Viewing Month: May 1982

Tabell’s Market Letter – May 07, 1982

Tabell’s Market Letter – May 07, 1982

Tabell's Market Letter - May 07, 1982
View Text Version (OCR)

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVII!IION OF MEMBER NEW YORK STOCI( EXCHANOE, INC MEMBER AMERICAN STOCK eXCHANGe ,,- It is time, we think, once again to drag out the four-year cycle, a subject which will not be unfamiliar to those who have perused this letter during the past few years. We think an understanding of the cycle is of particular significance at this juncture, since it appears highly likely that a major turning point in the context of this pattern will ultimately be identified as having taken place sometime during the year 1982. We have stated in the past our view that the cycle is definitely not a statistical aberration. A careful study of the Dow-Jones Industrial Average back to its inception will identify 23 such cycles which have occurred since June, 1896. The length of the 22 completed ones has averaged 45 months and, with the exception of two cycles in the 1920's, the only examples of significant non-conformity with the pattern, all cycles have lasted between 3l' and 55 months. We already know a great deal about the 23rd cycle in this series. It appears obvious that it began in March of 1978 at an average monthly price of 756.14 on the Dow. Its end (the cycle, remember, is measured from low to low) cannot have been any earlier than March of this year at which point the average price for the DJIA had retreated to 812.33. It is interesting to note that, if this turns out to be the actual low, the cycle will have justified its popular appellation, turning out, in this instance, to have been exactly four years in length. It appears equally obvious that the advancing phase of this cycle ended in April, 1981 during which month the average price was 1004.86. That advancing phase thus consummed 37 I–t-mont-hs.signifieanan-t-he-similarphases-of–the-threepreviouscyleswhichad,- 1 vanced for 26, 32, and 21 months respectively. In contrast, the four cycles starting in June, 1949 advanced for periods of between 43 and 48 months. If the cycle ended in March, those 37 advancing months will mean it spent 77 of its time in an advancing phase, an interesting figure, since it is exactly the average for the 22 completed cycles in this century. Its declining phase will have involved a 19 drop, based on average prices, a figure slightly on the low side but not out of line with past history. What are t,he chance of the cycle's having been completed with the March low and a new upswing phase of a four-year cycle having begun It is, of course, possible. As we have tried to suggest above, there is absolutely nothing in a March, 1978 – March, 1982 completed cycle which would be out of line with the pattern established by 86 years of past stock market history. However, a few additional points may be suggestive. The first is that, in the post-World-War II period as noted above, cycles have tended toward a somewhat longer length. The one that ended in March, 1978 was exceptionally short in being only 39 months long. However, of the eight cycles beginning in April, 1942 and endiI!g in December, 1974, six have run for 50 months or longer, and two have reached as long' as 55 months. A 55-month cycle in the current instance would take us to October, 1982. Here, another historic pattern is relevant, namely the unlikelihood of a low in the mid- summer months. It would therefore seem probable that, if the low has not already been scored in March, it will occur within the next six weeks or be deferred until Fall with a decent, although failure-destined, intermediate-term rally possibly being posted over the .Summer. – –…..- – —- We tried to suggest last week the sort of market uncertainty now prevalent, with distinct technical improvement having taken place without stfficient accumulation to suggest an imminent major upswing. We are thus unwilling to eliminate the possibility of the March low's,being tested or slightly penetrated during the next few months. Were such testing to occur under the usual climactic conditions of extreme pessimism, it would be well to remember the market's current position in the four-year cycle picture, i. e., in the general area of a major bottom. – AWTrs Dow-Jones Industrials (12 00 p.m.) S P Composite (12 00 p. m.) Cumulative Index (5/6/82) 867.39 119.34 1153.03 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No talemenl or expre510n ()f opmlon or any other mOiler herein contolned IS, or IS 10 be deemed to be, dlredly or indirectly, an offer or the sohcltoltan of on offer to buy or sell any security referred to or menhoned The moiler IS presented merely for the convenlen!l of the subscriber While oNe believe the sources of our mformoIlon to be reliable, we ,n no way represent or guarantee Ihl! a'ura,y thereof nor of the stotements mude herem Any aClian to bl! taJ..en by the subscriber should be based on hiS own mvestlgatlon ond mformotlon Janney Montgomery SCOII, Inc, as a corporotlO, and Its officers or employees, may now have, or may later lake, pOSIIIOf\ or Irodes In respect 10 any secunhes menhoned In this or any future Issue, and such POSition may be different from any views now or hereafter expressed In thiS or any other Iue Janney Montgomery Scoll, tnc , which IS registered With the SEC as on Investment adVisor, may give adVice to Its Investment adVisory and othel customers Independenily of any statements mode In thrs or In any other Issue further ,nformat,on on any secuTify mentioned herein IS available on reque&,

