Tabell’s Market Letter – September 03, 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 September 3, 1982 L 'h ,'- .f ;,,' ,-th, domoot'oon trom a technical point of view. was that it ;, ,,; ,;'- a-strong likelihood thllt'the '98182 bear market had terminated and a new major upward cycle had begun. In light of recent further strength, it is perhaps worth documenting this assertion. The most dynamic upsIde action during the market's turn was concentrated in the eight-day period ended August 26. In that short space of time. the Dow moved up almost 100 points from its low, for a better-than-12 advance. Advancing stocks for the eight days constituted just under 62 of all issues traded. Average volume for the period was over 109.000.000 shares. representing an increase of 111 over the average volume for the previous eight days. For the time frame 1949 to date. all three figures set, or were close to. recods for any eight-day period. The following table documents the three sta- tistics. eight-day percentage advance. eight-day percentage of advancing stocks and eight-day volume increase. The figures reached a week ago plus the 20 other highest readings in the past are shown for each item. Also shown for the 20 past instances is the percentage change in the Dow six months follow- ing the end of the period in question. DATE ———– AUG !3 198 OCT 15 1974 AF'R 17 1975 JUN 1 1970 JUL 17 1970 JAN 31 1975 uc 'v 0 FEB 3 1975 NOV 2 196 JAN 14 1976 JUN 10 1974 AF'R 24 1978 APR 11 1968 JAN 7 1974 DEC 7 1971 AUG 25 1970 SEF' 26 1973 NOV 20 1980 MAR 7 1975 NOV 15 1955 AF'R 30 1980 DJ!A ; ADVANCE —— 14.66 12.05 10.31 10.16 9.82 9.63 7dO 9.01 8.34 8.6 S.08 7.80 7.73 7.61 7.36 7.30 7.12 7.11 7.08 7.07 7.03 AVERAGE DJ!A 6 MO. LATER —— 23.80 1.93 12.42 14.72 18.16 , 0' 16.17 18.06 8.22 -31.71 2.46 4.96 -9.70 11.31 14.63 . b. 93 -2.36 8.86 1.59 14.04 —— 6.75 DATE ———– JAN 10 1975 AUG 26 1982 JAN 12 1976 JLJL 10 1962 JAN 16 1967 D,C 7 1971 CO , ' v FEB 3 1975 JAN 7 1974 NOV 14 1962 JUN 4 1970 AUG 22 1962 OCT 21 1969 APR 11 1968 AUG 28 1970 OCT 15 1974 JAN 14 1963 p 6 1973 JUL 27 1950 JIJL 17 1970 JUN 15 1967 AVERAGE ;; OF ISSUES ADV'NG —— 62.48 61.96 60.10 59.'38 59.37 58.86 0 7 58.10 57.82 57.77 56.70 56.60 56.57 56.47 55.89 55.79 55.21 55.05 54.83 54.60 54.56 DJ!A 6 MO. LMER —— 32.34 177777 8.75 14.31 5.86 11.31 '16'.'1'7' -9.70 14.89 12.42 10.81 -B.78 4.96 14.76 23.80 4.73 -6.93 16. 9 14.72 -0.10 —— 9.68 DATE ———– AUG 26 1982 JUN 4 1962 JAN 15 1976 APR 11 1968 OCT 25 1962 JUL 3 1950 nH' 0' po JUN 30 1950 SEP 21 1949 AUG 31 1970 FEB 4 1975 APR 25 1978 AUG 25 1971 APR 21 1975 SEF' 1 1970 APR 6 1919 SEP 7 1973 JAN 16 1980 OCT 17 1957 'MAR 30 1949 SEP 19 1950 AVERAGE VOLUIi INCREASE —— 111.15 110.24 109.S 87.62 85.19 78.20 '74.5'5 73.93 73.43 71. 95 70.83 69.14 68.76 67.20 66.36 64.22 63.77 63.23 61. 93 55.71 DJIA 6 MO. LATER —— 9.37 8.72 4.96 25.63 10.88 0.';0 9.21 13.40 15.43 15.53 0.53 0.56 2.70 16.47 .60 -8.61 4.20 1. 88 2.08 12.03 —— 7.69 The upside bias is clear. In almost all cases, a performance comparable to the current one has resulted in an appreciably higher market six months later. As the table quite clearly shows. the end of most previous major bear cycles was, in fact, accompanied by action similar to what we saw during the last two weeks of August. 1982. The 1974 bottom, for example. produced a record-setting eight-day advance on the initial rally, plus subsequent record-setting advances on the early 1975 takeoff. These rallies also showed unusual upside breadth and two instances of above-average volume increase. Similar action was observed at 1970 and mostprevious majornbottoms. 1 – – The only instance in the table where strength remotely comparable to that shown recently resulted in significantly lower prices occurred in 1974. In that case. however, the June rally was accompanied by weak breadth and almost no increase in volume. As we noted last week. the exact shape of the pattern now forming remains unclear and, short- term, the bottoming process mayor may not involve lower prices. We think from a long-term point of view. however. that the recent strength can only be read as having highly bullish implications. AWT It Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (9/2/82) 925.77 122.74 1208.00 ANTHONY IV. TAB ELL DELAFIELD. HARVEY. TABELL No statement or expre,on of opmlon or any other mat1er herem cantamed IS, or .5 to be dee,,d ta be, directly or ,nd,rectly, On oHer or the ollcltotlo of On oHer to buy or sell ony securIty referred to or menlloned The motter I presented merely for the convenlenCtl of the subscflber While we believe the sources of our Informa tlon to be relloble, we III no way represent or guarantee the accuracy thereof nor of the slatements mude hereIn Any actIon fa be token by the subSCriber should be boed on h,s own investIgatIon Clnd Informat,on Janney Montgomery Scoll, Inc, os a corporotlon, and Its offIcers or cmployees, moy now hove, or may loter lae, positIons or trades In respect to ony SeCUritIes mentioned In thIS or any luturc Issue, and such POSItIOn may be different from any vIews now or hereafter expressed In ti'us or any other Issue Jonney Montgomery Scott, Inc, whICh IS regIstered WIth the SEC os on Investment odvlsor, may gIve odvlCe to Its IIlvestment odvlsory and othe, CVltomers IIldependently of any stctements mode ,n thIS or III any other Issue Further IIllormotlon on any security mentIoned hereIn IS oVOllable on request