Viewing Month: November 1985

Tabell’s Market Letter – November 01, 1985

Tabell’s Market Letter – November 01, 1985

Tabell's Market Letter - November 01, 1985
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V Lii.\1m1ED..D..'S Ia1iI Lii.\ IRl lEV Il.IEVVIEIRl 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 November 1, 198, Market action this week followed a familiar pattern. Prior to a Thursday pullback, the . – Dow Jones lnaustrliJ.l1Verage- on o-ctooer- 30posfeda-ne-w -alltifijehlgWll.t137''; '7, -b-e(trlng the- – – 1369.29 peak it had scored a week and a half before, on October 17. At the time of the midOctober high it was widely remarked, both here and elsewhere, that the performances of the Dow and the broaderbased indices had been quite different. A day prior to the Dow's high, the S & P 500, for example, had reached 187.98. This left it almost 4 below its July top of 195.65. The difference is beginning to be erased. The market's second short-term upside thrust this week saw the S & P advance to 190.07, closer to although still a fair amount away from its all-time high of last summer. Interestingly, the original reason for the dichotomy was removed, on Wednesday, in action taken by Dow-Jones itself. That reason had been the action of General Foods which, in the wake of the announcement of its takeover by Philip Morris, had moved recently some 48 above its mid- July level. This week its acquirer, Philip Morris, was substItuted for it in the DJIA. In an era when cigarettes are being equated with original sin, it would have been inap- propriate to have two tobacco stocks in the Dow, and American Brands, therefore, was duly re- moved. We consulted with Dow-Jones prior to the changes, and AMB's successor, McDonalds Corp. appears to us to make eminent good sense. It was I indeed, one of the issues mentioned in this space as a potential Dow replacement on the occasion of the 100th birthday of the Industrial Aver- age in July, 1984. This issue having been disposed of, it is our own feeling that the S & P 500 will shortly follow the Dow into new high territory. The broader index's move to 190 this week constitutes an upside breakout from what looks like a head-and-shoulders base formation, with an objective around the 200 level, comfortably above its all-time high figure of last July. Whether or not the S & P will again begin consistently outperforming the Dow, however, is more of an open question. -IL…we assume that the latter averagl'erior performance is going to continue over the interme- diate term, it is necessary to examine the implicationS, -if any, of suclf actlon-. — ………. — – – – -.- i A number of commentators, referring to the phenomenon of the DJIA's leading the S & P on the upside, had called it a divergence. We cannot quarrel with this as English usage, since it is possible for any two numerical series to diverge, and the two averages have, in fact, done so. It should, however, be noted that ,within the professional community of technicians, the term di- vergence is generally taken to mean diverging action between the Dow and measures of market breadth, not other indices such as the S & P 500. Such a condition exists at the moment, will probably continue to exist, and the ramifications of this divergence have been discussed at length in this space. The condition, as we have noted, suggests a market peak likely to be scored at some point in the future, although not necessarily over the short term, since the historic lead time of breadth over the Dow at market peaks tends to be significant. It is this lead time that makes breadth analysis useful. By contrast, however, inferior action on the part of the S & P 500 is of questionable usefulness as a market predictor. The mistaken impression that superior performance by broad-based indicators is bullish may arise from the fact that such action, with some frequency, has often begun manifesting itself somewhere in the fairly early stages of major upswings. For example, the 500 began to outperform the Dow in late 1982, a few months after the August, 1982 bottom. Although the market had al- ready moved up significantly by that time, the outperformance continued through the fall of 1983 as did the market rise. Superior S & P action reasserted itself in the spring of 1984, shortly before the intermediate-term bottom in July and continued until this summer. A period of Dow outperformance began last May. The trouble with prior periods similar to May to date is that they have been initiated at widely different points in various market cycles. Occasionally they have occurred well after peaks, and, with equal frequency, they have taken place too far ahead of important higbs to be of any use. Reference to divergence. in other words, is best restricted to the classic technician's usage, comparing the Dow with market breadth and not with broad-based indicators. AWTrs ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (1200 p.m.) 1383.14 S & P Composite (1200 p.m.) 189.77 Cumulative Index (10/31/8,) 2444.83 No statement Of epresslon of opinion or any other matter herem contained IS, or IS 10 be deemed to be directly or mdlrectly an offer or the sollcllatlon of an offer to buy or seli any secuflly referred toor mentioned The mailer IS presented merely for tho convenience at the subSCriber While we believe the sources of our Information to be reliable, weln no way represent or guarantee the accuracy thereof nor of the statements made herem Any action to be laen by the subSCriber should be based on hiS own investigation and mformatlon Delafield, Harvey, Tabell Inc, as a corporation and ItS officers or employees, may now have, or may later tae, POSitions or trades In respect to any secufilies mentIOned In thiS or any future Issue and such pOSition may be dlilemnt from any views nower hcreafler expressed In thiS or anyothel Issue Delafield, Harvey, Tabell Inc which IS registered With the SEC as an Investment adVisor, may glV!! advfce to Its Investment adVISOry and other customers mdcpcndcnHy of any statemenls made In thiS or In any other Issue Further informatIOn on any security mentIoned herem IS avaIlable on request

