70 10.11 6.46 11. 88 10.88 -16.28 -,.39 4.40 -0.03 -7.;7 -1;.04 0.88 3.71 -6.69 -10.26 -6.36 -2.3, 4.16 -13.11 -14.10 .08 11.14 7.71 9.79 -3.07 -13. ,0 2.37 -,.86 -,.93 -4.02 -9.60 -3.12 -0.38 -6.68 3.08 The table shows the 31 prior instances where the six-month trading range for the Dow dropped below 11 after having been above that figure. It also shows the subsequent percentage change of the Dow after six months, nine months, and twelve months. It is true that previous bear markets have often been preceded by such trading ranges. Thus, the 1962 bear market was preceded by a narrow trading range for the six months ended July, 1961, the 1966 bear market by such a range ending in March, 1966, and the 1970 bear market by a narrowly confined period ending in February, 1969. However, in many cases, such protracted trading ranges have been only consolidations in on- going bull markets. This was the case for the periods ended June, 1951, September, 1953, July, 1963, and July, 1971. The most recent'instance of a narrow trading range, the one ended June, 1979, was somewhat ambiguous. It produced a somewhat lower market nine months later at the March, 1980 low, but the recovery thereafter was fairly steep. The average percentage changes for six months (2.5) and nine months (4.1) after narrow trading ranges are almost exactly in line with normal expectations based on 55 years of market experience. The average percentage change for twelve months (6.6) is slightly greater than the normal expectation. The market has moved up following such trading ranges 55 of the time over six months, 58 of the time over nine-month periods, and 61 of the time over twelve-month periods. All these figures are just about in line with normal expectations. It is difficult, therefore, on the face of the evidence, to assert that the current trading range, in and of itself, has any particular predictive significance. Dow-Jones Industrials (1200 PM) 951.19 S & P Composite (1200 PM) 130.02 Cumulative Index (2/5/81) 1032.46 AWT sla ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL No stotement or e)(prelon of opinion or ony other motter herein contolned IS, or 1 to be deemed 10 be, dlrectl)' or Indlredly, on offer or the soliCitation of on offer fa buy or sell any security referred to or mentioned The maller IS presented merely for the converlenC(; of the subscriber While we believe Ihe sources of our information to be reliable, we In no way represent or guaranlee the accuracy thereof nor of the stalements mude herein Any odlon to be token by the subSCriber should be based on hiS own Iflvestlgotlon and Informollon Janney Montgomery SCOII, Inc, as a corporal lon, and lIs officers or employees, ma)' now have, or may loler lake, pOSitions or trades In respect 10 any securities mentioned In thiS or any future Issue, and such postllon may be dlfferenl from any views now or hereafler elprcssed In Ihls or any other Issue Janney Montgomery Scotl, Inc, which 15 r'glstered wllh the SEC as on Investment adVisor, may give adVice to ItS I!weslment adVisory and othel cus.tomcls Independently of any sotements mode kl thl or In any olher Issue Further Information on ol'lY eOJf\t'f mentioned herein IS (wolk!.ble 01'1 request —

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Tabell’s Market Letter – February 13, 1981

