Viewing Month: June 1987

Tabell’s Market Letter – June 05, 1987

Tabell’s Market Letter – June 05, 1987

Tabell's Market Letter - June 05, 1987
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 June 5, 1987 I-II- ThChl't elq)'-II!J!..l!cPl,-el!Ied. ill.tpJlLM1acLjl,lst amoI,-tLgQ.,1utt..h.,g..sg9.iflgdeve9.! of the market pattern since that date, we ttiink, makes it'worth 'displaying -again. When – . discussing the Dow a month ago, we noted that the 2200 level might again be tested. This, in fact, took place, and the lateral trading area between 2200 and, roughly, 2350 has now broadened enough to make the eventual breakout from this range significant—in whatever direction that breakout ultimately takes place. DDW JDNES INDUSTRIAL AVERAGE BREADTH While this sideways trading range was taking place in the Dow, the market's internal action was, unfortunately, not all that good. Our daily breadth index, the middle line on the chart, now has exhibited five successive lower peaks and a set of four lower lows. We noted earlier that we would not like to see the December low on breadth broken. Another minor downswing would, in all probability, accomplish this. The number of stocks acheiving new highs has also, during the past month, managed to turn in a less-than-impressive performance. The ten-day average dropped below zero in late April, and, after brief strength, has returned to that area again. On only one day since the trading range began have we seen more than 100 daily new highs, and the most recent downthrust, with the Dow only marginally below its all-time peak, produced, on May 20, 119 new 52-week lows. Now we have enumerated above what we believe are valid observations, but we feel constrained to point out that exactly the same objections could have been voiced regarding the period March-December, 1986. At that time, breadth posted six lower peaks before reaching a final low at 1986f s end, after which, of course, the market took off on its 500-point advance. Additionally, the ten-day difference of highs and lows moved below the zero line in 1986 on no less than four separate occasions. We are not suggesting here that, because manifest signs of deterioration were negated in January, 1987, we should ignore the emergence of similar portents as the averages, apparently, move into another trading range. We are noting, rather, that recent market behavior seems, at best, inconclusive. From a strategy point of view, we would rather admit this fact and keep our options open rather than allow ourselves to be pinned down to a forecast based on insufficent evidence. ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. AWTebh Dow Jones Industrials (1200) 2327.67 S & P 500 (1200) 293.52 Cumulative Index (6/4/87) 3725.27 No statement or expression of OpIniOn or any other matter herem contained IS, or IS 10 be deemed 10 be, directly or IndIrectly, an offer or the SollcllatlOf1 of an offer to buy or set! any security referred to or mentIoned The matter IS presented merely lor the convenience 01 the SUbSCriber While we believe the sources 01 our information to be rehable we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by the subscnber should be based on hIS own investigation and Informallon Delafield, Harvey, Tabell tnc, as a corporation /lnd I\S officers or employees, may now have, or may later take, poSitions or trades m respect to any securities menlloned In thiS or any future Issue, and such position may be dlfferentlrom any views new or hereafter epressed In thiS Of any other Issue Delaheld, Harvey, Tabel! Inc, which IS registered With the SECas an Investment adVisor may give adVice to ItS Investment advIsory and other customers Independently of any statements made In thiS or In any other Issue FUrther information on any secuflty mentioned herein IS available on request

