Viewing Month: November 1981

Tabell’s Market Letter – November 06, 1981

Tabell’s Market Letter – November 06, 1981

Tabell's Market Letter - November 06, 1981
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f, f L……… TABELL-S MARKET ,' LETTER' 909 STATE ROAD. 'PRINCETON. NEW JERSEY 08540 MEMIIEFI NEW YOAI( STOCK EXCHANOE, INC MEM8ER AMEFI'CAN STOCK EXCHANGE November 6, 1981 We have spent our .time, In the. last !ew.issues of this letter, .taking.a.somewhat jaundiced view of the stock market. That view is based on the proposition that the major problem facing the portfolio manager today can be reduced to a rather simple set of alternatives; (a) either the stock market recorded a major bear-market Iowan September 25, 1981, or (b) it didn't. Our own assumption, for the moment, remains that alternative (b) is more likely to be the correct one. The centrality of this set of alternatives is, we think, axiomatic. If a major bear market remains underway, the dangers to capital preservation are obvious. On the other hand, it can be amply demonstrated that a large portion of the excess return earned by common stocke over the years has come from their performance shortly after major turning points. Thus decisions made at this juncture could well impact portfolio performance for years to come. The reason we fmd ourselves discussing major turning points at this particular time stems from a background view of the market which can, we think, be adduced from known facts. We are, first of all, inclined to accept the proposition that the so-called four-year cycle in stock prices (It is either more or less than four years depending on how measured.) is a real phenomenon. We think the fact that such a cycle began in March 1978 is the only plausible current interpretation of the cyclic pattern. We think it equally unassailable that the decline of 19.53 in the Dow between April and September of this year constitutes part (or all) of the declining phase of that cycle. Once the cycle has run its course, the obvious aftermath will be the next major bull market. We thus arrive squarely at the issue suggested above. Was September 25 a cycle bottom Here, cycle theory itself is of precious little help to us. Cycles, be it remembered, are measured from low to low and the last low can now be assumed to be March 6, 1978. Nine hundred trading days intervened between that date and September 25 of this year. As we pointed out in this space two weeks ago, this 900-day length would be perfectly consistent with the two shortest of the seven cycles that have occurred in recent market history. The other five cycles would suggest that a September 25 low is premature, perhaps by as much as six months to a year. We venture now into uncertain waters, since we are thus forced to determine whether market behavior around the time of the September 25 low was consistent with that observed at past major market bottoms. We came to the conclusion at the time and are, reluctantly, forced to hold to it, that such is not the case. In terms of breadth there have been four major upside days since October, the best one being Monday of this week when 66 of all issues traded advanced. The early stages of all seven major prior advances have included at least one day on which 70 of all issues advanced, and, in most cases, 80 advanCing days have occurred. Nor has the volume normally associsted with selling climaxes taken place. Monday's trading, agsin, produced 1. 