Viewing Month: December 1986

Tabell’s Market Letter – December 05, 1986

Tabell’s Market Letter – December 05, 1986

Tabell's Market Letter - December 05, 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 December 5, 1986 Tuesday's market performance was, without doubt, impressive. A 2.25 DJIA advance was Coupll!dt-l, 326't1dvancing-stocks,64. 7 -af–issul!s .traded.T.he230;millionshar.ev.o!-ume — constituted 1.46 times the recent average, just under the 1.5 threshold that normally marks a volume reversal. Despite this impressive performance, however, we think it necessary to await further confirmation before affirming a major bull-market continuation. Tuesday was only the 11th day since March which has seen a new high scored. All of the previous occasions saw clusters of new highs followed by a substantial retreat. It is also worth noting that previous moves to new peaks produced fairly impressive rises. April 16th saw a 38-point upswing with 1,305 advances, and the September 4th high was achieved on a 38-point advance with 1,289 rising issues. The current advance, so far at least, seems to be producing little in the way of new leadership. The table below shows the close of the 30 individual Dow components on each of the five days the Average itself posted new peaks. The number of new highs for each stock is shown in the right hand column, and individual new highs by date are shown on the bottom line. Mar 27 Apr 21 july 2 Sept 4 Dec 2 Hlhs ALLIED-SIGNAL INC 46.734 46.059 44.000 41.B75 40.750 0 ALUMINUM CO OF AMER 43.500 40.625 38.375 40.250 35.500 0 AMERICAN CAN CO 76.625 74.500 81.375 BB.375 8B.250 2 AMERICAN EXPRESS AMERICAN TEL & TEL BETHLEHEM STEEL CORP 68.750 t250 20.250 65.B75 25tOOO 18.875 62.000 25.125 14.625 65.375 25.250 9.625 59.750 27.625 5.000 0 4 0 CHEVRON CORP 37.375 3B.750 38.750 46.625 47.875 4 1,-I lJ,LLOJ1LU NEMOURS EASTMAN ODA CO 75.000 78.500 82.875 B7. 000 90.750 4 63.250 59.125 5B7000 57''000 – 1l;875n-I EXXON CORP 56.250 58.625 61.375 70.750 70.500 3 GENERAL ELECTRIC CO 78.000 79.625 Bl.250 7B.625 B4.875 3 GENERAL MOTORS CORP 88.000 82.250 GOODYEAR TIRE & RUBBER 36.500 32.500 78.250 33.500 71.150 35.125 70.750 0 43.125 1 INca 16.375 14.875 12.750 13.625 12.625 0 IBM 149.125 154.875 149.500 139.375 129.B75 1 INTERNATIONAL PAPER MCDoNALDS CORP 61.875 58.750 62.625 69.500 78.875 3 64.083 70.333 75.625 61.875 64.250 2 MERC & CO INC MINNESOTA MINING MFG 84.875 90.250 105.375 113.625 115.000 4 106.375 105.250 114.000 112.500 115.500 