Tabell’s Market Letter – November 27, 1981

.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