Viewing Month: February 1983

Tabell’s Market Letter – February 04, 1983

Tabell’s Market Letter – February 04, 1983

Tabell's Market Letter - February 04, 1983
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIYISION OF MEMBER NEW YORK STOCK EXCHANaE, INC MEMBER AMERICAN STOCK EXCHANoe February 4, 1983 While the Dow-Jones Industrial Average spent most of the week moving sideways just under its recent hIgh levels of early January, some fairly interesting upside action was taking place in other areas. -T he Transportation-A'vcra ge–moved 'up-1'2Point s 'on-Thurs d ay-;-to withiennleof'its -. b-u11m a1'ket-pe-aKand. througliout the week, the NASDAQ OTC Industrial Average was posting new alltime highs. The general subject of OTC Issues is a rather interesting one at this stage. The NASDAQ industrials have moved from 177.70 at their August low to 301. 99 yesterday. a 70 advance as opposed to a 40 rise in the Dow. The chart below presents a 10-year history of the Dow as compared to the OTC Industrial Index. The upper line is the DJIA, the center line the NASDAQ Index, and the lower line is the relative strength ratio. the NASDAQ Index divided by the' Dow. INDUSTRIAL AVERAGE One of the characteristics of OTC stocks tends to be 8 high beta, which, in English, means that such issues tend both to rise and fall more sharply than listed ones. A glance at the chart will show that this has been true in most major swings. Much of the superior relative action of OTC stocks stem from their behavior between 1976 and 1980, which constituted an exception to this rule. During that time OTC issues moved moderately upward during a downward and then flat market in the DJIA. Since 1981, action has been more normal. Over-the-Counter issues moved down more than the Dow during the 1981-1982 bear market and, as suggested above, have been more dynamic on the upside since. Some recent performances in the OTC market have been quite eciting , SinceOctober -6, 127 representative issues rose,on average, some 42 to their highs versus 16 for the Dow. Their greater volatility is suggested by the fact that, following those highs, the 127 stocks, on average, posted a 14 correction. They remain, however, at prices of this week, 30 above their early-October figure. This spectacular l'erformance has, moreover, been fairly broad. 111 of the 127 issues moved up more than the Dow to their high, and 87 have shown a better performance than the Dow to date. Just about half have posted new peaks within the last month, with 29 reaching new highs this week. Continuance of this sort of action could produce excellent investment results for those investors willing to assume the inherent risk. AWTrs Dow-Jones Industrials (1200 p.m.) 1064.57 S & P Composite (1200 p.m.) 144.71 Cumulative Index (2/3/83) 1624.02 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No statement or expressIon of opinIon or any otner matter herein contained IS, or 1 to be deemed 10 be, directly or mdlfec1ly, an offer or Ihe SOllCllatlon of an offer 10 buy or sell any security referred 10 or mentioned The motter IS presented merely for the convenience of thc subscriber While we bellcve the sourccs of our tnformahon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the stotements mude herein Any oellon to be token by the subscriber should be based on hiS own Investigation and Informatton Janney Montgomery Scali, Inc, as a corporation, and lIS officers or employees, may now have, or may loler lake, poSllions or trades In respect to any seCUrities menlloned In Ihls or any future Issue, and such position may be different from any views now or hereafter C)(prCsed In thiS or any other ISlue Janney Monlgomery call, Inc, which IS registered With the SEC as an Investment adVisor, may give adVice to lIs .nvestmcnt advISOry and othe! customers !ndependently of any statements made In thiS or In any other Issue Further Information on any sccurlty mentioned herein IS ovorlable on request

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Tabell’s Market Letter – February 11, 1983