2 NAVISTAR INT'L 11.000 11.250 B.875 8.000 5.625 t OWENS ILLINOIS INC 35.750 37.750 39.500 42.500 46.B75 4 PHILIP MORRIS INC PROCTER & GAMBLE 59.438 69.250 76.000 74.875 74.875 75.875 81.750 78.750 75.750 BO.625 2 2 SEARS ROEBUC ca 50.125 47.625 48.375 44.750 45.000 0 lEXACO INC 30.125 32.000 31.000 35.000 35.000 3 USX CORP 22.875 20.250 20.500 20.625 21.1 0 UNION CARBIDE CORP 22.125 24.875 23.875 23.125 23.125 1 UNITED TECHNOLOGIES 53.375 53.250 48.250 47.250 45.70 0 WESTINGHOUSE ELECT 53.625 56.500 53.000 60.000 62.000 3 WOOLWORTH FW CO 38.250 40.188 46.500 44.250 45.875 2 DOW-JONES INDUSTRIALS 1821.72 1855.90 1909.03 1919.71 1955.29' TOTAL NEW HIGHS 16 14 .10 12 The twelve new closing highs of December 2nd bettered the September figure but were inferior to both April and July. Moreover. the issues making new highs on Tuesday were, for the most part, stocks that had been reaching new peaks all along. Evidence of new leadership—by scoring a new high for the first time—was shown by only two stocks, Goodyear, a takeover candidate, and Eastman Kodak. Thus, to date at least, market action remains consistent with a continuation of the last nine months' pattern—a trading range with a slight upward bias. AWTjt Dow Jones Industrial Average 1928.57 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. S P Composite 253.07 Cumulative Index (12/4/86) 32l7.28 NO slatement or epresslon of opmlon or any olher mailer herein contamed IS, or IS to be deemed to be dlrec1ly or indIrectly, an oller or the solicitation of an offer to buyor sell any security fe/elred loor mentioned The matter IS presented merely forthe convenience of the subscriber While we believe the sources of our Information to be rehable, we In noway represent orguaranleelhe accuracy thereof nor of the statements made herem Any action to be laken by the subscriber Should be based on hiS own investigation and Information Detalletd, Harvey, Tabell Inc as a corporal Ion and Its officers Of emptoyees may now have, or may later take positions or trades In respecl 10 any secunlles mentioned In this or any future Issue, and such pOSition may be dltlercnt from any views now or Mlcallel expressed m thiS or any other Issue Delafield Harvey, Tabell Inc which IS registered With the SEC as an Investment adVisor, may give adVice to liS mvestment adVISOry and othc' customers Independentty of any statements made m thiS or In any other ISSUi'! Further mformatlon on any security mentioned herem IS available on request