41 times average volume as measured over the previous 25 days. A figure between 1. 5 and 2 plus has been more typical of major reversal points. None of this is to argue that the market has not behaved well in the past month or to assert that it cannot rally from here. Indeed we have been trying to demonstrate in our last few issues the fact that behavior to date — or even behavior to date extended by a fairly meaningful rally — would not be inconsistent with recent bear cycles. The question of the short/ intermediate course of the market is one which we view as, so far, being unanswered. Crucial at the moment would be the ability to reach 880 in terms of the Dow. A base of some proportions exists between the September bottom and that figure, and the ability to break above 880 would suggest an advance to somewhere in the 920-930 range Unfortunately such an advance would not take the market to a level Significantly different from where it now finds itself, and it would move the major indicea into areas of heavy overhead supply while just about exhausting the upside potential which now seems to exist. We continue, therefore, to operate on the assumption that the market story has not been completely told by the low chalked up last September. We emphasized above that we feel only that this assumption is the best possible one at this time. Furtber broadeninp of a potential base pattern together with future successful testing of the September low or, alternatively, future downside action culminating in a more recognizable selling climax could drastically alter our view of the investment odds. For the time being those odds, it seems to us, remain unfavorable. AWTrs Dow-Jones Industrials (12 00 p. m.) 855.31 S P Composite (1200 p.m.) 123.)1 Cumulative Index (11/5/81) 1099.68 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL No clement or expren,on of opiniOn or orty other matler herein contOlned II, or Is to be deemed to be. d.rectly or .ndtrectlr,' on offer or the 10Ile.,ot.on of on offer to buy or sell ony leeuII reFerred to or ment,oned Tne motter Is presented merely for the conve,e,, of tne subcrober Wht e -Ne believe tne Ources of our Informa t,on to be relloble. we il'l no way represent or guarantee tne accuracy tnereof nor ot the stotements mude herein. Any action to be token by 'he subscriber shold be bosed on his own investlgotu;m and Information Janney Montgomery Seoll, Ine. as 0 eorporollon, ond Us officers or employees, moy now nove, or moy 10ler loke, pasftfon. or tlodes ,n respect to ony securillt\ menlloned ,n thIS Of tiny future luue, ond luch pOS!hon moy be different from ony views now 01 hereafter e7presed In ,ts or ony olner IS,ue Jonney MOfllgomery Seoll. Inc. which 15 re;llSlered wltn Ine SEC os on Investmenl odvnor, moy g,e adVice to Its ,ve,lmenl odvIOty ofld Olnel customers ,ndependently of ally stolemen1li mode, ,IllS Of ' ony o1ner Isue further information on cmy securiTy menhoned nerem 1 ovolloble on request

