Viewing Month: April 1986

Tabell’s Market Letter – April 04, 1986

Tabell’s Market Letter – April 04, 1986

Tabell's Market Letter - April 04, 1986
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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 April 4, 1986 Last week we tried to identify the gradual rotation of leadership that appears to be taking place in the Standard & Poors industry group indices within the framework of an ongoing bull market. It was – – – pointed-out ….that. the –stron-g-long-t-erm-performance Lof,.,the….mterest-sensltive…. groups have, sincethe -first of the year, continued to move ahead but are starting to show signs of a loss of momentum. To put this long-term performance in proper perspective we have taken a monthly average of S & P groups that either constitute an inflation hedge or would be a disinflation beneficiary and have created two seperate indexes. Inflation hedge groups would include, among others, metals, gold, copper and the entire energy sector. Disinflation beneficiary groups would include groups such as airlines, drugs … foods and the interest-sensitive sector–banks, insurance and utilities. STRNDRRD &paaRS 500 INFLRTlaN HEDGE VS DISINFLRTlaN BENEFICIARY RRTla The chart above shows the monthly close of the S & P 500 and the ratio of the inflation hedge index to the disinflation index from January 1972 through March 1986. If the inflation hedge index is advancing more than the disinflation beneficiary index the ratio line is going up (1972-1980). Clearly it can be shown from the chart above that the inflation hedge sector has underperformed those groups which are disinflationary benefiCIaries since the start of the bull market-August 1982. But it is possible to go back even further than this date to identify the beginning of this significant change in the market environment, a change that has sustained itself to the present. The ratio reached its high at the end of 1980 coincident with the high in the S & P 500. This date by hindsight signaled the peak of the ratio of inflation hedge stocks relative to those stocks that are beneficiaries of disinflation. It was during the subsequent correction in the market to the August 1982 low that the inflationary-hedge index turned down. Tlus occurred while the disinflationary beneficlary index continued to move ahead in the face of a 15 dechne m the S & P 500. The final confirmation of this significant internal change came when the market rallied dramatically in AugusL 1982, but failed to include the inflation hedge sector. Currently. from the ratio peak of December 1980, the inflation hedge sector has declined with minor interruptions approximately 30 thru March 1986. The disinflation beneficiary index on the other hand has increased 185 to date. This is not to suggest that an immediate switch into the disinflation beneficiary sector was warranted shortly after the peak in the ratio in December, 1980. Rather we would suggest an examination of the ratio over time would reflect the gradual internal change within the market. By the August 1982 low this change should have been clearly identified with appropriate shifts in weighting made in order to participate in the advance which was to come. Where are we now in terms' of this ratio The raho based on data available from 1960 to date cur- rently is at the lowest level since April 1972, the historical low for the series. Although it seems likely to expect further strength in the disinflahonary beneficiary sector of the market in the immediate future, it would seem wise. as we discussed last week to monitor series of this type that attempt to measure shifts in market sentiment. Dow Jones Industrials (12 00 noon) 1765.09 S & P 500 (1200 noon) 231. 69 Cumulative (4/3/86) 2611. 93 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVERY. TABELL, INC. NO statement or cpreSSlon of OplnlO'1 or any other matter herem contained IS or IS 10 be deemed to be directly or indirectly, an offer or the sohCltatlon 01 an cHer to buy or sell any security referred 10 or mentioned The mailer IS presented merely tor the convenience of the subscriber WhllclIIe beheve the sources of our information lobe reliable we In no way represent Of guarantee the accuracy theroof nor 01 the statements made herein Any action to be tak.en by the subscriber should be based on hiS own investigation and Information Delafield, Harvey, Tabell Inc. as a corporation and Its aUlcefs or employees may now have, or may laler take pOSitions or trades In respect \0 any securities mentioned In thiS 01 any future Issue and such POSition may be different Irom any views nowor herealter epressed In thiS or any other ISSUO Oetallolcl Harvey Tabell Inc whIch IS regIstered with the SEC as an rnvestment adVIsor may gIve aovlcetorls rnveslment adVIsory and other customers mdependently 01 any statements made In thiS or In any other Issue Further Information on any security mentioned herem 15 avallabte on request

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Tabell’s Market Letter – April 11, 1986

