Tabell’s Market Letter – April 25, 1986

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