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Tabell’s Market Letter – November 13, 1981

Tabell’s Market Letter – November 13, 1981

Tabell's Market Letter - November 13, 1981
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TABELL'S MARKET; LETTER . 90e STATE ROAD, PRINCETON. NEW JERSEY 08840 MEMIEiIII NEW YOfilK STOCK eXCHANGE. INC. MEMBER .'.U'CAN BTOCI( EXCHANGE – November 13, 1981 . . – – –', r-' – -.. – — – For '8 numoer' Of weeks now, this letter has been attemptiiig' to assert s' particular' view -of the general equity market outlook and, for the most psrt, as a proxy for that general market, we have been using the Dow Jones Industrial Average. As is often the case, this has created problems. since, if recent market action is traced uaing other indicators, the picture becomes somewhat different. It must be emphasized, however, that action of these other indicators does not alter the broad, longer-term market pattern. The table below traces the recent history of seven major averages including the Dow. The first four columns show the dramatic difference in recent action. All seven averages scored bear-market lows on September 25. The DJIA, in terms of its percentage advance from that low to its high. has dramatically underperformed all of the other indicators, even the normally-Iess- volatile Utilities. The Dow high, moreover. was scored over five weeks ago on October 8. whereas other averages are either now reaching highs or peaked as recently as early November. DJIA DJT DJU S P 500 S P 400 NYSE Camp. NYSE Fin. !I/25 Low 824.01 335.48 102.21 112.77 125.93 64.96 68.10 Recent High 878.14 394.06 110.78 124.80 139.48 72.38 77.59 Date 10/8 11/12 11/12 11/3 11/3 11/4 11/12 Advance From Low 6.57 17.60 8.38 10.67 10.76 11.42 13.93 11/12 Close 860.54 394.06 110.78 123.19 136.74 71.69 77.59 , Adv Possible From Objective 11/12 960 12 410 4 111 131 6 147 7 75 5 77 Adv From Low 16.5 22.4 8.8 15.9 16.6 15.3 13.2 The inferior action of the Dow has caused it to form a pattern different from that of other indices. Unlike the others. it has remained in a trading range. which mayor may not be a potential base formation. between 824 and 878 and has not. the 878 high being five weeks old, yet broken out of that range. By contrast. every one of the other six indicators has already broken out of the base formed subsequent to the September 25 low, and four poasess Objectives. shown in the table, moderat ely. although not a great deal. above current levels. The Dow Jones Utilities and the NYSE Financial Index have already reached their shorter term objectives. Were the other indices to reach these objectives, moves of 4-7 from Thursday's close would be involved. The Dow, by contrast, were it to break above 88O,might have a possible objective as high as 960. a further 12 move from present prices. The point is that, were such a rally to ensue. it would no more than cause the Dow to catch up with the other averages. The final column of the table is thus the most interesting. If one measures the difference between the Septem- ber low and the upside objective on all the averages a move on the order of 15-16 appears to be in order for all of them. The basic difference is that most indicators have already accomplished some two-thirds of this move. The Dow. so far, has managed to accomplish less than half of it. Unfortunately. allowing for the modest further strength shown in the table, attainment of the upside objectives shown would place all of the indicators in the same position. They would then have run out their base formations and would flnd themselves in areas of massive over- head supply. Further upside progress from that point. therefore. would be highly questionable. Possible exceptions to this are the Utility and Financial averages. which still possess favorable long-term patterns despite the fact their short-term objectives have been reaChed. It is doubtful, however. that these segments, although they might outperform the market, could demonstrate significant upside strength in an environment of heavy overhead supply for most stocks. We are therefore. regardless of the psrticular average being used for measurement, con- tinuing to view the current rally with a certain degree of skepticism. AWTrs Dow-Jones Industrials (1200 p.m.) 859.97 S P Composite (1200 p.m.) 122.68 Cumulative Index (11/12/81) 1110.16 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No cltlment or I!xprenion of Optnl(Irl or any oihtH moiler herein COr'llolned u, or to be deemed 10 be directly or Indirectly on offer or the soliCitation of on offel to buy 01 lell any, security referred 10 or mentioned lhe moiler 15 presented melely for the convel'lenc(. of the wbnber. Whl e e believe the sources of our Informo han 10 be rehab e, we m no way represent or gvoronlee the occurocy thereof nor of Ihe stotements mude herein Any action to be token by 1he subscriber should be based on hu own Investigation and information Janney Montgomery Scali, Inc, os a corporollon, and IU officers or employee1, may now have, or may later toke, ''\11PDtloni OT ,rodes In respect 10 any securities menTioned In Inl or any fvlule Inue, ond l!,leh pOSihon may be dlfferen! from any views now Or hereafter expressed In or any other bsue Janney Montgonery Stott, Inc. which 15 u!gl5tered With the SEC as on Investment adVisor, moy gIVe advice 10 lIS Investment adviSOry and athll! customers Independently of any statements mode In thiS or In any other ISsue Further information on any security mentioned herem Is available on request

