Viewing Month: October 1985

Tabell’s Market Letter – October 04, 1985

Tabell’s Market Letter – October 04, 1985

Tabell's Market Letter - October 04, 1985
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TABELL'S MARKET LETTER 909 STATE ROAD, I3INCETON. NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 924-9660 October 4, 1985 -, —— ';. ;.r …Bl. -theyapf!.o!,!! plia.in–. -the!entral concern-of-this-Iet-tep,- despite occasional–. -… excurSIOns afIeld, has been the eqUIty market. Presumably. therefore. that market has also been the central concern of its readership. It is necessary, therefore, occasionally to remind ourselves of the basic place of the stock market in the investment scheme of things. Essentially It IS an area where, on certain occasions, exceptionally large returns can be attained. Reduced exposure to the equity market, therefore, entails a risk—the forfeiture of the opportunity to attain these exceptional returns. We can summarize our view of the market's current position by stating that that risk, at the moment. appears to be smaller than it has been for some time. Let us review the market's current position. The major benchmark, to which we have been referring ever since it occurred over three years ago, is August 12, 1982 which we have, since shortly after its occurence, been able to identify as a major four-year-cycle low. With that low now having receded some 38 months into history, the conclusion is almost inescapable that the upswing which began on that benchmark date is approaching maturity. We used the words almost inescapable above because there remained, through early 1985 at least, a pOSSIble way out of the dilemma. One could hypothesize a foreshortened cycle with its downward phase having been completed in July, 1984 with a new major-cycle starting on that date. The problem is that this hypothesis becomes increasingly less likely. For it to be valid, the market would have had to display, for a protracted period of time, the sort of vigor associated with the takeoff stages of bull markets. Indeed, by a number of measures, it ,did so during the latter half of 1984 and early 1985. During most of the fIrst half of 1985, however, upside action became more restricted, focusing largely on disinflation-hedge issues. Such a market would have been, of course, subject to mild correction at any time but, as we have been pointing out in recent weeks, the correction from the July 19th hIghs has involved somewhat more serious deterioration. This is uncharacteristic of a bull market's middle stage, which is where we 1 – -would-nowbc-were-said-bull-marketjusver-a-yeal'-el. – We have, purposely, emphasized the bearish case above in order to provide perspective. As our readers are aware, we do not view the intermediate-term outlook with serious trepidation and, indeed, continue to think it likely that new highs, above those of midsummer, may be attained before the year is out. The advance of 1985's first half, however narrow, was still sufficIent to carry breadth indicators to new highs, and the central factor is that such highs normally precede highs in the market averages. The problem is that the breadth deterioration which took place between July and September now makes it extremely difficult for further new peaks to be confirmed by market breadth. There still remain a fair number of encouraging features for the intermediate term. A number of the issues that were hardest hit in the recent correction have made significant progress in forming new short-term bases over the past few weeks and could make attempts at, minimally, testing their previous highs. This applies especially to the food and retrul groups but does not appear to be true of other former leaders, such as the financial sector. There begins to exist, moreover, some eVIdence of new market leadership. There have been, over the past year, three general areas which were candidates for inheriting this mantle. The first was the high technology/over-the-counter area, but this prospect evaporated when that sector's rally failed to follow through in January. The second possibility was cyclical issues, and this area remains a possible source of leadership although short-term relative action has deteriorated somewhat. In recent market action, though, a new candidate has emerged in the energy group. This is a significant market component, accounting for some 20 percent of the Standard & Poor's 500. It remains relatively unexploited, and continued improving technical action here could go a long way towards bolstering the near-term outlook for the market. It appears appropriate, therefore, to maintain reasonable equity exposure combined with shifting emphasis in the direction of areas mentioned' above … However, the number of favorably-situated issues seems to have been reduced sufficiently so that, from a practical point of view, it will become more and more difficult for the sorts of exceptional returns earned through mid-1985 to continue to be attained. For this reason, we are amenable to moderate decreases in equity exposure on any further strength. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00 p. m. ) S & P CompOSIte (1200 p.m.) Cumulative Index (10/3/85) AWTke 1324.71 183.09 2407.38 No statemenl or expression 01 OPinion or any other mailer herein contamed IS or IS to bo deemed 10 be directly or indirectly, an oHer or lhe soliCitation of an offer 10 buyor sell any secunty referred tOOl mentioned The matter IS presenled merely forthe conltenlenceof thesubscnbe, While we beheve the sources Of our Information 10 be lellable we In noway represent or guaranteelhe accuracy thereof nOI 01 the statements made herem Any action to be taken by lhe subSCriber should be based on hfs own mltesllgallon and information Defafleld Harvey, Tabell Inc, as a corporation and liS officers or emplovees may now have, or may laler take, POSitions or trades In respeclto any securities mentIOned In thiS or any future Issue, and such POSition mav be dillerenilrom any Ylews now or hCleafter expressed In thiS or any other Issue Delafield, Harvey Tabell Inc, whiCh IS registered With the SEC as an Inyestment adYlsor maygllte adyiceto ItS Investment adYlsory and other customers Independently 01 any statements made In thiS or In any other Issue Further InlormatlOn on any security menlloned herem IS available on reQuest

