Viewing Month: January 1983

Tabell’s Market Letter – January 07, 1983

Tabell’s Market Letter – January 07, 1983

Tabell's Market Letter - January 07, 1983
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// TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORk STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE I I January 7, 1983 Being second-generation technicians, we possess, we hope, some appreciation of the history of our – profeSSiori- -.That';;history'is, in-fact .-ratherlorig one ,tnenrst7recl.'-fdedinsrance -of 'the'-use -of -techni — cal analysIs being the charting of the price of tulip bulbs in Holland during the 1630's. Many technical devices. the Dow Theory for example, go back to the turn of the century and there exists ample evidence of the applicatIOn of technical work to American securities prices during the early years of this century. Many of the early texts on the subject dating back to that period are still extant, and they make interesting reading today. Most advocate a rather simplistic approach to the problems of stock-price forecasting. They outline a process of accumulatior, of charted data from the daily stock-price tables, followed by an attempt to draw meaningful conclusions from the pictures that thus unfold. One theme that appears rather early in this extensive literature is a paramount concern regarding long periods of sideways price movement. such periods being variously described as congestion areas J Htrading ranges, and, later,' as bases and tlops. The theory, in its simplest form states that a move out of such a range in one direction or another, tendsto lead to a more extended move in the direction of that breakout . It never was quite that simple, although many of the classic texts read as if their writers felt they had stumbled upon revealed wisdom. Furthermore, with the advent of tools such as the computer and the wide-spread aprlication of numerical analysis to the study of time series, technical analysis has become infinitely more complicated. In our view, however, the early writers were indeed on to something. It would be as senseless to dismiss their work as mere historical artifact as it would be to suggest that the planets no longer revolve around the sun because the equipment Copernicus used to discover this principle is now obsolete. All of which brings us to the present case. The Dow Jones Industrials reached a bull-market high of 1065.49 on November 3, subsequently declined to 990.99 on November 23, rose to 1056.94 on December – -7-,-d-ropped-t0-998. 25 011 Deeembe,nd-reacheda-peak-1l70,-55-on-December-27-hursday's-c10se saw a new high posted by a minor fraction, and this gain is being modestly extended at this writing. What we have here, in short, is a trading range of precisely the sort beloved by the ancients, and we do not think it old-fashioned to state that this trading range constitutes the most salient factor in technical analysis of the current stock market. The problem at the moment is exactly thesame as the one faced by the early chartists, i. e., whether or not this week's action constitutes a true breakout from that range. We think a good case can be made that such is the case. For one thing, the short amount of time which has elapsed since the August lows strongly suggests that we remain in the relatively early stages of what should be a long upward cycle. If this is the case, the lateral trading range of the past two months should logically be viewed as a consolidation area, necessary after the steepness of the Au,ust-November. rise and simply part of an eventual orderly progression toward higher prices. Furthermore, the formation seems to have more of the characteristics of a base than a top. The low around 990 has been thrice tested and a good deal more work appears to have taken place around the bottom of the range than around its upper levels. The market's internal action during the trading range, moreover, suffers only by comparison with that during the sharp rise which proceeded it. Breadth action over the two months has remained consistently positive, with a fair number of advancing stocks even on poor days. The result is that breadth indicators during the period have declined hardly at all. Thursday's 1450 advancing stocks indeed brought most breadth indices to new highs, coincident with the new high posted by the Dow. This lack of divergence between breadth and the averages is the classic manifestation of a bull market underway. Thursday's rally, moreover, was strong enough to oroduce many of the classic symptoms of a takeoff rally, such rallies being especially reliable indicators of higher prices when they occur, as this one did, within the context of ongoing bull markets. As we noted above, technical analysis is a great deal more complicated than' simply reacting to' — breakouts from trading ranges, and there remains the possibility that the present one will turn out to be false. Nonetheless, for the myriad of reasons we have been citing in this space since last summer, we think that the current odds favor continued higher equity prices. AWTrs ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (12 00 p.m.) 1075.15 S & P Composite (1200 p.m.) 145.60 Cumulative Index (1/6/83) 1577.39 No statement or expression of opinion or any other motter herein contOlned IS, or IS to be deemed to be, dHeClly or lMdHectly, on offer or Ihe 50lu;llollon of an offer 10 buy or sell any seCUrity referred 10 or mentioned The molter IS presented merely for the conveOlence of the subscriber While we belteve the sources of our mformalion to be rellcble, we In no way represent or guarantee the accuracy thereof nor of the slolements mude herein Any action to be token by the subsc(lber should be bosed on h own mvestlgollon and information Janney Montgomery Scoll, Inc, os CI corporahon, and Is officers or employees, moy now hove, or moy loter toke. positions or trodes In respect 10 any seCUrities mentioned In thts or any future I55UI!, cnd such pOSitron may be different from any views no …. or hereafter expressed In thiS or ony other Issue Janney Montgomery Scott, Inc, which IS registered With the SEC os on Investment adVisor, moy give adVice to Its Investment advbory and othel CtJstomers Independently of any Slatement mode In thl or In any other Issue Further informatIOn on any &ecurlty mentioned herein IS aVailable on request