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Tabell’s Market Letter – November 08, 1985

Tabell’s Market Letter – November 08, 1985

Tabell's Market Letter - November 08, 1985
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DLinIBUEIL.IL.' S IiijiJ Lin IRl IED 1L.1EDD1E1Rl 600 ALEXANDER ROAD. PR If'lCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 987-2300 November 8, 1985 ..'; —, The……,week!smar..ket8ction occasioned 8bit,of4anfar.et-so uchbecause-e-of..,new.aUt-ime-,Jrighs,in. the Dow on Tuesday and Wednesday, 'but 'because Wednesday's close moved the DJIA' above 1'400. As the average moves higher I financial commentators are going to have to become less euphoric about magic numbers ending in two zeroes. At current levels. a lOO-point move for the Dow is just a bit over 7, a figure just barely qualifying as a meaningful short-term swing. There appeared. as the new highs were scored, to be a fair amount of fighting the tapel! gOlng on. Those who had been bearishly inclined before the entire process started were, as of this week, still clinging to the straw of the S & P 500's failure to post a new peak. As we noted last week, we thInk this bit of bearish ammunition will soon disappear, since our own short-term objective for the 500- stock index IS 200, a level which would place that indicator in new high territory with room to spare. The bearish case had been based on the scenario of a major high's having been made back in July, coupled with the noticeable deterioration. particularly in terms of breadth. that followed the achievement of that peak. We have been discussing this deterioration at various times in this space throughout late summer and early fall. The manifestations thereof still exist and constitute a fact investors must live with. What this letter has tried to do, while drawing attention to the less-than-scintillating breadth action which featured mid-July-mid-October. was to put that phenomenon into historical perspective. What we now have is a quantifiable phenomenon with certain benchmarks. The most important such benchmark is July 19, 1985, the day that market breadth indices scored theIr high. New highs have now been being posted in the Dow for almost a month, and breadth indicators remain significantly below last summer's levels. The divergence could, of course, be cancelled by new highs In breadth. Indeed, it can be noted that breadth action ceased being substandard on October 8, and has, actually, been slightly above average since that time. Examination of the record, however, shows that a breadth de- cline of the magnitude of July 19-0ctober 8 has never. in recent market history, subsequently been erased. We are. therefore, willing to make the assumption that this partIcular divergence will not be erased either. 1 The pitfall to be oiin breadth analysis is dnlwing near-termjmplications from breadth pe,aks'.', -lf-I … s noted above, Jiilfl9, wIth Its close of 1359.54. IS noW a benchmark wHlCh can be compared to sImIlar dates in past bull markets. As we have p6inted out, the Dow, in the post-World-War II period. has, in eight different bull markets, ultimately moved above its breadth-peak level by amounts ranging from 6 to 24. This range equates to 1440-1685itl terms of today's Dow. Past lead hmes of breadth highs over market highs have ranged between nine months and three years which would suggest a bull-market top between March, 1986 and July, 1988. Now these ranges are admittedly so wide as to be almost useless, and our own tendency is to anticipate something on the conservative end of both. Even that anticIpation. however. leaves a fair amount of both room and time for profits in the stock market. In our own view. if there is anything particularly surprising about recent action. it has centered on the leadership. The following list shows the ten best acting S & P industrial-group indices for the past four weeks, together with their percentage change versus a 5.8 rIse in the Dow. l. Department Stores 2. Property-Casualty Ins. 3. Savings & Loan 4. Soaps 5. Multi-Line Insurance Co. 18.4 16.8 15.4 14.7 14.6 6. Pollution Control 7. Life Insurance 8. AIr Freight 9. Retail Specialty 10. Textile-Apparel 14.0' 13.7 13.6 13.4 12.8 What we have here obviously is a return to the atmosphere which prevailed between summer 1984 and summer 1985. We say this is surprising because we had thought that the deterIoration in these dis- inflation-hedge groups. between July and October, had been signIficant. Most stocks in this general class. however, have sailed merrily along to bull-market hIghs with, as noted, action superior to that of the Dow itself. This phenomenon engenders some of the same conservatIsm produced by examination of market breadth. Stocks WhICh have had this long an advafice- can certainly be' said to be at least partially ex' plaited, and, indeed, long-term upside objectives in many of these stocks are beIng approached. With the new highs, however. there obviously remains an absence of current top patterns. which, even under worst-case conditions, would take time to form. This conforms to the thesis that there remains a fair amount of life in the old bull yet. AWTrs ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (12 00 p. m.) S & P Composite (12 00 p.m.) Cumulative Index (11/7185) 1395.18 192.71 2484.17 No statemont or expreSSion of opinion or any other matter herein contained IS or IS to be deemed to be dlrectty or Indirectly, an offer or the soliCitation of an offer to buy or sell any security referred to or mentioned The matter is presented merely tor the convenience of the subSCriber While webellevethe sources of our Information to be rellabl'l, we In no way represent or guarantee the accuracy thereof norot the statements made herein Any action to be taken bv the subscrlher Should be based on hiS own investigation and Information Delafield Harvey, Tabell Inc as a corporation and Its oilicers or employees, may now have, or ma( later take, POSitions or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such position may be dlfferenl from any views now or heleafterexpressed In thiS or any other Issue Delafield, Harvey, labell Inc, which Is registered with the SEC as an mvestment ddvlsor, may give advice to ItS Investment advisory and other customers Independently of any statements made In thiS or In any other Issue Furlher mforma\lon on any security mentioned herein IS available on reQuest