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Tabell’s Market Letter – December 12, 1986

Tabell’s Market Letter – December 12, 1986

Tabell's Market Letter - December 12, 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 (6091 9872300 December 12. 1986 We commented. in last week's issue. on the impressiveness of the December 2nd rally. -wJlkhRroducJ!.dJ.33.JloiniJ'ise.Jn….theD.ow. or-than.J..300ad,,ancing ,.stOjlks .and.230-million …… – – – tL– – – – – -rl' – ……— -. — sharesoLvoltime. ,Weisuggested; though. that. however impressive this 'performance it was still possible to place it within the context of the trading range that has characterized most of 1986 to date. This remains true a week later. We noted last week that the December 2nd rally constituted only the 11th instance subsequent to March 27 of a new high in the Dow's being scored. The 10. previous cases are worth reviewing. The first three such occasions took place in four days between April 16 and April 21. The first rally featured a 38-point advance and 130.5 advancing issues. The high was' 1855.90.. and some three weeks later the average had moved almost 10.0. points lower. There then followed three new highs over an eight-day period. May 29-June 6. the final high being 1885.90.. A three-week trading range then preceeded new peaks on three successive days ending July 2 at 190.9.03. Two days afterward came a 61-point drop. and an ultimate low at 1763.64 was attained on August 1. The Dow spent only one day in new high territory on September 4 before reacting to a 1755.20. low on September 29. The final new high at 1955.57. of course. occurred on December 7. This high. interestingly enough. has now been followed by seven trading days on which no new high has been made. The whole point of this exercise. of course. is to suggest that it is. at least. possible that this early-December high may be just another one in a series of short-lived peaks which are followed by declines back to within the trading range. This theory becomes even more plausible when it is noted that a goodly portion of the Dow's strength is accounted for by two issues that have emerged as takeover or restructuring candidates. Goodyear and – .- Owens Illinois. For what iHis worth. oHhl!–Sl!ptemtrer-pe-.theDec'E!lIfljer' had 2f1d- htihgeHse–wiOs\sluledslibaveeenoereermf oovnelyd from the Dow nf31r.1i9; – a n d at the time yesterday';;;s—I close would have been 190.3.81. Needless to say. in a market which has featured selectivity, individual stocks show a wide variety of patterns. A fair number remain in ongoing uptrends and a smaller. but not insignificant fraction, remain in uninterrupted downtrends. Many issues. in addition. find themselves in what appear to be major base or major top formations. The most prevalent pattern, however. especially among high-grade stocks. is similar to the example shown at right. which happens to be a point-and-figure chart of American Home Products, 9b drawn on a two-point-unit basis. It must first be noted that objectives higher than this year's 94 7/8 peak exist. The crucial question. however. is what sort of intermediate correction is currently plausible. At recent lows of around 72. the stock had just about reached the downside target of the 94-84 top. Thus. an important issue is the nature of the 72-80. trading range. If this is a base. a test of the previous highs in the mid -9o.'s is highly probable. Indeed. other issues with similar patterns have bases which suggest the attainment of new highs. On the other hand. a downside penetration of this range would produce a head-and-shoulders formation with disturbing implications. Another alternative would call for AHP simply to back off into the 7Q's andbroaden.the .pattern. further postponing .decisive ,resolutionto .the,dilemma .. Since this stock is a typical example of the most common pattern currently extant, it can be seen that, despite the one-day new high. some questions regarding the current market outlook can be raised. Our own preference is to await the resolution of these questions. AWTcg ANTHONY W. TABELL DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials (Noon) S & P 50.0. (Noon) Cumulative Index (December 11, 1986) 1915.63 247.72 3177.21 No slalement Of expression ot opinion or any other matter herem contained Is or IS to be deemed to be directly Of Indirectly an offer or the soliCitation of an offer to buy or sell any secunty referred 10 or mentioned The mailer IS presented merely for the convenience 01 the subSCriber White we believe the sources of our Information to be reliable, weln no way represent or guarantee the accuacy thereof nor of the statements made herein Any action to be taken by the subSCriber should be based on hiS own Inves\!gatlon and information Delafield, Harvey, Tabell Inc, as a corporation and ItS officers or employees may now have or may later take positions or trades In respeclto any securities mentioned In thiS or any future Issue, and such POSition may be dltlen!nt from any views nowor hOlea/ter erplessed In thiS or any other Issue Delatleld Harvey Tabel! Inc whrCh IS registered With the SEC as an Investment advisor, may give adVice to ItS ,vestment adVISOry and othe' customers Independently of any statements made In thiS or In any other Issue Further Information on any security mentioned herein Is available on request

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Tabell’s Market Letter – December 19, 1986

