Viewing Month: August 1982

Tabell’s Market Letter – August 06, 1982

Tabell’s Market Letter – August 06, 1982

Tabell's Market Letter - August 06, 1982
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBEFI NEW YORK STOCk; EXCHANGe, INC MEMBER AMERICAN STOCK eXCHAIliGE August 6, 1982 The headline for the stock market summary in this mornin Wall Street Journal read, Broad ,,.,.. -1lh 10'.. .h .ROO.r.l.in A . ri'neii'is that even-Cbe utltiual, Thursday's activity .'1',,.01de,,s;;e''r' ved.'Itfh-eth-eh,pArllln' 'The Dow Jones Industrial Average indeed moved below the 800 level, having been trading for the past four weeks moderately above it. This event marked the 62nd time in history that the Dow has crossed through 800 in one or the other direction. The string of successive 800-crossings goes back more than 22 years. On February 28, 1964, the average first closed above 800, never having previously traded there. This marked the first of the series of moves back and forth through that level, leading to crossing number 62 on Thursday. If one eliminates those crossings which occurred within a month of each other, it is possible to reduce the actual 62 occasions to 21 cases where the Dow passed through 800 and then remained substantially above or below that figure. For the record, these 21 cases are set out in the table below. The table lists the date of each crossing, its direction, the subsequent high or subsequent low in each case and the number of trading days until the next crossing which remained valid for longer than a month. Direction of Trqcding, Days D-a-te Crossing Subsequent High Subsequent Low Until Next Crossing February 28, 1964 up 995.15 – 626 August 22, 1966 down – 744.32 9J January 5, 1967 up 985.21 – 730 January 9, 1970 down – 631.16 228 December 2, 1970 up 950,82 – 247 November 23, 1971 down – 797. 97 ' —-.2D6.19n -i,uP–105U.JO–.-'r;—-,u December 5, 1973 down – 788.31 11'9 December 6, 1973 up 891. 66 – May 29, 1974 August 20, 1975 January 6, 1978 April 17, 1978 down up down up 1014.79 907.54 577,60 742.12 – 311 601 69 138 October 31, 1978 down – 785,26 37 December 22, 1978 up 897.61 – 221 November 7, 1979 down – 796.67 2 November 9, 1979 up 903.84 – 87 March 17, 1980 down – 759.13 28 April 25. 1980 up 1024.05 – 470 March 8, 1982 down – 745.47 8 March 18, 1982 up 869.20 – 57 The table is not without interest. On only two of ten occasions when the average moved be- low the 800 level, was the subsequent downward move of significant dimensions, these two occasions, of course, being the bear marke1sof 1970 and 1973-4. On the other hand, when it passed through on the upside, the resulting move was generally fairly substantial. The average subsequent low, following a downside move through 800, has been 741. 80, The average high following an upside crossing has been 953.78. Downside moves also were of generally shorter tiuration. The mean length of time which the average has remained below 800 after a downside crossing is 78 trading days. On the other hand, it has remained above 800 after upside transitions for an average of 346 days. It is also interesting to tabulate where the market wound up subsequently after it moved through 800 on the downside in the past. We have examined the record for approximately three months, six months, one year and two-year periods and it is rather interesting. Fo llowing past downside breaks, the Dow wound up above 800 after three months seven times out of ten; six months later it was above 800 seven times of nine, eight times of nine a year later, and in all cases it-was above 800 two years later. The average price was 827 three months following a downside break, 818 six months later, 860 a year later and 888 two years later. Now none of this does anything more than suggest the obvious fact that 800 represents a level near the bottom of a trading range which has contained the Dow for some time. Nonetheless, it dres tend to put the recent downward move in perspective, and suggests that it is hardly a unique historical event. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (12 00 p. m.) 796.99 S & P Composite (1200 p.m.) 105.12 Cumulative Index (8/5/82) 1065.43 No lclement or expreUlon of opinion or any other molter herein contOlned 15, or IS 10 be deemed to be, directly or Indirectly, an offer or the sollcllC'l,on of on offer 10 buy or sell ony seC\.lflly referred 10 or menhoned The motter IS presented merely for the convemence of the subscriber While loll! believe the sources of our Informa- tion to be relloble, we In no way represent or guorantee Ihe occurocy thereof nor of the statements mode herein Any ocllon to be token by the subscnber should be bosed on hiS own Inve1190110n and Informotlon Janney Montgomery Sc;ott, Inc, as 0 corporotlon, and 11 offlc.ers or employees, may now hove, or may laler lake. pOSitIOns or trodes In resped to ony securities mentioned In Ihl5 or any future rssue, and such posrtron may be drfferent from any vrews now or hereofter expreHed m ttllS or any other rS'ue Jonney Montgomery Scoll, Inc. whIch I' regrstered With the SEC 05 on rnvestment odvrsor, may grve adVIce to It! mvestment advrsory and other customers mdependently of crny stcrtements mode rn thiS or rn any other rssue Further rnformatron on any securrty mentroned herem 15 ovollable on request

