Viewing Month: April 1981

Tabell’s Market Letter – April 03, 1981

Tabell’s Market Letter – April 03, 1981

Tabell's Market Letter - April 03, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEy 08540 DIVISION OF MEMSER NEW YORI( STOCI( EXCHANOe. INC MEMBER A.MERICAN STOCK EXCHANGe April 3, 1981 —- — …. – — – , – – – – – . . …. — — — — — —'!' -….. -….. e. – -0… – – FO' most 'imdrtat questions, there exist both simple and 'compi,'' a'ns';ers' in-many cases; the com- plicated answers do not contribute any additional useful knowledge by virtue of their complexity. Such is often the case with questions regarding the equity market, and it is particularly true, we think, today. It is possible, at the moment, to take an extremely simple-minded attitude toward the stock market. That attitude can be constructed approximately as follows The market has just made a new high; we are, therefore, in a bull market; one should, therefore, be fully invested in common stocks. This, it is true, is an excessively simple construct. It is also probably correct. It is when one begins to look at the market esoterica that we technicians are paid to observe that com- plexities begin to arise. The first one, which we have mentioned before in this space, centers around the proper interpretation of the base formed in January and February of this year. As we have pointed out, the optimistic interpretation of that base leads to a short-term target of 1050 in terms of the Dow, and, as the patterns have formed recently, similar targets in the broader-based indices. In light of market action over the past couple of weeks, such targets appear plausible. The past fortnight's inspec- tion of individual chart patterns has detected a broad host of upside breakouts in individual issues, a large number of those breakouts being of significant proportions. Certainly, a continuation of the move to no more than 4-5 above current levels appears well within the range of possibility. Such a move, as we pointed out last week, would lend strong credence to the theory that the sideways trading range of September-December was nothing more than an interruption in an ongoing upswing from the lows of silver Thursday back last March. Such an upswing would have plausible targets in the area of 1200. When one begins to look elsewhere for evidence confirming such targets, the picture becomes mixed. Let us consider, for , breadth statistics. Most breadth indicators, including those of the most hA;h hiA hAVP nnwthp.Dowinmoving ab9ye thejrevelsoLJJIJLUary 6. Breadthcan, there-,.,,-jI''1 fore, be said to be in gear with the market in an upside move dating back to the year-end rally low early December. That move, incidentally, having now extend,ed into early April, and having advanced well over 10 percent, suggests, on the basis of historical evidence, that the December low of 908.45 is unlikely to be broken during 1981. What is still lacking in breadth statistics, is a confirmation of the highs of last September. Such a confirmation by one indicator, unadjusted weekly breadth, will probably take place when the figures for this week are finally in. As far as other breadth indicators are concerned, however, it will require considerable time and further strength before the highs of last September are penetrated. When and if a confirmation of last September's high does take place, those unshakably determined to seek bearish arguments in breadth statistics will be able to point out a lack of confirmation going back to September, 1978. We are inclined to dismiss this argument for a number of reasons, but it is probable that it will be heard from those who remain inclined to continue to fight the tape as the market moves to and through the highs made last fall. The importance of the September, 1978 breadth peak is one facet of a fairly important unresolved cyclical question. Our own interpretation of the market's position, in terms of the major four-year-cycle, has been — since approximately one month after the cycle started — that such a cycle began March, 1978. There exists growing evidence that this cycle may have been attenuated and that a new major cycle began just over a year ago, in March, 1980. It would be useful, although it is unfortunately- im- possible, to be certain whether we are dealing with a three-year-old mature bull market or one that, at the age of 13 months, remains relatively youthful. . It is possible to raise yet other esoteric questions. New NYSE highs for the week ended March 27 were 354 versus a figure of 516 last Septem,ber. The best figure so far attained for new daily highs is 175 on March 23, versus levels consistently above 200 in the September-November period. This consti- tutes evidence of some degree of maturity for the current upswing. – ;' 1I of this, however, should do nothing more than remind us that we see only through a glass darkly, and that portfolio management consits of making decisions in the face of uncertainty. Uncertainty has always existed, and it exists currently. However, the most practical attitude toward equities at the moment undoubtedly remains the simple-minded one suggested above. That attitude calls for a fully invested position in common stocks. Dow-Jones Industrials (12 00 PM) S & P Composite (12 00 PM) Cumulative Index (4/2/81) 1011.17 136.16 1139.97 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL' AWT sla No statement or expreSSion of opinIOn or any other motter here'n contained IS, or IS to be deemed 10 be, directly or indirectly, an offer or the soliCItation of on offer to buy or sell ony security referred to or mentioned The matter IS presented merely for the converlen of the subscriber While 'Ne 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 II'Iformatlon Janney Montgomery Scott, Inc, as a corporatlon, and Its officers or employees, may now have, or may laler take, poslilons or trades In respect to any secUrities mentioned In thiS or any future Issue, and such pOSitron rooy be different from ony views now or hereafter expressed In thl or any other Issue Janney Montgomery Scali, Inc, which IS registered With the SEC as on Investment adVisor, may gIVe adVIce to Its Investment odvl(Y and othel customers Independently of any statements mode In thiS or In any other ISsue Further Informal Ion on any secunty mentioned heretn IS available 01 request