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Tabell’s Market Letter – January 13, 1983

Tabell’s Market Letter – January 13, 1983

Tabell's Market Letter - January 13, 1983
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-, TABELL'S MARKET LETTER I 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK eXCHANGE January 13, 1983 s there any pomt to WhICh you would WIsh to draw my attention' . –.–'To .., thUlO s tt!ci de n!.0 f,..t e….gJO.Jrt;JI t)—ngJ!tt ime '….,. …..,,' . –.- 'The dog. did,nothing in the mght-t1me' I , , .. M … -. r …. 'That was the curious inc1dent,) remarked Sherlock Holmes. II S,r Arthur Conan Doyle, Silver Blaze We have used the above quotation many times in this space over the years,and the reason therefor goes beyond the fact that we are Sherlock Holmes buffs. The moral that it evokes is probably applica- ble to formulating a forecast during most of the life of a typical stock-market cycle, and is particularly germane at a time like the present. The context from WhICh the quotation IS extracted involved the fail- ure of a watch-dog to bark during the night on which a crime took place. From this, the great detective was able to deduce that no unusual incident had taken place on the night in question. The point was that this very lack of an unusual incident itself constituted a useful piece of information. in this case. the fact that the perpetrator was a familiar figure. The fact is that very often — probably two-thirds to three-quarters of the time — the most import- ant possible stock-market clue is provided by the fact that no unusual incident is taking place. Let us examine the present instance. We are, we think it axiomatic, in a bull market or, in any case, were in one as of that one bright shining moment around 2 30 on Wednesday when the Dow, in a flirtation with a brand new round figure, swung momentarily above 11)0. It is an intellectual necessity to accept this fact as given, despite the fact that there may be those who are stlll fighting it. A market that has moved up 41 over a five-month perIod is by definition a bull market. Period. On to the next step. Having arrived at this stage J it becomes incumbent upon the technician to drag out a whole arsenal of indicators, many of WhICh W'lre gathering dust in the closet over the past four or five years. These are the indIca- tors normally associated with the identification of market tops. Almost all of these indicators are now be- haVIng absolutely like Holmes' dog in the night -tIme. They are doing nothing. This lack of indication, in other words J results in a positive clue that the market is likely to continue to move higher. 1–I–,uCi'reWo;emmcoieted'n-solmmewnoifcnthweseentinsdmicliantgorsmeinrr last week's ily along to letter. One family' consists oLmarKeLbr.eadthmeas– new bull market highs–coincident with the major aver- I ages attaining those highs last week. A whole host of others could be added to the litany. New highs continue to expand satisfactorily; group momentum appears positive, and dollar-flow measurements appear to suggest a presently inexhaustable supply of buying power. One would expect that five months into a rIse there might be a significant number of potential distributional formations in individual stocks. These are beginning to present themselves, but in paltry amounts that make vulnerable patterns seem as rare as diamonds. No dog is barking in the night-tIme to warn us of any condition other than the early stages of a buH market. We can describe the process of operating an investment portfolio under such condItions by resurrect- ing an eight-year old quotation from this letter. It appeared on March 19, 1971, at which pomt, we now know, we were in a bull market then some seven