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Tabell’s Market Letter – August 13, 1982

Tabell’s Market Letter – August 13, 1982

Tabell's Market Letter - August 13, 1982
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TABELL'S MARKET LETTER – 909 STATE ROAD. PRINCETON, NEW JERSEY 08540 DIVllilON OF MEMBER NEW YORK STOCK EXCHANGe, INC MEMBER AMERICA.N STOCK EXCHANGe August 13, 1982 The stock market remains in the same dreary bind in which it has found itself now for almost a year. It will be recalled that back on September 25, 1981, the Dow posted what was then a six-month bear-market low at 824.01. That low was followed by a moderately decent rally which continued into December, and held for almost six months until it was finally broken in late February, 1982. However, the new low produced little further action On the downsfde, . and the lowest point reached was 795.47 on March 8. An even less impressive rally followed, and by June the averages were again flirting with new lows. Finally, a close of 788.62 was chalked up on June 18. This third downward thrust was followed by a modest move into the low 830's in July. Now the Dow finds itself skidding to yet a fourth new low, with the lowest figure reached so far being the close of 776.92 on August 12. Thus we have a rather unique ll-month-Iong configuration of four separate lows, with each successive low separated from the previous one by at least a two-month interval. The last of these lows is lower than the first by something less than 6. This pattern, extending over such a protracted period of time, is an event without a great deal of precedent in contemporary stock-market history. The only roughly similar period that comes to mind is the late 1940's prior to the Junc,1949 low. Even in that instance, however, the swings were considerably wider and the rallying phses more dynamic. Since none of the declines in question have produced any follow-through, there has tend- ed to be a complete absence of those sorts of deeply oversold conditions which would suggest an 1–t-imminent–'-mar-k-et–t-uM-w-ln-OIle-4oI!ID.-Or–another J at -various -point S I the market–has ageJl.j;'Qo…,….-… exhibit some of the characteristics of major bear-market bottoms, but I at no time has it managed ……. to display a great number of them in particularly noticeable form. We displayed a chart back last June that suggested the market had remained in the low end of its recent trading range for a length of time comparable to that exhibited at past market lows, and we suggested then that this signified the presence of preconditions for a market reversal, although not necessarily that such a reversal was imminent. This week another statistic began to show numbers which, while not encouraging for the short term, tend to suggest that a low of some importance could be fairly close at hand. The statistic in question is the short-term trading index, a number widely available on quotation equipment, which consists of the ratio of two ratios, the advance-decline ratio divided by the upside-downside volume ratio. High figures tend to suggest a high degree of downside momentum and, when this figure is averaged over 10 days, a level of over 1.5 signifies unusual- ly high intensity. On August 6, this level was exceeded for only the fifth time since 1964. The other four occasions have all been associated with bottoms of some importance, the 1966 low, the 1970 Ibw, the 1974 low, and the Silver Thursday decline in 1980. A caveat should be notediin that, on three of the four previous occasions, the ultimate market low took place significantly later and at noticably lower levels than that which existed the first day the index moved above 1. 5. It occurred, for example, on September 7, 1966 and the final Dow low was a month later and 33 points lower. Likewise, the first occurrence in 1970 was on May 4 at 714 on the Dow, prior to a final low of 631 on May 26. In 1974 the first occurrence was on September 30, a week before and 23 points higher than the October low, which was later tested in December. Only in 1980 was the first occurrence of the 1. 5 reading at around the same timeasthe-ult-imate bottom. – – — '. — Based on these figures lower prices over the next month would not be t,,rribly surpris- ing. However, short-term-trading-index action would suggest that the culminatIOn of such a process could be a fairly important turning point. AWTrs Dow-Jones Industrials (12 00 p. m. ) 781. 49 S & P Composite (12 00 p. m.) 102.93 Cumulative Index (8/12/82) 1038,08 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expression of opinion or any other matter herein conh;lIned IS, or IS to be deemed to be, d,rectly or indirectly, an offer or the soliCitation of on offer to buy or sell any security referred to or mentioned The mollcr '5 presented merely for the convenlenct of the subSCriber While e believe the sources of our ,nformatlon 10 be reliable, we In no way represent or guarantee thc accuracy thereof nor of the statements mode herein Any action to be token by the subSCriber should be based on tliS own InvestigaTion and Informallon Janney Montgomery Scali, Inc, 05 a corporation, and Its officers or employees, may now have, or may later toke, pOSitiOns or trades In respect to any secufltles mentioned In thIS or any future luue, cnd such position may be different from any VIIWS now or hereafter e)'pressed '1'1 thiS or any other luu!;! Janney Montgomery Scott, Inc, whuh IS registered With the SEC as on Investment adVisor, may give adVice to Its Investment adVisory and othel customers .ndependently of any statements mode ,n Ih.s or In any other .ssue Further Informat'Qn on any secuflty menhoned herc, IS available on request