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Tabell’s Market Letter – April 10, 1981

Tabell’s Market Letter – April 10, 1981

Tabell's Market Letter - April 10, 1981
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,(, ;;;'-' , TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION Of' MEMBER NEW VOAK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – ……..— – – April 10. 1981 . – -….- – – — — –'- — — . – – – —-' –; – -.'—- Some three weeks ago, in this space, we made our own contribution to celebratmg the DowIs reachmg the 1000 level by reprinting the closmg prices of each of the 30 components on six different dates which had in common the fact that the Dow had, on those dates, closed at a hIgh above 1000. The dates were in the years 1968. 1973. and 1976. along with three more recent occaSIons. The purpose of the exercise was to show the diversity in prlce actIon among the individual Dow components over a long period of time. The study, however, did nothing to illuminate the relative value of the Dow today versus the previous dates on which it had attained 1000. We have tried to suggest some conclusions In thIS direction by putting together the table below which shows the earnings and dividends for each of the 30 components for 1968 and for 1980, both being years In which the Dow closed at or close to the 1000 level. We have also shown, in the table, the percentage changes in the earnings. dividends. and the stock price. the last taken from the orIgInal study three weeks ago. Company Name Allied Chemical Corp. Aluminum Company Amenca AmerIcan Brands. Inc. Amencan Can Co. American Tel & Tel Bethlehem Steel duPont Eastman Kodak Exxon Corp. General Electric GeneaLEQodsCor.p General Motors Goodyear Tire & Rubber Inco Ltd. International Business Mach. International Harvester International Paper Johns Manville Merck & Co. Minnesota Mining & Mfg. Owens Ill. Inc. Proctor 8; Gamble Co. Sears Roebuck 8; Co. Standard Oil of California Texaco Inc. Union CarbIde Corp. United States Steel Corp. United Technologies Corp. Westinghouse Electric Woolworth Co. AVERAGE EARNINGS 1968 1980 1. 46 1. 59 8.59 6.54 3.42 13.13 4.23 4.26 3.74 3.65 2.66 2.33 2.97 8.19 2.77 4.83 7.15 13.01 1. 96 6.65 2.08 5.15 6.01 2.06 1. 93 (2.65) 2.85 2.56 1. 54 2.69 5.72 (9.82) 2.28 5.97 2.39 2.47 1. 30 1. 49 1.55 2.15 1. 36 1. 33 3.07 2.60 5.54 5.78 5.09 7.78 1. 75 7.02 8.31 10.48 3.13 5.25 2.55 7.28 1. 74 4.71 1. 29 3.60 DIVIDENDS 1968 1. 73 .60 1. 88 2.20 2.40 1. 60 1.83 1.09 1.83 1. 30 I 20 4.30 .71 1. 23 .52 1. 80 1. 39 1.10 .90 .73 .68 1.20 .65 .63 1. 45 2.00 1. 60 .85 .90 1. 00 1980 2.15 1.60 5.90 2.90 5.00 1.00 2.75 3.05 5.40 2.90 2-1-5 2.95 1. 30 .69 3.44 2.50 2.40 1. 92 2.30 2.80 1. 40 3.60 1. 34 1. 80 2.45 3.10 1. 60 2.20 1.40 1.45 CHANGE Earmngs 488 311 284 1 119 – 24 81 207 338 239 147 38 33 271 162 3 326 287 228 262 29 428 171 303 68 186 170 57 Dividends 24 167 213 32 108 50 180 195 123 -1.9 – 31 83 – 44 561 39 73 75 155 283 106 200 106 186 69 55 158 56 45 173 111 Stock Price 52 44 106 – 49 6 3 – 11 4 70 39 – – 38 – 38 – 41 -2 – 47 30 – 40 92 11 – 25 54 – 48 144 – 13 21 13 55 – 17 – 24 10 Considering the fact that the Dow average itself is unchanged over the 12 years (The average price change, equally weighted. is 10.) the increases in earning power and dividend payout are quite as- tounding. 