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Tabell’s Market Letter – November 15, 1985

Tabell’s Market Letter – November 15, 1985

Tabell's Market Letter - November 15, 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 November 15, 1985 Beginning the week with a 27-point surge, together with an 11-point followup on Thursday, the Dow-Jones Industrial Average pushed further into newall-time high territory. As e-JjadSuggesred- wol.ila'be tJje . case';' itsoined-ii1new'nigh' grourid-by-the broader-oased—- '— ….,… indices, including the S & P 500 and the NYSE Composite. We expressed the view last week that there was nothing particularly surprising about the move to new high ground and went on to sug- gest that the most striking phenomenon of the past two months had been the resumption of upside leadership by those issues which had led the bull-market phase from summer 1984 to summer 1985 and had undergone severe corrections between July and September. This week, we attempted to quantify that phenomenon. Decile —— 1 2 3 4 5 6 7 8 9 10 A v e r a 712/84-7/19/85 e ————— 103.44 65.96 52.74 43.71 36.20 28.0'2 20.39 10.97 -1.73 -31. 37 F' e r C e co t a e 7/19/85-9/20/85 —– – ——- — 11. 83 0.33 -3.23 -5.34 -7.11 -8.74 -10.46 -12.69 -15.97 -25.72 C h a n e 9/20/85-11/12/85 —————'27.76 17.! 7 13.72 10.88 8.59 6.46 4.! 1 1.19 -2.86 -13.53 To do this, we studied the action of 1211 NYSE stocks over three market periods, the 1984-1985 upswing, which saw a 25 rise in the Dow, the correction from July to September and -the-I!ecent rise fr.om-September-to.this-X.u.esdayWeankedtheper.f),anof-eQ()hstkinch-.- , period by deciles of approximately 121 stocks each. The average performance Declle DeC11e for 7/19/85 to 9/20/85 for each decile in each of the three 7/84-7/85 1 2 3 4 5 6 7 8 9 10 periods is shown in the table above. Next we tabulated how 1 11 14 10 5 14 8 10 11 18 the stocks in each decile, based on 8 10 15 17 8 9 9 15 21 10 July, 1984-July, 1985 performance, fared during the correction, the re- 3 10 9 13 12 10 18 13 13 19 5 4 7 14 10 11 14 19 18 10 10 9 sults being shown in the table at right. As can be seen, of the 121 best performing stocks on the upswing, 38, or almost one-third, ranked in the 5 6 7 8 12 14 15 15 14 12 11 19 7 3 10 5 11 17 14 12 14 16 13 10 15 17 12 16 17 12 7 10 5 11 9 14 15 15 14 10 11 10 17 7 last two deciles for the July-September 9 19 13 15 9 11 14 18 5 4 14 correction. Similar bias was shown 10 20 12 6 5 6 8 11 13 6 27 for stocks in the second decile. What was truly amazing, however, is the extent to which the best performing stocks of last year!. rise have