months old. We said then' IIPortfoIio management in a bull market, it seems to us, is much like driving a car at night. The headlights allow a limited vision of the road ahead and, as long as it is clear, the traveller proceeds in relative serenity. Quite obviously he remains alert, but, were he continually to worry about obstacles just beyond the range of the headlIghts, he would turn himself quickly into a nervous wreck. At the moment, all technical signals suggest that the stock market road ahead is clear, and the investor who worries about what might happen beyond his field of vision is dissipating a good deal of intellectual ener- gy that could better be applied elsewhere. We think it obvious that the same sort of condition. as far as the market's techmcal position is con- cerned. applies today. We still find ourselves being asked what sorts of deterioration or unfavorable developments might emerge to upset our optimistic prognosis. The fact that such questions are still being posed is indeed the best indicator of the marketls remaining upside potential. Questions about deteriora- tIOn are usually uncommon in the area of market tops. One sort of deterIoration, of course, would be 3 move by the Dow deep back Into the late 980-1070 trading range, suggesting that the recent upside breakout was false. We frankly do not regard this as a hkelyeventuality Paradoxically the first thing that the market has to do to show deterioration is-to – post a decline of some magnitude. This of course. It has not done SInce August. Were It to do so. It would then possess a tlbenchmark and could apply the standard technical tests to the subsequent rnlIy. This procedure would not work, of course, If markets tended to turn on a dime, nnd reverse themselves immediately. A study of the historical record, however, teaches us that thIS is precisely not what they tend to do What we are saying, In other words, 1S that any development WhICh might cmerge to upset the opti- mistic scenario would require tIme, atd we would ap!1enr at the moment to have time on our side. We nre five months Into an upswing WhlCh, absent unusual conditIons. should have r\ lIfespan of two to three years. Should such unusual conditions emerge, we will, we hope. be able to rccognize them md act ac- cordingly. MeanwhIle. the investor should devote his energy to selecting those stOCkR. bcst cnlculated to provide the capItal enhancement available under bul1-fl'lllrket condItions. Dow-Jones Industrials (1200 p.m.) S & P CompOSIte (12'00 p.m.) Cumulative Index (1/13/83) 1081.22 146.76 160876 ANTHONY W. TABEl.L DELAFIELD. HARVEY. TABELL No statement or expressron of oprnlon or any other molter herern contolned rs, or 1 to be deemed to be, drrectly or rndrrectly, on offer or the .solrcrtollon of on offer to buy or sell ony security referled to or mentIOned The motter rs presented merely for the convenrenCll of the subscriber Whrle Ne belIeve the sources of our mformatlon to be relloble, we III no woy represent or guarantee the occurocy thereof nor of the statements mude herern Any actIon to be token by the subscriber should be based on hrs own rnvestlgotron ond Informotron Jonney Montgomery Seoll, Inc, os 0 corporotron, and rlS offrcers or employees, may now hove, or moy loter toke, posrtron or 'rodes m respect '0 ony securrtles meniloned In thrs or ony future ISUe, and such posrtron may be different from ony views now or hereofter epressed m thl' or any ather luue Janney Montgomery Seoll, Inc, which IS regrstered Wllh the SEC os an IIlvestment advrsor, may grve odvrce to rts rnvestment advrsory ond other customers Independently of ony statemena made m ttlrs Of In ony other rssue Further rnformatron on ony securrty mentroned herern IS avarloble on requel.t