Tabell’s Market Letter – February 11, 1983

Tabell's Market Letter - February 11, 1983
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TABELL'S MARKET LETTER 909 STATE ROAD. PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW VORK STOCK EXCHANGE, tNC. MEM8ER AMeRICAN STOCI( eXCHANGE – February 11, 1983 Pilots, of everything from light aircraft through the space shuttle, all engage in a stand- arc;I !,itu1 Yrior !2..!akeoff. They'-p!;,,-ed'!l,eticullyt,hrougl.!…..!!.. checklist of all of.Jl)J,s.ic 'systems affecting the performance' of their' aircraft. About 99.-99 of the time; thisrchecklist – produces the same boring, but comforting, result, the all-systems-go condition which indi- cates that it is safe to proceed. Ever since the stock market took off last August, these letters, or at least a great many of them, have exhibited some resemblance to the pilot's checklist procedure. One-by-one, we have tried to check those indicators which, historically, have come to signify the continuing presence of bull-market conditions. Each time, this check has produced the standard result. The indicators in question continue to behave perfectly normally and indicate that all systems remain in a go state as far as the bull market is concerned. As we move past the six-month mark for the current major cycle, it is perhaps useful to look at yet another such indicator, the numbers of daily new highs and new lows posted on the New York Stock Exchange. The behavior of these statistics has been distressingly normal. On October 11, two months after the rise began, 653 new highs were posted, this figure amounting to 32.25 of all issues traded on that day. That particular number constituted a record for at least as far back as statistics have been maintained. Normally, the initial surge of a bull market produces a few days on which some 20 of issues traded achieve new highs. October's figure brought us into uncharted territory by a wide margin.. It is highly probable that the October 11 record will not be exceeded at any time during the course of the bull market. Normal action is that the record-new-high figure for major up- swings is set in the very early stages. There then tends to follow a rather protracted period during which new highs maintain a respectable level, but one well below the earlier peak. The 127 new higosted on Thursday of this week, 6.5of the total issues traded, are totally,' t typical of this action. . . – . While new highs will continue to be important in assessing the market's health, it will be- come increasingly necessary, as time goes on, to examine new lows as well. Such an examina- tion has yielded zero results to date. The new-low list each day since August has consisted of a handful of issues, the highest number being 11, about half of 1 of issues traded, on December 20. Just as it is normal to expect the number of new highs posted gradually to de- cline, it is equally normal to expect new lows gradually to build up. Both these phenomena, however, conventionally occur many months before the end of a bull market. New high-new low figures tend to present a certain degree of analytical difficulty. It is generally the peak figures which are important, with the data interspersed between these peaks being somewhat meaningless. We have found it useful, once a bull market is underway to take the peak new-high and neW-low figure (expressed as a percentage of issues traded) for each month and then take a 10-month moving average of those monthly peaks. For the 10 months ended with February (so far), the average peak-new-high percentage has risen to 13.76, an- other record. It is likely to continue to rise at least through May, since May, June, and July of last year are still included in the average. A similar figure based on new lows has been falling ever since last summer. This action again is likely to continue through May-June. Reversal of this sort of action would indicate a very early warning signal of loss of market momentum. Normally, the new-high index, computed as notedbegins to decline followed by a rise in the new-low index. This action generally tends to occur well in advance of a peak. For example, it set in in February, 1976 prior to the new high on September, 1976, and in late 1978, more than two years before the ultimate high posted in April, 1981. Past upswings de- monstrate similar tendencies. Since it is highly- un1ikely that such action could begin' to mani- fest itself before this summer, new highs and new lows constitute another go indicator for the stock market. AWT rs Dow-Jones Industrial (12 00 p. m.) S & P Composite (12 00 p. m.) Cumulative Index (2/10/83) 1093.28 148.28 1669.56 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No Iatement or expression of opinIon or any olher molter herein contolned 1, or IS to be deemed to be, directly or Indirectly, an offer or the sollcllollon of on offer to buy or sell cny security referred 10 or mentioned The motter .s presented merely for the conVerlience of the subscriber While we believe the sources of our utformalion to be r!!!llable, we In no way represent or guaranl!!!e the accuracy thereof nor of !he staTements mude herein Any Ochon 10 be token by the subcrlber should be based on his own Investigation and Information Janney Montgomery Scoit, Inc, as a corporation, and lIS officers or employees, may now have, or moy later lake, positions or trades In respect 10 any seCUrities menhoned In thiS or any future luue, and such position may be different from any views now or hereofter expressed in this or any other ISsue, Janney MonTgomery Scott, Inc, which 1 registered With the SEC as on Investment adVisor, may give advice to ITS mveslment adVisory and othel customers Independently of any uatements mode In thiS or In any other Inue Further information on ony security mentioned herein IS available on request

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Tabell’s Market Letter – February 18, 1983