recovered and led the market on the upswing from September to date. Dc lle Dec 11 e for 9/20/85 to 11/12/85 The figures for this period are shown 7/84-7/85 1 2 3 4 5 6 7 8 9 10 in the table at left. Of the 121 stocks ranked in the 1 33 21 22 8 5 5 6 10 5 6 first decile for the year-long upswing 2 8 20 25 16 13 13 6 6 11 4 — a group whose average upside 3 13 19 11 13 12 18 11 9 8 8 gain for that year was over 100 — 4-., 10 8 9 20 '21 11 9 16- 11 7 33 issues, or almostone in four, were 5 6 11 12 21 18 13 15 16 5 5 among the best performers from Sep6 10 9 11 20 8 14 12 16 12 10 tern bel' to date. 76 issues, or almost 7 9 14 7 7 12 14 24 14 10 11 two-thirds of the group, ranked in 8 10 8 6 7 15 15 12 12 25 12 the first three deciles for the recent 9 8 4 12 6 9 8 19 10 27 19 rise. Broadening the study further, 10 14 8 7 4 9 11 8 13 8 32 of 363 stocks in the top three 1984-5 deciles, 172 stocks, almost half, also found themselves in the first three deciles for the most recent upswing. It is quite clear, therefore, that the recent advance has consisted largely of extensions of the moves of disinflation-hedge issues, notably in the consumer and interest-sensitive areas, which led the market in its previous major upside phase. Dow-Jones Industrials (12 00 p. m.) S & P Composite (1200 p.m.) Cumulative Index (11/14/85) 1444.38 199.14 2553.60 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No statement or epresslon of opinion or any other matter herein contained IS, or IS to be deemed 10 be, directly or Indirectly, an olfer or the soliCitation of an oUer to buy or sell any secunty referred tOOf mentioned The matter IS presented merely !orthe COfwemence of the subscriber While we believe the sources of our Information to be reliable weln no way represent or guarantee the accuracy thereof nor of the statements made herem Any action to be taen by the subscnber should be based on hiS own Investlgallon and information Delafield, Harvey, Tabelt Inc, as a corporation and lis officers or employees may now have, or may laler take, pOSllions or trades In respect to any securities mentioned In thiS or any future Issue and such pOSItion may be dlflerenl from any views nowor hcreaiter epressed In thiS or any other Issue Delalleld, Harvey, Tabell Inc, which IS registered With the SEC as an Investment adVisor, may give adVice to ItS InveStment adVISory and other customers Independently of any statements made In thiS or In any other Issue Further Informahon on any secull1Y mentioned herein IS available on request

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Tabell’s Market Letter – November 22, 1985