27 of the 30 stocks Increased their earnings over the 12 years involved, and all but 2 increased their dividends. The average percentage increase in earnings was 173, and the average rise in dividends 111. These figures stand up well even when adjusted for inflation. The GNP deflator rose by 119j; over the 12 years involved. Earnings bettered this increase by a conSIderable amount, and dividends about equalled it, even at 1980 rates, considerably lower than those estimated for 1981. 19 of the 30 stocks were able to show earnings mcreases better than the rate of inflation, and 12 posted dividend increases of more than that amount. The investor who followed the smple-minded course of buying the 30 current Dow stocks and holding them 12 years ago is now receiving approXlmately equal income after adjusting for mflation to that which he received at the time of purchase. We think there are two conclusions to be drawn from this study. The first is that investors in equities over the past dozen years may, at current prices at least. have seen capital values eroded by mflation. but the income provided by dividend growth has been able to keep pace with rising prices. We think It reason- able to conclude. furthermore, that the Dow remains demonstrably a much cheaper investment vehicle today than it was at the same price a bit over a decade ago. For this reason. the Dow's recent stutter at the 1000 level. while it may, for reasons we have suggested, be easily justified technically. would appear to have relatively little justification in terms of fundamental value. Dow-Jones Industrials (12 00 PM) S & P CompOSIte (12 00 PM) 1001. 89 135.00 ANTHONY W. TAB ELL DELAFIELD. HARVEY. TAB ELL Cumulative Index (4/9/81) 1142.44 AWT sla No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, on offer or the soliCitation of on offer to buy or sell any security referred 10 or mentioned The motter IS presented merely for the convel'lence of the subSCriber While -Ne b(!lleve the sourcC of our information to be reliable, we m no woy represent or guorantee the occurocy thereof nor of the statements mude herein Any action to be token by the subscriber should be based on hiS own investigation and mformatlon Jonney Montgomery Scali, Inc, os 0 corporotlon, ond 115 officers or employees, moy now have. or may loter toke, pOSitiOns or trades In respect 10 any seCUrities menlloned In thIS or any future Issue, and such position may be different from ony views now or hereafter expressed In thiS or any other Issue Janney Montgomery Scoll, tnc , which IS registered With Ihe SEC os on Investment adVISor, may give adVice to liS mvestment adVISOry and other customers Indept!ndently of any statements made m thIS or In ony other Issue Further informatIon on ony security mentioned h(!fcln IS avoiloble on request