Tabell’s Market Letter – April 11, 1986

Tabell's Market Letter - April 11, 1986
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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) 9872300 April 11, 1986 In the short span of six trading sessions the Dow Jones Industrial Average has corrected itself eighty-five points from its recent all-time high of 1821. 73 closing on Tuesday at 1735.51. This correc- – tipn L of4-73'-ist.h. largst-peJcentage'decline-in4h-DJIA- in well- Qvercayeardating-back—to' December -,0.. – – zo.-1984. The market as of this writing spnt the remainder of the week trying to recover part of thIS loss. With new highs in the market averages commonplace a minor correction of this type does not make us reverse our constructive view of the market. However it does afford us the opportunIty to stop and reexamine the position of the market in the context of cycle theory. The chart below should not be unfamiliar to readers of this letter. This updated version shows the present position of the current maJor market cycle which we believe began on August 12, 1982 at 102.42 and, interrupted by the October, 1982July, 1984 intermediate-term correction, carried to 238.97 as of March 27, 1986, a 133.32 advance. The history and shape of the eight previous cycles are shown by the horizontal hnes at the top of the chart. The lines are drawn to the same horizontal timescale as the chart itself, and each cycle is measured from low to low. The high for each cycle is shown by a hash mark along with Its date and the total percen- tage advanc2e'CllLCLEo-PEIRTIlrJOrrrlCrDnW-HnIGTHY-HDVrRrNYCt'.)–'PERKrCInCC,E,ORIE JUN 1949-SEP 1953 SEP 1953-DCl IS57 OCl IS57-JUN 1962 JUN 1962-0Cl 1966 OCT 1966-MRY 1970 MRY 1970 OCl 1974 OCl 1974 MR 1978 MRR IS7B RUG 19B2 (48.051 ( 73.14) (119 02) 96.75) I JRN 1953 RUG IS56 86.351 II DEC IS61 79.781 I FEB IS66 I NOV 1968 73.53) JRN 1973 SEP 1976 (61 70) I NDV ISBO .- (68.57 CURRENT CfClE 1133 321 t61.66 OCT 11l1liE'—'!!.h JUN 11llll2'-''''''''''''L.11C I DECLINES !F f'VEVM 6!AA ItRf.E1S fR0I1111E ClJ!9Em CTCLE'S 11(;11 The average length of these cycles, measured from low to low has been 45 months. The present cycle from August 1982 to date is now over 43 months old. There have been instances of cycles in the 50-55 month range. which would leave us less than one year for a typical cycle completion. Proponents of the four-year cycle are being tested because. since we are measuring a cycle from low to low, there is very httle time left for the necessary correction of the advance to take place. True, the percentage of the total length of a cycle spent in an advancing stage has been measured as much as 90 of a gLven cycle. However, taklng the maximum length of the advancing cycle and the maximum length of the cycle itself from our historical experience. the present cycle would have a lifetime that could carry into the fall of 1986. Clearly the four-year cycle is facing a problem–time is running out. The recent action of the DJIA could help solve this problem. After breaking out on the downside from a short-term top the Dow corrected to the low 1700 support area. If, as has been repeatedly done in the recent past, the market reverses itself and goes to a new high then the bull market is back in gear, and the four year cycle problem remains unresolved. However if the market were to begin to back and fill in this 1800-1700 area a potential head and shoulders formation could develop, the recently tested 1700 support area representing the left shoulder. At this time it would be foolish to place any bearish importance to a pattern that has not yet evolved. However because of the recent wide vohtile swings In the averages this could happen sooner rather than later. Dow-Jones Industrials (1200 noon) 1795.63 S &P Composite (1200 noon) 237.32 Cumulative Index (4/10/86) 3094.15 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL, lNC. No statement or expression of opinion or any other mailer herein contained IS or IS to be deemed to be dlreclivor IndireCtly, an oHer or the sohcltahon 01 an olfer to buy or sell any security rcferred to or menloned The matter IS presented merelv for the convcmence of the subscriber While we believe the sources of our Information to be reliable. we In no way represent or guarantee the accuracy thereof nor of the statcmens made herein Any action to be taen by the SUbSCflber should be based on his own Investigation and Information Delafield, Harvey, labell Inc, as a corporation and ItS officers or employees, may now have, Of may later tae, pOSitions or trades in respect to any secuntles mentioned In thiS or any future Issue, and such position may be dlfferenl Irom clny Iews now or hcroaJtcr epressed In thiS or any otller ISSUO Delafield Harvey Tabell Inc which IS registered With the SEC as an Investment adVisor, may give adVice to IS Investment adVisory and other cuSlomers Independently of any statements mllde In thiS or In any other Issue Further Information on any sccuntv mentioned horein IS available on request

