Viewing Month: May 1983

Tabell’s Market Letter – May 06, 1983

Tabell’s Market Letter – May 06, 1983

Tabell's Market Letter - May 06, 1983
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I I TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY OB540 DIVISION OF MEMBER NEW VORK STOCk eXCHANGE. INC MEMBER AMERICAN STOCK EXCHANGe …. May 6, 1983 ———–,..i-.-i-r.——–'-,–c—'—07-;————I It would 'be pardonable if Monday's market action caused for the-investor, a slight -sense of deja vu. Purportedly in response to a less-than-sanguine market opinion expressed by an analyst for a well-known brokerage house, the Dow interupted its march to new highs by declining 21. 87 points or 1. 78. This recalled, to our mind at least, January 7, 1981, on which date it will be remembered, a pessimistic forecast by a somewhat more free-spirited analyst led to a 23.80 point, 2.37 decline m the Dow. Th,S week's reaction was consiLlerably less explosive. January, 1981 produced not only a larger decline, but an all-time New York Stock Exchange volume record, which lasted for a year and a half. In the present instance, all we got was the ninth largest decline since the bull market began last August (Tlie record, on October 25, 1982 was 3.5) on a volullle level that was noticably reduced from that' whi;h .had been OJrevailing for the previous fortnight. All this may have been due to the fact that the forecast in question was couched in considerably less apocalyptlC terms than was its predecessor. Indeed, it expressed confidence in the long.' term health of the market, but, according to the Wall Street Journal, expressed the opinion that stock prices might be headed for some months of interim weakness. We have a certain tendency to be wary of opinion's of this sort. As forecasters ourselves, we fmd it useful to engage in a bit of self-examination and to try to identify what we are really saying when we issue a forecast. Suggesting a significant interim correction while still looking for considerably higher levels is, it seems to us, in reality, saying something like the following I, of course, am clever and perspicacious enough to recognize the fact that the market is reasonably –1—-0,al.ued-a1Td-headed-highehere'-CXists-OUt-1heI e, -howe, e., a-hcrd-of-idio-t-sTwho-are-going-to-do—t-1 me the favor of selling stocks down to lower prices so that I, in my wisdom, may take advantage of those lower prices and buy them. There are, unfortunately,two likely possibilities in such a scenario. The first is that the ignoramuses who are going to drive the market down are not really waiting out there in the wings. The other possibility is for the ignoramuses to turn out to be smarter than the forecaster. At the moment, the opinion that a correction is imminent appears to be a fairly widely-held one. Based on the figures compiled by Investors Intelligence, Inc. as of April 12, three weeks ago, almost 50 of forecasters leaned in that direction. This was, interestingly, the highest percentage of forecasters expressing such a view since June, 1976. Historically, when the consensus opinion is basically bullish but favoring a near-term correction, one of two results tends to occur along the lines suggested above. Either the anticipated correction totally fails to materialize, or it does, indeed, emerge and then matures, along the way, into a full-scale bear market. We think this principle has a good chance of holding in the present case. It remains, of course, to choose between the two alternatives, and regular readers of this letter will be aware of our firm belief in the former, more optimistic one. We find ourselves reminding our readers ad nauseaum that this particular bull market is only eight months old, and instances of bull markets with such a short lifetime are comparative rarities. There indeed exists only one such to our knowledge, the Baby Bull Market of 1938. That particular upswing produced a 60 advance without substantial correction, over a seven-month period ending in November. 1938. The aftermath was a slow, steady erosion of prices .which lasted for the next 3! years and ultimately, in April, 1942, retraced the entie rise and brought the market back to a new low. Now we think that comparisons between today and 1938 produce precious little similarity. For one thing, the recent rise has taken the Dow to newall-time peaks, while the 1938 market was only a partial recovery. Furthermore, the 1938-1942 period was essentially the product of an aborted economic recovery, and our own faith in the viability of the current expansion remains essentially unshaken. Thus our own skepticism regarding a significant correction followed by new highs. Such a view it seems to us is dangerously close to allowing the trees to obscure one's view of the forest. ANTHONY W. TAB ELL AWTrs DELAFIELD, HARVEY, TABELL Dow-Jones Industrials (12 00 p.m. )1226. 30 S & P Composite (1200 p.m.) 165.30 Cumulative Index (5/5/83) 1888.81 No statement or expreSSion of opmlon or any olher maUer herein conlOlned IS, or IS 10 be deemed to be, directly or indirectly. on offer or thc soliCitation of on offer to bvy or sell any security referred to or menlloned The molter IS presented merelv for the convenlenc of the 5ubscflber While He believe the sources of our information to be relloble, we In no way represent or guarantee Ihe accuracy thereof nor of the stotements mude herem Anv action to be laken bV the subSCriber should be based on hiS own Investigation and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now hove, or may loler toke, POSitions or trades m rupect to any seCUrities mentioned 10 thiS or ooy future nsue, and such POSition may be different from any vle ….s now or hereafter expressed In thiS or any other Issue Janney Montgomery ScaU, tnc , which IS registered With the SEC as on Investment adVisor, mav give adVice to Its Investment adVisory and othel customers IndependentlV of any stolements made In thiS or In any other Issue Further mformollOn on any seC1.Jr,lv mentioned herein IS available on request

