Viewing Month: August 1983

Tabell’s Market Letter – August 05, 1983

Tabell’s Market Letter – August 05, 1983

Tabell's Market Letter - August 05, 1983
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, – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – — TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08!540 DIVISION OF MEMBER NEW YORK STOCK eXCHANGE, INC MEMBER AMEAICAN STOCK EXCHANGE August 5, 1983 Judging by recent stock market comment in the financial press, an amazing -..,—.phenomenon- has' justcometothe-attentionof –he'-investment-communitY-'llt-la!'-g.e-.-1'hatf phenomenon is the fact that the Dow-Jones Industrial Average has held, ever since late last April, in a trading range bounded by, roughly, 1180 and 1250. This manifestation can hardly come as fresh news to readers of this letter. We have, in this space, been tracing the development of this trading range, as the pattern built up, ever since mid-June. We do not lay claim, thereby, to any special acuity. It is, simply, that we are old-fashioned technicians, and it is the function of such people to keep charts, watch those charts and try to draw meaningful conclusions from patterns as they unfold. What we have here is a probable (Even after Thursday's action, the word is appropriate) top formation. It may be helpful to trace the formation of this particular cloud on the investment horizon. The Dow moved above 1180 for the first time in its history on April 18th. On May 6th, at 1232.59, it posted what was to be the first of a series of approximately equal tops. By May 20th, it had declined to 1190.02, thus defining the lower limit of the trading range. This level was infinitesimally penetrated on June 8th at 1185.50, and, just over a week later, a modest new high, the actual high to date, was scored at 1248. 30. There was, however, no follow-through to this move, and the market promptly retreated again into the by-now-well-defined trading range. By July 18th, it was back at 1189.90. The subsequent rally was so obvious a test of the low that it should perhaps have aroused suspicion. It did not, honestly, arouse ours, and we were somewhat lyrical about it – -in-thiB.-.space-illl–.lul;y-22nd–Itcontinuednlythrough.J.uly 2Bthwjth..lLcJose at 1243. 69 ,!- it is now obvious that this was as much a test of the top of the trading range as mid-July was of the low. The Average declined sharply in five consecutive sessions and, on August 2nd, found itself again at 1188.00, back around the 1180 level for the fourth time. We referred to ourselves above as old-fashioned technicians, which means that there was a time, in our youth, when absolutely nobody, with the exception of a few freaks, would have been aware of any of the foregoing or, if they were, would have believed it had any significance. Times have changed. There is a growing public awareness of the general principles of technical analysis, and among those principles is the one that says that a lateral trading range, followed by a downside breakout from that range, presages lower prices. Thus, the recent widespread comment on the trading range, even to the point of crowding out of the news columns the familiar circular references to interest rates. This growing awareness, however, has brought its own problems. Since the whole world has become aware of the existence of such phenomena as distributional tops, false breakouts have proliferated. Thus, Thursday's penetration of 1180 and the negative implications of that penetration have been widely heralded. Shortly, market weakness may even reach the 11 p. m. network news—a good latter-day indication of a mature trend. The downside breakout, therefore, is difficult to analyze. Another general prinCiple is, perhaps, useful in this connection. It is that a widely expected move will either fail to materialize or will extend farther than most people expect. On the face of it, the trading range has downside implications of, at least, -intermediate scaleimportance , with objectives in the range of 1100-1050. If the breakout turns out to be real, rather than the sort of publically-induced phenomenon discussed above, a broad decline to these levels, perhaps one sufficient to produce a full-scale selling climax, appears to be a real possibility. AWTjt Dow Jones Industrials (12 00 p. m. ) 1181. 29 S & P Composite (1200 p.m.) 161. 67 Cumulative Index (8/3/83) 1944.40 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL No stotement or exprcnlOn of opinion or any other motter herem contained IS, or I 10 be deemed 10 be, dIrectly or Indirectly, on offer or Ihe 50!1I;llollon of on offer 10 bvy or sell any security referred to or mentIoned The moiler ,s presenled merely for the converlence of the subscriber Whl!e we believe Ihe sou'ces of our information to be reliable, we ,n no way represent or guarantee the accuracy thereof nor of the statements mude nereln Any action to be token by the subscriber should be based on hiS own ,veSl'9otlon and information Janney Monlgomery Scott, Inc, as a corporal lon, and liS offICers or employees, may now have, Of may laler toke, positions or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thl or any other Issue Janney Montgomery Scott, Inc, which IS registered With thc SEC as on Investment adVisor, may give adVice to liS Investment odvlsory ond othel customers Independently of any statements mode In Iha or In any other Issue Further IIlfarmatlon on any security mentioned herein IS available on mquest

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Tabell’s Market Letter – August 12, 1983