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Tabell’s Market Letter – October 11, 1985

Tabell’s Market Letter – October 11, 1985

Tabell's Market Letter - October 11, 1985
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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 October 11, 1985 – – c ThemarkeL environment-. sinceOctober-beganas-turned.f-rom-oneof……decline–toone- of —-c-dullness The Dow'';'eachedi!s 'low at 1297.94 on September 20, imd the S & P 500, a better measlI'e in this case, moved to a new low on September 25. Since that time, both averages have rallied modestly. T.he current hiatus affords an opportunity to assess the damage which has been done. –'-' On an intra-day basis, the S & P 500 is down 8.5 since its mid-July high. A study of the action since that time of 1303 NYSE stocks shows that the decline in the average issue was a good deal greater. Measuring from the July 19 close to the individual low in each case, the average NYSE issue decilned 14.43. The Decilne No. of Stocks distribution of the individual declines is 0-5 139 shown in the table at right. The diffi- 5-10 286 culty of the recent environment from a 10-15 359 portfolio management point-of-Vlew is 15-20 270 underscored, not only by the average 20-40 218 drop of over 14, but by the fact that 40-plus 31 249 issues, or 19 of the total, dropped, during the July-October period, 20 or more, with 31 posting declines of greater than 40. As is generally the case, certain market sectors were particular targets for weakness. 128 issues declined 25 or more from mid-July. Of these, 21 could be generally identified as belonging to the electronics-semi-conductor sector. All of the stocks in the S & P hospital-management group were included in the list, along with a fair number of airlines. There was also considerable representation of financial and utility stocks and a fair number of retailing issues. Market action to Wednesday's close shows that relatively little of the technical damage done – – – h a s – y e t 4 e e n – r e p a i r e u – .-Wlffi-measure-tJre-amount-uf-indiv1uualecovery-fronrthe-jows-irom-both'''—,-,,,-1 a time and percentage-change point-of-view. Considering the former aspect, the table at left shows Date No. of Shares the date on which each of the 1303 individual issues made July-Aug 315 its low. What is particularly striking is the fact that no Sept. 3-13 96 fewer than 315 stocks were continuing to new lows as Sept. 16-20 217 late as this week, and 547, or 42, have posted their lows Sept. 23-26 128 in the past 10 days. This suggests that, despite the mild Sept. 30-0ct. 4 232 recovery in the averages, a fair number of stocks still Oct. 7-9 315 remain in downtrends . From a price-recovery point-of-view, the record has been spotty. After examining the post-July lows for the 1303 issues, we went on to inspect their subsequent highs. On the plus side, it must be noted that 371 stocks completely recovered their declines and moved ahead to new highs above their July 19 close. On the other hand, as of Wednesday, an un weighted average of the 1303 stocks was still down over 8 from July 19. 1055 issues were still below their mld-July highs as of Wednesday, and only 65 had advanced by 10 or more above that high. In the case of many issues, the recovery has been modest. 243 stocks had. as of Wednesday, recovered less than 20 of the total decline posted during the period. As is the case with the large declines, the best recoveries were centered in a few areas. Renewed strength in the consumer group was signified by the fact that 32 issues in that group were among the 131 stocks showing the best advances from their July highs. Domestic-oil and drug issues were also liberally represented in the list, but there seemed to be little evidence of new long-term leadership coming to the fore. The action of individual issues, in summary, suggests that the damage done by the summer's decline is at present not yet totally repaired; AWTrs Dow-Jones Industrials (12 00 p. m.) S & P Composite (1200 p.m.) Cumulative Index (10/10/85) 1335.46 182.95 2399.64 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No statemlJnl or eplcSSlon 01 opinion or any other maIler hereIn COntained IS or IS 10 be deemed 10 be, drrec11y or IndirectlY, an oHer or the sollCI\atlon 01 an offer to buyor sell any secunty referred to or mentioned The matter IS presented meralyfor the convonlonce of the Subscriber White we behevethe sources 01 our mlorma\lon to be reliable we In no way represent or guarantee the at.culacy thereof nor of the statements made herem Any actlCn to be taken by the SUbscriber should be based on hiS own Investigalton and Inlormatron Delafield Harvey, Tabel1 Inc, as a corporal Ion and Its oilicers or employees may now have or may later tae POSitiOnS or trades In respect to any securities mentioned m thiS or any luture Issue, and such position may be ddlerent tram anyvlcws nOwor hereafter e.(prcssed In Ihlsor any other Issue Delafield Harvey, Taben Inc, whIch IS registered With the SECasBn Investment adVisor, mByglve adVice 10115 mvestm(!nl advlsmy and othN customers Indepondentty 01 any statements made In thiS 01 In any othel Issue Further Inlormatlon on any securll y montlonerl herein IS available on requast

