Viewing Month: March 1986

Tabell’s Market Letter – March 07, 1986

Tabell’s Market Letter – March 07, 1986

Tabell's Market Letter - March 07, 1986
View Text Version (OCR)

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 March 7, 1986 Disinflation is now a household word, the interest-sensitive sector is where the action is, long-term interest rates are quoted in single digit figures and lower crude oil prices are all – – – .,t.o,.oveieawseyd-.b1yt…h.e–i.m- Te…s..t-m.e'n-t-.;comm.. un….i..ty-.as cons.t..r..–ucti;ve-forthe…stock-maI;ket.-.It,almost -see-ms,.,..I While the Dow Jones Industrial Average spent most of the week trading just under its recent all-time high of 1713.99, some fairly interesting market action has been taking place in the NASDAQ OTC Industrial Average which posted a new 52 week high yesterday at 358.66. The general subject of aTC issues is a rather interesting one at this stage. The chart below pre- sents a 12-plus year history of the Dow as compared to the OTC Industrial Index. The upper line is the DJIA, the center line is the NASDAQ Index, and the lower line is the relative strength ratio, the NASDAQ Index divided by the DJIA. J ('I' jBOO. \ ' !'Y\700 250 NVj'rj rV-A,D(OV .,\,,IE1'S '.1.NJD'U.\Sf,\;'L;1,,V,\;,'oE\\I1..tI! \ I.,,'\..(\.J V .. 200 '50 r \;\j( ' \OTe llioy'jTP. AL /v V J.,-/,v, lit (J (VI' \'\'-.; I / …… .1 ——1 00 .LL—…….—l To briefly review the last few years, the NASDAQ Industrials has moved from 177.70 at the August 1982 low to a high of 408.40 in June 1983, a 129.83 advance as opposed to a 65.68 com- parable rise in the DJIA. The OTC Average then corrected itself 38.76 in July 1984 verses a correction over a similiar time period of 15.59 in the Dow. Although very dramatic, both of these moves in the aTC Index are not surprising, as we know a characteristic of the aTC Average is its historical tendency to rise and fall more sharply than the Dow, i.e. a higher beta. A glance at the chart above will show that this has been true in most major swings. However much of the superior relative action of the OTC stocks stem from their behavior bewteen 1976 and 1980, which constituted an exception to this rule. During that time OTC issues moved moderately upward during a downward and then flat market in the DJIA. Since then until the July 1984 low the action has been normal. However, recent strength in the OTC market relative to the Dow has been poor. True, the aTC Index has risen 43.41 from the July 1984 low, but this compares with a 57.75 increase in the DJIA. The OTC Index is still trading 12.22 below its June 1983 high While the DJIA continues to flirt with new highs, over 400 points above its November 1983 pre- vious high. .. As we had superior relative performance in the 1976-1980 period in the OTC sector, while the DJIA was moving down, since July 1984 we are seeing the OTC /DJIA ratio under-perform as the DJIA continues to move up. Monitoring this ratio may give us a clue to the ability of the general market to sustain its upward movement. Dow-Jones Industrials (12 00 p. m.) 1691. 68 S & P Composite (1200 p.m.) 225.67 Cumulative Index (3/6/86) 2955.56 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TAB ELL INC. No statement or epresslon of oPinion or any other matter herem contamed Is, ()( IS to be deemed to be, directly or Indirectly an offer Of the sollcrtatlon of an offer to buyor sell any security referred toor mentioned The matter IS presented merely for tM convemenco 01 the subSCriber While we believe the sources of our Inlormatlon to be reliable, we In no way represent or guarantee the accuracy thoreo! nor of Ihe slalomenls made herem Any action to be laken bylhe SubSCflbor should be based on hiS own mvesllgatlon and mlormatlon DelafJeld, Harvey, Tabell Inc, as a corporation and Its officers or employees may now have, or may laler talle poSitions or trades In respect to any seCUrities mentioned In thfs or any future Issue, and such pOSItion may be dlHerent from any vlev's nowor hereafter epf(lssed In thiS or any other Issue Delafield Harvey Tabelf Inc …. hlch IS registered With the SEC as an Investment adVisor, may give adVice tOltS mvestment adVISor, and other customers mdependcnlly of anv statemenls made In this or In any other Issue Further mformatlon on any security mentioned herem Is available on request

