Viewing Month: March 1981

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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Tabell’s Market Letter – March 20, 1981

Tabell’s Market Letter – March 20, 1981

Tabell's Market Letter - March 20, 1981
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TABELL'S MARKET LETTER 909 STATE AOAD, PRINCETON. NEW JERSEY 08540 DIVIBION OF' MEM6ER NEW YORK STOCK EXCHANGE INC MEMBER AMERICAN STOCK eXCHA.NGE March 20, 1981 –!'- – …-…….s. –,,.. – k-. '- . — – – 0- .. – ;;-;;.;;-;;'t;'-11-1 The Dow-Jones Industrial Average's latest flirtation wIth the 1000 level set uS to doing- some this week. The venerable indicator first touched 1000 some 15 years ago in January. 1956. Since we have spent some 27 years In the securitIes business. this means that something more than half of our career has been spent witnessing periodic occurrences of this phenomenon. We were. thus. inspired to collect the figures below. 1966 is so far back in ancient history that computerized data bases do not cover it, but we have shown. in the table below, the closIng price of each of the DJIA TS components for selected dates starting with Dec- ember 3, 196B. the second occasion on which the Dow approached the 1000 mark. (It should be noted that IBM and Merck were not in the Dow for most of the period shown. All prices have been adjusted for stock splits.) Following the 1968 rise, the Dow then reached what is, to date, Its all-time high at 1051. 70 on January 11, 1973. 1t spent much of 1976 at or above the 1000 level with the high being reached at 1014.79 on September 21. The last three columns of the table show the Dow's most recent three attempts at four digits, November 20, 1980 at 1000.17, January 6, 1981 at 1004.69, and March 16, 1981 at 1002.79. Company Name 121 3168 1/11/73 9121/76 11/20/80 11 6/81 3/16/81 Alhed Chemical Corp. Aluminum Company America AmerlCan Brands, Inc. American Can Co. AmerIcan Tel & Tel Bethlehem Steel Corp. duPont Eastman Kodak Exxon Corp. General Electric Co. 37-1/4 24-7/8 35-3/4 58-3/8 55-1/4 28-7/8 58 78-3/4 41-1/2 49-318 30-1/8 19-7/8 45 32-3/8 54-5/8 29-112 61-1/2 147-3/4 45-5/8 73-5/8 40-1/4 29-1/2 42-5/8 36-1/8 62-1/8 42-1/8 44 93-518 56-7/8 55-3/4 60 3/4 33-5/8 76-1/2 30-3/8 47-1/2 28-1/4 43-1/4 74-1/4 87-1/2 61-1/2 55 31-1/8 80-1/4 32 50-3/8 26-7/8 44-3/8 75-1/2 80-1/2 64-1/2 56 112 36 73-314 29-7/8 52 29-3/4 51-7/8 82 70-3/4 68-1/2 General Foods Corp. eneralSJvlotors .-' – , – ,c–. 43-7/8 29-112 33-3/4 29-518 30-7/8 34 8 3 1 . 1 2 – 8 3 ' 73 -..;c –46-1-/1349–05i-'lHJ,o;o,-I,,,.-1 Goodyear Tire & Rubber Inco Ltd. InternatIonal Business Mach. International Harvester International Paper Co. Johns Manville Corp Merck & Co. Minnesota Mimng & Mfg. Owens Ill. Inc. Proctor & Gamble Co. Sears Roebuck & Co, Standard Oil of California Texaco Inc. Union Carbide Corp. United States Steel Corp. United Technologies Corp. Westinghouse Electric Woolworth Co. 30-3/8 37-1/4 66 36-7/8 39-114 40-1/8 44-3/8 56 39-112 48-1/8 33-3/8 17-3/8 44-1/2 48-7/8 29-1/8 36-1/8 37-1/2 34 30-3/4 36-1/8 83 37-1/8 41-7/8 29-518 98-3/8 88 21 114-3/4 60-3/4 21-1/8 39-5/8 50-3/8 22-1/2 22 46-1/4 30-1/4 24-1/4 17-7/8 35-112 22-1/8 72 72 