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Tabell’s Market Letter – August 20, 1982

Tabell’s Market Letter – August 20, 1982

Tabell's Market Letter - August 20, 1982
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TABELL-S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEy 08540 DIVISION OF MEMBER NEW YORk STOCk E)(CHANGE,INC MEMBER A.MERICA.N STOCK EXCHANGe August 20, 1982 Holderncsc;. New Hampshire ' . rr.Ojre9fltnef1iazll.rdS'With-Which–onelearns'to-comctFterms-aftra-quarter-centq…of,.writin g .abut. -I the stock market is that it is no respecter of sche.duled vacatiohs. 'We' find ourselves' not -t6o-terribly surprised, therefore, to find the hubbub at Broad and Wall Streets this week made a sufficient din to penetrate the serenity of Squam Lake, New Hampshire. Not for the first time, then, we find ourselves taking a few moments of vacation time to produce some commentary on what seems to be going on at home. In one sense, there did exist an elenent of surprise in Tuesday and Wednesdayts eruption, since it . appeared, as of the last week at least, we could not have picked a more appropriate time for a short holiday. F9r the fourth time in a period of just under a year, a tepid rally attempt had fizzled in mid-July and the widely-followed stock market averages had once more drifted to new lows, down by typical bear market dimensions of some 25 from highs scored 16-22 months ago. Unlike other bear markets, however, there had not emerged since the first of the four lows took place last September, any of the frenetic downside action, the same evidence, that might have been expected as a prelude to the upside explosion which took place this week. In this sense, at least, the emergence of the rally precisely in the third week of August, 1982, came as a bolt out of the blue. i It was, on the other hand, overdue. We have been ooring our readers for some six months now try- ,j ing to think of new ways to say in this space that we thought the market oversold. We coupled these observations with the fact that cycle theory strongly called for a bottom of some importance to OCcur at some stage no later than the latter part of 1982. All that was missing throughout this entire period was any sort of climactic evidence. By this point, the.reader.will not..doubLhallegaU.eredthaLwe seethis evidence as having been pro- vided this week. This is, in fact, the case. The most widely-held statistic was the record-setting 38.81 points by which the Dow advanced on Tuesday. It is, of course, obvious to elementary school children that such figures, to have meaning, must be stated in terms of percentages. Even by this standard, the results were impressive. The 4.90 advance was the second best for the post-World-War II period, ex- i,- ceeded only by a better than 5 up move on May 27, 1970. What is more important is that, over the past 35 years, advances, oft1us approxjmate magnitude-have—inv-aPiably…….oeen-associa1ed….with…major…..cy.cleboHoms.I-.J Also required for the reversal evidence J as we have long pointed' out in this space, are 'extraordinary 1 breadth and volume statistics. Both emerged this week. Tuesday's 1564 advancing stocks constituted 1 81 of issues traded. Once again, with a single exception, this advancing percentage has been associated ; with the beginning of important upswings. Concerning volume little needs to be said. 100 million, like one thousand on the Dow, is another one of those round figures that assumes inflated importance based solely on its number of digits. Indeed, it is quite obvious to anyone who has studied trading patterns, that it was only a