Download PDF

Tabell’s Market Letter – March 14, 1986

Tabell’s Market Letter – March 14, 1986

Tabell's Market Letter - March 14, 1986
View Text Version (OCR)

r- 4J;II' 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 March 14. 1986 There was yet another impressIve rally in the stock market thIS week as the Dow Jones Industrial Average closed at a record high of 1753.71 after posting a 43.10 point advance on Tuesday, the second biggest one-day gain on record, In very heavy trading. As impressive as thIS single day advance in low-.– …,.,….ptehreDenJtIA-ohis,diatyiasavnoatncuenpnaesd-beenetne'-de-,twteheedned,e-xfopurretseseend–i'n-ffrtfeferimasloiot-fep'selflrcceenthtaegeA. iiFiuosrt.Liegx-aSmf ple -thOiLs'fh2e.-5,-3-,;.-.,…,,-,,,,,.,,,-,..,, Standard &; Poor's 500-stock index also closed at record highs wIth the NASDAQ OTe Industrial Average posting a new 52-week hIgh but, as dIscussed last week, still tradmg below its June 1983 hIgh The arbItrage traders gave stocks a bIg push thIS week by bidding up the popular Standard & Poor's stock-mdex futures to record highs exaggerating the usual spreads between these future contracts and the underlYIng stock Indexes. These hIgh premiums In turn triggered the selling of these future contracts and the bUYIng of the related stocks. But what continues to fuel the stock market IS the expectation of lower long-term mterest rates. Thirty-year Treasurys are now at a ten-year low currently selling below eIght percent. Tills has not gone unnoticed in the Investment bankIng commumty as corporations lined up and sold billIons of dollars of new debt instruments this week. CUMULRTIVE NYSE PREFERRED STOCK BERDTH lNDEX DJIA DRILY CLOSE CUMULATlVE NYSE COMMON STOCK BERDTH INDEX PlCTTED Ttm.01 13 IgaS ' JAN as JAN 86 The strength of thIS interest sensitive sector in the stock market can be dramatIcally shown by examming a traditional technical tool–market breadth–m a slightly different manner. As this letter has pomted out, market breadth measurements continue to confirm the new highs in the averages. The NYSE for some SIxty years have recorded the advances, dechnes and unchanged of all Issues traded. More recently breadth fIgures have become available for common stocks only. This new series constructed as a breadth Index (advances-declmes diVIded by total issues traded) IS shown m the low- er third of the chart above. As expected thIS common stock only mdex behaves similarly to the tradI- tional total issues breadth Index. By subtractIng common stock issues from .total Issues traded we are also able to develop a preferred stock breadth mdex. Thls interest-sensltive mdex IS shown above in the upper third of the chart. Both of these breadth indexes are compared to the DJIA In the mIddle of the chart from pre-1982 low to date. It IS interestIng to point out that the common stock breadth Index spent most of the second half of 1983 declining while the DJIA went on to a new hIgh in November 1983. ThIS divergence was fol- lowed by a correctIon of 15.39 In the DJIA lasting untIl July 1984. The preferred stock breadth Index durmg this period, however. went to a new high reflectmg the ongoing strength In the mterest- senSItive sector during tlus declme. From the July 1984 low to date the DJIA has advanced without major interruption 61.40. During this period the strength of the common stock breadth index has been consistently ImproVIng, confirming each new hIgh in the averages WIth a new hlgh m breadth. What is most remarkable however. IS the relatIve performance of the preferred stock breadth mdex. Clearly reflecting the tremendous relative strength m the Interest-sensItIve sector of the market, this unique index should be monitored closely to reflect any loss of momentum WhICh, In turn. mIght be a precursor to a loss of momentum In the general market. Dow-Jones Industrials (1200 p.m.) S & P Composite (12 00 p.m.) Cumulative Index (1200 p.m.) 1769.52 234.53 3046.38 ROBERT J. SIMPKINS. JR. DELAFIELD. HARVEY. TABELL INC. No Statement or epresslofl of opinion or any other matter herein contained IS or IS 10 be deemed to be dlreclly or Indirect lv, an offer or the soUcltal1on of an oHer to buy or sell any secutlly referred to 01 mentioned The matter IS prosented merely for the convemence of the subscriber While we believe the sources of oUllniormallon 10 be retmbte, we In no way represent or guarant!!t! Ihe accuracy thereof nor 01 the statements made herein Any acllon to be taken by the subscllber should be based on hiS own investigation and mformat,on Delafield, Harvey, Tabelt InC, as a corporation and lIS officers or employees, may now have, or may latel take, poSitions or trades In respect to any socurities men\loned In thiS or any future Issue, and such position may be dltloront Irom anyvlOws now or hCloaf1or epressed In thiS or any other Issue Delafield Harvey, Tabelt Inc, which is registered With the SECas an Inestment advlsor.maY9lve advlcOlo 115 Invostment adVisory and other customers Independently of any statements made In thiS or III any other Issue Further Information on anv seculity mentioned herein IS available on request