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Tabell’s Market Letter – April 18, 1986

Tabell’s Market Letter – April 18, 1986

Tabell's Market Letter - April 18, 1986
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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 April 18, 1986 The advance of the stock market was again quickly reestablished this week as the Dow Jones lndus'-'trial Averag p5E'Jed anotheE nw,!ll!tim-clsinghigh of-185 03-on'l'hursdayA-s- was dlSCll s-se-cl,.last''.M-….,,J-, week in this letter, the possibility of the minor 4.73 correction. the largest decline in the DJIA since December 1984, potentially being a precursor to the formation of a potential head and shoulders. has been erased. We have reproduced below the charted history of daily and weekly breadth indices SInce the August 1982 low. The classIc interpretation of these indicators, based on the number of advancing and declining stocks for each day or week, suggests that when succeSSIve new highs in the Dow are unaccompanied by new highs in breadth, a divergence condition exists, indicating a potential correction in the market to follow. The action of the two indices between June 1983 and January 1984 is a recent example. Dot i DRILY BRERDTH INDEX WEEKLr BRERDTH INDEX Conversely, extended periods where breadth outperforms the Dow are normally suggestive of bull markets. The behavior of the two breadth indices from the July 1984 low is important to review. Since then there have been a serIes of minor peaks in the Dow, followed shortly by new highs. Each of these peaks has been accompanied by a new high in both daily and weekly breadth indicators. Even more significant is the level of the dmly and weekly breadth index in relatIon to its peak of June 1983 and January.1984 .. As can be seen, both.of these highs have been exceeded by daily and we-ekly breadth erasing entirely any potential negative divergence condition on those indices. ThIS means that the signal given by the June 1983/January 1984 divergence and the subsequent 15.59 correctlon was completed at the July 1984 low. The record of daily and weekly breadth to date continues to impressIvely accelerate into 1986. Currently daily and weekly breadth action remains positive confirming recent new hIghs in the Dow Jones Industrial Average. Dow Jones Industrials (12 00 noon) 1858.26 S & P Composite (12 00 noon) 243.20 Cumulative Index (4/17/86) 2645.31 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL, INC. No statement or epreSS10n 01 opinion or any other matler herein contained 15 or 1510 be deemed 10 be dlrectryo! mdlrectly an offeror thesohcltatlon of an offer lobuyorsell any securl\yrelerred tOOl mentioned The matter IS presented merely for Ihe convenience 01 the subscriber While we believe the sources of our information 10 be reliable. we In no …ay represent or guarantee the accuracy lhereal nor of the stalements made herCIfl Any action 10 be talcn by the subscriber should be based on hIs own investigation and Information Oelafll,ld. Harvey, Tabell Inc, as a corporation and ItS officers or employocs. may now have, or may lator take. pOSItions or trades In respccllO any securities mentIOned In thiS or any future Issue, and such posilion may be different from any views nOw or h(lJcafter epressed In thts or any othor Issue Delafield Harvey label! tnc which IS registered wllh the SEC as an Inestment ad\sor, may give advlco 10 liS Investment adVISOry and olher customers wdependenUy of any stalements made In thiS or In any other Issue Furthor information on any security mentioned herem IS avarlable on request

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Tabell’s Market Letter – April 25, 1986