Download PDF

Tabell’s Market Letter – June 12, 1987

Tabell’s Market Letter – June 12, 1987

Tabell's Market Letter - June 12, 1987
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 June 12. 1987 , We focusedour attention lstw!lek on the trading range between, oughly, 2200 and 2350 whicliliaa;by -and rarge; 'cofltain-ed -the- Dow–since' its'1hltilil ftill–ff -from its' all-time- high — '—- – , of 2405.54 on April 6. This week's action once again underscored the importance of that trading range. Technically, a breakout from the range for most averages did occur at mid-day on Wednesday. However, immediately following that breakout, one of the last-hour gyrations which have cone to typify today's market took place, with a 50-point decline and a 20-point rally leaving the average just about unchanged only slightly above the 2350 level. Assuming the breakout is real, likely, in light of today's early strength, higher objectives for most averages are clearly readable although these objectives are not all that great in percentage terms. In the case of the Dow, upside targets center around the 2490-2540 range, and similar objectives exist for broad-based indicators, such as the S & P 500, S & P 400, and NYSE Composite. NO. OF AVERAGE EXTENT OF DECLINE nATE' OP' fllGH S'rdCKS fiECLINE I\) 10-20 20-30 30-40 4050 5'0 Before 5/19/86 168 46.1 0 1 17 52 44 54 5/19/86 – 7/31/86 159 40.4 1 1 46 48 21 42 8/1/86 – 9/28/86 107 29.9 0 5 68 22 57 9/29/86 – 12/30/86 46 30.7 10 6 19 15 42 12/31/86 – 4/26/87 501 21.7 16 215 207 49 86 4/27/87 – DATE 292 9.9 162 107 17 4 11 TOTAL 1273 25.6 179 335 374 190 83 112 Last wee.k's letter centered on the poor action of market breadth and the low nu'm'b'e'r-cof -I daily new highs which have characterizeo the recent sideways move. The tables located above and below, if the figures do not leave the reader totally numb, are worth wading through. since they examine the last 14 months in some depth and provide a little more encouragement than macro-indicators based on breadth and new highs. The first column of the table above shows the number of stocks posting new highs during four of the minor upswings of 1986 and for two periods during 1987. The second column shows the average decline for each group of stocks, to its subsequent low and the numbers of stocks which dropped by various amounts. We think it moderately encouraging that 793 stocks or just about two-thirds of the total, have posted new highs at some point during 1987. Indeed as the table's last line shows, 292 issues have actually out-performed the market. reaching new highs after the Dow had started to turn down. The subsequent decline for these issues is rather small and, for the bulk of them, weli under 30 percent. NO. OF AVERAGE EXT E NT OF RECOVERY DATE OF' HIGH STOCKS RECOVERY 20 20-40 4tl60 608\) 80-10\) Before 5/19/86 168 36.4 51 43 43 24 5/19/86 – 7/31/86 159 25.2 51 46 32 24 8/1/86 – 9/28/86 107 28.8 33 52 14 5 9/29/86 – 12/30/86 46 39.3 11 16 7 9 12/31/86 – 4/26/87 501 39.8 87 185 132 75 4/27/87 – DATE 292 39.6 74 81 66 52 TOTAL 1273 37.8 307 423 294 189 7 6 3 3 22 19 60 The above table focuses on the recovery following each stock's low which had taken place through Wedensday's close. t is hardly surprising that the extent of recovery for the stocks that peaked in 1987 has been substantial, since, as we noted above, these issues never declined by all that much. What is interesting is the above-average recovery shown by those stocks which peaked well over a year ago, before May, 1986. On the average, they have recovered 36.4 of their loss, and 44 of them have posted retracements greater than 40 of their declines. Persistence of this sort of trend would suggest a pattern of rotating leadership which might sustain the current bull market for some time. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL NC. AWTebh Dow Jones ndustrials 02 00) 2377.27 S & P 500 0200) 300.80 Cumulative Index (6/10/87) 3771.29 No statement or expression of opInion or any other matter herein contained IS or IS to be deemed to be, dlrectty or indirectly, an oHer or the soliCitation of an offer to buyor sell any security relelred to or mentioned The matter IS presented merely for the convenience of the subscriber While we oelleve the sources of our information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subscriber Should be based on hiS own investigation and Information Delafield, Harvey, Tabel! Inc, as a corporation and ItS olflcers or employees may now have, or may laler take, positions or trades In respect to any securities mentioned In thiS or any future Issue, and such pOSItion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey labell Inc, which IS registered With the SEC as an Investment adVisor, may gIVe advICe 10 ItS Investment adVISOry and other customers Independently of any statements made In thiS orin anyolher Issue Further Informallon on any security mentioned herein Is available on reQuest

