Tabell’s Market Letter – March 25, 1983

.-,! TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08!140 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER AMERICAN STOCK eXCHANGE March 25. 1983 A,lluther newbuIJ-!llarket.higb h,!s–R,IJ,,1!chJey.ed,,!asti'1tF….l1!1'l'J9nsI.ndus!.r;iala!,d – Transportation Averages. (The S & P 500. at Thursday's close , remained fractionally under its March 7 peak.) This latest ascent took place. for thO! most part, without fanfare, being largely produced by rallies which suddenly emerged on Wednesday afternoon and in the last half-hour of Thursday's trading. Volume increased only moderately, to the 90-million-share level versus the 60- 80 million shares which had been recently typical. All this is as it should be. Under current bull-market conditions. the achievement of new peaks is. indeed, a routine event. It will be when long periods go by without the achievement of new highs that investors should begin worrying. The 50 upswing which the S & P has scored since August can be divided into three phases. The first was a just-under-40 move between August 12 and November 9. This was followed by two rises of roughly 10 magnitude. November 12-January 10 and January 24 to date, each one being preceded by a relatively mild correction. 7 in November and 4.6 in January. Such relatively mild shocks are generally the worst that can be expected during the earlymiddle stages of a major advance. It is normal to expect each successive advancing phase in the series of upswings composing a typical bull market to show less and less dynamism. This has been only partially true in the pres- ent case and, indeed, the present rise. from January to date, has displayed exceptional vigor. This can be demonstrated by the following table based on the action of 1351 individual issues. These issues are divided into deciles based on performance, from the best-acting 10 to the worst- acting 10. The averag'e performance of each of thes-e deciles is then,computed for each of the three rising phases. and this performance-is shown -relative-to the performance of the S -& P 500. For reasons of data availability. the first phase is computed only from September 9. rather than the August 12 low. i. CHANGE i. CH,NGE i. CHflNGE 9/9/82 DECILE llL2L82 RfLrHIVE 10SlIE 11/23/82 .. RELATIVE lOSU 1124/83 – RELATIVE 3L23L83 105&1- 1 58.58 15.!4 37.15 )4.20 10.16 28.38 2 36.45 16.36 21.03 9.61 26.53 15.90 3 29.94 10.82 l'j,J 4.4 19.94 9.87 4 25.43 5 21.19 6.97 3.35 11. 78 9.08 1.23 –1 .. 2 15.33 11.7 el.64 () 6 16.79 -0.40 6.35 -3.69 8.18 -0.5) 1 7 13.03 -3.60 3.80 -,6.00 4.17 –4.59 8 9.22 -6.86 1.06 –8 f 48 ( 51 -7.94 9 3.99 -11.32 -2.56 -11.76 -J 40 -13.3 10 -11. 38 -!4.42 -11.78 -20.10 -19.76 -26.50 S&P 500 17.26 10.42 9.j7 The first phase bf the rise. the figures clearly show. wss by far the most .dynamlC, with even the ninth decile posting a 4 advance, and with the best-acting 10 of all stocks rising, on average, 58 over a two-month period. This works out to a 1400 annualized rate. It is, literally. almost impossible to show a loss during such rare market phases ,which fact is the genesis of the old adage Never confuse brains with bull markets. Predictably. the second phase of the rise from Novem- ber to January was less dynamic;with the best-acting 10'-of aU'stocks risin-g(6nly)37-';'nd'the . worst acting 20 actually posting losses. On the third phase. contrary to expectation however, the performance of the average issue actually improved. The sverage percentage change for the first seven deciles was better than it had been previously, as was the action of those segments relative to the S 1\ P. The one predictable event to emerge was increased selectivity. The losses posted by the worst-scting issues increased sharply. More of this sort of thing should manifest itself as successive intermediate-term upswings are posted. . AWTrs Dow-Jones Industrials (12 00 p. m.) 1148.12 S & P Composite (1200 p.m.) 153.70 Cumulative Index (3/24/83) 1751. 23 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL No ,totemen! or expression of opinion or ony other mailer herein contained IS, or 1 to be deemed 10 be, directly or Indirectly, on offer or the oll(llotlon of on offer to buy or sell any security referred to or mentioned The malter IS presenled merely for the convenience of the subSCriber While Ne believe the sources of our Information 10 be reliable, we ,n no way represent or guarantee the occurocy thereof nor of the statements mude herem Any oct Ion to be taken by the subSCriber should be based on hiS own Invelilgollan and Information Janney Montgomery Scali, Inc, as a corporation, and ItI officers or employees, moy now have, or may later take, positions or trades In relpcl to any seCUrities menhoned m Ih,s or any fulure Issue, and such pesltlon may be different from ony views now or hereafter clpressed In thiS or any olher Issue Jonney Montgomery Scoll, Inc, which IS registered Ih thc SEC as on mvestmenl adVisor, moy give adVice to Its ,nvestment adVisory and othel customers Independently of ony stotements mode H\ Ihls or m any other Issue Further Information on any security mentioned herem IS avollable on request