31 28 71-318 42-1/4 30 25 80-3/8 80 66 60-1/2 29-1/8 27-1/2 95-7/8 73-1/8 35 16-1/8 19-318 51-7/8 29-518 49-1/4 65-1/8 52 51-1/4 24-3/4 34-5/8' 61-1/4 18-7/8 32-1/4 24-5/8 24 18-1/4 21-3/4 71-112 25-7/8 44-5/8 26 85-3/4 63-1/8 26-1/2 71 16-5/8 49-318 47-1/4 54-5/8 25-7/8 65 31-7/8 25- 3/8 18-3/4 22-1/8 64-5/8 19-5/8 51 24-1/8 85 62-3/8 29-3/4 74-1/8 17- 3/8 42-3/8 38-1/2 59-1/8 32-3/4 56-1/4 31 25-3/4 Taking the entire period December, 1968 through March, 1981 shows that the five best-acting stocks were Standard Oil of CalIfornia (143). American Brands (106), Merck (92), Exxon (70), and United Tech- nologies (56). An equal investment in these five companies would have produced a 90 gain over the 12year period. The worst-performing components were American Can (-49), Sears Roebuck (-48). International Harvester (-47), Inco (-41), and Johns Manville (-40). An investment in these five would have shown a 45 loss. Over the 12 years. those stocks advancing and declining are divided evenly with 15 stocks up from their1968 figure, as of last Monday, and 15 others down. A short-term comparison comparing MondayTs prices witli. those of January 6also has its interesting facets. ever the two-month period involved J 16 of the components have advanced and 14 have declined. The basic reason that the Dow remams below its January highs lies in the action of International Harvester plus the three oil components of the average. An equal investment in the Dow components. leaving out these four issues, would have produced a 4.1 gain over the last six weeks, The diversity of action, if nothing else, puts a fine point on some of the sermons we have recently been delivering in this space on the subject of securIty selection. As the table quite clearly shows, though the average itself may have made no progress over the past 12 years. the action of the individual components has been widely varied, and. in some cases. quite dynamic. ANTHONY W. TABELL Dow-Jones Industrials (12 00 PM) 991. 71 DELAFIELD, HARVEY, TAB ELL S & P Composite (12 00 PM) 133.77 Cumulative Index (3/19/81) 1104.60 AWT sla No statement or expression of opmlOn or any other motler herein contOined IS, or IS to be deemed to be directly or indirectly, on offer or the solicitation of on offer 10 buy or sell any security referred to or menTioned The matter IS presented merely for the convellence of the subscriber While He believe the sources of our Informo tlon to be rellClble, we In no way represent or guarantee the accuracy thereof nor of the staTements mude herein Any actIOn to be loken by the subSCriber should be based on hiS own investigation and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now have, or may later toke, POSitiOnS or trodes In respect to oily securities mentioned In thiS or any future Issue, and such POSition may be different from ony views now or hereafter expressed In thiS or on)' other Issue Janney Montgomery Scort, Inc, which IS reg,stered wah the SEC as on investment adVISor, may give adVice to Its ,vestment adVISOry and othel customers Independently of ony sTotements mode In thiS or In any other Issue Further Information on any security menTioned herein IS available on request