Tabell’s Market Letter – February 13, 1981

Tabell's Market Letter - February 13, 1981
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TABELL'S MARK.ET. LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANO. INC MEMBER AMERICAN STOCI( eXCHANGE February 13, 1981 Anyone who has spent some time in the securities industry is used to being greeted with the ques- – – tion,. Whatith!nn.ark-!ioing–BaQk illthe d!!rl5 'ages ;hen. we-Jirst, enterectthe 'profession-, the- question had a very specific meaning. It basically asked for the change in the Dow-Jones Industrial Average. In those simpler days, before the invention of the computer, and prior to the invasion of Wall Street by refugees from mathematics departments, the Dow-Jones Industrial Average was just about all there was. It dated back to 1884, when Charles Dow first compiled a list of 12 (later 20, then 30) stocks and utilized their average price as a market indicator. Mr. Dow's original average has subsequently been severely criticized on a number of grounds involving, among others, the inclusion of only 30 stocks, the choice of those stocks, the relative weighting method, and the unscientific method of adjusting for splits. Other market indicators have emerged, including the capitalization-weighted SliP 500 and NYSE indices, along with a host of others. The advent of the computer, and the fact that almost all securities trades are now on line to EDP equipment, has made possible the calculation of averages and indices in limitless variation. No longer restricted to the relatively few stocks that Dow and his staff could calculate by hand, we now have averages comprising individual prices of in excess of 5000 securities. What Dow was doing when he first calculated his average, of course, was following a statistical procedure that goes back into the dimmest reaches of mathematical antiquity. The creation of an average was then, and remains, an attempt to describe a disparate group of numbers bymeans of a single number. This remains true today, regardless of how many stocks an average may include or how sophisticated its calculation may be. It remains a reference to a of quantities and is a form of mathematical shorthand, an attempt to pinpoint one property oTUiiit particular group. Only a single property, however, is described. Consider these two groups 102, 96, 100, 104, 98, and; 10, 350, 5, 132, 3. One does not need to be a mathemetician to realize that the two groups are very different. Yet they have one attribute in common. The average value of each is 100. –fn-OIder-toquantify-the-diHerenee-bet-ween-the-secGndgroupandthefirst.we-needLto-examine– -. another property of groups of numbers — variability. What obviously distinguishes the second group . above is that it is a good deal more variable. This same concept of variability applies to changes in averages over time. Consider an average of three stocks, each selling at 100. If one moves to 104, another to 102, and the third stays the same, their average would have moved to 102. If one doubles and another declines to 6, with the third remaining the same, the new average will also be 102. The dimension within which the component stocks have varied over time, however, is quite different. Which brings us back to Dow. Even in the 1880's, Mr. Dow was smart enough to realize that if stocks varied widely in disparate directions, the concept of an average would be meaningless. He knew intuitively that