Tabell’s Market Letter – August 12, 1983

Tabell's Market Letter - August 12, 1983
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———————————————————————— —;.. TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANoe, INC. MEMBER AMERICAN STOCK EXCHANGE August 12, 1983 Happy Birthday Bull Market, Happy Birthday to you. – We could not resist the above. It is precisely one year ago-today that the Dow-Jones Industrial Average closed at what now seems like an incredible level of 776.92. Today it is 51 higher than that level, and, at its peak two months ago, it was 60 higher. It has, withall, been one of the stock market's better years. It is too bad that, on its birthday, the bull market finds itself suffering from a mild indisposition. We have been commenting on the amazing market story, as it unfolded, in the last 52 issues of this letter. Very early on. a number of things became obvious. It became apparent. for example. almost at the outset. that the stock market of 1982 and 1983 was not playing by the rules of the 1970's. As the market rise paused. first in November and then in January. many analysts found themselves becom- ing nervous and proclaiming that the market was in need of a correction. No such correction. of course, ever materialized. What we have been doing in this space for a year. essentially. is pointing out the differences between this particular bull market and bull markets of the recent past. The first major contrast became Obvious early this year. For 17 long years cycle upswings had tended to peak around the lOOO-plus level on the Dow. Beginning in February. the average began scoring newall-time highs. and it became evident. not only that we were in a conventional cycle bull market. but in a new super-cycle environment. Once this was Obvious. further analysis was much like feeling one's way in the dark. The rules had clearly changed. but it was not immediately apparent precisely what the new rules were. As an aid in solving this dilemma. we began looking further back in to history — at the bull markets of the 1950's and early 1960's. One characteristic of these markets was that each moved, at its high. into significant new high territory. just as the present one has done. Another characteristic was that they tended to proceed to their conclusion with little in the way of interim correction. We I–,,-f-.fl.ave-been–speculatin.g for some time t b eL.a….similar-Pattern mi gbt emerge-in…the-curr.e.nLmar.k.et……..especially When it failed to show significant signs of technical deterioration at the November and January consolidations. Based on recent action. however. it seems that such might not be the case. A characteristic of recent cycle upswings has been their interruption by relatively deep intermediate-scale corrections. The last previous bull market. which ran from February 28, 1978 to April 27, 1981. is a caSe in point. It was interrupted by no fewer than three sharp and rather nasty declines. c!he Halloween Massacre in the fall of 1978. a 13.5 decline. a similar interruption of 11. 25 in November. 1979. and the Silver-Thursday debacle of March-April. 1980 which produced a 16 drop. Interestingly enough, two of these interruptions, 1978 and 1980, came to an end in full-scale selling climaxes. Even more interesting. the actual bear-market low in February. 1978 went largely unanticipated and unrecognized. simply because it never produced such a climax. It is perhaps not coincidental that the low whose birthday we are today celebrating also failed to produce such a climax — record upside action. yes, but upside action not preceeded by a downside washout. It seems to us this is all worth keeping in mind in the present environment where. as we noted last week. we have just broken out of a rather substantial intermediate-term top with, as we then noted. downside objectives in the 1100-1050 range. Were the latter objective to be reached it would be a correction of just under 16. and it could wind up looking suspiciously similar to the three interruptions in the last bull market mentioned above. It could even wind up with a conventional seIling climax. The last two major bottoms have demonstrated that the institutional investors who dominate today's market, unlike the individual investors of the past. are disinclined to engage in panic selling after a long decline. 1978 and 1980 would suggest that they are more likely to indulge in such behavior when they are in the position of having comfortably established profits which they wish to protect. Certainly they are in that position today. We would not be surprised; thet'eforeto see the current weakness extend itself over the relatively short term and would be equally unsurprised bY-'icceler..tin-g-aownside–action and a typical selling-climax termination, probably producing all-time record volume. It would be most plausible for this to emerge in the 1100-1050 range. although it might emerge at a slightly higher level. Such a climax would undoubtedly be accompanied by the usual predictions of the end of the world, focusing on the current ostensible concern — interest rates. It would. of course. provide the best buying opportunity since last August. AWT rs ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (8/11/83) 1180.89 161. 96 1939.73 No stotement or exprenlon of opHllon or any olher moiler herein contained IS, or IS 10 be deemed to be, directly or Indirectly, on offer or the soilt.totlon of on offer to buy Of sell any security referred to or mentioned The matter 1 preented merely for the convenience of the substflber While we believe the sources of our Information 10 be rehoble, we m no way represent or guaronlee the occuray thereof nor of the lolemen!s mude herem Any actiO to' be token bV the s'Jbscriber should be based on his own mvestlge!lon and Information Janney Montgomery Scott, Inc, as a corporation, and Its officers or employees, may now have, or may lotcr toke, positions or trades In respect to any secufltles mentioned In thiS or ony fulure Issue, and such position mey be different from any views now or hereafter expressed m thiS or ony olher luue Janney Montgomery Scott, Inc, whICh IS registered With the SEC as on mvestment adVIsor, may gIVe adVice to Its mveslment adVISory and other ar.;tomers mdependently of any stotements mode In thiS or tn any other Issue Further Information on any secuflty menlloned herein IS aVailable on request —————————- — .- –