Tabell’s Market Letter – December 19, 1986

Tabell's Market Letter - December 19, 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 December 19, 1986 , – – . ..Readers ofthislettere,.no,,dubwretha tits, subjectma-t-t-er,is-of-ten- dictatedby …,. force of habit.' ,The'end of each year, for instance, occasions the'publication of 'three ' letters. The first of these is a review of the year just passed, the next an attempt at a forecast for the year ahead, and the third is an updated exposition of our fascination with the phenomenon of the year-end rally. The time for the first of these efforts, a review of 1986, has now arrived. Where to begin 1986 will, we suppose, go down in history as the year of the insidertrading scandals, but this is a subject better treated by the social commentator than the market technician. More in the technician's province is the full-blown maturity, during 1986, of the triple witching hour. It is, however, as yet unclear, at least to us, just what the longer term significance of this new trading pattern may be. (Due to our noon presstime, we are unable to comment on the latest edition of this event.) However, neither of these two phenomena will, in our opinion, be recognized by historians as the salient feature of 1986. That feature, we believe, will be one that this letter has been harping on for most of the past six months. It is the slightly upward-tilted trading range which has characterized the last three quarters of the past year and Which, quite possibly, may be continuing. To review it once more, that trading range, in terms of the DJIA, began on March 27th, at 1821.72. It went on to produce modest new highs, posted on April 21st at 1855.90, July 2nd at 1909.03 and September 4th at 1919.71. The interval between each of these peaks saw a decline to the mid-1700s. Provisionally, at least, it is possible to include the last high, posted at 1955.57 on December 2nd, as part of this pattern since, so far at least, that high, like the others, has produced no follow-through. I I ..-,.,T–,,h,,esiua non of a 1986 forecast is the determination of what,–p,re.cisjlly,hasb,een,, going on for the past nine moii'ths. We became disturbed, as the-pattern unfolded during the year, by the prospect that the tradng range might be a distributional top. That concern was elicited by the fact that leadership seemed to be narrowing as the year wore on. While the Dow and the S &p 500 found themselves early this month in new high ground, broader indica tors, such as the Value Line and market breadth remained closer to their lows than to their highs. Until this action improves, the possibility of a broadening top formation will continue as a cloud on the horizon. An alternative interpretation is, of course, that we are witnessing a consolidation phase in preparation for a new bull leg. This interpretation gains some credence from the fact that an important leadership shift, from consumer non-durables to the energy and industrial sectors, appears to be taking place. Such rotation is characteristic of sideways corrective processes. It is not possible to complete a review of 1986 without glancing once more at the traditional four-year cycle. It is now 52 months since the market made its last major low in August, 1982. Such cycles are, of course, measured from low to low and, with a single exception, have not exceeded 55 months in length. If the market is going to conform to this pattern, an identifiable pullback will have to occur fairly soon. We have noted in the past that it is possible to avoid this particular worry by acceptance of the hypothesis that the 15 decline between November, 1983 and July, 1984 constituted a full-scale correction and that a brand-new cycle began 2 1/2 years ago. This is, of course, plausable but, we think, somewhat less than likely. Unfortunately, the emergence at this stage of another major upward leg after a consolidation no more severe than that of 1983-1984 would have an only one historical parallel, a similarity which has been another favorite subject of this letter over the past year. That similarity would, of course, be to the market of the 1920's. It is against this rather fascinating background that we will attempt, next week, to produce a forecast of 1987 market action. AWTjt Dow Jones Industrials 1918.45 S 8. P 500 246.99 Cumulative Index 02118/86) 3145.49 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. NO statement or expresSion of opInion or any other maller herem contained IS or IS 10 be deemed 10 be directly or Indirectly. an offer or the soliCitation 01 an oller to buy Of sell any secunty referred 10 or mentioned The maHer IS presented merely for the convenience 01 the subSCriber While we beheve the sources of our Inforrnalton to be reliable, weln no way represent or luarantee the accuracy thereof nor 01 the statements made herem Any action to be laKen by the subscrtber should be based on hiS Ollln Investigation and Information Delafield, Harvey, Tabell Inc, as a corporation and liS o1!lcers or employees, may now have, or may later take, POSitions or trades In respect to any securities mentioned In thiS or any future Issue, and such pOSltlon may be dlfterentlrom any views now or herealtcr eplCssed In thIS or any other Issue Oelafleld Harvey Tabell Inc which IS registered With the SECas an Investment adVisor, may lIVe adVice to lis Inveslment advlsorv and olhe' customers Independently of any statemenls made In thiS or In any other Issue Further mlormatlon on any securtty mentioned herein IS available on request f

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Tabell’s Market Letter – December 26, 1986