Tabell’s Market Letter – November 22, 1985

Tabell's Market Letter - November 22, 1985
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V&.\ IBHELL' SiB &'\RIE'1J' IL.1E'1J''1J'IER 600 ALEXANDER ROAD, PRI NCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 November 22, 1985 If the recent rally has been a surprise to many analysts, its 23. OS-point extension to 1462.26 on Thursday probably generated total astonishment. It can, of course, be pointed out that the market is deeply overbought on a short-term basis but this, paradoxically, can be con- strued bullishly, since overbought short-term advances often initiate above average intermediate- term action. The only possible sign of weakness in the market's current technical condition can be ex- emplified by applying the classic test for a good stock recommendation. Such a recommendation should elicit a one-word response. Two such responses are appropriate. The first is That. The second is Here. The only possible quibble with current market action is that there are too many Here1lls and not enough Thatllts. A stock in the latter category should, by definition, be one that has been out of favor for a protracted period of time. From a technical point of view, that lack of investment attention will have produced a long accumulation range, often covering many years, during which the available supply of stock offered by disgruntled and impatient holders has been absorbed. Recent technI- cal action will have seen the stock break out of that long trading range, suggesting an upward adjustment to a new, and perhaps significantly higher, price level is imminent. There do, indeed, exist a few current That-type patterns. One such, offered purely as an example, might be Dupont. A Dow component, it has been out of favor since the Eisenhower administration. It has basically been a non-participant in the last three major market cycles hav- ing, in the bull phase of all three of those cycles, moved, roughly, from 30 to 50 and having then retraced that move on the downward swing. It has, finally, only this year, moved out of the re- sultant trading range, and iScurrently posting new 52-week highs. This is classic good technical – . – –antlon-;4Juttointlng-uuHhe-facHs-likely-to-elieit-ineredulit-yon–thepart-of-most-pept-f()lio—–I managers. Actually, the Dupont pattern is fairly typical of the chemical industry, not one that can be said to have been in recent favor. A few other such industries exist. The market's current in- fatuation with possible lower interest rates is an observable phenomenon, and it is logical to sur- mise that such lower rates might extend to the mortgage market and thus provide a stimulus for building activity. Building-material stocks, however, have only just recently begun to exhibit above-average relative action and, in the process, have tended to break out of the sorts of long trading ranges beloved by chartists. As we noted above, however, this sort of thing is somewhat atypical. We have been sug- gesting in recent issues, that the best relative market action has tended to be shown by those stocks which have been market leaders for the past three years, a great many of them, during the course of that leadership, having more than tripled in price. Analysis of the average food stock, for example, consists essentially of trying to project uptrend lines, trendlines which, as the stocks move to new alltime highs, are still a good piece away from being broken. Insurers and regional banks, by and large, pulled back sharply on the July-September downswing, but have quickly re- based and either moved on to new peaks or give every implication that they are about to do so. To a slightly lesser degree, this applies to other interest-sensitive sectors. Retailing issues, now being increasingly viewed as real estate plays and/or buyout candi- dates have also completed reaccumulation patterns and find themselves resuming the upward moves begun in the summer of 1984. The same is true of most drug stocks. However, mention of the fact that such stocks, now selling around three-year cycle peaks, are possible purchases based on relative strength is almost guaranteed to provoke the Here response — possibly rightly so. None of this, however, should be interpreted as having negative implications, at least for -the intermediate term. The most striking feature of the present market is the almost .complete – — absence of anything vaguely resl'mbling a distributional top, especially a major distributional top. Now we have been taught, in recent years, how quickly such tops can form and how rapidly surprise declines can ensue. Despite this, time is still required for reversal patterns to build, and it certainly will be required in the current instance, where, by and large, intermediate -term patterns consist of intact uptrends with recently-posted new peaks. The maturity of the current cycle continues to be a well-known fact, but the total absence of those conditions which would be necessary precursors to its reversal must also be noted. AWTrs Dow-Jones Industrials (1200 p.m.) S & P Composite (1200 p.m.) Cumulative Index (11/21185) 1464.56 201. 70 2580.92 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. NO statement or expreSSion of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an offer to buyor sell any securUy referred to or mentioned The maIler IS presented merely forthe convenience of the subSCriber While we believe the sources 01 our information to be reliable we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subSCriber should be based on hiS own Investigation and In!ormatton Delal1eld, Harvey, Tabell Inc, as a corporation and ItS officers or employees, may now have, or may later lak.e pOSitions or trades In respect to any securities mentioned In thiS or any future Issue, and such posl\!on may be dllfefent from any views now or heleaftere)(pressed In thiS or any other Issue Delafield Harvey, Tabell Inc, which IS registered With the SECas an Investment adVisor, may give advice 10 lIS Investmenl adVISOry and other customers Independently of any statements made In thiS or m any other Issue Further mformatlon on any security mentioned herem IS available on reQuest

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Tabell’s Market Letter – November 29, 1985