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Tabell’s Market Letter – October 18, 1985

Tabell’s Market Letter – October 18, 1985

Tabell's Market Letter - October 18, 1985
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– TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 October 18, 1985 – – ..- — With -Rn almosL18point rally-n .Wednesday, the DowJonesIndustriaLAv-erage.rocketed.. to a new high this week Readers of this letter are aware that this particular eventuality was expected, although the timing was not. We had surmised a more protracted base formation period with an advance to new highs taking place around year end. The base formation actu- ally completed itself a great deal more rapidly, and the actual breakout took place earlier this week when the Dow moved above 1340 on Monday. As has been widely advertised, both here and elsewhere, the broad based indices are lagging behind the DJIA to an unusual degree. As of Wednesday, with the Dow at a new high, the S & P 500 was a hug.., 7.67 points behind its high of July 17. This, however, does not essentially alter the overall market pattern. Upside objectives for the base formed since July are modest, with targets in the 1400- 1418 area. Earlier bases yield upside targets in the high 1400's. These objectives are not in- consistent with our overall reading of the market pattern, as will be developed further below. New highs are helpful to the technician since they provide fixed benchmarks. We know, for example, that a bull-market process, in the DJIA at least, was intact this Elk as the high was posted. As far as market breadth is concerned other benchmarks emerge. On Wednesday, when the Dow first posted its new peak, our daily breadth index was 14.26 points below its previous high, which had been posted 61 trading days earlier on July 19. This is a quantifi- able condition which we can compare with the historical record. The first question which must be asked concerns the likelihood of the current breadth divergence's being erased in later trading. A check of the record shows that there has been no breadth divergence in excess of 14 points in any bull market since 1949 which has later been cancelled by new breadth highs within the same bull market. The current divergence may now be said to have existed for 61 days. There are only two caseson recordoLJongerd;x.eJ.'gences….pr,ior to the final one at a bull end One was in 1975-1976. The other was the peculiar mini-divergence of 19R–19R5 which led to the rather severe 1983-1984 intermediate correction. It is highly probable, in other words, that the breadth peak last July was the final one for the current bull market. This piece of intelligence, although certainly not bullish, is not, it must be emphasized, one that should cause uS to run immediately for the storm cellars. As we have repeatedly noted in this space, the distance in time between breadth peaks and peaks in the averages has historically been substantial. In the eight completed bull markets since 1949, the shortest lead between a peak in breadth and a peak in the Dow was nine months, in May, 1965-February, 1966. The longest lead, in 1959-1961, was an astounding 33 months. These long lead times are one of the great advantages of breadth analysis. If we aSSume a breadth high as of July 19, we have a fixed benchmark comparable with past breadth peaks. It is therefore possi.ble to measure how much each of the eight previous bull markets has advanced following occurances comparable to the present one. In the 1950's such advances were large, ranging from 15 to 25. However, the four most recent bull markets saw advances in the 6.0-12.8 range. These percentage advances would be consistent with the upside objectives mentioned above. The one factor that argues against an excessively protracted upside move at this stage is the maturity of the cycle, which must, we think, be dated back to August, 1982. However, this would still allow for an advance continuing into next spring with a target somewhere in the 1400's. This scenario, subject to revision, appears the most likely one at the moment. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. Dow-Jones Industrials (10/17/85) 1368,83 S & P Composite (10/17/85) 188.36 Cumulative Index (10/16/85) 2406.37 No statement or epresslon 01 OPinion or any other matter herem contained IS, or IS to be deemed to be directly or indirectly. an oHer or the sollcltallon of an oHer 10 buy or sell any security referred 1001 mentIOned The matter IS presented merely lor the convenience 01 the subSCliber While we bellell'e the sources of our intO/mahan to be rehable we In no way represent or guarantee the accuracy thereof norolthe statements made herein Any aellon to be lalen b the subSCriber should be based On hiS own investigation and information Delafield, Harvey. Tabell Inc as a corporation and lIs oUlcers 01 employees, may now have or may laler take. positIOns 01 trades In respect to any seCUrities men\toned In thiS Of any future ISSue, and such POlhon may be different Irom any views now or hereafter e1pressedm thiS or any other Issue Delaflefd Harvey labetl Inc, which IS registered With Ihe SEC as an Investment d(jvlsor maygrve adVice to lIs Investment adVISOry and other customers Independently 01 any statemenls made 111 thiS or In anv other Issue Further mformatlon on anv securrly men\!oned herein IS available on leQuest

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Tabell’s Market Letter – October 25, 1985