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Tabell’s Market Letter – January 21, 1983

Tabell’s Market Letter – January 21, 1983

Tabell's Market Letter - January 21, 1983
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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 January 21, 1983 Wednesday's market decline, the latest interruption in the bull market, was widely attributed – . to 'econolnic newCrn8rfillnl'i'FeaIGross'Natiimal 'lfOdticCfor r982Tlle' droIJ-could hardly-h-ave' been surprising, since it simply confirmed the fact that we were, during 1982, in a recession, a piece of information constituting news to absolutely nobody. The crucial question, of course, cen- ters around the low point of that recession. Our economist colleagues have been sticking their necks out ever so slightly, and many have lately sugested that December, 1982 may, in fact, have been the recession's low month. There is no way of accessing the accuracy of this prediction since the NBER, which is the arbiter in such matters, will probably not put a date on the recession's end for at least a year. Assuming, however, that the end was in December, how does one square this with the sharp stock-market rise since August Recession DJIA The table at left shows the low point of the Low Oct. 49 Low June 49 Lead -4- eight recessions in the past 35 years. Everyone of these eight recessions was associated with a May 54 Sept 53 8 stock-market decline, six of them with major bear Apr. 58 Oct. 57 6 markets. (The two exceptions were the 1961 and Feb. 61 Oct. 60 4 1980 recessions which produced only intermediate- Nov. 70 May 70 6 scale stock-market drops.) The second column Mar. 75 Oct. 74 5 of the table shows the date of the stock-market July 80 Mar. 80 3 lows associated with the recession, and the third Dec. 82 Au!'. 82 4 shows the number of months lead. It is quite clearly demonstrated that a stock-market bottom four months in advance of the recession low is totally consistent with past history. It may well be argued, however, that a market rise as steep as the recent one, with the re- -.—-cession-not-even-havin gbottomed, is-withoutprecedent—–Thisargumenthassomele-gree-ofvalid— – – ity. The table at right Recession Low DJIA Low High Reached Adv. shows the same eight re- Oct. 49 161. 60 190.36 18 cessions, the associated May 54 255.49 327.49 28 low in the Dow and, in Apr. 58 419.79 458.65 9 the third column, the Feb. 61 566.05 662.08 17 high which had been Nov. 70 631.16 794.09 26 reached by the Dow in Mar. 75 584.56 786.53 35 the month the reces July 80 759.98 936.18 23 sion came to an end. Dec. 82 776.92 1070.55 38 1982's 37.8 advance to the December high is indeed a record, but the rise from October, 1974 through March, 1975, the month the 1974-5 recession actually hit its low was almost as great. In all cases, a significant stock-market rise had taken place by the time the recession was over. The key point, of course, Recession High Subs. Mo. Adv. is what happened afterward. Low Reached High Oct. 49 190.36 293.79 Date Sept 53 Later Adv. Cmp!. 4'7 22 The table at left shows the seven previous recessions and May 54 327.49 521. 05 Apr. 56 23 50 27 the high which had been Apr. 58 458.65 685.47 Jan. 60 21 49 15 reached on the Dow by the Feb. 61 662.08 734.91 Dec. 61 10 11 57 time the recession bottomed. Nov. 70 794.09 1051. 70 Jan. 73 26 32 39 The next three columns show Mar. 75 786.53 1014.79 Sept 76 18 29 47 the subsequent high, the date July 80 936.18 1024.05 Apr. 81 10 67 of that high, and the number Dec. 82 1070.55 of months required for that high to be reached. In none of the seven previous cases did the market fail to advance for less than 10 months after the recession bottomed, and, in 1949, it continued to rise for almost four years. The percentage advance from the high at the recession trough to the subsequent high was, in most cases, fairly substantial as the next column shows. The final column in the table shows the percentage of the total ultimate advance that had been completed by the time of the recession trough. In only two cases had more than half of the total rise taken place by the time the recession hit its low, and, in a number of instances, only a minor portion of the rise had taken place. If the almost- 300-point advance from August to December turns out to constitute half or less of the ultimate total advance, the results will indeed be impressive. AWTrs Dow-Jones Industrials (1200 p.m.) 1057.40 S & P Composite (1200 p.m.) 144.25 Cumulative Index (1/20/83) 1627.47 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or e)(prCS510n of opinion or any other matter herein contolned IS, or IS 10 be deemed to be, directly or ,ndirectly, an offer or Ihe 501lcltallon of on offer to buy or sell any security referred 10 or mentioned The maHer IS presented merely for the convenience of the subscriber While we believe the sources of our information to be reliable, we In no way represent or guarantee the occlJracy thereof nor of Ihe statements mude herein Any action 10 be toen by the subscriber should be bosed on his awn poslhons or trades Investlgotlon In respect to and Information Janney Montgomery any securities mentioned In thiS or any SfuctolJllr Inc, as a IS5IJe, and corporation, and lIS officers or such position may be different employees, may from any views now now have, or may later take, or hereofter expressed In Ih or any olher Issue Janney Montgomery Scott, Inc, which IS registered With Ihe SEC as on Inveslment adVisor, may gIVe adVice to lIs Investment adVisory and othel customers Independently of any stalements made In Ihls or In any olher Issue FlJrther Informahon on any sewrlly mentioned herem IS available on request

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Tabell’s Market Letter – January 28, 1983