Download PDF

Tabell’s Market Letter – May 14, 1982

Tabell’s Market Letter – May 14, 1982

Tabell's Market Letter - May 14, 1982
View Text Version (OCR)

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBEFI NEW VORK STOCK EXCHANGE. INC. MEMBER AMERICAN STOCK eXCHANGE Mav 14, 1982 -cvCle sfiiWlien;rr efYVivedanrliI)lF.if,1Rc!;i with the 23rd either having been completed in March of this year or, if not, likely to be completed sometime during 1982. For the benefit of stock market historians and statistics buffs, we are setting out below a table summarizing the relevant statistics for each of the 23 cycles in question. The table is based on average monthly figures. Each cycle, as we noted last week. is measured from low to low. The table makes the assumption, not now known to be true, that the current cycle ended in March. START HIGH LOW AS HIGH AS LOW TOTAL HaS HaS r. 7- 7- OF 7- OF DATE DJIA DATE DJIA DATE DJIA MaS ADV ADV ADV DEC PREV LOW PREV HIGH ——– ——- ——– ——– ——– ——- ——– ——— JUN 1896 30.22 APR 1899 54.90 JAN 1901 49.53 55 34 62 82 -10 0 0 JAN 1901 49.53 JUN 1901 56.53 NOV 1903 32.09 34 5 15 14 -43 164 103 NOV 1903 32.09 JAN 1906 72.32 NOV 1907 40.83 48 26 54 125 -44 65 128 NOV 1907 40.83 NOV 1909 71.95 OCT 1911 56.22 47 24 51 76 -22 127 99 OCT 1911 56.22 DEC 1912 64.50 MAR 1915 58.30 41 14 34 15 -10 138 90 MAR 1915 58.30 NOV 1916 107.89 DEC 1917 70.17 33 20 61 85 -35 104 167 DEC 1917 70.17 OCT 1919 113.91 AUG 1921 66.93 44 22 50 62 -41 120 106 AUG 1921 66.93 MAR 1923 103.87 JUL 1923 89.32 23 19 83 55 14 95 91 JUL 1923 89.32 SEP 1929 364.93 NOV 1929 232.60 76 74 97 309 -36 133 351 NOV 1929 232.60 APR 1930 288,j 7 JUL 1932 46.19 32 5 16 24 -84 260 79 JUL 1932 46.19 FEB 1934 107.26 SEP 1934 90.'54 26 19 73 132 -16 20 37 SEP 1934 90.54 MAR 1937 188.40 APR 1938 112.85 43 30 70 108 -40 196 176 APR 1938 112.85 NOV 1938 151.96 APR 1942 97.79 48 7 15 35 -36 125 81 APR 1942 97.79 JUN 1946 207.32 NOV 1946 168.94 55 50 91 112 -19 87 136 NOV 1946 168.94 JUN 1948 191.05 JUN 1949 165.59 UN-l..9.4..9–l.65 .5.9-.JAN -1 953 SS..4 4SE.l43 161 9.0 SEP 1953 261.90 JUL 1957 514.64 DEC 1957 436.92 31 19 51 43- 51 46 61 13 -13 S4—9c 90 97 -15 173 08 158 -92 1..,5..1.–c 178 DEC 1957 436.92 lEC 1961 728.44 JUN 1962 572.64 54 48 89 67 -21 167 142 JUN 1962 572.64 JAN 1966 985.93 OCT 1966 778.10 52 43 93 72 -21 131 135 OCT 1966 778.10 lEC 1968 968.39 MAY 1970 691.96 43 26 60 24 -29 136 98 HAY 1970 691.96 JAN 1973 1026.82 lEC 1974 596.50 55 32 58 48 -42 89 106 lEC 1974 596.50 SEP 1976 994.37 MAR 1978 756.14 39 21 54 67 -24 86 97 MAR 1978 756.14 APR 1981 1004.86 MAR 1982 812.33 48 37 77 33 -19 127 101 AVERAGE – JUNE 1896-MAR 1978 -AVERAGE – NOVEMBER 1946-MARCH 1978 AVERAGE OCTOBER 1966-MARCH 1978 45 29 61 77 -28 47 35 72 58 -22 46 26 57 47 -31 127 130 104 126 125 100 The table gives, for each cycle, the starting date, the high and the low. The next column shows the total length of the cycle in months. As can be seen. with the exception of the strange pattern of 1921-29. all cycles have been in the range of 31-55 months in length, and the average is just under four years. The next column shows the number of months spent in an advancing phase followed by the per- centage of total cycle months spent