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Tabell’s Market Letter – April 16, 1981

Tabell’s Market Letter – April 16, 1981

Tabell's Market Letter - April 16, 1981
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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 EXCH!NOE April 16. 1981 It has been the ofFrepeated opimOhof.thisletter1hat . when engaging-irttM nazardbu ari-'of stock market forecastIng, It is as important to ask the right questions as to get the right answers. It is. perhaps, worthwhile, then, at a time when ready answers to the stock market dIlemma are receIving wide publicity. to back off a bit and try to see just what sort of questions we should be asking ourselves at this stage. In such a process. it IS always best to begin WIth known facts. The first such fact is that we are (or. at worst. were three weeks ago) in a bull market. This statement is derived from the simple arithmetic of the Dow's having been at 759.13 on April 21. 1980 and at 1015.22. some 34 higher. on the 25th of last month. Thirty-four percent. while rather paltry for a bull market. even by modern-day standards. unquestionably meets historical criteria. Like most bull markets. this one started out WIth a dynamic phase. Between April 21 and September 22 of last year. it moved ahead 28 to 974.57 in just 5 months. This sort of thing is reasonably familiar to market observers. It is comparable to the 26 advance between December. 1966 and September. 1967. the 42 illcrease between July. 1970 and April. 1971. or the 52 rise from December. 1974 to July. 1975. Beginning in September. as we all know. the advance became more irregular. New hIghs above 1000 were subsequently reached, first in November. then in January, and once again three weeks ago. Yet, compared to the prior upside phase. the advance has definitely been more modest. The Standard & Poors 500. for example. posted ItS high last November and remains. at current levels. some 4 below that peak. The same is true of other broad-based indicators. There are only two possible interpretations of this sort of action. Either we find ourselves in a distributional phase preceding an important market decline. or we are in (or have just terminated) a consolidation phase preparatory to a new upswing. Having defined the question, we can now proceed to offer an answer. Based on the weight of currently available evidence. we are inclined toward the latter interpretation. There exists ample historical precedent for the argument favoring a consolidation phase. especially if one examines the history of more ,recent upswings as compared to those that took place in the 1950's and early 1960's. Following the initial advance from 669 in July-, 1970 to .950 in April. 1971. for example. -,.,– tl1eDow posted a 12 decline to August. recovered- some two-thirds of tne ground-lost. and then posted – — – another 13 drop to 798 in November. 1971. This was followed by an upward move to 1051 in January. 1973. Likewise. 1974 saw summer doldrums in which the Dow. having attained a high of 882 in July. declined to a low of 784 in October. It subsequently rose to 1014 in September. 1976. Neither of these instances is terribly unlike the present Gase. ill which the Dow declined 9 from its high of last November. posted a 10 rally into early January. dropped 7 by mid-February. and then moved tl the most recent new high. As we suggested in our letter of last week. one of the most telling arguments in favor of a consolidation phase lies in the patterns of individual stocks. By and large. these patterns fail to reveal the sort of widespread distribution whiCh one would expect to find during the buildup of a major general-market top formation. We see instead stocks just breaking out of important base formations or, more commonly, in various phases of upmoves where, in most cases, higher objectives are readable. What may well make the current market unique is the single exception to this rule. The only area in which important distributional patterns appear widely is in the energy stocks. The rather sorry short-term behavior of these Issues is, of course, a matter of historical record. It can be exemplified simply by noting the fact that the Standard & Poors Oil Composite Index reached a high of 392 back in November. It was. as of this Wednesday. around 278. a drop of almost 30. We have. in this single statistic. an almost complete explanation for the lack of progress in the averages since last fall. As of the November peak. the Oil Composite represented 24 of the S & P 500 and. related groups comprised another 2 or 3. Under these circumstances. the fact that the 500 is. at the moment. only 4 below its November high. can be construed as nothing short of remarkable. It is. indeed. a testimony to the continued technical strength of issues other than the energy laggards. We are unable to interpret this sort of action — continuing general market strength. coupled with fairly severe weakness in one area — as being a symptom of market vulnerability. This IS especially true since energy issues had, until November at least, been unquestioned market leaders. Measured on a longterm basis. these stocks have been demonstrating consistent. above-average relative strength since early 1976. The emergence of a corrective phase after five years of superior performance would appear to be nothing more than a legitimate expectation. Moreover, while some degree of further vulnerability in oil issues does exist, downside objectives in these stocks are being approached in a number of cases. If nothing else. the magnitude of the decline already posted would suggest further downside action might be limited at best. Were oil issues simply to begin moving sideways in a base formation, while the rest of the market continued its established strength. the action of the averages could be dynamic indeed. It is unarguable that the current bull market is a great deal more mature than it was at its takeoff point back last April. We think however, that, in most areas, at least, it remains in fairly robust health. and it is probably far too early to begin making pronouncements about its imminent demise. Dow-Jones Industrials S & P ComposIte CumulatIve Index (4/15/81) AWT sla 1005.58 134.58 1144.87 ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL No statement or exprenlon of opinion or any otner matter nere.n contolned IS, or IS to be deemed to be, directly or indirectly, on offer or the O(lcltotlon of on orler 10 buy or sell anr. secvflly referred to or mentioned Tne moiler 15 presented merely for Ine convc'lenc of the subscriber While we believe the source of our Informa tlon 10 be fel,ab c, we ,n no way represent or guarontee Ine accuracy Ihereof nor of Ihc slalement mude nereln Any ocllon to be loken by Ihe subSCriber snould be bosed on nlS own Inves!lgahan and infOrmation Janney Monlgomery 50011, Inc, os 0 corporohon, and Its officers or employees, may now have, or may loler toke, poslhons or trades In respect 10 ony securitIes mentioned In Ih'5 or any future Issue, ond such pasltlon may be d,fferenl from any vIews now or hereafter expressed In tnls or any other lSue Janney Montgomery Scolt, Inc, wnlch 15 regluered wlln Ihe SEC as on Inveslmenl adVisor, may give adVice to .ts Investment advl50ry and olner customers rndependently of ony stotemenls mode In thiS or In any olner ISsue Further onformotlon on any security mentioned hereon IS available on request -'.