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Tabell’s Market Letter – May 13, 1983

Tabell’s Market Letter – May 13, 1983

Tabell's Market Letter - May 13, 1983
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YOAK STOCK EXCHANGE, INC MEMBER AMERICAN STOCIC EXCHANGE ….. May 13, 1983 Our readers are, by this time, certainly aware of the importance we attach to the fact ,that in the process of attaining new, all-time highs in recent months, the Dow-Jones Industrial Average has decisively broken out of a trading range that goes back 17 years to 1966. We can think of no bet- ..te'lITf'iratizihllig-imj5Ortancetnah-t63tIeainthech1i.rtOeloW-'r.iiSs-thepage. It- is''a20'''-'''—!f-.-. pomt-umt, pomt-and-flgure chart of the Dow-Jones Industrial Average covering the period 1966 to date. . It demonstrates graphically that the 17 years of trading prior to early this year constituted, essentlally,a lateral trading area which has been significantly penetrated with the recent move to above 1200. For those unacquainted with the mechanics of point-and-figure charts, their uniqueness lies 1–11-..111 ..theJactey…arEl-Ilime..\las..,..JJlehart above is constructed by plotting each 20-point f1uc tuation in the DHIA, regardless of the time intervals between each-such fluctuation. The lateral width of the chart is determined solely by the necessity to move sideways one unit on the graph each time a 20-point reversal of the previous trend takes place. The analytical usefulness of point-and-figure charts (We maintain them for every NYSE and ASE stock and a large number of OTC issues.) stems from the fact that there tends to be a relationship between the lateral extent of a given trading range and a subsequent upside or downside move. In other words, if a given trading range consumes a certain number of units horizontally and is then penetrated on the upside, the subsequent upward thrust will often tend to be around the same number of units. The practical difficulty in interpretation consists of deciding where, within a given range, to apply this counttl for short, intermediate, and long-term moves. If one were painstakingly to count the entire range on the chart above he would find that, through mid-1982, it extends horizontally for 168 units. Since each unit on this particular chart is 20 points, the indication is a 3360-point move from, roughly, the 800 level, yielding an upside objective of 4160. Astronomical as this figure may sound, we have no trouble conceptually. When we start talking about numbers of this magnitude, we are, quite simply, expressing faith in the continued growth of the American economy over the very long term. We continue to hold this faith and, consequently, are ready to accept the validity of the objective, given a long-enough timeframe. The figure IS of little practical use, however, since it is obviously not going to be attained on this cycle. for nearer-term objectives, one must turn to narrower portions of the trading range. The first such portion existed between 1981-1982 at 780-880. It is 10 units wide and, measured across 840, yields an upside objective of 1040. The market paused at that point in November-December of last year, but has now comfortably exeeded it. It therefore becomes necessary to go back to the trading range of 1976-1980 between 740 and 900. The upside objective of that range is 1340.Tak- mg- the range between 1973 and 1976, one which, technically inclined readers will be aware. demonstrates the familiar head and shoulders pattern, yields a target of 1700. Our original thinking last Fall was that the former objective would prove a valid one for the current cycle, with the latter to be reached on a subsequent cycle starting perhaps in the latter part of the 1980's. This may yet prove to be the case, but the prOblem is that, just eight months into the bull market, we are already fairly close to the initial target. It becomes possible, then. that the 1700 figure will prove a valid upside objective for the current upswing, to be reached, cycle theory would suggest, sometime in 1984-5. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL Dow-Jones Industrials (12'00 p.m.) 1217.69 S & P Composite (1200 p.m.) 164.77 Cu'mulative Index (5/12/83) 1898.66 No statement or expressIon of opInIon or cny olher motter herem contolned IS, or IS 10 be deemed 10 be, directly or indIrectly, on oHer or the sollclloloon of on cffer 10 buy or sell cny security referred 10 or me'llloned The molter IS presenled merely for the convenIence of the subscrIber While Ne believe the .Clurees of our ..,formatIon 10 be rellcble, we In no way represent or guarantee the accurocy thereof nor of the Iotement mud!! herein Any odlon to be token by Ihe subscflber should be hosed on his own Investlgotlon cnd mformollon Jenney Montgomery Scott, Inc, as a COfporotlon, cnd olllcers or employees, may now hove, or may Joler loke, POSitions or trodes In reSpect loony secUrities mentioned In thiS or ony future Issue, ond such POSltIO'1 may be different from ony VleoNS now or hereafter el'pressed III thiS or ony other Inue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment ad150r, moy give adVice to Its II'lvestment odVlsory and othel customers Independently of any statements mode In thl or 11'1 any other IS5ve fVflher Information on any securrty mentioned herem IS avoiloble on request,

