Tabell’s Market Letter – September 04, 1981

Tabell’s Market Letter – September 04, 1981

Tabell's Market Letter - September 04, 1981
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08S40 DIVISION OF MEMBER NEW YOAK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE September 4, 1981 One,of!h. 1JI0resote;j.c, sttistkal ocGuI'.renQesofAhepast w,.eek was that, on Wednesday, a 14-day movmg average of NYSE new lows, expressed as a percentage 'of issues-traded, moved above the five-percent figure. This is a level which, when it has occurred in the past, has possessed a certain amount of significance. This indicator, which we call a new low index, has moved above five percent only thirty previous times in the past 20 years, and it has done so as an accompaniment to every major and intermediate correction that has taken place in those two decades. Like any other indicator, it falls short of perfection, having occasionally moved above five percent when important downswings did not ensue. It has, however, proved to be an index worth watching. , The following table shows all of the occasions since 1962 when this series moved above toe five-percent threshold, together with the level of the Dow Jones Industrial Average on the first day it did so. The next two columns show the subsequent low for toe DJlA and the ultimate high for the new low index. The final column shows the percentage change between toe day the index first moved above five percent and that final low. –…. FH,ST CROSSING THfWUGH 5 HIGH rOR PERCENT NEW LO, EVENTUAL LOW NEW LOW CHANGE — ..D.-A–T-E—-. INDEX —— –D- -.lIA—– ——D,.H.. l — D.. -J1–A–. -IN-D-E-X- T–O—L-O-W- AF'R 4 1962 OCT –j 1962 JUN 4 1965 .0543 .0557 .O51 69.,.88 5i8.06 900.87 -lUN '26 196'2 28rI) I; , 196. JLlN 1 S'6 535.76 558.06 84('.59 .'289 -3.12 .0726 0.00 .189 -6.69 MAR 3 1966 .O51 9H.J ,55 M.,F' I 5 1966 911.08 .0599 -!. 70 MI'lY 5 1966 Oj4l 899. 77 MAY 17 196. 864. J 4 .lb43 -3.96 JUL '26 1966 .0571 8S!. l7 AUG 29 1966 767.03 .399 -9.99 SEP '29 1966 .0513 77'2.66 OCT 7 1966 744.3; .1539 -3.67 NOV '2 1967 .0500 864.85 N(lV EI 1967 849.7 .0589 .. 1.76 M'R '2 1969 .0516 930.9- APf, '21 1969 917.51 .0741 -1.44 SJUENE..l4611.996.969.. 00552.30.3 928.8 /1 JUL I;-13.\,1-o64(J J – 9 1969 801.96 8 -l.9 69,8 0-.-2-0 .2354 ,0690. .-13.66 il5 DEC '2 1969 .0524' 001;3'; DEC 17 1969 769.93 .149'2 -3.92 ,JAN 28 19/0 .0515 758.84 JAN 30 1970 744.06 .0839 -1.95 Af-'R 14 1970 .0508 780. i1,W 26 1970 (,,31 16 .31'23 –19.14 .JUN 25 1970 .0529 693.!J) JUL 7 1970 669.36 .0970 -3.49 AUG (, 1971 ,05j 850.61 AUl 10 1971 839.59 .Ob08 -1.30 OCT 28 1971 .Oj9 f137 II) NOV 1 Y 1.) I .- i 7 C1 7.97 .0849 –4./3 MAY 4 1972 .0509 937.31 M';Y 9 1972 q!5.12 .0582 -1.30 JUN FEB 15., 197 1973 .0504 .0524 94!J.97 978.40 JUL 20 1'f72 JUN 25 19;'3 '-110.45 809.13 .0675 .1678 3.75 –11.17 AUG 13 1973 .0501 8133.0 AUG 1973 851.90 .')608 -3.54 NOV 16 1973 .0533 B91. n flEC 5 1973 788.31 .1791 -11.56 APR 0 1974 .0533 839.9cl MAY 9 1974 79.37 .1401 -5.31 ,JUN '21 1974 .0543 815.39 OrT 4 1974 584.56 .2209 –8.31 DEC 6 1974 .0605 j77.60 lEC 6 1974 '.l760 .090 0.00 APR 4 1977 .0508 OCT 25 1977 .0529 915. 16 EIO 1 . ',4 Af'f, NOV t;,, 1977 1977 914.7 BOO.B5 .0613 .0591 –0.09 -0.09 OCI 30 1978 .0575 Bl1.85 NOV 14 1978 785.2b .0715 3.28 OCT 19 1979 .0512 814.6H NOV 7 1979 79t,I.IJ7 .0823 -2.21 -3FEB 1980 .0509 SEI' 1981 .0511 8()8.i 884.3 MAR ,7 – ' 1980 ,759.98 .1404 -12.52 As the table shows, the current figure for the new low index was first reached well before the bear-market lows in 1962, 1970, 1974, and most recently in 1980. On other occasions, toe market's decline following the first attainment of five percent has been relatively modest. A key seems to be the ultimate high achieved by the new low ratio. It reached 29 in 1962, 24 in 1966, 31 in 1970, and 22 in 1974. Declines in which the index rose only to around the eight-percent level before its reversal have tended to be mild. Since the index is an average of 14 days, it is possible to make some projections regarding its future behavior. For the next five trading days it includes relatively low readings, taken on days in mid-August when the number of daily new lows ranged around 50. With the exception of last Wednesday, most recent trading days have produced over 100 new lows. If, over the next week, the number of daily new lows can retreat to, and remain below the 100 figure, the index should top out between seven and eight percent and begin to turn down, Should new lows move up to around or through the 150 level, the 14-day average would undoubtedly move up to a figure in excess of eight percent, and we would have action not dissimilar to that which took place on the major declines in the table above. All of this is, we think, more than just statistical mumbo jumbo. It constitutes, ratoer, a quantitative way of expressing the fact that a good deal of downside momentum has now been built up. Until some sort of reversal evidence is seen, that downside momentum suggests—at least over the short term—a continued downward course for the market. AWTrs Dow-Jones Industrials (1200 p,m.) 862.54 S & P Composite (12 00 p, m.) 120.43 Cumulative Index (9/3/81) 1066.29 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other matter herein contained 15, or IS 10 be deemed to be, directly or indirectly, on offer or the sOI,cltollon of on offer to buy or sell any security referred to or mentioned The matler IS presented merely for the convellenCE of the subscriber While we believe Ihe sources of our Informo lion 10 be rehoble, we In no way represenl or guarantee the accuracy thereof nor of the statements mlde herein Any acllon to be token by the subSCriber should be based on hiS own investigation and information Janney Montgomery Stott, Inc, as a corporation, and ,ts officers or employees, may now have, or may later lake, posillons or trades In respect 10 any secvrttles mentioned In thiS or any future Issue, and such pOSition may be d,ffere'lt from any views now or hereafter expressed H'i thl or any other nsue Janney Montgomery Scott, Inc, which IS reglsered With the SEC as on Investmenl adVISor, may give adVice to ,Is Investment odvlOry onr! othel customers Independently of any statements mode In thl5 or In any other Issue Further Information on ony secuTity menTioned herein IS ovodabfe on request

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