Tabell’s Market Letter – November 29, 1985

Tabell's Market Letter - November 29, 1985
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T lii.\BIED..D..' S m1iJlii.\R IET D..lETTIER 600 ALEXANDER ROAD. PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS,INC (609) 987-2300 November 29, 1985 Thanksgiving, 1985 should have been a particular occasion for stock-market investors to ' temem be!'tir Ablessing ,wJlwitthIIl!ljp',mawt,.lv'l.rgs,,,.af;JatW911!0t!,,J tOp9int . advance;haVingAposted 'newall-time highs on -the holiday eve. 'As a group, however, investors may not, in fact, have been sufficiently appreciative, as suggested in the lead story in Wednesday's Wall Street Journal, which called the recent advance a strange rally and noted that Stocks Have Climbed, but Usual Euphoria Seems Oddly Absent. We confess that we agree, in large part ,with the Journal article. Our own investment ca- reer spans the bull markets of the 1960's. John Brooks, around that time wrote a book, about an- other stock-market period, entitled Once In Golconda, explaining the title by saying, Golconda, now a ruin, was a city in southeastern India where, according to legend, everyone who passed through got rich. A similar legend attached to Wall Street between the wars. The mid-1960's attitude was not all that dissimilar. Our own reading of the current level of Wall lit reet euphoria would place it at a point on the scale not too far removed from that of the early 1950's. Shortly before that time, the writer's late father ventured the opinion in this letter that the Dow-Jones Industrial Average, then below 200, would ultimately surpass its 1929 high of 386. He later revised this to mention a specific tar- get of over 500 by the mid-1950's. For this, he earned a reputation as some sort of kook — or whatever the 1950's equivalent of a kook was. The prevailing Street attitude in those days, with most of its luminaries having undergone the dismal 1930's as their formative years, was that signifi- cantly higher prices were not only unlikely — they were unthinkable. The Journal in its Wednesday article, was at least able, after, we suspect, a fairly inten- sive search, to discover a number of analysts who were at least willing to talk about higher levels. One suggested a Dow gain of 800-1000 points over the next five years, and the venerable John Templeton noted the possibility of a 3000 Dow by 1991. The point is that these predictions, on the high end of the current optimism scale, are not particularly startling. 1000 points on the Dow in –rfive-yenrs-equals-an-annttai-compoundedgainof-H-;-,-and-3000DJ-IA-tal'getfor–l991wol'-ksoutAo. – just under 13 on an annual basis. Both figures are above the long-term rate of return offered by the stock market during this century, but not by wldly unrealistic amounts. An inspection of stock-market history will show any number of five-to-six year periods when the total appreciation on the Dow was well in excess of that figure. From 1949 to 1956, for example, the annual percent- age appreciation for the average was 18!. In our own view, a workable hypothesis for making long-range projections is that a secu- lar bull market 'lxisted from 1949 until 1966, a 17 -year timespan. We also thinK it arguable that a watershed low, similar to 1949, occurred in 1974, following which 17 years takes us to 1991. The 1949-66 rate of growth was 11. 38, and a similar rate would have us, in 1991, at 3592. Our own technical work confirms the possibility of such higher upside objectives. The upside target based on the 1978-1982 accumulation is 1700, and this is confirmed by the 1984-1985 formation. A longer-term projection, taking 1966-1982 as a base, suggests 2600, and higher figures will probably become reachable from new bases formed along the way. However, while we are perfectly willing to go along with long-term suggestions of a higher stock market, we are not sure that they help solve the major dilemma facing investors at the mo- ment. That dilemma centers on whether or not the long-range objectives are going to be attained in a more or less straight line from current levels, or whether the advance will be interrupted by another cycle bear market, mild perhaps, but a bear market nonetheless. Readers of this letter are well aware of our own inclination toward the conventional view that the current cycle, having begun in August, 1982, is currently in a mature stage, and that there exists the possibility that the road whose destination, we fully agree, is a much higher market in the 1990's may involve a detour of fairly significant proportions. It is our hope that technical evidence, as it develops over the short termC. willpr,ovide the dilemma's resolution. . . .,.,.. AWTrs ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. Dow-Jones Industrials (12 00 p. m.) S & P Composite (12 00 p. m. ) Cumulative Index (11/27/85) 1475.11 202.75 2584,48 NO statemen or expresSion 01 oplOion or any olher matter herein contained 15. or IS 10 be deemed to be, directly or indirectly. an oller or the sohcltahon 01 an oiler 10 buyor sell any security referred to or mentIOned The matter IS presented merely j() Ihe convemence oj Ihe subscllber While we believe the sources of ourlnlormallon 10 be reliable we In no way represent or guarantee the accuracy thereof nor ollho slatemenlS made herein Any action to be taken by the subSCriber should be based on hIS own Investlgatron and mlormallon Delafield, Harvey Tabell Inc as a corporallon and Its officers or employees, may now have, or may later take poSitIons or trades In respect to any securities menhoned In thiS or any future Issue, and such position may be different/rom any views now or hclealler expressed In thiS or any other Issue Dela/leld Harvey Tabell Inc, which IS registered With the SECas an Iflveslmenl advisor, may give adVice to 115 Investment adVISOry and other customers Independently 0/ any statements made m thiS or In any other Issue Further mformatlon on any security menl!oned herein IS available on request

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