Download PDF

Tabell’s Market Letter – June 19, 1987

Tabell’s Market Letter – June 19, 1987

Tabell's Market Letter - June 19, 1987
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 June 19, 1987 W.e-hye. .as our readers ar..e.-awrdevDted.a….fairamount,….of.!-stud.yover–theyears,….to-seasonal— patterns inthe stock market. In connection therewith, we have published, at around this time each year, the table below, which, for each of the twelve months, shows the number of times the market has advanced for each month, the number of declines, and the average percentage change. In all, 732 months, comprising the 61 years from 1926 to 1986 are included in the compilation. Ooebac1be,ad5 i1261286) IwoMaotbe,od5 L12612861 EcdbolJtb ad!.ldClCS DecltJes BeagelCbs edllaoces DeclDe!l. A!.lerasEkCbg …. Jan!.Jar Februar!d March AF'rll Ma June July AIJS1.Jst Sfptelliber October November lecember 39 31 31 34 30 32 37 39 23 33 38 44 22 1.06 30 -0.07 27 0.07 7 1.16 31 -0.75 29 0.91 4 1.57 22 1.62 38 -1. 39 28 -0.20 3 0.85 J 7 1 t 21 40 1 35 26 29 32 38 23 35 26 28 33 37 4 41 20 35 26 28 33 37 4 44 17 2.36 1. 00 -0.08 1 t !9 0.60 O. J 3 .44 3.33 0.19 -1.56 0.70 2.08 TOTL 414 318 0.50 47 305 1.04 As the table indiestes, of the 732 months since 1926, 414—or 57—have been advancing months, and – —month ';;'uld 318—or 43—have showed declines. be 34-35- advances and '26-27 declines. Thus the normal. expectation for 1anygiv,en Similar figures esn be adduced for two-month periods. From the data above, we have been able to extract four patterns of a seasonal nature which seem to be statistically signifiesnt, The most signifiesnt one is the least known, the tendency toward a market decline in the month of September. Since 57 of all months have been rising ones since 1926, the expectation would be a plurality of advances over declines. However, precisely the opposite is the esse for September, which, in 61 years, has produced 38 declines and only 23 advances, with an average drop of 1.39 percent. Interestingly, the tendency held true last year. The period between September 4, 1986 and September 29, 1986 produced an 8.57 decline, the largest fall since the present phase of the bull market began in 1984. The next most signifiesnt pattern has been the year-end rally, illustrated by 44 rising Decembers in 61 years. Our readers know that we have published an annual comment on this phenomenon around December or January of each year. Another seasonal manifestation which esn be statistically demonstrated, although we have no idea of the reason therefore, has been the fact that the direction in which the market mOVes in November has appeared to be a moderately successful predictor of the market's direction for the following year. Of the four seasonal phenomena, the least significant has been the summer rally, which is due to be analyzed at this juncture. As the table shows, the 37 advances and 24 declines for July are marginally better than one would expect. August shows an even greater abberation. The percentage advances for July and August, along with the two-month period ending in August, are easily the largest figures in the table. interestingly, seasonal behavior since the current bull market began has been somewhat at variance with past history. Four of the five Julys since 1982 have been down months. As the tendency toward a weaker July has emerged, the pattern of August strength has continued. The two most important bottoms in the current major advance have both occurred in mid-summer. in August 12, 1982 and July 24, 1984. However, summer, 1983 produced the top which led to the 15 1983-1984 decline, and. as noted above, the most important decline of last year, however small it may have been, began in early September. It thus appears that there has been a recent tendency for important turning points to occur during the summer months. As we enter the summer with the Dow just having posted a newall-time high, it will be interesting to see whether the traditional summer rally occurs, or the more recent pattern of a reversal's occurring during the Bummer, unfolds. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials 0200) 2420.22 S & P 500 (1200) 306.05 Cumulative Index (6/18/87) 3822.44 NO sta1Cment or eJfprCS310n 01 opInion or any other matter herDln contalfHhllS 01 IS to be deemed to be directly or mdlrec1ly an offer or the soliCitation 01 an oller to buy or sell any secunty referred 1001 mentioned The matter IS presented mcmly lor the convenience of the subSCriber While we believe the sources of our mfOrmatlon lobe reliable we In no way represent or guarantee the accuracy thereol nO! 01 the statements made herein Any aCllon 10 be taen by the subSCriber Sllould be based on hiS own InvestigatIOn and InlOfmatlon Delalleld, Harvey Tabell Inc, as a corDO'allon and liS olhcers or employees may now have, or may later take poslhons or trades tn respect to any secuntles mentioned In thiS or any luture ISSUe, and such position may be dllfcronllfom any views now or he/ealter epH!ssed In thiS or any other Issue Delafield Harvey Tabel! Inc whiCh IS registered With the SEC as an Investment adVisor may give adlce to ItS mestment adVisory and othe' customers mdependently 01 any statements made In Ihls or III any other Issue Further Inlormatlon on any security mentioned herem IS aallabte on request