such was not the case. Stocks tend to vary in harmony with each other, and, therefore, as Dow well knew, an average would be a useful tool. In mathematical terms, this property is called covariance, and the fact that stocks possess it was rediscovered in the 1960's and 1970's by mathematicians armed with computers. The fact that the rediscovery was not particularly earth- shaking was unfortunately lost on many of them. All of the above rambling is intended to lead us in the direction of a sermon on the current stock market. The recognition that stocks tend to move together goes back to Dow, and this tendency certainly continues, in some degree, to be a fact. There exists some evidence, in our view, however, that such may be less the case in recent years than has been true in the past. The extent of co- variance in common stock prices, in other words, may be diminishing, slightly and imperceptibly . perhaps, but to a degree significant enough to affect portfolio behavior. A recent instance that can be documented is the period 1976-1978, during which time, in general, large-capitalization stocks tended to decline significantly while smaller stocks advanced sharply. Intuitively, based on our own experience, there has been no recorded instance of comparable behavior. We are unable to quantify this suspicion, but we strongly believe it to be true. In the most recent past, the last couple of months, we have seen the averages do eSSentially noth- ing. This would lead one to believe, given a high degree of covariance, that most stocks were doing nothing at all. Such has not been the case. Energy stocks have been declining sharply, while other issues have been moving ahead. This is a lack of covariance which, again intuitively, we suspect may not often have been present during past periods, such as those enumerated last week, when the averages moved in s narrow trading range. One of the things that makes the stock market so fascinating is the fact that it possesses many properties which remain unchanged over time. Others, however, subtly become altered. In the case of variability, we may presently be witnessing such an alteration. Dow-Jones Industrials (1200 PM) 934.73 S & P Composite (1200 PM) 127.19 Cumulative Index (2/12/81) 1025.41 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL AWT sla No statement or e)(preSSlon of opinion or any other moIler herein contolned i, or IS 10 be deemed to be, directly or indirectly, on offer or the OII(llollon of on offer to buy or sell any secunty referred to or mentIOned The motter IS preented merely for the CO!'lvel'lenC of the subSCriber While oNe believe the sources of our Informa1,0 to be reluJble, we If'I no way represenl or guarantee the accuracy thereof nor of the tatement mude herein Any action to be token by Ihe subSCriber hould be based 0 hiS own investigation and Informollon Janney Montgomery Scott, Inc, as a corpo'atlon, and lIS of/'cers or employees, may now have, or may later toke, poslhons or trades In respect to any secufltles mentioned If'I Ihl or any future Issue, and SiJch pOSition may be ddferenl from any views now or hereafter expressed In llIs or any olher Issue Janney Montgomery Scolt, Inc. whICh IS registered With the SEC as on Investmenl adVisor, may give odvke 10 ,ts ,veslment adVISOry and olhe! customers Independently of any statements mode, thiS or In any olher Issue Further mformOI,on on any security men honed herein IS avatlable on request