matter of time that this threshhold would be exceeded. The threshhold was not exceeded. It was shattered, Wednesday's figure being 43 above the former record. More importantly, the figure was well over twice the recent average, the usual litmus test for major reversal volume. All of the above factors remain true, incidentally, despite the wild gyrations and assorted rumors that are welling about as this is written. As we have always done, writing at similar market Junctures in the past, we duly noted the caveats. A phrase we are fond of dragging out at such times is effective bottom It, and we think such an occurrence is likey to have occurred a week ago as evidenced by this week's action. Bottoms have, in the past, however, assumed varying shapes and patterns. In May, 1970, for example, the climactic action of May 26 marked the market's actual low and a minor test attempt in July was all that followed. May, 1962 and October, 1966, however, were followed by full-scale tests both of which involved new lows. It is, therefore, far too early a stage to trumpet confidently that 776.92 on October 12 was the low of the 1981-82 bear market, or even that the majority of stocks have seen their lows. even though this latter, at least, may well be the case. Another mildly contrary factor is that August tends to be a less-than-propitious month for such an occurrence. Indeed, a study of all major cycle bottoms since 1897 shows that in no case has the actual low occurred in August. A final note of warning. Pay no attention to the excuses. The factor widely cited as the reason for the rally was lower interest rates or, more properly, forecasted hwer interest rates. This, of course, – is nonsense;-Themarketwent-up,quite SImply because forsome months now,it hasbeen in a technlcal position to do so. Interest rate forecasts have come and gone throughout that period with little or no effect. With the benefit of 20-20 hindsight, we now know that the oversold condition ,had reached a sufficient extreme this week for forecast of lower rates to have a tinder box effect J This is important. .,1 We think the next major move in the stock market is likely to be upwards, ThIS mayor may not be accompanied by lower-long rates. If the failure of lower rates to materiahze causes skepticism regarding the ongoing stock rally, so much the better. '. AWTrs Dow-Jones Industrials (12 00 p. m.) 847.03 S & p Composite (1200 p.m.) 110.31 Cumulative Index (8/19182) 1102.57 ANTHONy W. TABELL DELAFIELD, HARVEY, TABELL .. No statement to buy or sell oarnexsperceussriItoyn of opln!on referred to or tiny other Or menlloned maHer herein The matter !s contained presented 15, or !S to be merely for the deemed to be, convemenCf; of d!rectly or Ind!rectly, the subSCriber WhJJe on He offer or the sollc!tot!On of on offer beJleve the sources of our mforma- t!on to based be on hrleslloowbne,nwvee1Ilng0n1o10w aayndrepInrefosremntato!ornguJaarnanneteye the accuracy thereof nor of Montgomery Scan, Jnc, as the statemenTs a corporation, mude hereIn Any and lis off!.ers or ad!on to be taen by employees, may now the subsct!ber have, or may should be later take, posItIons or Trades In respect to any r.ecurlt!es mentioned In thiS or any future !Sue, and such posItIon may be different frOm any vIews now or hereafter epressed In thIs or any other !Uue Janney Montgomery ScolT, Jnc , whIch !s regIstered wuh the SEC as an Investment advIsor, moy give adllice to .ts Investment advlOry and other customers Independently of any statements mode !n thIs or ,n any other !ssue FUr1her !I'\formol!on on any seo…. !ty mentIOned herem !S available on request

