Tabell’s Market Letter – June 27, 1986

—————————————————————————————— TABELL'S MARKET LETTER 600 ALEXANDER ROAD. PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES OEALERS. INC (609) 987-2300 June 27, 1986 The season has arrived for discussion of the Summer rally and republication of the table below. – -.,..duly-rec.mpute-''c!yr-8sneWfigtlres – . ' b e-c….o….m… e a v ail a b l e . -. …..- – which One Month Periods (1926-1985) Two Month Periods (1926-1985) End-Month Advances Declines Average Change Advances Declines Average Change January 38 22 1.05 February 30 30 -0.22 March 33 27 -0.04 April 34 26 1.21 May 29 31 -0.85 June 31 29 0.91 July 37 23 1.70 August 38 22 1.53 September 23 37 -1.30 October 32 28 -0.30 November 37 23 0.83 December 44 16 1.24 39 21 2.29 34 26 0.84 28 32 -0.34 37 23 1. 24 34 26 0.56 27 33 0.03 37 23 2.57 40 20 3.38 35 25 0.20 28 32 -1.56 36 24 0.57 43 17 2.10 TOTAL 406 314 0.48 418 302 0.99 The 60 years since 1926 have comprised a total of 720 months. Of those months. 406. or 56. produced advances. The normal expectation for any single month for the GO-year period, therefore, would be that approximately 34 months would show a rise and some 26 months. a decline. As can be seen, the record for both July and August, the latter month especIally, is somewhat better than this. It is on the basis of these numbers that many analysts have remarked the tendancy toward a rally in the Summer months. s we have pointed out in the past, however. July and August do not constitute the- most statisticallysignificant periods In the table. The most unusual record shown is that of September which occured as a rising month in only 23 of the 60 years, a phenomenon widely at variance with the overall history. Likewise, the year-end rally, as shown by the fact that a rising December has occured in 44 of 60 months. is a considerably more likely occurence than an advance in July or August. Nonetheless, although the significance may be marginal. the July-August period does demonstrate an advancing propensity. This propensity becomes even more significant when one looks at two-month periods. The two months together have produced a rise in 40 of 60 years, and the average change for that two-month period is 3.38. a number almost 3 112 times as great as the average for the 720 periods under study. Interestingly, however, summer behavior since the current bull market began has been somewhat at variance with past history. three of the four Julys since 1982 having been down months. The reason for this is that each of the past four summers can be identified with fairly important market turning points. This is somewhat unusual, based on pre-1982 behavior, which generally saw important turns occuring in the Spring or Fall. The past four years, however, started with one of history's most important bottoms in August. 1982. The initial phase of the ensuing rally was topping during the Summer of 1983. and the 1983-1984 intermediate-term correction bottomed in mid-summer (July 24th) of the following year. Last summer saw a flat consolidation phase preceding the latest upward swing. which. it will be recalled, began at the end of September. It will thus be interesting to see whether summer, 1986 produces the traditional rally or a continua- tion of the recent tendency for stocks to exhibit some sort of reversal behavior. AWTvfi – ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL. INC. Dow-Jones Industrials (12 00 noon) 1885.12 S. & P. 500 (1200 noon) 249.18 Cumulative Index (6/26/86) 3176.79 –,.., NO statement or epresslon Of OpiniOn or any other mailer herem contamed Is or IS 10 be deemed 10 be directly or mdllectly, an oller or Ihe soliCitation of an offer 10 buy or sell any secunty referred to or mentloned The malter IS presented merely for the convemence of the subscriber White we believe the sources of our information to be rehable, we in no way represent or guarantee the accuracy thereof nor of the statements made herem Any action to be taken by the subSCflbershould be based on hiS own invesllgatlon and information Oelafleld, Harvey, labell Inc, as a corporafion and ItS officers or employees may now have, or may later take, POSitions or !fadeS In respecl to any socunlles mentioned In fhls or any future Issue and such position may be dlfterent from any views now or hcrcalter e..pressed in thIS or any otherlssuc Delafield Harvev label! Inc which Is registered With the SEC as an Invesfmenl adVisor may give advice to ItS Invesfment adVISory and other customers Independently of any statements made In lhls or In any olher Issue Further information on any security mentioned herein IS available on request 0