advancing. An analysis of these figures suggests that. in line with the secular uptrend which ran from 1942 to the mid-1960's, cycles during that period tended to spend unusually large numbes of months advancing and unusually large percentages of their life span in an upward phase. More recently. as the market has flattened. the tendency toward the cycle's spending about 60 of its life span moving upward has reemerged. The next two columns show the percentage advance and the percentage decline in each cycle. As can be seen, these figures have varied widely, reflecting somewhat higher volatility in the 1930's and before than seems to be the case today. The final two columns show startmg low as percentage of the previous low and cycle high as a percentage of theprevious high. It -can benoted that never during the century have there been more than two cycles that showed consecutively lower lows or lower highs. The recent cycle reversed just such a pattern, starting at 127 of the December, 1974 low. As we noted last week. the assumption of a March-1982 end for the present cycle makes it consistent with past history. Its 37 advancing months (77 of its total length) seems to revert toward the 1950-1960 pattern. However, if the S & P 500 were used to measure the cycle, the high would have been in November, 1980, thus fitting the pattern neatly within the context of the past three. The rather low 33 advance scored on this cycle is consistent with recent history, and the extremely small 19 decline to date probably reflects the small advance. Also, assuming that the ultimate low is close to that of March 1982, the present cycle will be the fourth consecutive instance where both the low and the high were not all that dIfferent from their counterpart figures of the previous cycle. The first cycle which reverses this pattern will strongly suggest that the period of stagnation which has prevailed in equity markets since the mid-1960's is fmally at an end. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (12 00 p. m.) 859.97 S & P Composite (1200 p.m.) 118.35 Cumulative IndeX C5'lS/8Z) No ,tatement or i!xpreulon a opmlon or any other lUjS.S7 motter herem contomed 15, or IS to be deemed to be, directly or Ind,redly, on a f f er or tCne so I Ic.lollon f on Ifer to buy or lell any security referred to or mentioned The matter IS presented merely for the convenience of the subscr,ber While we believe the sources of our mformotlon to be rel,oble, we m no way repreent or guorantee the accurocy thereof nor of the statements mude hefeln Any oc.on to be token by Ihe subSCriber houtd be based on hiS own mvestlgatlon and 'nformatlon Janney Montgomery Scali, Inc, as a corporal lon, and ,Is offICers or employees, may now have, or may loter toke, POSitions or frodes In resped fa any sC(urotles mentioned In thiS or any future IUe, and such pOSlhon may be d,fferenl from any views now or hereafter eTpressed In thn or any other Issue Janney Montgomery Scott, Inc, which IS regIstered With the SEC as an mvestment adVisor, may give adVICe 10 .ts mvestmenl odvisory and othel customers mdependently of any satemenls mode In Ih,s r on any olher ISsue Furlher ,nformahon on any security mentioned heretn IS available on request