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Tabell’s Market Letter – August 19, 1983

Tabell’s Market Letter – August 19, 1983

Tabell's Market Letter - August 19, 1983
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TABELL'S MARKET LETTER 909 STATE ROAb, PRINCETON, NEW JERSEY OB540 DIVISION OF MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER AMERICAN STOCK EXCHANGe August 19, 1983 .,.,. – – – Rear.2..f-hisdet.t-may.-haY,eetted,a,Jljghl!,Jpg.e in. our market attitude over the past two weeks, and it is perhaps well, at this stage,to try to clarify thatraftit-uae – orclarily.,t. as much as possible in a market environment which, when examined closely, tends to defy simple explanation. Two weeks ago we commented on the fact that the Dow-Jones Industrial Average had broken below the 1180 level, although,on Thursday, August 4 and Friday, August 5, it managed to remam above that level on a closing basis. The decisive break came the following Monday when the average closed at 1163.06 which. interestingly, happens to be the closing low to date. We commented further on the occurrence last week, voicing the thought that, if a true downside breakout had occurred, significantly lower prices were a possibility and that the decline leading to those lower prIces might well produce a selling climax of notable proportions. The theory behind this suggestion was based on the fact that intermediate-term declines ending in selling climaxes were features of the early stages of the last bull market, 1978-1981. and that no real selling climax had occurred at the August 12 bottom a year ago. This particular scenario, we hasten to admit, is definitely speculative, and it remains to be seen whether or not it will hold good. The reason we were and are concerned with the breakdown from 1180 is that we are, as we have noted in the past, old-fashioned technicians. We were learning to analyze stock-market behavior back in the days when computers were machines that remained in the back office, serious quantitative analysis of stock-price data was unheard of, and a random walk was something found in an English garden. Back in those simIle days we dutifully traced the movement of stock prices on hand-drawn charts and paid serious attention to the formation Ir those charts of long lateral trading ranges. We were instructed by the sages that, when a stock or average broke out of such a lateral trading range on the downside, the range then became known as a distrIbutional top and was strongly indicative of a further downward move. The technical community likes to think it has become more sophisticated of late, and there is little question that! it has. One writer pointed out that, following the widely-heralded break of 1180, the sky has not fallen. This is indeed true, but it has not risen a heck of a whole lot either. Since the Dow -reacrreu,tsl!10'S1n-g4ow-on….A.ugust8;-fiv..f..;.the.fle.t…seven….tJ.adingsessionsw.ereJisJIlg ones. B,.yc;-;-;- Wednesday, the Dow had once more risen above 1200 to close at 1206.50. Breadth and volume statistics, however, were not tremendoUSly eltCiting. Volume remained mostly in the 70-80 million share range, the low end of the recent spectrum, and the most dynamic up day, Monday, August 15, produced only 1107 advancing stocks. A greater number of issues declined on no fewer than seven occasions when the market was receding in late July and early August. In the simple days referred to above, this used to be known as a pullback into overhead supply. It may well have ended with Thursday's 14-point decline. Having said all of the above we do not wish to give the impression that we have turned, suddenly, into rampant bears. The lUXUry of being able to be either super-bearish or super-bullish on the market as a whole is one that, unfortunately, has come to be denied us as markets have become more and more complex. A tremendous diversity among individual stock patterns has been a growing phenomenon, and such diversity, on a short-term basis at least, seems to us to be as great at this moment as it has ever been. After the market rise leveled last May, a great many issues began to break out of individual distributional tops of fairly significant proportions. That process continued right through last week. However, recent inspection of 2000 individual chart patterns shows that the downside objectives of many of these tops have been reached. In a fairly significant minority of those cases signifcant short-term bases have been formed. A still smaller subset of this select group has posted upside breakouts from those bases, and an even smaller elite has managed to move out of those bases to new highs. Meanwhile, while all this was going on, a goodly number of issues formed nothing resembling a top at all and continued in minor uptrends. Almost all of the above formations, it must again be emphasized, took place within the context of established major uptrends which are still intact. The phrase, rotating correction, is a much abused one, but it is indeed descriptive of what has recently been going on. While the Dow was, on August 8th, off only 6.8 from its-peak, an analysis of some 1600 representative issues shows that, as of Wednesday, they were, on average) sellrng for some 15 below their six-month highs.' In other words, a good deal of correction was taking place .while the averages were, until recently, moving sideways. The above should make it clear that we retain a positive position regarding the cycle bull market for reasons abundantly documented in this space over the past six months. We are not totally sure, however, that individual patterns, diverse as they are, do not leave room for more weakness in the widely followed averages on a short-term basis. We therefore, continue to hold to the old-fashioned belief that the break below 1180 does possess significance for the intermediate term, and we expect to retain this belief until solld market evidence forces us to abandon it. AWT rs Dow-Jones Industrials (1200 p.m.) 1195.12 S & P Composite (1200 p.m.) 163.64 Cumulative Index (8/18/83) 1967.54 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL

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Tabell’s Market Letter – August 26, 1983

Tabell’s Market Letter – August 26, 1983

Tabell's Market Letter - August 26, 1983
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TABELL'S MARKET LETTER 909 STATE ROAC, PRINCETON. NEW JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANOE, INC MEMBER AMERICAN STOCK EXCHANGE August 26, 1983 We discussed at some length last week the fact that we considered the break below the 1180 level on the Dow, which took place in trading of August 4-8, to be sigtlificant from a technical ,- – pomt' of VlewWe also noteutnat'we 'contmuetl tofeerlhis-way despite' thefact thaI ,immeQlr'a't-ely-'–I after breakmg down and reaching an hourly low of 1158.85 at 2 p. m. on August 9, the market rallied fairly sharply and the low then achieved has held for 2! weeks to date. In that intervening 2! weeks there has. It seems to us. been less and less scare talk about interest rates and more and more confidence expressed about the resumption of the bull market later on this year. Implicit in this new view, it seems to UE', is that in the intervening period prices are unlikely to move much lower. By contrast, we see nothing in what has taken place during August, 1983 to make us wildly sanguine about the short-term outlook. We categorized this action last week as a typical rally into overhead supply, and we see no reason to alter this view. This can perhaps be clarified by the chart below, a shorter-term device than those generally used in this letter, which traces hourly chanees in the Dow-Jones Industrials during August, together with hourly volume figures. DOw ONE.S VI / /v ; d The chart clearly shows the breakdown which took place in the early part of the montn ana the subsequent rally from mid-day August 9 to a 2 p.m. high of 1202!iS-on AUgUst-rs-ri is action since then that has been particularly desultory. There have been three separate downthrusts, the last one of WhICh culminated in the lowest bottom of the three yesterday. It is the volume trend on those three downthrusts that is of interest. On each one, volume decreased as prices moved lower, generally tending to reach its lowest point, somewhere about 5-7 million shares of hourly volume, at the low point. Contrary to generally accepted theory, this is not bullish action. It suggests, rather, that lower prices were unable to generate demand and that selling temporarily ran out of steam. It is in contradIction to the action of August 5-9, when lower levels generated increasing volume which carried over at least into the early part of the subsequent upside move. This lack of demand suggests to us that the August 9 low is likely to be'tested and pmetrated, thus confimmg the SIgnificance of the break from 1180. As noted over the past two weeks, this break suggests downside objectives in the 1100-1050 range. At around that level, the sort of demand necessary to produce a meaningful turn might be generated. AWTrs Dow-Jones Industrials (1200 p.m.) S & P ComposIte (1200 p.m.) c 11muJ stive J pdex (8 (25 (83) ANTHONY W. TABELL 1185.67 DELAFIELD, HARVEY, TABELL 160.49 1 94L. .27L No slatemenl or expressIon of op'nion or any ather maNer hereIn contolned IS, or,s '0 be deemed 10 be, directly or IndIrectly, on offer or Ihe solICItatIon of on offer to buy or sell any security referred 10 or menlloned The molter IS presented merely for the convenIenCE of the subscnber While we belIeve the sources of ovr Informa Iton 10 be reliable, we In no way represenl or guarantee the accuracy thereof nor of the statements mude herein Any OClian 10 be token by Ihe subscflber should be based on h,s own InvestigatIon and Informallon Janney Montgomery Scali, Inc, as a corporatIon, and Its offIcers or employees, may now have, or may taler toke, poSItions or trodes In respect to any securilles menhoned In thIS or any future Issue, and such pos,hon may be d,fferent from any v,ews now or hereafter expressed In ThIS or any olher Issue Jonney Montgomery 5011, tnc , which 15 registered WIth the SEC as on ,nvestment adVIsor, may gIve adVice to ,Is ,vestment adVISOry and othel customers Independently of any statements made In th,s or ' any OTher lSue Furlher information on any security menlloned heretn IS available on request

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