Download PDF

Tabell’s Market Letter – March 21, 1986

Tabell’s Market Letter – March 21, 1986

Tabell's Market Letter - March 21, 1986
View Text Version (OCR)

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (6091987-2300 March 21. 1986 Again the Dow Jones Industrial Average methodically moved ahead this week posting a new record tlQirlg H.higQ.on..r!)urIay()i1804. an event that isbecoming oGomlIlonplace no story reporting thIS cuts.. event was made on either therranf page of ihe'-lfe YorkTmes' or TheWaI1-Street -JournBi morrt- . – ing. Rather the investment community seems to be preoccupied with trying to measure the influence of buying and selling programs tied to arbitrage against stock index futures and options. Of additional interest today is the anticipation of the expiration date of options on individual stocks as well as options and futures on stock indexes. Past expiration dates have produced wide fluctuations in stock prices and volume. Within this framework some rather interesting upside price and volume action is being featured in the over-the-counter market. This can best be shown by placing these series m longer term perspec- tive. which we try to do in the chart below. The chart shows the monthly average price for the DJIA since October. 1973, the ratio of OTC volume to NYSE volume and the ratio of the NASDAQ OTC Industrial Index to the DJIA. DOW JONES INDUSTR!RL RVERRGE OTC VOLUME / NY5E VOLUME OTC lNOU5TlRLS / DJ1R lNOUSTlqLS The first ratio, the monthly average of NYSE volume compared to the monthly average of the OTC volume is instructive. What is perhaps most interesting is the recent rise in the GTe volume relative to the NYSE volume. For March, through thIS week, OTC volume has amounted to approximately 84 of NYSE trading. If this level holds it will be the third highest monthly figure on record and is close to the peak level of June, 1983 when the ratio reached over 88. This volume increase measured against the recent rise of the OTC Index suggests that the OTC market is again attracting investor interest. Currently selling at a low hlstorlCal valuation to the DJIA. the second ratio. OTC mdustrials di- vided by the Dow Industrials, is beginning to show signs of reversing the downtrend channel that has contained the ratio from the OTC mdustrial high in June 1983. As can be seen above the period from 1973 to mid-1977, OTC performance was similar to that of the DJIA, with the NASDAQ Index trading at around 10 of the Dow. Beginning in 1977 a long-steady relative Improvement developed with 'shortinterruptIOns in 1978 and 1980 and a flattening of the relative strength curve in 1981-1982. By June 1983 the monthly average price for the NASDAQ Index had reached 32 of the comparable figure of the Dow. Over this ten year period the Dow increase was 48 while the OTC average rose 310. Since the June 1983 absolute hIgh in the NASDAQ Index and the relative high in the OTC IDJIA ratio much of this gain has been given up. Currently the Dow is trading over 500 points above its November 1983 high while the NASDAQ Industrial Index approaches its June 1983 high of 408.40. Currently the OTC Index has declined to 21 of the Dow figure. It has not been this low since June 1980 and is lower than it was at the start of the bull market m August 1982. It is for these reasons, a further increase in the interest of OTe volume relahve to NYSE volume which we have quantified, coupled with a historically low valuatIOn relative to the DJIA. that it is still possible to suggest the speculative phase in the over-the-counter sector has not fully run its course. Dow-Jones Industrials (1200 p.m.) S & P Composite (12 00 p.m.) Cumulative Index (3/20/86) 1806.87 236.95 3062.41 ROBERT J. SIMPKINS. JR. DELAFIELD. HARVEY. TABELL INC. No sl81emenl or expresSion 01 OPinion or any other maUer herein contained IS, or IS to be deemed 10 be directly or indirectly an olfer Of the soilc!tallon of an oller to buy or sell any security referred loor montloned The mal1er Is presented meraly for the convenlonce of thesubscnber While we believe the sources of our Information to berehable, we In no way represent or guarantee the accuracy tMmof nor of the statements made herGm Any action to be taken by the subSCriber Should be based on hiS own investigation and mformallon Delafield, Harvey, Tabel! Inc, as a corporation and ItS officers Of employees, may now have Of may later lake, positions or trades II'! respect to any securities mentioned II'! thiS or any future Issue, and such pOSItion may be dltferent from anyvlcws now or herealter cpressed In thiS or any other Issue Delafield, Harvey Tabell tnc which IS registered With tho SEC as an Investment adVisor, mayglva advice to ItS –Investment adVISOry and other CUSlOmers IndGpendcnlty of any slatemonlS made In thiS or In any other ISSue Further InformatIOn on any security mentroned herem IS available on request