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Tabell’s Market Letter – February 20, 1981

Tabell’s Market Letter – February 20, 1981

Tabell's Market Letter - February 20, 1981
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'. ' TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE February 20, 1981 The long-term implications of President Reagan's economic address to the Nation must be viewed as constructive. However.- tne–iriIfiiirreacUon -of the-stockrriarkeLyesterday. reflectea -an-atmospnere of – ..,. skepticism as the Dow-Jones Industrial Average closed at 933.36, down 13.74 points. The Dow-Jones Industrial Average has, since last July, been contained in a trading range deiIDed by a low of 908.45, posted on December 11, 1980, and a high of 1004.69, posted on January 6, 1981. As this letter has suggested in recent weeks, within the framework of this trading range, individual components of the Dow are, by no means, acting in concert and are, in fact, in many cases, reflecting quite dissimilar patterns. Obvious examples of this apparent dichotomy would include the constructive relative strength of such securities as Alcoa, Owens Illinois, Union Carbide, and U. S. Steel, compared with the poor price performance of stocks such as Exxon, Standard Oil of California, and Texaco. – COMPUTED TREND RNRLTSIS – DJIR F'6 10 'gal III'II! jlllllllllill I1II111111111 1 11111111 I II11I1I111 1l l l-lt1 1 1Illrll 1 l . —— – Iltlrllllll 32..20, —- —1 – — –. I I I II I II1I1 .Jm. .1lJL —- .ilL 't't llao Fn 1980 y J!IBD 1..lJN 1900 LJUl !98(1 IU; 1980 lSEP 1980 OCT !9SC llllv 1981' IOfC lqs(1 JIll! 'qa' 1Ell '011' To put the past 12 months in proper perspective, an inspection of the above graph of the daily high-low-close of the DJIA is useful. As can be seen, the DJIA, in the span of 226 trading days, has advanced from a low of 759.98 on March 27. 1980, 244.71 points to a high of 1004.69 on January 6, 1981. THs 32.20 advance in the market since March of last year to early January of this year was, by any historical measure, both in terms of magnitude and duration, a respectable, but by no means unprece- dented, move. Since the January 6, 1981 high of 1004.69, the Dow has corrected 72.12 points, or 7.28, in 35 trading days to a recent low of 931. 57 on February 13, 1981. This 29.88 correction of the recent ad- vance would appear, on the surface, to represent a normal one-third to one-half correction of the move. But, clearly, that does not tell the whole story. Serious technical damage has been done to the energy- related sector with corrections in individual stocks in this area in excess of 30 not uncommon. The fact that the general market has supported this amount of concentrated selling pressure to date has been constructive. The ability of the stock market to continue to absorb this pressure, must, however, be monitored closely. Dow-Jones Industrials (1100 AM) 934.13 S & P Composite (11 00 AM) 126.60 Cumulative Index (2/20/81) 1017.19 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL RJSsla No statement or expression of opinion or ony other motter herem contained 15, or 15 to be deemed to be, directly or indirectly, on offer or the SOI,cllol.on of on offer to buy or sell onr. seamty referred to or mentioned The matter IS presenled merely for the convef'lence of the subscrIber WhIle we believe Ihe sources of our Informo han 10 be rellob e, we In no way represent or guarantee the accuracy thereof nor of Ihe stotemenls mude herein Any act.o… to be tal-en by the subscriber should be based on hh own Investigation and Information Janney Montgomery Scott, Inc, as 0 corporat.an, and .ts offICers or employees, moy now have, or may loter toe, positions or trades In respect to ony securll1es menhoned In th.s or any future ISUe, ond such POSition may be different from any views now or hereafter expressed In Ih,s or ony other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to lIs rnvestment adVISOry and othe, customers Independently of any statements mode In th,s or In any 01 her Issue Further information on any security mentioned herein IS ova liable on request