Download PDF

Tabell’s Market Letter – May 21, 1982

Tabell’s Market Letter – May 21, 1982

Tabell's Market Letter - May 21, 1982
View Text Version (OCR)

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY OB!54Q DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER ….MERICAN STOCK EXCHANGE May 21, 1982 4 – T-he ,last-two–iss1iesof-thiscHerhavebeen,'(jevoted-;-as'Our,readm-s-arearertoac–1… discussion 'oftiiitsock market's major four-year cycle pattern'—It is' impossible'- f;' the sprinit of 1982, to discuss this pattern without making a reasonably bullish case. As we pointed out a couple of weeks ago, the current cycle had, at the low for the Dow-Jones Industrial Average scored in March of this year, run for exactly 48 months measured from the previous low in March, 1978. We mdicated at the time that the entire historical experience of this century suggests that the cycle is highly unlikely to run any longer than 55 months, which would mean a major low's being achieved no later than this Fall. In our study of last week, setting out the data for the 23 cycles which had occured in this century, we made the point that the assump- tion of a bottom's already having occured in March would be highly consistent with all of past market history. While we were in the process of delivering this discourse, the market turned down in the first decline of any magnitude that had been posted since the March low. After reaching a peak of 869.20 on May 7, the Dow has now declined 4.2 over nine trading days reaching a closing figure of 832.48 on Thursday. That the advance .should have been hurled back at around the 870 level is, under the circumstances, hardly surprising. Most indices were, at that point, confronting fairly heavy overhead supply from their trading ranges of last Winter. Moreover, as we have been suggesting, the base-building process so far has been insufficient to suggest that a major advance is now immediately in the works. Had the rally continued for much longer and broken out above 895 on the Dow, such an advance would have become an immediate possibility. This is a phase, we think, that the market is not yet ready for, and it is thus logical that the reversal occurred where it did. Nonetheless, in our view, underlying technical improvement continues. Ultimately, with , – tne wisacirri ofU720mndsignt, we WIll K'now whether -the low' of the bear'market which began in November,1980-April, 1981 was scored on March 8, 1982 or at some later date during the Summer or Fall of 1982. We can best describe the market picture at the moment by suggesting that that question has become more or less academic. Back last Fall, with the bear market in full swing and with large numbers of stocks having significantly lower objectives, th2 possibil- ity of significant further downside risk Was one that had to be taken into account. With more and more downside objectives having been reached and with significant base building having taken place (indeed, with upside breakouts from fully formed bases having already taken place in a number of instances), it is possible to suggest that downside exposure, in a well-chosen portfOliO, is, at this point, limited. Whether March 8 was the low remains an unanswered question, and we refuse, at this stage, to hazard a guess on it. The important point is that whatever low is made will not, we think, be all that different from the low of 795.47 chalked up on March 8, which, in turn, means it will not be that different from the present figure' which is a bare 37 points higher. . The technical pattern as it now exists, does not, indeed, suggest a low below that of March, most plausible downside objectives centering around the 820-810 area for the Dow and around 112 for the S & P 500. This should not be taken to be the final word on the subject, however, since it is entirely possible that the short-term top pattern whiCh has formed over the past couple of weeks could further broaden and su;gest somewhat lower targets. The crucial question is what action should be taken when and if such lower prices present themselves. As our readers are aware, this letter has advocated a defensive posture over approxi- mately the 1ast 9-10 months. During that time, the cycle has moved inexorably ahead, and, more recently, tentative technical improvement in individual stocks has.taken place. Market leadership has emerged quite clearly in the disinflation, consumer-non-durable sector of the market, and in this sector a fairlv significant number of potentiallv attractive technical patterns are present. The next bull market mav well not have begun, but it is not too earlv to start thinking about it. It will be especially important to think about it if continued disillusionment with the short-term economic picture should produce a decline of climactic proportions. Were this to occur, almost all the underpinnings for the next advance would be firmly in place. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (1200 p.m.) 834.47 S & P Composite (1200 p.m.) 114.76 Cumulative Index (5/20/82) 1131. 87 No tolement or eo;prCSSlon of opinion or any other matter herCln contained IS, or 15 to be deemed to be, directly or mdtrectly, on offer or the sollcllollon of on ofh!r to buy or sell any security referred to Or mentioned The matter IS presented merely for the convenienCE of the subscriber While NC believe the sources of aUf information to be reliable, we In no way represent or guorontee the accuracy thereof nor of the statements mude herem Any action to be talen by Ihe subSCriber should be bosed on IllS own investigation and Information Jonney Montgomery Scott, Inc, as a corporation, and III officers or employees, may now nave, or may later tole, POSitionS or trades In respect to any seCUrities mentioned In tnls or any future Issue, and such posilion moy be different from any views now or hereafter expressed In thiS or any other ISsue Janney Montgomery Scali, Inc, which IS regIStered With the SEC as on Investment adVisor, may gIve adVIce to ds ,nvestment advl!wry and athel customers Independently of any statements mode In Ihls or In any other Issue Further information on any scamty mentioned herein IS avolloble on request

Download PDF

Tabell’s Market Letter – May 28, 1982

Tabell’s Market Letter – May 28, 1982

Tabell's Market Letter - May 28, 1982
View Text Version (OCR)