Download PDF

Tabell’s Market Letter – March 27, 1986

Tabell’s Market Letter – March 27, 1986

Tabell's Market Letter - March 27, 1986
View Text Version (OCR)

m …… 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) 9872300 March 27, 1986 For the third week in a row the Dow Jones Industrial Average posted a record high, closing on Wednesday at 1810.70. Rotation of leadership is characteristic of the mature stages of most bull markets, and there. is. present!yJ,illlpleevtdence thatit…is ,ocquring in, tlJi,s. 9ne , .Thejollo.win,g .table list,s,1he. . . atwenty best and twenty 'worst performing of the 94 Standard & Poors'industry group indices on wee'klY- basis from the July 25 1984 low to March 19 1986, a period that fairly represents the latest upward leg of the current bull market and one clearly identified with the interest-sensitive sector of the stock market. For each of these groups we have also listed its rank and percentage change from the beginning of this year to date. The results are interesting. Included in the top twenty performers for this period are six groups (Savings & Loans, Property'Casualty Ins, Multi-line Ins, Banks-New York City, LIfe Insurance, Personal Loans) which are clearly associated with the above mentioned interest-sensitive sector of the market. These six groups from the beginning of this year. however, have in each instance underper- formed relative to the 94 S & P group universe. Although still up for the year, relative loss of momentum in this sector can be shown, and should continue to be monItored closely. Listed in the bottom twenty groups are seven energy-related groups which we know have all relatively performed poorly. Not only has this been true since the start of this last up leg of the advance but we find this also to be true even more recently since the first of the year. On the other hand, from the first of the year continued improvement in relative strength can be seen in the Auto, Building MaterIals and Brokerage stocks from the top twenty groups, while dram.atic improvement was shown in the Machine Tools and Steel groups in the bottom twenty groups. Contmued successful portfolio performance will be dependent on identifying these long term changes in group leadership as they evolve. M'.PERCENTAGE CHANGES THiU 1. 1986 FOR s,p INDUSTRY GROUP INDICES FROM JUl 25 1984 fROM DEC 31 1985 GROUP NANE TEXTILE APPAREL MFRS. POLLUTION CONTROL RANI , CHGoo 1 162.809 2 1508.571 RANI 1 CHGoo 30.294 11 22.189 SAYINGS , LOAN CDMPAMIES PRO'-ERTtSUALI TY—'liisiiAHte MULTI-LINE INSURANCE BANlS(NEW YORI CITt RETAIL SPECIALTY ,3146.336 n . .n. – , 140.411 128.190 7 125.421 . 