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Tabell’s Market Letter – August 27, 1982

Tabell’s Market Letter – August 27, 1982

Tabell's Market Letter - August 27, 1982
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE The first wrlting Job afforded the author of thIS letter. long before our lnvolvement In the stock market. was writing about sports. At the hme, there were two recognized schools of sportswriting. known as the Gee-Whiz and the I1What-the-Heck schools. The former, origInated by the late Grantland Rice. tended to trent every sporting cantcst as n memorable clash of titans, forever to be engraved on the pages of hlstory. The latter, dominnnt today, tended to recognIZe that children's games did not. most of the time. mean vel'Y much in the overall scheme of things. The two sChools hnve their counterpnrts In stock mflrkct commentary, and most of the time. the cynical view is the approprlllte one. SInce, in the great majority of cases, what the market does OVer short periods is of httle significance. Occasionally, however, there comes a time when the gee-whiz re- act i on IS To uesn. tiareblylnsno.prwoapirti-natncd, – and see the past fortnight must certmnly be one sort of reachon to what has gone on over of those the past instances. two weeks consti- tues the only attitude that is rationally implausible. It is. of course, possible that recent action consh- tuted only some sort of bear-market rally. Such an interpretation, however. 1S totally inconsistent with the most recent 40 years of stock-market history. Unless we have evolved an entIrely new behavlOr pat- tern, it IS possible only to conclude that the 1980-1982 bear market effectively ended two weeks ago. The vigor and perSIstence of the last two weeksT rally not only puts it in the class with the sort of behavior that has occurred only at major bottoms in the past four decades,butindeed surpasses most prior instances. As of ThursdayTs close, the market had advanced over a ten-day perlOd by some 15. The last advance of greater magnitude for the same time-frame occurred in 1938. We have been accustom- ed to USIng 20 moves for the Averages as threshholds for bull and bear markets. We have had three- quarters of such a move jn the past two weeks. There do exist two instances in modern market history which appear roughly comparable to What has recently. The rallies which began on May 26, 1970 and October 4, 1974 were of vigor on a closing , wiped out about half the gam. October, 1974 was followed by a month of sideways action and a later full-scale test of the previous low. In both instances, however, the highs of the initial rally were comfortably exceeded within a matter of months. If we are to accept the premise that a new market cycle has begun, it is not too early to start thinking about some of the parameters. The average length of a cycle, low to low, is around four years with 50 or more of ItS time spent in an advancing phase, making a major top unlikely much before 1984- 85. As to where that top might take place, we find ourselves reluctant at this stage to hazard a guess. Bull markets have been compared to sex. When they are good they are spectacular, and when they are bad they are still pretty good. The last three have tended to fall into the latter category, running out of steam at around the magic barrIer of 1000 on the Dow Jones Industrial Average. They were, none- theless, periods during which above-average returns could be earned on equity investments, and we ex- pect the current case to be little different. The task for the investor at the moment, it seems to us, is to pOSItIon himself for a rise in equity prices. Projection of how great that rise will be is a task to be deferred for further analysis. A few thoughts on the makeup of individual-stock technical patterns, as compared with similar major-cycle bottoms. appear appropriate. There exists, it seems to us, more diversity among patterns than has been the case at most similar turning points in the past, the pOSSIble exception being the most recent upward cycle which began in March, 1978. This has both positive and negative implications. The pOSItive implications arise from the fact that there exists a cadre of potential leaders with sufficiently mature bases to support an immediate advancing phase. This potential leadership exists in those areas WhICh have shown the. most obvious relative strength over the past year, largely in the consumer non- durable and utilIty sectors. We would expect thIS pattern of leadership to continue at least in the initial stages. A second group of stocks, smaller in number than has been the case at past bottoms, are those lssues,.which.find …themselves thoroughly sold .. out but … with no appreciablebase. formations . Other. than tradIng rallies, we would expect little upside action from these issues in the early phase of the advance. Energy stocks are a typical case in point. Finally there exists a third group where further vulnerability still exists, largely confined at this stage to secondary and tertiary issues. Such a pattern (although the stocks were different) existed four years ago, and the result was a bull market moderated in its upside Intensity by severe intermediate-term shocks as the market progressed, i.e., October, 1978, October, 1979, March, 1980. Whether this sort of action will dupI1cate Itself as the current cycle progresses remains to be seen. AWT rs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (12 00 p.m.) 887.75 S & P Composite (12'00 p.m.) 117.49 Cumulatlve Index (8/26/82) 1192.49 No stalement or expression of opinion or any ather maller herem conta.ned .S, or IS TO be dee'Tled to be, d.rectly or .nd.rec1ly, an offer or the SOliCitation of on offer 10 bl.lY Or sell any secl.lflty referred to or menTIoned The motter 1 presented merely for the convenienCE of the sl.IbSC(1ber While oNe beheve the sources of our m/orma tlon to be reliable, we In no way represent or gl.lQlontec the accuracy thereof nor of the statements mude herem Any action to be taken by the subscriber should be based on his own investigation and mformctlon Janney Montgomery SeOll, Inc, as a corporat.on, and Its offICers or employees, moy now hove, or may laTer take, pOSitions Of trades m respect to any seCU(1t'es menltoned Tn thiS or any fultae !Sue, ond such pos.tlon moy be different from ony views now or hereafter eypressed m thl! or any other lSue Janney Montgomery Scott, Inc, which IS registered With the SEC as an Investmenl adv.sor, may g.ve adVice to Its .nvestment adVisory and othel customen Independently of any statements made In t I or In any oTher lSue Further mformaT.on on any security mentioned herem IS ovailoble on request

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