Tabell’s Market Letter – January 28, 1983

Tabell's Market Letter - January 28, 1983
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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 January 28, 1983 To those who are fond of large numbers it was, we suppose, an interesting week. In Some r!'lPjl!l toa. strengthenL!91111l.J1Jldforcasts.oLhigher(or. at.Ieast.,…not .lower.)interest6rates, .,- the DolY gave up 30points at its worst levels of Mondaybefore– closlngW!th' i-23-point loss. After relatively indecisive action on Tuesday and Wednesday, Thursday saw a 25-point recovery whlch was being extended on Friday morning. The Monday drop saw 1632 declining issues thus making it by far the broadest fall to occur since the bull market began last August. All of this produced ample fodder for headline writers. From the point of view of the technician, however, the proper response to it all is So what It is, of course, the most difficult response for the market analyst to make. As ana- lyst ourselves, we are subject to the continual feeling that, in order to earn our keep, we ought to say something, preferably something different than what we said last week or the week before that. There were, accordingly, as the week wore on, the predictable forecasts of further market weak- ness, a commodity which, since we have seen precious little of it in the past six months, at least possesses the quality of being different. Much as we would like to say something new, however, we find ourselves unable to read all that much gravity into the present stock-market situation. Let us review for a moment precisely what has happened in recent weeks. At Monday's low, the Dow had declined some 5.69 over a two-week period. This did not even qualify as the largest decline since the market rise began, the Dow having dropped 6.31 between December 7 and December 16 and a bit more than that if one cares to measure that decline from the previous high back on November 3. This cur- rent, totally unspectacular drop took place from a new bull-market high achieved on January 10, a date which hardly qualifies as ancient history, having occurred just three weeks ago. Again, in November and December, we managed to survive all of two months without the market's achieving a new high, and we do not recall that particular period as having been one during which investors – -we.,e-dl'agged.,-kickin.g-and-seamin g ,off-totheioor.,.house. What has been happening since last November, of course, is the loss, by the market, of a fairly significant amount of upside momentum. This would hardly be surprising. Between August 12 and November 3, the Dow advanced 37 over 58 trading days. Were that rate of rise to have prevailed through today, the Dow would be at 1477. Bull markets are, of course, pleasant, but we think such a figure is a bit much to expect. What we are suggesting, of course, is that a loss of momentum at this stage, especially given the frenetic action of August, September, and October of last year, is a perfectly natural occurrence. While there appears to be ample evidence that the market's upward slope has dropped off sharply, there is little to suggest that that slope has changed direction. One of the oldest technical devices is, of course, a 200-day moving average, and we have no apologi.es about dragging it out, despite its antiquity. The reason this device has been used for so long is precisely because it has proved useful in smoothing out the short-term fluctuations in the market. During all major bear markets in the post-World War II period, a 200-day average, at some stage, turned down and the Dow itself moved below it. This generally occurrefi well after the high was reached but, in most cases at least, it occurred before the low. Such an event, properly interpreted, constitutes a final signal that preconditions for a bear market are present. It is worth recalling, therefore, where the 200-day average of the Dow is at the moment. It is, to be precise, around 921 or roughly ISO points below the Dow itself. Even more significant is the fact that today's average includes data as far back as April, 1982. Since these take-off figures for the average are a matter of past history, we are able to draw some tentative conclusions as to what the average is likely to do in the future. We know, for example, that between April and August of last year the market trended basically downward, and its subsequent recory .did not begin to approach current levels until October. It wo1l.ld be very difficult, therefore;-to sug' gest that this smoothed curve will likely turn down much before late this summer. The very reason that a smoothed curve of as long as 200 days is useful is that major market tops, when they form, tend to do so slowly. There has been some suggestion in rp(,pnt P. of a change in this tendency, but not, we think, a significant one. It is possible that a top of intermediate-scale proportions is in the process of formation, although we remain skeptical even of this possibility. If such is the case, however, its completion will require a good deal more time. AWTrs ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL Dow-Jones Industrials (12 00 p. m. ) 1071.10 S & P Composite (12 00 p.m.) 145.17 Cumulative Index (1127/83) 1607.93 No stotemen or expreslon of Opinion or any other motter herein contolned Is, or IS to be deemed 10 be, directly or tndtrectlr,. on offer or the soliCitation of on offer to buy or sell any security referred to or mentioned The mot'er IS presented merely for the convenience of the subSCriber Whl e we belteve the sources of our mformo tlon to be reliable, we m no way represent or guarantee the accuracy thereof nor of the statements mude herein Any achon to be token by the subSCriber should be based on h,s own Investlgotlon and mformatlon Janney Montgomery Scott, Inc, as a corporatIon, and Its offlc.ers or employees, moy now have, or may later toke, pos.tlons or trades m respect to any Cc.untles mentioned .n thIS or any future Issue, and such pOSItIon may be ddferent from ol\y vIews now or hereaher expressed In thIS or any other Issue, Janney Montgomery Scott, Inc, whIch 15 regIstered WIth the SEC as an mvestment adVisor, may gIve adVice to lIs .nvestment adVISOry and othel customer, ,ndependently of any IOtatemenlS mode m IhlS or m any other Issue Further mformotlon on any seC\mty mentIoned hereIn IS ovalloble on request

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