7 2&.45l., 12 z4.101r 19 22.061 Z9 18.190 15 22.232 ENTERTAINMENT FOODS EltLUDING GEN. MOTORS 8 122.523 118.458 10 116.400 53 13.061 27 19.041 2 34.298 BEYERAGES BREWERS 11 111.801 .0 n.ll1 TRUtlERS TOYS LIH INSURANtE 12 111.289 13 111.015 14 105.359 18 22.186 ,.22 20.821 11.850 BLDG MATERIALS 15 103.909 11 25.008 GAMING COMPANIES I. 101.840 11 18.339 BROItERAGE FIRMS 11 99.919 1. 23.612 BROADCAST MEDIA 18 98.825 .5 15.548 PERSONAL LO, .. S 19 95.150 72 to.02e. tONlAtHER METAL 'LASS 20 91.448 2' 19… 658 . OJ!A SLP SOD .5 62 .. 993 5. 58.30t 15.600 .1 11.511 AUTO TRutlS PARTS 15 29.1H .0 11.684 REAL ESTATE INYESTMENT TRUSTS 1. 29 .. 119 50 14.862 DIU INTEGRATeD INTERNlTIDNAL 17 28.853 82 2 .. 648 COAL 18 25.116 78 1.841 ELECTRONItS-INSTRUMEHTlTION 19 25.224 5. 12.565 ELECTRONICS(SEMItONDUCTDRS,tONPO 80 22.924 61 10.386 AtHINE TOOLS NETAlS IStELLANEOUS OIL tOJIPOSlTE ,– INYESTENT COMPANIES EXtLUDING U.S .. STeEL 81 22.053 82 Zl.18B 13 23.665 15.320 – 1. -8' 16.111 . 84 …… 15.958 ' . -85 15.909 85 -l.B59 -3.044 25.082 .. , CANADIAN OIL GAS 8. 12.245 93 -15.690 STEEL B1 10.861 1. 9.339 HOSPITAL JlANEMENT tONPAHIES 88 6.865 19 5.6') DIU INTEGRATED DOMESTIt 8. 4.500 '1 -9.586 'OLD COMUNltA1ION EQUIP,MfRS OIL WELL EQUIPMENT AND SERVICE OIL CRUDE PRODUCERS OFFSHORE DRILLING '0 1.336 n91 -8.44) -20 .. 642 93 -22.839 -59.168 8' -0 .. 492 8' -5.192 9Z -12.049 -1 … 339 -39.B51 c — .' DOW-Jones Industrials (4 00 p. m.) 1821. 95 S & P Composite (400 p.m.) 240.05 Cumulative Index (3/26/86) 2594.75 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. No statement or expression of opmlon or any other matter herem contained IS Of IS to be deemed to be directly or Indirectly, an offer or the soliCitation of an offer to buyor sell any security referred to or mentioned The matter IS presented merely for the convenlcnccof the subscrrber While we believe the sources of our InfOrmation to be reliable, we In noway represent oruaranteethe accuracy thereof nor of the statements made herem Any action to be taken by the SUbscriber should be based on hiS own rnvesllgatlon and Informatron Delafield, Harvey, Tabell Inc, as a corporation and lis offICers or employees, may now have or may later tae, positions or Irades In respect to any secuflhes mentioned In this or any future Issue, and such posItion may be eMlerent from any Views now or heteafler expressed m thIS or any other ISsue Delafield Harvey labell Inc, whICh IS regls/ered With the sec as an mestmenl adlsor, may gle adVICe tOltS Investment adVISOry and other customers Independently ot any statements made m thiS or III any other Issue Further mlormatlonon any security mentioned herein IS available on request

Download PDF