Tabell’s Market Letter – October 25, 1985

Tabell's Market Letter - October 25, 1985
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'U'Lii.\ IBUE n. n. ' S Lii.\R&E'U' n..1E'U''U'IER 600 ALEXANDER ROAD. PRINCETON. NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 9872300 October 25. 1985 The most significant feature of thIS week's letter is, actually. the masthead. Readers will note that it carrIes our new address. 600 Alexander Road, and, more importantly. our new telephone number. I (6jj,9 98143 00, ur,post-)ffice-aldl'ess-an d zip ,ode7 –Princeton ,-dfow'/Brsey,-eS5 40—remam the–'….t— same. All ofthis is by way of announcement that Delafield. Harvey, Tabell is now located-In its new quarters ,a scant five miles away from the old ones on the south, rather than on the north. side of PrInceton. We know that most of our readers have experienced the trauma and chaos involved in office and/or residential moves and have no partIcular Interest in the parochial woes generated by our present transfer. It goes without saying, moreover, that the basic objective behind our decision to relocate was to achieve the sort of physical facility which would enable us better to serve our chents. Nonetheless. the occasion of the move constitutes a stimulus for some thoughts on the operational philosophy of Delafield. Harvey. Tabell. which. we think. may be worth sharing with our readership. Fifteen years ago. the Delafield. Harvey. Tabell Division of the then Montgomery. Scott and Co. fIrst opened Its doors at 909 State Road here in Princeton. The principals of the operation had been officers. for many years. of different NYSE member firms in New York City's financial district. They were accustomed to spending large parts of their day commuting to the Wall Street area from suburban homes. The decision to locate the new operation in the relatively placid. university-town atmosphere of PrInceton was a conscious one, engendered by the realization that ours was essentially a service business — one in which there was presumably a correlation between hours spent at one's desk and level of service to chents. Those clients were not beIng served, quite obviously, by principals and employees who were spending a major portion of their day as passengers on a steadily deteriorating train service to New York City. The idea. strangely enough. was a fairly radical one at the time. especially to those who had spent their entire business career m the global-village atmosphere of Wall Street — an atmosphere which still exists and whiCh we still miss, at least to some very small degree. However. even 15 years ago, the age of communications was upon us. and we were able to put in place in Central New Jersey all the facilities to WhICh we had been accustomed In the city. Needless to say, communlCation facilitles – – —h'RVe-tmprove-n-sttU-fulth-er Over-a–'-deCade-ll-ndnmf;affdYlTIa–pracbcru' sense. we are, -tonay , – as close to major financial markets as we were when they were around the corner. The major change, then, has been one of style, and we continue to feel, as we did at the outset, that the relatively relaxed atmosphere of Princeton, with all of our associates residing within a few minutes of the office. essentially cmributes to better client service. What should be stressed is our belief that this will remain unchanged with our move to larger quarters. One writer noted, when