Tabell’s Market Letter – February 18, 1983

Tabell's Market Letter - February 18, 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 .;o– – – – – .-',. – ….. ..o, .. Ir ;..f' – – … — — —Februar)ri.8; -1983– ,….-…….;..;..;z – One of the favorite current worries among those who Seem to feel an innate compulsion to worry about a rising stock market is the presence of what is variously called increasing confidence or excessive speculation. Cassandras on this particular subject point out that such indicators as the AMEX and OTC indices have been outperforming the Dow for a few months now and, from this kernel of truth, draw all manner of portentiolls conclusions. Implicit in their reasoning seems to be a widely accepted piece of folk wisdom — that increasing speculative activity is bad II and in fact associated with the onset of bear markets. There is only one thing wrong with this particular myth. The first is that it is, largely, just plain wrong and, to the limited extent that it is correct, it is vastly oversimplified. The oversimplification part is somewhat easier to deal with. To the extent that increasIng speculative action signifies the mature stage of a market, the important factor is the length of time it has continued. One does not announce the onset of high noon at sunrise simply because the sun becomes visible, just as it is at midday. Rising confidence is the necessary fuel to all bull markets. The extent of its increase and whether it has become excessive are the crucial questions. More important, however j the basic assertion that major market tops are invariably accompa- nied by increasing speculation is, as noted above, contrary to fact. Of the last eight major bull markets, two, those ending in 1966 and 1968, displayed ymptoms of increasing speculative activity somewhere around their peaks. The other six were characterized at their high points not by in- creasing but by decreasing speculative activity. Interestingly enough this is also true of the granddaddy of all bear markets, 1929-1932. Contrary to the popular impression of rampant speculation in secondary stocks prior to that decline, secondary issues peaked in November, 1928, 10 months before the market break, and the expansion of speculative activity achieved its peak in 1926, more than three years before the high. When the 1-41—–'m'ar.Kret reacheo.ltS1iig1lins-eptember;-t92'.901ie relative-sttll of Secondary issues was-'''decreas—-I- ing with record-breaking momentum. The measure of speculation on which we base the above is the ratio of the Standard and Poors Index of low-priced stocks to its index of high-grade stocks. Despite certain technical short- comings in these two indicators, their long history makes them useful in looking at extended periods of time. Obviously, an increase in this ratio (increasing relative strength of low-priced stocks) signifies rising speculation, while a decrease suggests the opposite. The history of this ratio for the last eight market cycles can be summarized as follows 1. It tends to decline for a short period of time following a market bottom. This has been true in seven of the eight bottoms in question, where the ratio bottomed from 2-12 months after the low in the Dow Jones Industrial Average. The only exception was the March, 1978 bottom where the low in the ratio occurred three months prior to the market low. In the present instance, the speculation ratio bottomed in November, 1982, three months following the August nadir. 2. Following this low, the ratio tends to expand, as measured on a six-month percent- age change basis, for a relatively protracted period. This has ranged from 7 to 25 months in the last eight bull markets, with the average being 14.5 months. 3. The end of this expansion phase has tended to lead market tops by as much as 30 months, with the only exception being 1969 where it lagged the market high by two months. 4. In most cases the bull-market peak for the ratio occurred from 13- 32 months prior to the actual market high. The 1966 and 1968 tops, as noted above,were exceptions. The other ex- ception was the aftermath of the December, 1974-SeptemberJ 1976 rise, a period unique in market history since secondary stocks continued to rise throughout an entire bear market in the averages. In view of this history, where do we now fmd ourselves We are three months into an ex- pansion of the ratio, these expansions in the past having averaged more than 14 months in length. -The end of past expansion phases. in all cases but one. have led the eventual market high by — periods of one year to two years. It is. to put it mildly, an understatement to say that those who are working themselves into a fit over excessive speculation at this point are being a bit premature. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY. TAB ELL Dow-Jones Industrials (1200 p.m.) 1085.57 S & P Composite (1200 p.m.) 147.32 Cumulative Index (2/17/83) 1677.35 No statement or expressIon of opinion or ony other maHer herem conlamed IS, or IS to be deemed to be, dIrectly or IndIrectly, an offer r the sollcllahon of an offer to buy or sell anr, secunty referred to or menhoned The matter IS presented merely for the convenIence of the subSCriber While oNe betleve the sources of our Informahon to be rehab e, we In no way repreent or guaranlee lhe accuracy thereof nor of the statements mude hereIn Any action to be taken by the subscrIber should be based on hI! own InveslIgollon ond Informallon Janney Montgomery SCali Inc, as a corporation, and lis offIcers or employees, may now have, or may laler toke, posHlons or lrades In respect 10 any SeCUritIes mentioned In thIS or any future luue, and such posItIon may be different from any vIews now or hereafter eyprened In thu or ony other Issue Janney Montgomery Scott, Inc, whIch IS reglslered WIth the SEC os on Investment adVIsor, may gIve adVICe to ,ts Investment adVISOry and othel customers Independently of ony statements made In lhls or In any other Issue Further informatIon on ony security menhoned hereIn IS available on requesl

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Tabell’s Market Letter – February 25, 1983

