Tabell’s Market Letter – April 13, 1984

,——————————————————————————————————- 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) 9249660 April 13. 1984 '''' T!!!Irsdy's bIznrre nction J with the Dow up 26 points and last-hour volume one of the highest .figures -for tlie bUlliiiarket-.-d6es nor;-byitself .change thTdesunorys)fOltfermmaflfeCpicture. Rather. It provides the ground work for future improvement in that picture should major breadth and volume indicators be able to follow through. The key question is not a short-term forecast, but rather the nature of the process in which we now find ourselves. It has been the position of this letter. based on the study of past market cycles. that that process is a correction in an ongoing bull market rather than a cycle bear market. Let us document our reasoning a bit further. S rI'Ihl HIllH ,LOW Torr'L M05 MOS 0, LOW (,S OF HIGH (i , OF HATE IJIA ——– ——– ———riAl – IJJ fI ——– ItA 1 E LtJIA HfJ OV MiV .DV DEC Hi.EV LOW F fi.V HIGH ——– JUN 1896 30.2 Arh t899 54.90 JMI 1901 411.94 55 14 6' S, -11 0 0 JAN 1901 48.94 JUN 1901 57.10 NOV 1903 3.47 14 5 15 17 -43 NOV 1903 32.47 JAN 1906 73.76 NOV 1907 4,79 '6 54 127 -012 ,.NOV 1907 42.79 NOV 1909 70.34 OCT 19l1 55.52 .7 51 6. -21 OCT 19.11 5S.! DEC 1912 64.37 HM'.' 191 !. 60. EJJ J4 16 -6 MAR 1915 60.83 NOV 1916 105.97 lEe 1917 74.38 33 00 61 7. -30 .OEC 1917 74.38 OCT 1919 118.92 AUG 1921 67.11 22 50 60 -44 UG 1921 67.11 MAR 1923 102. ni JUL 19Z3 86.91 2J I. S3 53 -15 JUL 1923 86.91 SEP 1929 343.45 NOV 1929 23B.9S 76 74 .7 295 -30 NOV 1929 238.95 APR 1930 279.23 JUL 1932 54.26 5 1. 17 -61 .,JUL 1932 54.26 FE 1934 103.46 SEF 1934 92.63 26 1. n -10 16 66 132 130 110 1' .0 130 275 OJ 10. 1..2,,9 165 112 66 3J4 61 37 SEF 1934 92.63 MAR 1937 IB6.41 APR 1938 111.28 43 30 70 101 -'0 APR 1938 11) 213 NOV t9J8 149.82 APR 1942 95.35 .6 7 15 35 -36 .,AH 1942 95.35 JUN 1946 20.62 NOV 1946 169.89 so 50 116 -17 .,NOV 1946 169.89 JUN 1948 189.46 JUN 1949 167.42 31 19 12 -12 JUN 1949 167.42 JAN 1953 289.77 SEP 1953 ;!64.0 51 43 S. 7J -.SfP 1953 264.04 JUL 1957 508.52 DEC 1957 435.69 51 .0 .3 -14 DEC 1957 435.69 DEC 1961 731.14 JUN 1962 561.29 54 .S S. 68 -23 171 120 S6 17. ISS 165 ISO .0 137 .2 153 ,1.7,5 JUN 1962 561.28 JAN 1966 983.51 OCT 1966 807.07 52 43 63 75 -16 ocr 1966 907.07 OEC 1968 9-43.75 MAY 1970 700.44 4J 26 .0 17 -26 .129 I'tA'f-1970700…44.JAtt-I-973-999'02-DEC-H1 …- 6 t 6 . 2 – 5 5 – – – 3 2 – 5 . – 4 3 – – 3 9 – – – – – 8 7 OEC 1974 616.24 SEP 1976 990.19 HAR 1978 757.36 39 21 54 r 61 -24 88 MAR 1978 757.36 APR 1981 997.75 JUL 1982 808.60 52 37 71 32 -1. 123 135 106 101 -AVERAGE -AVERAGE -AVERAGE JUNE 1896-HAR 1978 NOVEHBER 194o-HARCH 1978 OCTOBER 196o-HARCH 1978 .5 2. 61 72 -27 .7 35 72 55 -20 26 57 40 -29 127 131 106 125 12'5 100 The above table (in slightly different form) last appeared in this space in May. 1982 — in circumstances directly opposite to those today, since we were then probing for a low yet to occur, rather than attempting to determine whether a prior peak constituted a major high. The statistics can be, how- ever, useful in both circumstances. They show some relevant numbers, based on month-end closing prices. of the 23 completed major stock-market cycles since the Dow was first computed in 1896. The present cycle, on a month-end basis. began in July, 1982 and has continued, to date, through November. The advance so far has been 58, and in terms of percentage advance. there is nothing in the table to contravene the thesis that the rise so far could have completed a bull market. Although the average advance for all 23 cycles is 72. the cycles since World War 11 have shown smaller average percentage advances than has the recent rise and the cycles since 1966 smaller ones still. It is when we look at the time factor that the thesis of a bull market which ended last November runs into difficulty. As can be seen from the table. the average length of the advancing phase of the 23 cycles has been 29 months, with the post-war cycles a little longer. Through November, the current cycle had moved ahead for only 16 months. Now there are, as the table shows, four previous cycles that have posted shorter runs. The most recent one, however, was 1938. the previous one was the 1929-1932 bear market. and the other two go back into the early part of the century It is difficult to envision those experiences being terribly relevant to today's conditions. An even stronger argument is provided if one manipulates two of the columns in the table. The one headed total months shows an average cycle length, from low to low. of some 45 months, giving rise to the popular term ''four-year cycle'J It also shows that the average cycle. spends 60 of its lifetime in an advancing phase. If the period July. 1982-November, 1983 constituted 60 of the current cycle. it will wind up being only 26 months long. hslf the length of the last one. 60 of the average length. and shorter than any cycle in history other than 1932-34. We must confess we regard this as unlikely. It is interesting to speculate on the timing of the present cycle were it to conform exab'tly to the average of this century. If it lasts for precisely 45 months, the next major bear-market low will be seen in March, 1986, A 29-month advance would place the ultimate peak in December of this year, to be followed by a bear market which would consume most of 1985. There is obviously a great deal of room for variance in these figures. but we think that variance is unlikely to be so great as to make a late-1983 major top a credible hypothesis. AWTrs Dow-Jones Industrials (12 00 p. m.) 1155.98 S & P Composite (1200 p.m.) 158.83 Cumulative Index (4/12/84) 1944,79 ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. No state'llent or expression at oplnton or any other malter herein corltlllned Is, or Is to be deemed 10 be, directly or indirectly, an ofter or the SOliCitation of an offer to buyor sell any security ret erred toormentlonC! The mailer IS presented merely for the convenience ollhesubscriber While we believe the sources of OUf Informatlonl0 be reliable, we In noway represent or guarantee the accuracy thereot nor of the statements made herein Any action to be Ilken by the subscriber should be based on his oWl'linvesllgatlon and mformatlon Delafield, Harvey.labell Inc. as a corporalon and Its officers or omployecs. may now have or may later tae. pOSitions or trades In respect to any securIties mentioned In thiS or anI,' luture Issue, and such pOSition may be dlflef'mf from an\ Views nowor hereafter eJ(pressed (fl Ihls or any other Issue Delafield, Harvey. Tabell Inc, whIch IS registered wr!tT the SEC as an (flvestment advrsor, may give advice 10 Its Investment adVISOry and other customerS Independentlv 01 any statements made In thiS or In anI,' olher Issue Further mformatmn on any secunty mentioned herem 15 available on request …' .— c C . . .