Download PDF

Tabell’s Market Letter – June 26, 1987

Tabell’s Market Letter – June 26, 1987

Tabell's Market Letter - June 26, 1987
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 June 26, 1987 ..- ….. – r- -'— – — – — — It was L … M. Lowry. we believe. who first made the pronouncement. liThe market is always lowst at the low. It has always been one of our favorite quotes. Seemingly trite and obvious at first, it becomes. on a few moment's reflection, a reasonably profound truth. Bear markets. after all, consist of a series of new lows each one bringing further erosion of portfolio value. After a while, these lows become more frequent and, essentially, indistinguishable from one another. Yet one of them will prove. well after the fact, to have been the major low. the best buying opportunity of the entire cycle. The same principle in reverse applies to bull markets, which are, by definition, a repetitive series of new highs. This observation is prompted by the fact that the Dow posted a new closing peak yesterday at 2451.05. the 38th occasion of a new high's being recorded since the bull market began on January 2. It is possible. of course, that this was the market high. Whether or not this was the case, however, we have one of the rare opportunities afforded the analyst to make a pronouncement with total certainty. We can assert that. as of June 25. 1987. a major bull market remained in effect. How useful is this information If bull markets had a record of turning on a dime and beginning precipitous plunges, it would have little or no value. Such, however, is not the case. Most bear markets do not begin the accelerated phase of their decline until well after the actual high is made, and they often begin it from a point very close to the high. In other words, that high is often tested quite some time later. This can be documented by the table below. which shows the high date for the last 11 cycle bull markets. It then shows the last date following the bull market high on which the Dow traded within 2. 5, 7. and 10 of its peak. The figures in parentheses are the number of trading days between the high and the date shown. BULL MARKET RIGR LAS T D ATE W I T H I N A G I V E N OF HI G H 2 5 '1 10' May 29, 1946 Jun 15. 1948 Jan 5, 1953 Apr 6, 1956 Dec 13. 1961 Feb 9, 1966 Dec 3, 1968 Jan 11. 1973 Sep 21, 1976 Apr 27. 1981 Nov 29, 1983 Jun 17, 1946 (12) Nov 1. 1948 (101) Mar 25, 1953 (55) Jul 26, 1957 (328) Mar 19. 1962 (65) Feb 17, 1966 (6) May 16. 1969 (109) Jan 12. 1973 (1) Jan 3. 1977 (71) Jun 23. 1981 (40) Jan 19, 1984 (35) Aug 15, 1946 Nov 4. 1948 Apr 2. 1953 Aug 9. 1957 Apr 6. 1962 Apr 26. 1966 May 29. 1969 Jan 26. 1973 Mar 17. 1977 Jun 30. 1981 Jan 27. 1984 (54) Aug 23, 1946 (60) (103) Feb 3, 1949 (172) (66) Aug 18. 1953 (158) (338) Sep 3, 1957 (354) (79) Apr 25, 1962 (91) (52) May 2, 1966 (56) (128) Jun 9. 1969 (124) (10) Oct 29. 1973 (201) (123) Apr 18. 1977 (144) (45) Aug 6, 1981 (71) (41) Feb 2, 1984 (45) Aug 2'6, 1946 (61) May 19, 1949 (264) Sep 9, 1953 (173) Sep 19. 1957 (366) May 8, 1962 (100) Jun 24. 1966 (94) Jun 18. 1969 (131) Nov 1. 1973 (204) Jul 25, 1977 (211) Aug 20, 1981 (81) May 10, 1984 (113) The figures show that in, seven of the eleven bear markets. the Dow returned to within 2 of its high over periods ranging from two to fourteen months. In ten cases, it had returned to within 5 of that high over a similar period. and, in all cases shown. a recovery to within 7 of the bull market high ultimately took place. We have, of course, been commenting here on some of the negative aspects of market action including poor breadth, few new highs, and insipid volume. All of these phenomena, however, tend to lead highs in the averages by many months. In addition. the table suggests that. even after a hlgh is reached, a serious decline does not usually set in until much later. This affords the analyst time to observe market action before actually making the suggestion that a given bull market is probably over. ANTHONY W. TAB ELL DELAFIELD, HARVEY. TAB ELL INC. AWTebh Dow Jones Industrials (1200) 2443.88 S & P 500 (1200) 307.82 Cumulative Index (6/25/87) 3844.60 No statement or expresSion 01 opinion 01 any other mailer herein contained IS, or ls 10 be deemed 10 be, dlfeClly or mdlrectly an oller or the solicitation of an offer to buy or sell any security relerred loor m()nllOned The matter IS presented merely for the convenience of the subscriber While we believe the sources of our Information to be reliable we In no way represent arguarantee the accuracy thereof nor ellhe statements made herein Any sctlon \0 be taken by the subscriber should be based on hiS own Investigation and information Detafletd, Harvey, Tabell Inc, as a corporation and lis officers Of employees, may now have, or may later tae, positions or Irades In respect to any securities mentioned In thiS or any luture Issue and such POSition may be different Irom any views now or hereafter e)(pressed In thiS or any other Issue Delafield Harvey Tabe!l Inc which IS registered With the SEC as an Investment adVisor, may give advice to ItS Investment adVISOry and other customers Independently of any sfatemenls made In thiS or In any other Issue Further information on any secunty mentioned herem IS available on reQuest

Download PDF