Tabell’s Market Letter – February 25, 1983

Tabell's Market Letter - February 25, 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 …, February 25, 1983 Thursday's surge, in which the Dow spurted 25 points to a new record high, should, in our …yiewy\!!prised absoly noone. We have been tD'ing..!Q…!!o'Z.tl! in this space for ttlPJl.st… ……, six mantl'fs- tHe very simple lessori- Of history tilat bull m-arkets; once underway, – tend to-spend most – of their life moving ahead, with very little in the way of significant correction in the process. There are, of course, plenty of exceptions to this rule. but it is the exceptions that should be regarded as unusual, not the conventional behavior. Thursday's rally, therefore, seems to us to be nothing more than part of a typical pattern that has tended to -r.epeat itself in all mazKet1!dbrwhich we have an historical record. The internal health of the market, meanwhile, remains good. We completed this week a survey of the action of 1536 major issues, ascertaining for each issue (1) the day on which it made its bull- market high, (2) the extent of the correction subsequent to that high, and (3) the amount of recov- ery since. The table at left, show- Date of High Issues ing the month in '!Pich the bull- Sept. 1982 25 2 market high was posted for each Oct. 1982 122 8 issue indicates that almost half of Nov. 1982 195 12 all stocks made their highs within Dec. 1982 202 13 the last month and two-thirds Jan. 1983 338 22 achieved their highs within the Feb. 1-23, 1983 654 43 past two months. It strongly sug- gests that upside presSUYe remains strong, carrying the bulk of issues along with it. The right-hand table tabulates the Total extent of the correction which each of -..co;rrect;iOI'-,- ,…I;;;ssuiBes,……… –t.fle-1-6aG-issues-has-undergone..f-rem-,fts 0 5 31-1 21—1– high to its subsequent low todate. 5 – 10 301 20 These corrections have, by and large, 10 – 15 252 16 been small. 311 issues have posted a 15 – 20 252 16 total correction of less than 5 from 20 – 25 168 11 their highs, and half of all issues have 25 or more 252 16 corrected less than 15. The average correction on all 1536 stocks is 14.8. Having identified the correction for each of the 1536 stocks under study, it is then possible to look at the subsequent recovery. The table at left, based on Wednesday's closing prices, shows the amount by which each issue is Down from High 2/23 Issues currently down from its bull- 1) 51; 535 35 market high. Roughly a third of 5 – 10 427 28 all issues are now within 5 of 10 – 15 264 17 their bull-market high, and two- 15 – 20 140 9 thirds are within 10 of that peak. 20 – 25 62 4 A relatively small proportion of the 25 or more 108 7 issues under study presently find themselves down by significant amounts from their peak bull-market levels. If there exists any suggestion of weakness at all, it is that issues which have moved down have tended to remain down. The table at right shows the amount of each correction retraced as of Wednesday. Retracement Issues As can be seen, the majority of 80 or more 184 f2 stocks have retraced less than 60 – 80 178 11 40 of the amount by which 40 – 60 331 22 they moved down. The reason, 20 – 40 382 25 in other words, that most stocks Less than O 461 30 find themselves so close to their recent highs is not the vigor of the post-high rallies but the fact that the corrections were small in the first place. This factor, if it persists, could suggest loss of upside momentum, but it is obviously highly volatile and will change radically with any continu- ing rally. AWT rs Dow-Jones Industrials (1200 p.m.) 1125.10 S & P Composite (12 00 p. m.) 150.30 Cumulative Index (2/24/83) 1678.83 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No slatemenl or el'prenron of opinion or any other motter herein contolned IS, or IS to be deemed to be, directly or mdneclly, on offer or Ihe soliCitation of on offer to buy or sell any eClJnty referred to or mentioned The moiler IS presented merely for the convenienCE of the subSCriber While we believe the sources of our Information to be relloble, we In no woy represent or guorantee the accurocy thereof nor of the statements mude herein Any actIOn to be token by the subSCriber should be based on his own Invesllgatlon and Information Jonney Montgomery Scott, tnc, as a corporation, and Its officers or employees, may now have, or may later toke, pOlllons or trades In respect to ony securllles mentioned In thiS or any future .ssue, and such pos.t,on moy be d.fferent from any v.ews now or hereafter expressed In th.s or ony other Issue Janney Montgomery 5eott, tnc , whICh .s reg.stered woth the SEC os on Investment odvisor, may g.ve odvlCe to Its .nvestment odvisory and othe! customers independently of any stotements mode In th.s or In any other ISsue Further information on ony secuflty mentioned herein ' ovollable on request

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