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Tabell’s Market Letter – February 27, 1981

Tabell’s Market Letter – February 27, 1981

Tabell's Market Letter - February 27, 1981
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TABELL'S MARKEY' LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08!540 DIVISION OF' MEMBER NEW YORK STOCK EXCHANoe, tNC MEMBER AMERICAN STOCK EXCHANQe February 27. 1981 —r- .. .- .HQ'me;-hi)ine'IJ.AalJgEr.-'7.— — ! ..—– Familiar Ballad z-.r— It is the duty of the market letter writer to report on a regular basis on the meanderings of the stock market. Under these circumstances. he is required. occasionally for protracted periods of time. to find new ways of stating the fact that the market has been doing — nothing. Such has been the case in the recent past. Ever since last August. when the Dow-Jones Industrial Average began its confinement to a range. roughly between 900 and 1000. this letter has been faced with the task of finding creative ways of commenting on the internal action of a market which has. essentially. been moving sideways. Since that internal action has created a few items of interest in the past month. we are due for one more episode in the ongoing saga. We last examined the Dow's trading range in some detail on January 23. noting at that time that it had begun on August 15.when the Dow reached 966.72. 27 above its level of late March. The period between August 15. 1980 and January 6. 1981. we noted. could be described as a series of five downward. then upward. swings. the last of which achieved a high of 1004.69. None of these swings required longer than 16 trading days. and none involved a percentage change of greater than 11 . In most cases. the percentage change was considerably lower. In commenting on this sort of action s month ago. we said. It is well to remember that no market environment goes on forever. At some stage. a breakout from this five-month trading range will take place. and it will be real. That trading range has now produced enough fluctuation and sufficient volume so that such a breakout. when it occurs. and if it can be properly identified. will be meaningful in whatever direction that breakout takes place. We do not ourselves possess the prescience claimed by some of our colleagues which would enable us to predict the direction of that ultimate breakout with any gree of certainty. Indeed. we see the evidence as noLbiIlg,co!,!pletely in, and we tlltl!),t-,i,sc.. –I precisely that condition of uncertainty which market action has been reflecting since mid-August. Unfortunately. we do not. at this stage. find ourselves much closer to a resolution to the dilemma. What has happened since January 6 is that a sixth cycle. within the confines of that larger trad- ing range. has occurred. After attainment of the January high. the Dow declined over a 14-tradingday period to reach a low of 938.91 on January 26. Following that occurred three separate cycles of short-term rallies and retreats all with highs in the low 950's and lows in the lower 930's. Following the familiar principle of wheels within wheels, we aChieved. over the last month. a trading range within a trading range. That particular phase may have come to an end this week. After spending a period of 18 trading days between the January 26 and February 19 lows. the market began to demonstrate some strength last Friday. On Wednesday, it closed at 954.20. better than any previous peak achieved since the range began. This occurred at the end of a day when it had managed to traverse just about the entire range on an intraday basis. This was followed by an only mildly erratic rally on Thursday which achieved a close of 966.81. a decisive breakout from what appears to be a month-long base. Modest follow-through took place in trading early on Friday. At the moment. the upside implications of that breakout are not significant enough to /lid in solving the larger problem,. Another attack on the 1000 level appears to be a likely possibility. Beyond that. we can only wait and see if indeed such an attack occurs. and if so. what strength it is able to demonstrate. Positive breadth and volume on such a short-term upmove would obviously be plus factors. Even a rally to the 1000 level would probably not return most breadth indices to their highs of last September. Therefore. further extension of the rally in terms of both the averages and breadth would be desirable. Such extension might be predictable were the base to broaden while the move up took place. Such broadening would logically occur around the 970-980 level. Meanwhile, the process of the present rally phase will simply serve to broaden the larger formation and increase the importance of the ultimate breakout of that formation whenever it should take place. It is this breakout which should determine the course of the market for the bulk of 1981. Dow-Jones Industrials (1200 PM) 970.65 S P Composite (1200 PM) 130.49 Cumulative Index (2/26/81) 1036.51 ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL AWTsla No 'Iatemfmt or expression of opinion Qr any other motter herein contomed IS, or IS 10 be deemed to be, directly or indirectly, an offer or the sollcllollon of an offer 10 buy or sell any security referred to or mentioned Tile mailer 15 presented merely for the conver-Ience of the 5ubscnber While e belteve the sources of our Informo- tlon to be relloble, we ,n no woy represent or guarantee the accuracy thereof nor of the stotements mode herelll Any actIon 10 be taJ.-en by Ihe subSCriber should be based on h,s own mveshgotlon ond IIlformotlon Janney Montgomery Scolt, Inc, os 0 corporatIon, ond lis off,cers or employees, may now have, or may later laJ.-e, pos1tlons or trodes III respect to any SeCUritIes mentIoned In thIS or any future Issue, ond such posItIon may be d,fferent from ony vIews now or hereafter expressed In this or ony other Issue Jonney Montgomery Scott, Inc, whIch IS regIstered WIth the SEC as on Investment adVIsor, moy gIVe adVIce to Its Investment adVISOry and other customers ,ndependently of any statements mode In thIs or ,n any other Issue Further InformatIon on any security men honed herein IS ovalloble on request

