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TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 924-9660 r— February 24, 1984 In this space last week, we examined the record of eight major stock-market cycles from June, 1949 to date and attempted to justify the contention that a new cycle did, in fact, begin on August 12, – – 198-2.-T-he–purpoe–Ofhis-week!8 ..Jetter .. willbe–toexamine .. ourinterpr..etation…oJ.these-4-psteight.Lcycles……–. -in greater detail relative to the new emerging cycle which we feel began'a year' and one-half ago. The chart below shows the recent cycle with the major component swings in the S & P 500 from August 12. 1982 to date. Using a 10 filter, the high and low points are drawn to a uniform horizontal scale. The other data on the chart attempts to place in perspective the present cycle compared to the previous eight cycles discussed, The horizontal lines drawn through the upper part of the chart shows the length in trading days in each of the previous eight cycles. ClCLE PERIOD LOW-HIGH RDVRNCE PERK Cfelt DRIE JUN 1949-SEP 1953 5EP 1953-0CT 1957 OCT 1957-JUN 1962 JUN I962-0CT 1966 OCT 1966-MRr 1970 MAr 1970-0CT 1974 OCT 1974-HAR 1978 MRR 1978-RUG 1982 196.751 JRN 1953 1119.021 AUG 1956 186.351 OEC 1961 179.781 , FE8 1966 148.051 NOV 1968 173.531 , JAN 1973 173.141 , 5EP 1976 161.701 NOV 1980 ..1.Il 172.65 OCT 1 1983 ..l2O. ..lSO. I- .571 — …l.'Ill ..l3ll ..l2O. — – 1 .571 F.EB 198Y – 15268 – — – -SEM MRR lIh OCT 1966 OCT JUN 1962 AUG 19B2.. ..1.lll AU 1982 .42 .J!lL MRr 19.Z(L OCT 1!l1l1. A comparison of the length of these lines to the current cycle obviously shows that each cycle has lasted a considerably longer period of time. Even were the present cycle to duplicate the short lengths of the 1966-70 or 1974-78 periods, there could still be well over two years remaining in the new cycle. Cycles are measured from low point to low point and a key question is whether the high of October 10, 1983 constituted the peak for the current cycle. The relative times of the previous cycle peaks again drawn to scale on the chart, are indicated by date and shown by the vertical tick marks on each of the cycle lengths. Once more, it becomes apparent from the evidence presented in terms of relative length of time from cycle low to cycle peak that a possible further high could still be achieved. However, also shown on each cycle length is the percentage increase from cycle low to cycle peak. The recent percentage increase of the S & P 500 from a cycle low to cycle peak is 68.57. This increase, although low in terms of the average advance of approximately 80 for the eight cycles e- has, -in fact, exceeded two previous periods;- 1966-70 and 1978-82.. – The market is at a critical stage and there are important questions to be resolved. Because of the short length of time from August. 1982 to date, cycle analysis at this time would describe the current decline in the market as an intermediate-term correction in an ongoing bull market. Can we pinpoint the level of the next low as a normal downward phase of a typical four-year stock-rnarket cycle To date, the decline (11.57) has not approached relative levels of previous lows based on percentage declines from their previous respective highs. These comparable figures are indicated on the lower right-hand side of the above chart. We know the market is oversold on a short-term basis and conceivably could be near or at an effective low. Can a subsequent rally carryon to new peaks and thus represent a continuation of the cycle The next few weeks should give us a clue to the above questions. Dow-Jones Irrdustrials (1200 p.m.) 1144.05 S 8; P Composite (12'00 p.m.) 155.19 Cumulative Index (2/23/84) 1896.26 ROBERT J. SIMPKINS, JR DELAFIELD, HARVEY, TABELL INC. No statemont or expression of otunlon or any olher mailer herein conlalned IS, or IS 10 be deemed 10 be directly or Inchrectly, an oller Of the sohCltalton of an ofter to buyor soli any secunty rctened to 01 montlOned The matter IS presented merely tOI the convenlenceot thesuhscnber While we beheve the sources 01 our informatIOn to be reliable, we In no way represent Of guarantee the accuracy thereot nor of the statements made herem Any action to be taken by the Subscllber should be based on hiS own mvest'gal,on and mformallon Dela/leld Harvey, Tabell Inc, as a corporatIOn and 1\5 ollicers or employees, may now have, or may lalertake poSitions or trades In respect 10 any secullltcs mentioned In thiS or any tUlure Issue, and such pOslt1On may be dillerent from any views now or helealte! expressed InthlS or any other Issue OelaftCtd Harvey, Taban Inc which IS reglsteredwlh the SEC as an Investmenl adVisor may give advice to Its mll(lSlment adVISOry and other customers Independently 01 any statements made In thiS or In any other Issue Further mformatlon on any secullty mentioned herein IS avallabte on reQuest -!