Tabell’s Market Letter – March 04, 1983

TABELL'S MARKET LETTER . I 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANOE, INC MEMBER AMERICAN STOCK eXCHANGE – March 4, 1983 The Dow-Jones Industrial Averages closed Thursday at 1138.06 postmg yet another new all- time high. This maturing, sIx-month old, bull market continues to move ahead o11….-a11 fronts–..1'Jith c. -. . 'nosighificantsigns-o! weaknes'sinighT-The 'maret ,as mElasuredby.the'DJIA-, has to–date' -,—- come a long way from its August 12, 1982 low of 776.92 in a relatively short penod of time. The DJIA has, in the penod of 141 trading days, posted a 47.09 increase. In fact, there has been only one other instance in the post-war experience when an advance of this magnitude has been achieved in the same short period of time without experiencing at least a 10 correction. ThIS period, as we should remember, was December, 1974-July, 1975. The similarities of these two periods are remarkable as well as instructive. As this letter has suggested in the past, the beginning of both periods started long-term cycle bull markets. A closer inspection of the two periods shows a number of sImilarities within these cycle bull markets which should be of interest. The tables below list the short-term percent swings of the two penods under discussion of greater than 8 up and 5 down in the DJIA. The columns are self-explanatory. —O-jel-T-E– 12 0 74 3 17 75 7 75 5 14 75 5 2. 75 7 15 75 Period. from 12J6/74 – 7/15/75 OJ A–V-ER-A-G-E577.60 786.53 742.88 858.73 815.00 BB1.Bl HUMIIER OF DAYS Z–C-H-A–N-GE THIS SWING ———- CUMULATIVE ———- 0.00 36.17 o0. 0 o. -5.55 14 .2 1!5.59 27 109 -5.09 10 11. 8.20 30 151 DATE B 12 82 11 3 82 12 16 82 1 10 B3 1 24 B3 3 J 83 Period. from 6/12/82 – 3/3183 OJ A-V-E-R-A-G-E776.92 1065.49 990.25 1092.35 1030.17 1138.06 HUI1BER OF DAY'S ,.X–C-H-A-N-G-E THIS SWING ———- CUI'IULATIVE ———- 0.00 0 0 37014 5. -7.06 30 B. 10.31 10 10. -5.69 10 11' 10.47 21 141 The following observations were noted from exam1n1ng these similarities. First, the percent- age increase of the entire December ,1974-July, 1975 advance was 52.67. This compares similarly with a percentage increase to date of 47.09 for the August, 1982-March, 1983 period. Second, the total number of trading days needed to complete the December, 1974-July, 1975 advance amounted to 151 days. This is indeed also in line with the current August, 1982-March, 1983 period of 141 trading days. Although slightly less in both magnitude and duration, the August, 1982-March, 1983 period cr.. still equal, or in fact, exceed the December, 1974-July, 1975 period in the next few weeks Third, also of interest is thp similar behavior of these two cycle bull markets at the beginning of each period. During the December, 1974-July, 1975 period the DJIA initially advanced 36.17 before a correction of 5 occurred. This was done m a period of 68 trading days. Remark- ably, the August, 1982-March, 1983 period showed an advance of 37.14 completed within 58 trading days. Fourth, in both cases the major part of the entire advance occurred durIng the early per1od. In other words, durmg the December, 1974-July, 1975 period, 68.67 of the entire advance occurred during the initial phase of the advance. The August, 1982-March, 1983 period recorded an initial advance of 79.9 of the entIre move to date. This we have found to be not un typical behavior for previous cycle bull markets … – – – – ……- What th1S exercise has tried to demonstrate is that the impressive performance of the DJIA to date should not be construed as unusual or unprecedented. It is interesting to note what hap- pened after the December. 1974-July, 1975 advance — an 11 decline was followed by a 30 advance. If we project a similar performance for our current market, n 1300 level on the DJIA 1S not impossible. We still are in a cycle bull market which is making newall-tIme highs. What still remains unresolved is currently identifyIng a new super-cycle bull market. The parts of the puzzle, however, appear to be fitting into place. RJS .rs ROBERT J. SIMPKINS. JR. DELAFIELD, HARVEY. TAB ELL Dow-Jones Industrials (12 00 p. m.) 1133.61 S & P CompOSIte (12.00 p.m.) 152.98 Cumulatlve Index (3/3183) 1726.76 No 'tatement or e;o;prenlon of opinion or ony other morler herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an offer to buy or lell ony security referred to or mentioned The matter IS preented merely for the convenience of the subSCriber While -He believe Ihe sovrce of our Informohon to be reliable, we In no woy represent or guarantee the accuracy Ihereof nor of Ihe stolements mude herein Any action to be laken by the subscriber should be bosed on hl own Inve5tlgotlon and Informotlon Janney Montgomery Scott, Inc, as a corporation, ond Its officers or employees, moy now have, or may loler tae, positions or trode In respect to any securities mentioned In thiS or any future Issue, ond such position moy be different from any views now or hereafter epressed In thiS or any other Issue Jonney Montgomery Scott, Inc, whICh IS registered wllh the SEC os on Investment adVisor, moy give adVice to liS Investment adVisory and othel customers Independently of any statements mode In thiS or In any other Issue Further Informotlon on any security mentioned herein IS available on request