DHT began. that we rented a furniture store and set up shop. n This referred to the former usage of the space at 909 State Road. a small portion of which we first occupied. With growth over the years. we ultimately found ourselves occupying a major portion of that building. and the pressures became sufficient that the desirabIlity of a move to new quarters. designed as office space. became apparent. Our new location is in a just-completed office building -in t.he heart of the so-called Route-1 corridor of Middlesex-Mercer County. with a number of Fortune-500 neighbors and with at least some of the atmosphere that we left behind m New York City some 15 years ago. Some of the published prOjections regardmg the Route-1 area. mto which we are catapulting ourselves, are rather interesting and create a certain sense of deja vu in one accustomed to financial markets. The office-space density of our new 10catlOn we are told, will, in the late 1990 ' s, be equivalent to that of downtown Houston. Rosy predicltions are made on the one hand regarding future levels of real estate values and, on the other hand, the usual dire projections are heard regarding traffic density, environmental impact, etc . etc. In all this. Just as is the case with popular concepts which move the stock market, there is some element of truth. As is the case wlth most stock-market stories. however. the projections — on both sides — tend to exaggeration. Traffic is bad and will undoubtedly get worse, but all of our employees still reside within a few minutes of their workplace. The view out the window of our new offlCe remains one of trees and greenery with the towers of the UniverSity in the background. We will, we think. be enjoying the same atmosphere in our new location that has prevailed for 15 years In the former one, along with facilitIes ,that will enable us more fully to meet the demands of our clientele. We look forward, over the next few months. to meeting clients in our new pfflces. and to them we offer the assurance that the service and philosophy of DHT will remain unchanged. ANTHONY W. TAB ELL DELAFIELD. HARVEY. TABELL INC. AWTrs Dow-Jones Industrials (12 00 p. m.) S & P Composite (1200 p.m.) Cumulative Index (10/24/85) 1358.31 188.02 2433.65 No statement or epresslon 01 OplnlOO or any other matter herein contaIned IS or IS to be deemed 10 be directly or Incllrectly, an oller or the SOliCitation of an olfer 10 buyor sell any security referred toor menl10ned The matter IS presented merety lor the convenience of the subscriber White webehevethe sources of ourmlorma\lon lobe fellable, we in no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any actton to be taken bv the subsCliber should be based on hiS own inVestigation and Inlormatlon Delafletd, Harvey, Tabelt In(, as a COrporation and Its oilicers 01 emptoyees, may now have or may later take, pOSitions or \Jades In respect to any secunUes mentioned In thiS or any fulure Issue, and such pOSlhon may be dlflerent from any views now 01 herealler epressed In Ihls or anyolher Issue Delafield, Harvey labolt Inc which IS reg1stered With Ihe SEC as an Investment ddvlsor, mav gIVe adVice 101tS Investment adVISOry and other customers Independentty 01 any statements made In thIS or In any other Issue Furl her mlormatlon on any secunty mentioned herem IS avaltable on request

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