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Tabell’s Market Letter – May 20, 1983

Tabell’s Market Letter – May 20, 1983

Tabell's Market Letter - May 20, 1983
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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MMBEfl NEW VOl'll( STOCK EXCHANGE, tNC MEMBEfl AMERtCAN STOCK EXCHANGE May 20, 1983 When the history of Wall Street for the past decade or so is finally written it may come to be known for the proliferation of new financial instruments. Taking only equity-related devices, we have witnessed, first. the birth of options followed by interest-rate futures, stock index futures, and fmally options on futurs.—————————- –I InsofAr a's the technican IS concerned. these instruments represent newly available numbers, and it is his job to analyze any and all numbers relating to the stock market. In this connection, we were ask- ed to give a talk last week before the annual seminar of the Market Technicans Association on the rela- tionship of stock-index-futures prices indices to the indices themselves. We will try here to summarize ., some of the conclusions reached. It is easy to theorize where a stock-index-futures contract should sell, given the current Interest- rate structure. Basically, it should sell for a premium over the actual index, depending on expiration date and gradually eroding to zero as expiration approaches. Historical analysis of the data, however, suggests that it does not, in fact, do so. By contrast, index-future prices seem to behave as a senti- ment indicator and, apparently, as an indIcator of uninformed sentiment. They tend, in other words, to sell at excessive premiums at short-term market highs and at low premiums or, often, at discounts at market lows. .-wc———— -.——–,H- 90 OAT PREMIUM INDEX 14 OAT AVERAGE) The above graph shows the S & P 500 over the past year, together with an invention of ours called the 90-day premium index, which is simply an average of the percentage premium or discount on the two nearest futures contracts for- that index, rweighted according to their -time to expiration. The periodsof discount and of excessive premium are shaded. It is interesting to compare the extreme values on this mdex with the short-term peaks and troughs of the S & P 500 itself. Note, for example, the period, August-October, 1982. A few days prior to the August low, index-future premiums moved to discounts and continued to remain at generally low values all the way through the steepest part 01 the rlse. l're- miums did not become excessive until mid-November, coincident with the first short-term top of any signi- ficance in the current bull market. Both the tops and the bottoms of the trading-range swings between November and January tended to be signaled by extreme values for premiums, and the final extreme high value was reached in late Febru- ary, just before the market flattened out prior to its recent rise. Interestingly, just prior to that rise, futures again began selling at a discount. signaling the most recent upward leg. Their current value is now neutral. Whether this relationship will remain, as investors become more used to interest futures, is a point which will remain moot. However, for the time being, at least, the technician would appear to have gained a new short-term indIcator of some value. ANTHONY W. TABELL AWTrs DELAFIELD, HARVEY, TABELL Do' IOneS Industrials (12. 00 pm) 1187.40 S Soplaslten(b!laf. 06nEm py alher matter 16-&Q S5-.tcllned IS, or IS 10 be deemed to be, directly or Indirectly, an offer or the sollCllollon of an offer e ta OVY PJ-slf''y .1ecurifY, jt!(j'!,r1 q.r menlloned The rqqA,,'AICls ..pJfsented merely for the convenience of Ihe subscriber While we believe Ihe sources of our mtormaUmli16IDW61IdIJK;lQiK If\ '&i ….lJl .senl or guoronlee.L1fl'oYl!ec6'r6cy thereof nor of the statemenls mude herem Any action to be taken by the subKt.ber should be based on hiS own Inveshgollon and information Jonney Mohtgomery Scolf, Inc, as a corporation, and Its officers or employees, may now hove, or may loler lake, poslhons or trades In respect 10 any securities mentioned m thIS or any future Issue, and such pos,tlon may be different from any views now at hereafter expressed In this or any other Issue Janney Montgomery Scolt, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice 10 lis Investment adVISory and othel customers Independently of any statements mode In thiS or In any other .ssue Further information on ony security menlloned herein 1 ovollable on request