Tabell’s Market Letter – December 26, 1986

Tabell's Market Letter - December 26, 1986
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'. T 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 December 26, 1986 – -AS'W'e notedlast w-,,'eK ,- tllisletler is'tlfe SecontlIn1,ge-ries traaitionally prodat – – year end, and its task is to formulate a forecast for 1987. Coming up with a yearend forecast is easy at some times and more difficult at others. At the end of 1982, for example, it was easy to postulate a continued rising market, with a target for the Dow, then at 1041, of around 1300. The closing high for 1983 turned out to be 1287. Last year, with the DJIA at 1536, we suggested that prices might first move higher, then lower. The first part of this forecast, obviously, has been fulfilled. Regarding the second there remains some question. A forecast for 1986 is, we think, particularly difficult. It centers, essentially, around the question of whether the correction we anticipated last year has yet taken place, a question for which we, frankly, have no answer. It is, in this connection, worth restating at this point the difference between a forecast and a recommended investment policy. The latter is of course necessary at all times. On some occassions it is based on a forecast, at other times, on the general investment climate. Such is the case this year, where arriving at an investment policy is a good deal easier than producing a forecast. One aspect of investment policy on which it is possible to settle is the question of what sort of stocks ought to be held. For the first half of 1986, leadership continued to ,come from on a group of issues which could be classified as disinflation-hedge stocks. Such issues were, generally, consumer-oriented and interest-sensitive. During the year, we believe, the baton of leadership passed from these issues to stocks in the energy and natural-resource areas, such as forest products, oils, and chemicals. Portfolio policy for 1987 will, we think, include increasing exposure to such issues. Regardin-g-equityexpose,.-oul'dnvestment-policYLth,,pasLfoear;;;endshasbeenone of being fully invested. As we begin 1987, however, we would suggesf having some reserves available. As we noted last week, the 1986 action upon which we base this policy has been the trading range which contained most averages from the end of March onward. This trading range involved successive higher highs at five separate points during the year. At any rate, this was true for the Dow. Such a pattern was less evident in other indices. We pointed out in November, the fact that the broader the index one looked at, the less well it had acted. The S & P 500, for example, continued to achieve new peaks through December, albeit by a lesser amount than was the case with th Dow. The Value Line average has yet to better its May high, and the performance of breadth has been abysmal. Indeed, a few poor days, of the magnitude of, say, Tuesday, could cause our daily breadth index to reach a new nine-month low. For this reason, we are unwilling to view the Dow's recent move to 1955 as a decisive break-out from the trading range, especially since, as was the case with previous highs, it lasted for only one day with no follow-through. We continue to regard the market as remaining within its range for the past three quarters, a range which, in the case of the Dow, possesses a slight upward bias. If this is true—and it must be reiterated that this is only a hypothesis—the best- case scenario for 1987 would be a continuation of the trading range with a later upside breakout. The worst case would call for a downside breakout some time during the year and ar ensuing full-scale major bear market. Such a process could involve the average moving below 1500. Now none of the above, we hasten to add. can be part of a forecast, since it is too easy for future market action to change it. New highs, accompanied by good breadth, could mean that-the'earlyDecember-upside breakout was real. Also, as noted above, 'themarket could return to its long trading range and then break out on the upside some time later. We think that this uncertainty provides the best reason for an investment policy which involves maintaining some reserves. If we are to be pinned down to a forecast, however, it would call for continued corrective action during the first part of the year followed by strength during the second part. Hopefully, the emergence of that strength will make our forecasting task a year from now easier than it is today. ANTHONY W. T ABELL DELAFIELD, HARVEY, TABELL, INC. AWTbh Dow Jones Industrials S & P 500 Cumulative Index (2/24/86) BEST WISHES 1930.82 246.58 3157.68 FOR THE CHRISTMAS SEASON! No statement or expresSIOn of OPinion or any other maHer herein contamed IS, or IS 10 be deemed 10 be directly Of Indirectly. an oHer or the solicitation of an offer to buyor sell any secuflly referred 10 or mentioned The mailer IS presented merely for the convemence of the subscriber While we believe the sources of our Information to be reliable, we In noway represent or guarantee the accuracy thereol nor 01 the statements made herein Any action to be tal(en 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 take, POSitions or trades In respect to any secufl\les mentioned In thiS or any futuro Issue, and such position may be dltferent from any views nowor hereafter c(pressed In thiS or any olhellssue Delalleld Harvey Tabel1 Inc, which IS registered with the SECas an Investment advrsor, may give advice to ItS investment adVISOry and othe' customers mdependenlly of any statements made m thiS or rn any other Issue Further InlormatlOn on any security men\loned herein IS avallabte on request \

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