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBER NEW VOAK STOCI( EXCHANGE, INC. MEMBER AMEAICAN STOCK eXCHANGE – '1l'itnp-ossitiletoptiJjlih'9. . y 28-, 1982 lOr 'b y'H–.wltnout. Jp'l1g- a lew pres- entations WhICh seem to recur wIth a certam degree of regularity. The appearance of the table below tends to coincide with the rhododendron season, since it is generally issued as a prelude to a discussion of the summer-rally phenomenon. The table shows the number of times the Dow advanced and declined for each of the 56 one-month and two-month periods since 1926 and also he average percentage advance for each period. As can be seen, the market advanced in July m 36 of 56 years and in August in 35 years, or in considerably more than 60 of the instances in question. By contrast, for all months the markethas advanced only 56 of the time. The av- erage percentage advance for the 672 months since 1926 has been 0.43, whereas July has averaged a 1.88 advance and August a 1.26 advance. The two-month period ended August shows a similar upside bias. It is our custom to point out that this tendency toward a summer rise is not the most statistically significant item in the table. December is more likely to show an advance than either July or August, and the 'tendency toward a decline in September is lilewise greater than the summer rally probability. However, the predispostion of the market to advance in July- August and decline in September is, it seems to us, of special interest at this time. aQeMcQtbecds i12261281) IwcMootbeeods i122612811 EodMootb daDces Declioes Qe.cageZCbs … daQces DeclQes cagelLCb9 January 36 20 1. 03 Fpbrusr March Apri 1 29 27 -0.10 25 -0,05 25 1.09 Ms 28 28 -0.79 June 28 28 0.89 July 36 20 1. 88 Allsfust 35 21 1..6 September 34 -1. 37 October 9 27 -0.57 November 34 0.63 Deceolber 41 15 1 2 — — —– TOTAL 380 292 0.43 37 32 27 34 32 26 35 38 32 25 33 39 — 390 19 2.i. 29 24 30 21 18 24 31 23 –1-7 282 2.35 0.9 -0 !5 1.10 O.5.! 0.06 2,72 3.29 -0.15 -1.90 0.10 1. 87 —– 0.89 As our readers are aware, our current view of the equity market can be summed up in the statement that it is presently probing for a major bottom which may have already occurret! in March or may occur at some not-too-different level at some future date. The studies of the four-year cycle which we have been presenting in this space suggest that, if such a bottom has not yet occurred, it should not be delayed much beyond September. Now, presumably due to the tendency toward a summer rally, there is no case on recortl of a major cycle low's having occurred in the months of July or August. (The low based on average price in 1932 was in July, but the actual closing low was in June.) This raises some interesting questions regarding the test and lor penetration of the March 8 low, which we regard as a possibility. Either that test should come- within the-next-month, thuB completing the.bear -market cycle which be(Jl-n in November, 1980-April, 1982, or it is likely to be deferred until September. Any attempt by the market, therefore, to probe new low territory during June should be regarded with special significance. If the conventional signs of a major bottom present themselves and the ensuing summer rally is especially vigorous, we will probably be able to identify the resultant pattern as the takeoff point for a new bull market. Should the more recent tend- ncy toward low volume and desultory market action continue, together with a-tepid sort of summer rally, it then becomes probable that a major turning point might well be deferred until sometime in the Fall. Dow-Jones Industrials (1200 p.m.) 821.35 S & P Composite(1200 p.m.) 112.10 Cumulative Index (5/27/82) 1109.03 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL (,,- I ' No statemenT or expression of opinion or any other molter herein Contained IS, or 1510 be deemed 10 be, directly or Indirectly, on offer or Ihe solle.totlon of on offer to buy or sell ony security referred 10 or mentioned The matter 15 presented merely for Ihe convemence of the subSCriber Whde we believe the SQ1,HCeS of our mformo tlon 10 be reliable, we jI'J 1)0 way reprc5cnl or guarantee Ihe accuracy Thereof nor of the s\olemenls mude hercln Any action 10 be token by the subSCriber shOuld be bosed on hiS own investigation and InformaTion Janney MonTgomery ScalI, Inc, 0 0 corporation, ond ,Is officers or employees. may now hove, or may IOler fake. pOSitions or trades In respect to any SeCUritIes mentioned In thiS or ony future IHue, ond such position may be different from ony views now or hereafter c..-prcssed In thiS or any other lSue Janney Montgomcry Scott, InCh' which IS registered With, 'h'h SEC ,os on Investment adVisor, may glvedodhlce to Its In,',bm, '0' Od,.'ql,',Y, ond othel customers Independently of any llolements mode In t IS or In any Olhc( Issue urI er In ormation on ony secuflly menllone erem IS ova a e n …

Download PDF