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Tabell’s Market Letter – May 27, 1983

Tabell’s Market Letter – May 27, 1983

Tabell's Market Letter - May 27, 1983
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,————- TABELL'S MARKET LETTER 909 STATE ROA.D, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMseR NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGE – May 27. 1983 It is impossible to publish a market letter for 37 years without developing a few presentations whichseemtQ. recwi!h acertdegre'hofregularity.The..aPQeJlranceofthe tble.belowtends to coincide' with the rhododendron season. since it is generally issued as a prelude to a discussion of the summer-rally phenomenon. The table shows the number of times the Dow advanced and declined for each of the 57 one-month and two-month periods since 1926 and also the average percentage advance for each period. As can be seen. the market advanced in 36 of 57 years in both July and August. or in considerably more than 60 of the instances in question. By contrast. for all months. the market has advanced only 56 of the time. The average percentage advance for the 684 months since 1926 has been 0.45. whereas July has averaged a 1. 84 advance and August a 1. 44 advance. The two-month period ended August shows a similar upside bias. It is our custom to point out that this tendency toward a summer rise is not the most statistically significant item in the table. December is more likely to show an advance than either July or August. and the tendency toward a decline in September is likewise greater than the summer-rally probability. However. the predisposition of the market to advance in July-August and decline in September. is. as always. of interest. OoeMoo1berods !12261282) IwoMoo1berods !122612821 EDdMoo1b Adllaoces IJeclioes AeraSeCbS dacces Declioes Aerage&CbS Januar! 36 21 1. 00 Februar! 29 28 -0.19 March 31 26 -0.06 Aprll 32 25 1.12 M-a9 28 29 -0783 June 28 29 0.86 Jul! 36 21 1.84 August 36 21 1.44 September 22 35 -1.36 October 30 27 -0.37 November 35 22 0.70 December 42 15 1.21 —– TOTAL 385 299 0.45 37 20 32 25 27 30 35 22 -32 25 – 26 31 35 22 39 18 33 24 26 31 34 23 40 17 396 288 !.28 0.81 -0.34 1.14 0. 50 -0.02 2.65 3.42 0.05 -1.690.37 –1-.9-40.93 As noted at the outset. we have been -publishing the figures above for some time. It is one thing to publish figures and another to interpret them. At this time last year. the Dow found itself probing for a bottom in the low 800's. We. therefore. suggested that. due to the tendency toward a summer rally. the market's low was likely to occur either in June. prior to the rally. or sometime in the fall. after the rally took place. This was based on the theory that there was no case on record of a major cycle low's having occurred in July or August. Suffice it to say there is now. Despite our previous wildly unsuccessful attempt at interpretation we are perfectly willing to assay another one. The market is. of course. in a totally different position than that of a year ago. having posted a 60 rise since last year's first-on-record -August low. Under these condition the emergence of the usual rallying tendency this summer would.appearto be,. it anything, more likely than usual. The pronounced summer-rally tendency. it seems to us. mitigates against the immediate emergence of the sort of deep correction which some analysts ,still seem to expect. If such a correction does in fact emerge. existing seasonal patterns. as noted at the beginning of this letter. would seem to argue that it might occur sometime in the early fall. It will be interesting to see if summer. 1983 conforms to the usual case or. like 1982. presents an entirely new configuration. AWTrs ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL Dow-Jones Industrials (1200 p.m.) 1221. 36 S & P Composite (12 00 p. m. ) 165.36 Cumulative Index (5/26/83) 1949.07 No ltalement or e)(prelon 01 opinion or any other matter herein ontomed IS, or 1 to be deemed to be, dlfeClly or ,nd,rectly. on offer or the sollcllotron of on offer 10 bvy or ell any sec\.lrlty referred to Or menlloned The matter IS preented merely for the convenience of The subcrober While oNe believe the sources of our 'nformolion 10 be reliable, we ,n no woy represent or guarantee the accuracy thereof nor of the statements mude herein Any octlon to be token by The subSCriber should be boed on hiS own InvesilgaTlon ond information Janney Montgomery Scott, Inc, os a corporation, and Its officers or employees, may now have, or moy laTer toke, positions or trades In respect to any securities mentioned In thiS or ony fuTure Issue, and such position may be different from any views now or hereafter el'pressed In' thl or ony other Issue Janney Montgomery Scott, Inc, which IS regisTered With the sEC as on Investment adVisor, may give odvlce to ItS ,vestment odvlOry and othel customers mdependently of any statements mode in thiS or In any other Issue Further mformatlon on any secunty mentioned herem IS aVailable on request

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