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Tabell’s Market Letter – March 06, 1981

Tabell’s Market Letter – March 06, 1981

Tabell's Market Letter - March 06, 1981
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. TABELL'S MARKET LETTER – l————– 909 STATE ROAD, PRINCETON, NEW JERSEY 08!540 DIVISION OF MEM8ER NEW YORK STOCK eXCHANGe, INC MEMBER AMERICAN STOCK EXCHANGE March 6, 1981 New Ladership is a.p,h;ase which.hascI'9PRed up regularly in.these.writingsalong with. thoseof most other financial commentators. In many ways'the phrase is yet-another Wall Street euphemism meaning — in simple terms — that a lot of stocks, which were not going up before,are going up now, and a lot of other stocks, which were going up, have stopped doing so. Regardless of the politeness of the phraseology, the phenomenon has been a fact of stock market life over the past three months, and it has decided implications for successful portfolio management. Through the early part of 1980, at least until the popular averages began moving sideways early last fall, the distinctive feature of the stock market was strong upside action on the part of energy-related, high-technology, and defense groups. This sort of leadership was broad enough to have a pronounced upward effect on the major market averages. (Broadly defined, energy constitutes almost a third of the weight in the S & P 500). It is not surprising that the onset of correctionary phases in these groups coincided with the recent halt in upside progress for the major averages. For example, for the past three months, group indices for International and Domestic Oils are down 11 and 12 percent respectively, and these two groups rank 97th and 99th out of 102 industry groups in terms of price performance over that period. This downside drag has proved too great a force for the major market indicators to overcome. The last quarter is an interesting time-frame over which to measure individual group performance. Such a measurement takes US back to the second week of December last year, and it was in that week that the Dow-Jones Industrial Average touched its December low of 908.45 from which point the yearend rally began. That rally, fairly dynamic- in extent, carried over 10 percent to 1004.69 in early January. The entire period since has been spent in a retracement phase during which the Dow lost threefourths of the ground gained, and other averages retraced their entire upside moves and, in some cases, a bit more. The S & P 400 as of this Wednesday was 1. 5 percent above its level on December 10. It might well be cQncludedthat, in such a priod,ppljunitie!lJ0Lm!ljngful gains in the stoC.k.. …,.t market would be limited. Such has hardly been the case. If one isolales lhe 10 b-est-acting groups pver' the three months, one finds that they have moved ahead by amounts ranging from 20 to 38 percent. 73 of 102 groups have turned in performances on the plus side and 70 have outperformed the S & P 400. Again it is the dominance of energy and energy-related stocks in capital-weighted averages which accounts for this discrepancy. The heavy weight of these industries in broad-based market indicators has caused those indicators to perform in, at best, an unexciting fashion. Nonetheless, attractive investment opportunities have existed and continue to exist in industry groups possessing a smaller relative importance. Eliminating a couple of groups dominated by takeover candidates, the 10 best performing group indices over the past three momths have been as follows 1. Air Transport 2. Mobile Homes 3. Air Conditioning 4. Chemicals 5. Soft Drinks 6. Restaurants 7. Truckers 8. Steel 9. Tires & Rubber 10. Department Stores It is not easy to find a common denominator for this new leadership, but, on analysis, a few factors emerge. There is, first of all, a flavor of smokestack America, the basic industry stocks which turned in a strong market performance in the 1974-76 period and have been largely quiescent since. There is also, in the reemergence of such groups as Department Stores, Soft Drinks, and Restaurants, a suggestion of a revival of interest in stocks affected by increased consumer spending. This is an interesting phenomenon, since the conventional wisdom would hold that the outlook for such an increase is questionable, at best. Finally, s common thread thst seems-to-15ind -mucll'of-th'E!neW -market leadership is relative cheapness. By and large,msny of the issues now outperforming the market sem to be priced fairly low in relation to their current earning power, vis-a-vis a great many leaders which, in the process of the 1980 market rise, became fairly well exploited. Whether the present leadership continues a transitory phenomenon or something more permanent, is of course, the crucial question. Technical patterns, however, would suggest that the latter is more likely to be the csse. . Dow-Jones Industrials (12 00 PM) 959.82 S & P Composite (1200PM) 129.23 Cumulative Index (3/5/81) 1054.63 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stalement or expreSSion of opinion or any other moiler here'n tonlOined IS, or IS to be deemed 10 be, dlrettly or ,ndirectly, on offer or the soliCitation of on offer to buy or sell any security referred 10 or mentioned The maIler IS presented merely for the convef'len of the subscriber While we believe the sources of our information to be reliable, we In no way represent or guarantee Ihc accuracy thereof nor of the statements mllde herein Any ochon to be taken by the subSCriber should be ba5ed on hiS own Investigation and information Janney Montgomery Scot!, Inc, as a corporation, and Its officers or employees, may now have, or may lator toke, 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 thl or any other Issue Janney Mootgomery Scott, Inc, which 15 reglsfered With the SEC as an IIlvestl'lent adVISor, may gIVe adVice 10 lIs Investment adVisory and other customers ,ndependently of any statements mode In Hus or In ony other Issue Further Information on any security menllooed herein IS aVailable on request

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Tabell’s Market Letter – March 13, 1981

