Tabell’s Market Letter – December 07, 1984

Tabell’s Market Letter – December 07, 1984

Tabell's Market Letter - December 07, 1984
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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) 9249660 -'-'-, .-.,—– o- ….. ;. – . De-cetn1Jel'-7–1'984 – – ——– The market contInued lt8 post-election slIde to new lows this week, -;Xth 'Thursday'S closIng low of 1170.49 constJtuting tw lowest level It Wh1Ch the Dow had closed since early August. exceed- ing the mId-October low by some five points. As we documented with a chart in this space three weeks ago. the conventIonal readIng of the August-November tradIng range as a top has some fairly negative lmplIcations. Mmimnlly. a move deep into the early 1984 support, to 1130, would be sug- gested. and a move to below thot support, to 1030, would not be out of the question. There is some basIs. however, for questioning the conventIonal reading. The November- December drop has been the thIrd short-term decline since the mnrket reached its hIgh in August. Each of these dechnes has started around the same level, approximately 1240, each has moved mar- ginally lower than the low of the previous one. and each has been some three-four weeks in dura- tion. The volume on each of the last two drops has diminished considerably from that of the pre- vious rallying phase and has been signIficantly lower than the average (90.1 millIon shares daily) before the declme began. ThIS pattern, a series of short-term declines achieVIng margInal new lows, IS not without precedent m recent market history. The relevant flgures are shown in the table below followed by two sets of figures WIth eerie similarity. Each case showed three short-term declines startIng from around the snme level and achIeving new lows. Each declIne showed lower volume than had been seen on the previous rally. For the most part, the length of each decline was about the same as in the current case. Decline No. Average Daily Vol. High- Declme of Milhon Shares High Aug 21. 1984 1239.73 , –Sepl.4-;l'98'1—-I237'52 Low Sep ll. 1984 ll97.99 Ocr-90'98 11'75713 Low -3.4 5-1) Low-Low Days Decline Prev.Rallx –rr- 78.5 1791l'88-1—-l'O8 Nov 6, 1984 1244.15 Dec 6, 1984 1170.49 -5.9 -0.4 21 82.3 9R.1 – -, Mar 16, 1984 ll84.36 Apr 5, 1984 1l30.55 -4.6 14 83.9 May 2, 1984 ll86.56 Jun 15. 1984 1086.90 -8.4 3.8 31 84.5 July 3, 1984 ll34.28 July 24, 1984 1086.57 -4.2 -0.1 14 72.2 87.0 87.2 Jan 29, 1982 May 7, 1982 Jun 20, 1982 871.10 869.20 833.43 Mar 8, 1982 Jun 18, 1982 Aug 12, 1982 795.47 788.62 776.92 -8.7 -9.3 -6.8 -0.9 -1. 5 25 29 17 54.7 49.0 51. 6 53.7 55.3 As the dates make apparent, the two previous cases trace the market's history just prior to the rally of August, 1984 and to the start of the bull market in August, 1982. In both these prior Instances a period of relative torpor with the market mOVIng to new lows on light volume was followed by what was, at the time, an hlstorically unprecedented upside explosion. It should be most emphatically noted that no prediction of a similar upside explosion is being made in the present instance. Certainly a major dlfference between the past four months and the prior two periods shown is the fact that the current weakness is taking place after a fairly sharp rally while the last two cases have occurred following market declines. It is, however, an undeniable fact that, over the past few years, moves to new lows, especially on light volume, have not see(ned to produce the followthrough they once had. Moreover, despite the fact that there exist individual issues, including some major ones, WIth top patterns SImilar to those of the averages. a significant number of other Issues appear to possess limited vulnerabihty, either showIng no top formation at all or finding themselves already severely depressed after previous sharp declines. There appears therefore, some Justification for feeling that the downside objectives suggested by a conventional reading of the pattern In the averages may not materialize or that, at least, a goodly number of stocks will be able to demonstrate reSIstance to any weakness which may occur in the major market indices.. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. AWT rs Dow-Jones Industrials (12' 00 p. m. ) 1172.70 S & P Composlte (1200 p.m. 163.17 Cumulative Index (12/6/84) 2033.54 No statement or expression of opinion or any other matter herein contained IS, or IS 10 be deemed to be, directly or indirectly, an oller or the solicitation of an oHer to buy Of self any security referred 10 or mentioned The matter IS presented merely/or lhe convenience of the subscriber While we believe the sources olour Information lobe reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be talen by the suoscrtber should be based on his own Investigation and Inlormatlon Dela!ield, Harvey, Tabell Inc, as a corporation and rts officers or employees may now have, or may later take pOSItions or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such position may be different from any views flOW or hereafter expressed In thiS or any other Issue Oelalleld, Harvey TaOOIl Inc which IS registered with the SEC as an Investment adVisor, may give adVice to Its Investment adVISOry and other customers mdependen\ly of any statements made In thiS or In any other Issue Furlher Information on any se-cuflty mentioned herein IS available on request

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