Tabell’s Market Letter – April 25, 1986

Tabell's Market Letter - April 25, 1986
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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 (6091987-2300 April 25, 1986 The internal health of the stock market remains good. History tells us that bull markets, once established, spend most of their life moving ahead with very little in the way of significant correction in the process. The current position of the market, it seems to us is reflecting nothing more than a typical pattern that has tended to repeat itself in all previous markets for which there is a historical record. There are exceptions to this rule and, of course, no two markets behave alike. As the table below shows by comparing the recent bull market performance of the Standard & Poor's 500 Index to the OTC Industrial Average from the 1982 low to date, we find that both indices have appreciated approximately 130. Closer examination shows the OTC index achieved this performance in the short period of 219 trading days while the S & P 500 has taken over four times as long to achieve the same percentage advance. In other words the OTC Index reached its alltime high in June 1983 and has spent the remaining three years relatively underperforming the S & P 500. —JA–r- -H 13 02 10 10 d3 7 2 ti4 4 1 86 4 21 db .P 5JO AVElA;E ——103.5 172.65 17.S2 244.74 44.74 ——- t1ANGE 0.00 o6.l3 -14.3. &5.57 O.OJ J AT t ——-ti 1J ,2 0 ,, d3 7 , 84 L db 4 l6 OfC I'O Al/flAc ——- 171.10 40Q. 'ttl l50.10 191 O H7.90 —- — IwtiA.Nut O.OU 129.dj -jo.76 j9.10 O.OJ – — – — — – — – – – – The following table, however, suggests that this action may be changing. It shows the close for the S & P 500 and the OTC Industrial Index for the past ten trading days through Thursday. It also shows the net percentage change in each indicator and the net difference between the two. The OTC average has outperformed the S & P 500 on eight of the ten days, reflecting a positive increased in- terest in secondary and tertiary stocks. The net result is that ti1ere has now taken place a fairly sub- stantial rally from the recent April 7th low in the OTC Index of 7.69 verses 5.86 in the S & P 500. OA rE APR 11 B&6 AP 14 US6 APR 15 1186 .Ptl 16 186 . J.7 1i tlb AP 1 B ljlo APR 21 1;00 AP I I IHo APK j lIH6 PR 24 !'l8b SP jOU U5.9/ 2H.ld 37.73 'L42.2..! 243.03 22.3d 244.14 42.4L 241.7S 242.02 , CH .NGc -0.20 a 5.3 lJ.1J 1 9 0.33 -U.ll 0.91 -0.15 -0.28 v.i! TC iNOS 382.0 3d5.20 306.70 394.30 33 .40 35.9U 396.40 395.60 393.90 397 .. 0 CHAN;;E OIFHRENCS 0.60 0.80 0.60 O.lL 0.3-1 0.20 1.91 O.Oti 0.53 C.lO -0.13 0.14 0.13 -u.o5 -O.lJ 0.75 -0.43 -J.l' 1.0L 0.90 – This relative strength improvement in the Over-the-Counter issues certainly is tentative at this stage. but it does constitute the best relative action in this sector in a long while–the index itself is iust nowapproaching its June 1983 high of 408.40. Nor can it be taken that- the average secondary stock is necessarily an attractive purchase candidate at this time. However since the correction in the OTC Index through July 1984 and the subsequent rally to the present levels, many individual stocks have completed base-building phases and are positioned techmcally to indicate higher prices. The general market is in search of new leadership to sustain its advance. A proposition could be developed that the Over-the-Counter sector will provide this leadership. Dow Jones Industrials (12 00 noon) 1822.91 S & P Composite (12 00 noon) 242.72 Cumulative Index (4/24/86) 3174.65 ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL, INC. No statement or epress!on 01 OPinion or any other matter herein contained IS or Is 10 be deemed 10 be, directly or indirectly, an offer or the soltcltatlon of an offer to buyor sell any securtty referred loor mentioned The matter IS presented merely for the convenience of the subSCriber While we believe the sources of our information 10 be reliable we In no way represent or guarantee the accuracy the.eof norof the statements made herein Any aCllon to be taen by the subSCriber should be based on hiS own investigation and Information Oelalleld, Harvey, Tabell Inc, as a corporation and Its olliccrs or employees, may now have, Of may later take pOSitions or Hades In respect to any securities mentioned In thiS or any future Issue, and such POSition may be dlfferonl1rom any views nO\lor hernalter cpressed In thiS or any other Issue Delafield Harvey labell Inc which IS registered With the SEC as an Investment adVisor, may give advice to lIs Investment adVisory and other customers Independently 01 any statements made In this or In any other Issue Further Information on any security mentioned heraln IS avaIlable on request

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