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Tabell’s Market Letter – March 27, 1981

Tabell’s Market Letter – March 27, 1981

Tabell's Market Letter - March 27, 1981
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TABELL'S MARKET LETTER' 909 STATE ROAD, PRINCETON. NEW JERSEY 081540 DiVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE ./ March 27, 1981 Come on now. Does anyone really, after the last three weeks, still believe that the stock market is a-,random walk The denotlement, 0f..course7'isthat',-on.Weanesday-,-March25;cthe Dow-Jones' ., Industrial Average closed at 1015.22, its highest level since 1973, and a point decisively above the trading range in which it had been locked since last August. It is, however, the ritual dance it engaged in in the course of reaching that point which is of interest to the mnrket observer. . The level of about 1000 on the Dow was of particular interest this time aro\md since, in addition to being an easily-remembered approximation of high points going back some 15 years, it was also the level of recent widely-repeated oracular predictions. The Dow, therefore, did not simply embrace and ravish the 1000 level. It flirted with it coyly over a period of no less than nine trading days, until such time as the final consummation took place on Wednesday. The story really begins back on January 6 when the Dow continued the year-end rally to achieve a new closing high of 1004.69. The twenty-point break on record volume the next day was followed by two weeks of lateral action around the mid-960's. An eventual low was reached at 932.25 on Feb- ruary 2, and tested on February 13. From that low, a bit over a month ago, a recovery set in which, by the beginning of March, had brought the Dow back to the mid-960 level. The question, of course, was whether or not all this was preparation for yet another assault on 1000. To gsin the full flavor of what happened subsequently, one is forced to resort to hourly readings. On Thursday, March 12, having spent two weeks at the 960- 970 level, the Dow posted a 22-point gsin, closing at its highest level of the day at 989.92. The following day saw strength at the opening bell which took the average,at its initial figure, to within an ace of 1000 at 997.93. This first assault was, predictably, turned back, and the market was six points below its opening figure at noon. An other attempt took place between noon and one o'clock, with a level above 995 being reached. This assault also was repulsed, and the final close (possibly suggesting that Friday the thirteenth was an -'- – inauspiciousAay-for- an-assault-on.a-new-highwasfourpointslowerAhanThur.sday!s .—— Monday, March 16 saw another attack with renewed vigor. After moving sideways until one o'clock, the market rallied sharply and closed at 1002.79, breaching the four-digit barrier but re- msining below the January 6 high. Tuesday's trading saw only slight progress (1004.86 at two o'clock was the high), followed by late afternoon weakness which led to a 10-point decline. That decline extended to a close of 986.58 on Thursday, March 19. Last Friday witnessed yet another attempt. The average was ahead 10 points to 996.13 at three o'clock, but lost a goodly portion of that gsin in the final hour. Then on Monday, the attempt was revewed and 1002.16 was reached at two o'clock, followed by weakness between two and three. Final- hour strength led to a close of 1004.23, 46/100 of a point below the January 6 high. By 11 AM on Tuesday, we were at 1009.37, but whatever was out there at the 1000 level had not yet given up. The two O'clock figure was below 1000, and the final close was 996.13. Finally on Wednesday, after reaching a low at noon of 998.56, the Dow demonstrated persistent strength throughout the entire day, and finally reached the 1015.22 figure mentioned above. We ask our readers' indulgence for this flight into recent history and are symphathetic to the com- plaint that it does nothing to answer the question, What now. Actually, with the recent strength, the framework for a plausible short-term scenario exists. We think that the market's ability to move decisively above the 1000 level suggests that the more optimistic interpretation of the February-March base we have been alluding to in the last few issues of this letter is the correct one. This would suggest a short-term target in the vicinity of 1050. Interestingly enough, the more broadly-based indices have, in recent days, formed a pattern which somewhat parallels that of the Dow. The S.& P 50 for instance, now possesses a possible upside target of 144-146. Both these figures, if achieved, would make the trading range of August, 1980-March, 1981 a matter of historical artifact. The clear question would then center around'how far the move begun in March of last year was likely to carry. As we have suggested in the past, readings of as high as 1200 on the Dow are possible. Agsinst this optimistic interpretation must be set the present maturity of the cycle which began some three years ago now in March, 1978. We are not yet ready to consign the 1000 level entirely to past history. Indeed, as we write this, it is agsin being approached, this time from above, in what must be considered a normal correction following the Wednesday rally. We would suggest, however, that the prospect for a move substantially above that figure is now better than it has been in some time. Dow-Jones Industrials (1200 PM) 1003.96 S & P Composite (1200 PM) 136.18 Cumulative Index (3/26/81) 1127.92 AWTsla ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stctement or expression of opinion or any olher motter herein contotned IS, or IS to be deemed to be, directly or ,ndirectly, en offer or Ihe 501,;110110,\ of on offer 10 bvy or sell ony security referred 10 or mentioned The moiler 15 presenlC!d merely for the conYef'lenCE of the subscriber While VIe beheve the sources of our Informo han to be reliable, we In no way represent or guarantee the accuracy thereof nor -of the statements mude herein Any action to be laken by Ihe subSCriber should be based on 1'115 own Invesllgohon and Information Janney Montgomery Seoll, Inc, as a corporation, and Its officers or employees, may now have, or may laler toke, poslhons or trades In respect to any secufltles mentioned In thiS or any future Iue, and such posItion may be different from any views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scali, Inc, which 1 registered With the SEC as on Investment adVisor, may give adVice to lts Investment advlso!), and olhel customers Independently of ony statements mode In thiS or In any other Issue Further information on ony security mentioned herein IS aVOIloble on request

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