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Tabell’s Market Letter – November 20, 1981

Tabell’s Market Letter – November 20, 1981

Tabell's Market Letter - November 20, 1981
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TABELL'S .MARKET . , , R, '/t,) .; .t, .'S.b.J-.a;.tlr'. il''; 809 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYI.IO' OF MEMeE HEW YO STOCK EXCHANGE, INC MUISE AMEIIlICAN 8TOCK EXCHANQE – .- ….November 20, 1981 – ' '- – – ..- —- A couple' of months ago, President Reagan was being rather widely taken to task in the press for the failure of his economic program. The President, not unfairly we think, pointed out that, at the time (late September), his allegedly failed economic program had not yet begun the centerpiece of that program being the tax cut Which went into effect October 1. The current hot item in the financial press, of course, is recession. Whether this recession is or is not linked to Reaganomics is a question whose answer seems to depend largely on the poHti- cal affiliation of the commentator involved. Nonetheless it is worth pointing out that the reces- sion in question hasn't yet happened. Now that statement, we admit, is probably not quite true. If as and when the National Bureau of Economic Research, the official arbiter of such events, gets around to telling us that we were, in November 1981, in a recession, it wU1 probably identify that particular economic contraction as having begun sometime last Summer. Nor are we questioning those savants who are forecasting a less-than-rosy economic outlook. Indeed, the President himself has used the phrase hard times, one nostalgically redolent of his 1930's upbringing, to describe what may lie ahesd on the economic scene. Long-term readers of this letter are familiar with its biases, and they wU1 probably be able to detect, from the introduction above, the subject of this particular discourse. They are right. It is yet another sermon on the interrelation of economic events with the stock market. In this connection, we think it is worth drawing attention to two other themes that have appeared before in this space, first, the distinction between forecasting and journalism and ' second, the fact that the stock market leads the economy. Journalism is, of course, the reporting of events, and, as far as economics is concerned, events tend to be confined to the official release of various statistics, such as Gross National Product and Industrial Production. The former has been declining since early this year, and the latter since August. Both are Hkely to continue to do so. What we are saying, of COUl'88, is that as far as journalism is concerned, our biggest dose of recession news still undoubtedly lies ahead of us. Forecasting, on the other hand, is a different animal. It is no trick to look ahead and suggest that forthCOming economic figures wU1 be bad. As we look further ahead and try to figure out just how bad they will be and for how long, the process becomea more subject to error. There has, moreover. been plenty of error in the past forecasting of some of the ec0nometricians about whose predictions we are hearing so much today. The most pessimistic among them may be right. Their record does not necessarily inspire confidence that such is the cue. It now becomes necessary to 'tie all of this to stock prices. We ourselves. as readers are aware. are not optimistic on this subject. Since we like to think of ourselves as rational, how- ever. one simple eventuality would make us a great deal more optimistic — i.e lower prices. If these lower prices occur. it is possible to foresee at this early stage that they be accompanied by widespread heralding of economic disaster. .. – The following. in other worda. appears to be the future outlook for those factors which will be the input for forthcoming investment decisions. That near-term economic news will be abyssmal can be regarded as a virtual certainty. The course of stock prices is less certain. Either they will refuse to decHne in the face of that poor economic news. which wU1 be a sign of great technical strength. or they wU1 move lower as the news manifests itself. which would simply be the normal expectation. What can be suggested, on the historical record. is the fact that equity prices wU1 be close to their absolute low at just about that time that nomic reporting is most pessimistic. AWTrs ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL Dow-Jones Industrials (1200 p.m.) 849.22 s , P CompoSite (1200 p.m.) 121.38 Cumulative Index (11/19/81) 1099.81 .- ',', No stotement or tlJ(preUton of OJ;lInlon or any other moffer herein con1lIned '. or is fa be deemed to be, directly or indirectly, an offer or the IDI/tltallon ol.(m olfer kI buy or leU ony ucunty referred to or menhoned The moiler presented merely for the tonVlllen of Ihe subscriber While 'lie believe the IOUftfl5 of or Informo- , lion to be reliable, we In no way represent or guorontee Ihe accuracy thereof nor of the ,Iclements mude herein Any octu;m to be token by Ihe b,cdber Ihould be nil 'o.Tetbosed on own Invesllgatlon and mformallon Janney Montgomery Scott, Inc. til CI corporation, ond lis offlcer or employees, may now hove, or may lak, poslhOflS or Irode, In respect to ony leCurlTles mentioned ' Thll or ony future InUe, and luch pOsItIon may be dIfferenT from any …Ie…..' now or hereafter exprened In th' or any oTher Inue Janney MonTgomery Seo'T, Inc, wh,ch II reglltered WIth The SEC 05 on ,nvestment adVISor, may gIve od…lce to III investment advisory nd oher CUSTomers Independnfly of any SlolemenTS mode In Ihl5 or In ony other ulue Further rnformallOn on anI' seCurity mentlQl'/ed hereIn IS ovoJloble On request

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Tabell’s Market Letter – November 27, 1981