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Tabell’s Market Letter – April 24, 1981

Tabell’s Market Letter – April 24, 1981

Tabell's Market Letter - April 24, 1981
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I TABELL'S MARKET 1 LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE April 24, 1981 Markets which are weaker than they appear on the surface are, historically, a major concern of technicians ,anda1arge body -of- standard -analytical' work is-devoted –to detecting- such4nternal- weakness. — Mar- – kets which are, in fact, stronger than they at first appear, are rarer phenomena. It is, however, arguable that we are watching just such an occurrence at the moment. Since the first of the year, the Dow-Jones Industrial Average, in its continuing flirtation with the 1000 level, has attained a series of marginal new highs, the latest of which occurred this Monday on a closing basis, with an intraday peak occurring on Thursday. More broadly-based, capital-weighted indicators, however, as bearish forecasters in the financial community are fond of reminding us have been able to make little progress since last fall. The Standard & Poors 500 reached its all-time peak on November 28 at 140.52 and has been unable to better that high since, having chalked up a whole series of successively lower highs, 138.12 on January 6, 137.11 on March 25, and 135.45 early this week. Yet is it easy to demonstrate, despite this lackluster performance on the part of the averages, that a conventional and fairly dynamic bull market continues in force, albeit, with one major group failing to participate — the energy stocks. This can be demonstrated graphically in the chart below which shows, for the past three years, the action of the S & P 500 together with the action of that same S & P 500, reconstructed by us with the energy stocks removed. S&F 500 S&P 500 WITHOUT ENERGY STOCKS J The divergences are obvious. From the spring of 1979, the 500 itself began decisively to outperform the 500, ex the oils, by a considerable margin. The divergence became most apparent in March-April, 1980, when the 500 failed to post a new low and, indeed, remained in an irregular uptrend formation. With the oils removed, as the chart shows, the 500 would have plunged to a new bottom, which would have had all the characteristics of a major bear market low. The two indices moved up in parallel through the fall of last year, but, during that period, the oils carried the 500 to its new peak, while the rest of the index moved laterally. Sine that time, oil weakness has held back the index itself, and removal of those issues clearly reveals the rest of the market to be moving sharply ahead to new highs. There is no particular theoretical reason why this should not be so. Numerous studies have shown that energy stocks, in terms of price behavior, tend to constitute their own universe, moving independently of the general market. They are simply once more demonstrating that tendency. Indeed, from a technical point of view, we would not wish to argue that energy issues are not vulnerable to still further weakness. We would not, however, think that that weakness should be allowed to color one's thinking regarding the strength of the general market. The market, as a whole, we think J remains in a rather obvious uptrend with energy issues simply not participating. Appropriate investment policy, therefore, calls for a continued fully-invested position in equities, albeit with energy issues somewhat underweighted. Dow-Jones Industrials (1100 AM) 1009.55 S & P Composite (1100 AM) 134.06 Cumulative Index (4/23/81) 1153.33 AWTsla ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other motler herein contained IS, or IS to be deemed to be, directly or mdlrec1ly. on offer or the soliCitation of on offer to buy or sell any security referred to or menhoned The moiler I presC!nled merely for the converlcnce of Ihe subscriber Whde we believe the 5Qurces of our Informa han 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 aNn inVestigation and Informatton Janney Montgomery Scott, Inc, as a corporation, and Ils officers or employees, may now have, or may later loe, pOSItions or trodes In respec1 10 ony seCufltles menlloned ItI thiS or any future Issue, and such pOltlon may be different from any views now ar hereafter expressed In thl or any other Issue Janney Montgomery Scott, Inc, whICh I rcglstt!rcd With the SEC as on Investment adVisor, may give adVice to Its Investment odvlsory and othel customers independenTly of any statements mode ItI Ihls or In any other Issue Further Information on any security mentioned herem IS available on request

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