Tabell’s Market Letter – September 23, 1983

Tabell’s Market Letter – September 23, 1983

Tabell's Market Letter - September 23, 1983
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-. , -, , I I, ,,,J\',' e09 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF ,, MEMBER NEW YOfilK STOCK ExCHANOE, INC MEMBEA AMEAICAN STOCK EXCHANGE September 23, 1983 Accompanied by widespread hoopla in the financial press, the Dow-Jones Industrisl Average moved on to a new bull-market high this week. The first such high posted, on Tuesday, was marginal., d the ,following day's trading failed to follow through, Thursday. however-; 8i\ -a -H-point rise on reasonably decent volume toadecisive new closing peak of 1257.52. Strength in the averages, coupled with noticable improvement in many individual stock patterns, renders less likely the emergence of an intermediate-scale correction, a development which, our readers are aware, we had regarded as a possibility. We are not, however, it seems to us, entirely out of the woods. The high in the Dow remains, so far, unconfirmed by accompanying highs either in the Transports or the S P 500. Most importantly, it has produced, as we related at some length in our last issue, a classic breadth divergence. The implications of this divergence are worth reiterating. First of all, as we noted last week, even assuming that it is the final divergence of the 1982-198 bull market, it does not suggest that this bull market is anywhere near its end in point of time. In every one of the last eight majocycle advances, there has existed a final breadth divergence. However, it has occurred with leads ranging from 7 to 30 months on the ultimate bull-market highs. Thus, diverging breadth action at this stage is in no way inconsistent with cycle theory, which strongly suggests that the present upswing should continue at least into 1984 and probably 1985. What it does suggest is an advancing plilSe considerably less dynamic than the August-June, sixty-percent advance. ,n ' ….n ,11 , …11 'M ' J 10M .1'1 .A, 1),1 '''' ..nn h f \I 1, .,. W . IJh .I'm rI, LIJ I' ,.11 ' ,,.11 .ru J ,.M… .. .,. . 'llll ' .kLIiI I J, .. .If ,,,,,, ru J' ,nn \'I' II , IA .,. HI f . – -. N r' ,''.'''' ''''''' – –. '''''' ''1M '''' ,m ,en .en Vi .en 11\;/ .n II , ,.m 19, 19S' – ….. 5, 'N ,.., .. …. ,. ,'''''' ….' Ill…. 15m . ,'5m ,.''1ISIl …. 12. '9SS – ….T ,2, 'ffi fA! 15. ,9S9 – lEe ,3. '9j\\. ,0 '''' lt ,.0 ''''' '2. '''''' – FIl g. ''''l'Im II' J..SSO .-'.SOl lISIl J , .J \11 'VVV V '00 '''''' .1 (i ''!M ,' II ,om IY 'I . ,,…. ,…. .' ,, . , .' r'Vl ….n ,.m ,….. i j .,.., en ' ,'','.'..' '''' ' …. ',. '967 – lEe 3. ''11m …. S. '972 – …. II. ',,!lnn ….' 11 ,', 0' .,, fEB 211. 1976 SEP 21. 197fhn .lILY IS. 1980 Ff'I 21. IfHn , This is indicated by the charts above. They show the history of the eight previous bull markets from their first bresdth divergence to their ultimate high, the dates of those two points being given on each chart. However, the charts have been adjusted to show the Dow in current terms, using Wednesday's close as a reference point, and the dating has been adjusted to run forwsrd from that close. They thus represent eight possible scenarios for activity over the next one to two years. As can be seen, the eight market periods have some similarity, in most cases show- ing a potential high in the 140D-1500 range and a possible downside risk in the middle 1100 area. Fairly wide intermediate corrections are also a feature. While the scenarios shown are by no means poor, they ddinitely represent a change from the market environment of the past year. AWTrs Dow-Jones Industrials (1200 p.m.) 1254.17 S '& P Composite (l200 p.m. 169.38 Cumulative Index (9/22/83) 2042.00 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL ' No statemenl or e)(prenian of opmlon or any other moiler herein contolned 15, or IS to be deemed 10 be, directly or Indirectly, on offer or the s.ollCltotlon of on offer to bvy or , any seC\lrlly referred 10 or mentioned The mot'er II prnenled merely for the converlene,- 01 the 51,1bscrrber While we bellve Ihe sources of ovr Informolion to be rellobl\!, we In no way represent or guaronlee Ihe accurocy Ihereof nOI of Ihe stalements mude herem Any actiOn to be token by the subSCriber should be bosed on his own Investlgallon ond lnfolmOliofl Jonney Montgomery Scot!, Inc, 0 0 corpOlOhofl, ond lis officers or employees, moy now hove, 0'1 '!'noy loter toke, , pCIltlons or trodes In respect to ony seculltle mentioned ' 1IIS 01 ony future Inue, ond such pOllron moy be different from ony vrews now or hereafler eprened ' thIS or ony Olher ISSVe Janney Montgomery Scott. Inc, which IS reglsered wl,h Ii'll' SEC os on Investment odvlsor, may g,ve adVice to Its ,nvestment adviilOry ond othel customers Independently of any stotemellls mode In Ihls or In any other liSue FI,vlher Informolion on ony securrly mentioned herem IS avalloble on request

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