Tabell’s Market Letter – March 13, 1981

Tabell's Market Letter - March 13, 1981
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-T – -. -..,;..,.. TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER New YORK STOCK EXCHANGE INC MEMBER AMERICAN STOCK eXCHANGE March 13, 1981 A good deal of recent comment, much of it Ilegative, has centered. arounLs!9gk.J!l!,ket,.bradth.sta – – tiatics. n'h8seenpfinteQ- ounrt most- breadtfiffidfces (iridicators .based on thenumbers-oradvanc' -. ing versus declining stocks) peaked out last September and have failed to make new highs since, especially on the year-end rally which topped out in early January. All of this is indeed, true, but its significance may well be questioned. Breadth indicators behaved in a certain fashion in relation to the major market averages for a great many years. There is now some suggestion that that relationship may be changing. lrn/Ir–yI II cI qSE II I I \v' 90C II II II I II I I BOC II I II I I I, I I II I I I II II I \'oc II I II I \I I I II I I I\ – -. soc 000 – – – o-o 00 II I II I I P\t /\ /\I — ,. I VV- \I I I – – — i I DOH J9NES INDU I -I I 0 ,I !. I I \ . / ,r- – I .– – – II / YI 00 I ! I I II II II I I I I I I /Y I I I I II I II I II I I I I I I / I I I I I II I I! I I I I I I I I I I I I I I I I I I I I I I I I I i I i i i i I i I M I I The chart above shows the history of the Dow-Jones Industrisl Average and a daily breadth indicator since 1949. Peaks in breadth are denoted by solid lines and troughs in breadth by dotted lines. To simplify the chart, both the Dow and breadth have been drawn showing only major peaks and valleys, with intervening fluctuations eliminated. The chart quite clearly shows that from 1949 to 1975 the relationship was consistent. Bottoms in breadth tended to coincide with those of the Dow, and breadth peaks, as the solid lines clearly show, led peaks in the Dow by a considerable amount. Breadth, therefore, had predictive vslue. As the market proceeded to new highs with breadth failing to confirm, the position of the averages became increasingly more vulnerable and, invariably, a decline of significant proportions eventually ensued. From 1976 through March, 1978, however, a major decline took place in the market averages with no foreshadowing peak occurring in the breadth index. By contrast, the breadth index peaked shortly after the market had started up in September, 1979 and bottomed again in March of last year at a time that the Dow was still in the process of moving ahead. Breadth, in other words, seems to be out of gear with its historical behavior. This divergence, it seems to us, calls into question the whole historicsl relationship. It is conceiv- able, for example, that the Dow might continue to move ahead while breadth action deteriorated, precisely the opposite of what occurred in 1976-1978. There is some suggestion of -this in individusl stock patterns, where loss of momentum is being shown in a fair number of stocks, many of secondary quslity, while major issues still possess patterns which suggest that they might move higher. Quite obviously, the current implications are unclear, and until such time as the pattern clarifies, it would be wise to avoid putting too simplistic an interpretation on the behavior of breadth statistics. Dow-Jones Industrials (1200 PM) SloP Composite (1200 PM) ;umulative Index (3/12/81) AWTsla 992.16 133.83 1075.81 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL No statement or expreSlon of opmlon or any other motter herein contCIned IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of on offer to buy or sell any security referred to or mentioned The moiler IS pH!sented merely for the converlence of the subscrtber Whtle we belteve lhe sources of our tnformalion to be relllJble, we In no way represent or guarantee the accuracy Ihereaf nor of lhe slotements mude herem Any action to be toklln by the subSCriber should be based on hiS own Investigation and Informatlo! Janney Montgomllry SCali, Inc, as a corporation, and ,ts offIcers or employees, may now have, or may later toke, poslhons or trades In respect to any secuntles mentIoned In thIS or any future Issue, and such posItIon may be dIfferent from any vIews now or hereafter expressed In Ihls or ony othlH Issue Janney Montgomery Scott, Inc, wh,ch 1 regIstered WIth the SEC as on Investment adVisor, may gIve adVIce to 115 mvestment advuory and othel customers Independently of any statements mode 1M Ihn or In ony other Issue Further Inlmmo/lon on any secuflty menltoned hereIn 1 ovotloble on request

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