Tabell’s Market Letter – June 18, 1982

Tabell’s Market Letter – June 18, 1982

Tabell's Market Letter - June 18, 1982
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY OBS40 DIVISION OF MEMBER NEW YOAK STOCK eXCHANGE, INC MEMBER AMERICAN STOCI( EXCHANGE – . . . .J.llnrJ8…..1982…..,…-.- I , We speculated 'last week on the possible furor 'which might emerge were-theDow to post a new low below that of March 8. On Thursday the event duly occurred, with a close of 791. 48, some four points below the March figure, being recorded. As we noted a week ago, we doubt that this event possesses transcendent significance, but, paradoxically, it does make the task of the market technician somewhat easier. We can now date the 1981-1982 bear market as having extended at least through June 17, and we can begin to watch for those events which should normally accompany the posting of a major low. Such lows have, in the past, bee,n accompanied by the registration of what may be called an extreme oversold condition, Numerous measurements may identify the existence of such a condition, and the table below shows the extreme values reached by four of these measurements during ten test periods in the past. These test periods include every major cycle low since 1946. Each is three months long, ending ten days following the recording of the cycle low. For each indicator the actual date on which the extreme value was reached is given. The four indicators chosen are as follows 1. The lO-Day Advance-Decline Oscillator, This is simply a 10-day total of the difference between advancing and declining stocks. In the table, previous values are adjusted to make them comparable to the number of issues traded today. 2, The lO-Day Percentage Change Oscillator, This is a simple measurement of the percentage move over a ten-day period lor the Dow. 3, The 25-Day Volume Ratio This indicator measures the ratio of volume on a given day to a 25-day moving average. Most oversold periods tend to feature at least one extreme high-volume day. 4. The 10-Day Avrg of CloslnK. Fires for Short-Term Tradin Index This is the well- Sta rt End rate VallJe late Valtje Date Value Date Value JUL 9 46 MAR 13 49 JUN 14 53 JUL 22 57 MAR 26 62 JUL 7 66 FEB 26 70 SEP 6 74 NOV 28 77 MAR 17 82 OCT 9 46 JUN 13 49 SEP 14 53 OCT 22 57 JUN 26 62 OCT 7 66 MAY 26 70 DEC 6 74 FEB 28 78 JUN 17 82 REP 10 40 JUN 6 49 AUG 31 53 OCT 21 57 MAY 29 62 AUG 29 66 MAY 26 70 SEP 16 74 JAN 16 78 JUN 9 82 -6613 -5135 -5841 -5777 -7202 -8211 -7321 -4494 -4477 -3907 SEP 10 46 JUN 13 49 AUG 31 53 OCT 22 57 MAY 28 62 AUG 29 66 MAY 26 70 OCT 4 74 JAN 16 78 JUN 9 82 -15.07 SEP 4 46 -5.79 MAR 29 49 -5.02 SEP 15 53 -6.83 OCT 11 57 -10.72 MAY 29 62 -8.12 AUG 30 66 -10.42 MAR 25 70 -12.85 OCT 10 74 -7.15 MAR 10 78 -4.67' JUN 11 82 3.19 2.46 2.25 2.08 3.19 1.65 1.63 1.78 1.37 lo38 OCT 11 66 MAY 5 70 OCT 3 74 JAN 16 78 MAY 28 82 161 171 176 131 139 The figures speak for themselves without the necessity for a good deal of comment. In almost all cases, the extreme values for the four measurements recorded so far have failed to approach those values typically associated with major lows in the past. Even relatively soft bottoms, 1978 and 1949 are typical examples, have tended to produce somewhat more deeply oversold conditions than the present market has registered to date. Indeed, the low posted last September, one which has now been exceeded by a moderately significant amount, produced more deeply depressed conditions than have been scored in the present instance, On the other hand, we are not that far away from registering those values which one – would-normally associate' with a bear'marKet's end, -As we'have stated in the past, 'we feel it would be more bullish for a deeply oversold condition typified by the sorts of measurements shown in the table to appear sooner rather than later. The appearance of such conditions in the next few weeks might suggest the possibility of a low's being posted now rather than deferred until, possibly, in the Fall. AWTrs Dow-Jones Industrials (1200 p.m.) 788. 8i ' S & P Composite (1200 p.m.) 107.29 Cumulative Index (6/17/82) 1086.12 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No slolement or expression of opInIon (lr any other matter hereIn contOlned IS, or I to be deemed to be, directly or IndIrectly, on offer or the solICItatIon of on offer to buy or sell any secunty referred to or mentioned The matter tS presented merely for the conventence af the subscrtber Whtle we belteve the sources of our Informahan 10 be reliable, we in no way represent or guarantee the accuracy thereof nor of the statements rflLde herein Any octton to be tolren by Ihe subscrtber should be based on his aNn mvestigallon and Information Janney Montgomery Scolt, tnc , OS a corporaHon, and ItS officers or employees, may now have, or may later lake, pOSitions or trades In respect to any securities mentIoned In thIS or any future ISSUe, and such pOSItIOn may be different from any views now or hereafter expressed In thIS or any other tSSUe Janney Montgomery Scott, Inc, whtch tS registered With the SEC as on Investment adVIsor, may give advtce to us tnvestment odvlsory and olhet customers Independently of any statements mode In thiS or to ony other Issue Further infOrmation on ony securtly menttoned herem '5 aVailable on request .;;;

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