Tabell’s Market Letter – November 27, 1981

Tabell's Market Letter - November 27, 1981
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.i rf . , TABELL1S MARKET LETTER .9 …. .'.i!' -r- ' …… – ..t……,..J. ……… ,..t; 4;….,. ' t .,. I ; ;5.-.! ….'. '; ' . 908 STATE ROAD. PRINCETON. NEW JERSEY 08540 MEMBEfIt HEWYOIlIK STOCK !;ltCMANOE, tNC MEMBER AMEAICAN STOCK EXCHANGE November 27. 1981 -. -. Our readers are aware that, while allowing for the possibility of -a fairly dynamic short- term rally. this letter has not been particularly optimistic about the intermediate-term prospects for atock prices. As a contrast. therefore. we feel we should draw attention to one particular portent which has manifested itself as a result of the last few days' strength. The Dow-Jones Industrial Average closed October at 852. S5. and. barring unforeseen disaster. it will close higher than that next Monday. This means that November. 1981 will be an up month. This has some significance since. for ressons we are totally unable to explain, the month of November seems to possess some predictive value for market action for as long as a year ahead. Action for the month itself has been almost precisely normal. In the 85 years since 1897. the Dow has been up 51 times in November and down 34. showing a rise 60 of the time. This is close to the 57 rising average ahown by all one-month periods since the Dow was first constructed. What is interesting. however. is what has happened following the 50 past instances of an upward November. The following table summarizes some pertinent figures. ALL PERIODS FOLLOWING UP NOVEMBER Average Year Average Year Period Length Periods Periods Periods Periods Change Change Following In Months Up Down!!2. Up Down.!!E. All Periods Up November 1 577 440 56.7 35 15 70 0.49 0.92 2 576 440 56.7 31 19 62 1.00 2.32 3 587 428 57.8 32 18 64 1.53 2.07 4 596 418 58.8 34 16 68 2.05 3.73 5 615 398 60.7 36 14 72 2.60 4.89 6 605 407 59.8 33 17 66 3.16 4.39 7 612 399 60.5 32 18 64 3.71 4.70 8 612 398 60.6 37 13 74 4.25 6.95 9 602 407 59.7 35 15 70 4.83 8.55 10 608 400 60.3 35 15 70 5.42 7.62 11 606 401 60.2 32 18 64 6.03 7.27 12 614 392 61.0 32 18 64 6.62 8.61 The table shows the history of aU market periods of one to twelve months in length since 1897 and compares it with the 50 periods of like length following an upward November. Taking the first line as an example, of the 1017 one-month periods since 1897, the Dow waa up in 577 cases and down in 440. thus showing a rise 56.7 of the time. In the 50 Decembers following an upward November. however. the average found itself up 35 times and down only 15, thus rising 70 of the time. The average percentage change for all 1017 one-month periods was just under one half of 1. For the 50 period! following an up November. the average advance approached 1. The table may be read in the same way for all periods of lengths from two up to twelve months. A glance through the table will show that the predictive value of November appears to be quite uncanny. For all twelve period-lengths. the market produced a greater percentage of rising periods following an upward November than was'the case overall. For example. it rose 70 or more of the timp over periods of one. five. eight. nine or ten months compared with an expectation of around 60. Likewise. the average percentage change following an up November comfortably exceeded the average percentage change for all periods of similar length no matter what the length of the period in question. The average December-January change following an upward November. for example. was 2.32 versus an expected average of 1. Now none of the above says the market cannot go down after an upward November, and it has. indeed. done ao on numerous occasions. Certainly. there are large numbers of other factors detailed at length in recent lettera which go into the formation of our present market opinion. Nonetheless, the recent rise. causing November of this year to be an '.lP month. has. marginally at least. improved market proapects. AWT It Dow-Jones Industrials (1200 p.m.) 882.71 S P Composite (1200 p.m.) 124.46 Cumulstive Index (11/25/81) 1124.06 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL No s'alement or expren,on of opinion or any other motter nereln conjomed 15, or .s 10 be deemed 10 be, dIrectly or ,directly. on offer or the lollcltotlon of on oHer to buy or sell any security referred to or mentioned The motter ., prelenled merely for the converoltmCf; of lhe subSCriber While -Ne believe the sources of our Informohon 10 be rehoble, we In no way repre!ent or guarantee the occuracy thereof nor of the statements mude herein Any action to be token by the subs.crlber should be based on hIS own Investlgotlon ond mforrrn;lllor'l J/lr'Iney Montgomery StOll, Ir'lc , os a corporation, ar'ld lIS off,cers or employees, may now have, or may later tOKe, poslhons or Iraclu In respect 10 or'ly ecurilies mentioned In thiS or ony future Inue, ond such position may be dIfferent frOM any views now or hereafter eKprelSed In Ihl5 or any other issue Janney Montgomery Scan, Inc, whIch ,s reg,ered With the SEC as on ,nllestment adVisor, may give odYlce to ,tl Investment odyhory ond othel customers Independently of any ,talements mode 'r'I thiS or In any other Issue Funher ,nformatlon on ony SCCUflly mentioned herein ovolloble on request

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