Viewing Month: September 1987

Tabell’s Market Letter – September 04, 1987

Tabell’s Market Letter – September 04, 1987

Tabell's Market Letter - September 04, 1987
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,6 , …….. ——– — ,, ! TABELL'S MARKET II , LETTER I ! (– — – – —–.- – J f!7ak11 //nc. 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 September 4, 1987 I..'.'.. -he-1' ,correction whlClll'irougnCtile-Dow -toa- POlnCluf'unaertIiF'260Ul';veI-at;; -. –'-.'.–..–,- Thursday's close and still lower early Friday does not, in and of itself, appear to be too disturbing. Through September 3, it is only the third largest correction of 1987, having been surpassed by short-term declines in both April and May. Moreover, most downside objectives for the averages have now been reached. What is interesting is the timing, the downswing having begun on August 25. This fits in with a pattern we have noted in the past, the downward bias for the month of September. The following table summarizes the 1088 monthly changes that have taken place in the DowJones Industrial Average since It was first calculated in 1897. It shows, from left to right, the mean percentage change for each month over the past 91 years, the standard deviation (a measure of the dispersion of individual values around that mean), and the number of months in which the Dow was up or down. As the final total shows, the mean of all percentage changes was a bit over one half of one percent, and, over the 91 years, the Dow has posted 620 up months and 468 down months. Mooio /1e.!.i!L StJ–De!J. I1lJLJ1i..lU /jwClt.blJOWCl ZCo!!ff … Cll.1.-S.lUZi'L..! .Jan 1 1 1.67 38 33 0.9'1 1.67' Fob -0.35 4 10 3 48 1.8 3.i2 Milr () -, I' 0.76 08; '5.1'12 6.78 ;1 . 9 37 0.33 0.21 4 o. P, 0.37 M2 1.lJ(1 – ' — . . -JIJl 0.37 0 -..4 1. '13 5.81 ') 6JJ .6-9 ,,,' 46 4.2 ;6 – 4il 35 1 .60 .0.).2 1 6 1 j Ldl, ) ''7-' ('i!J Ser- 1 .81 -1.30 5.91 6.09 6 37 2 1 , 61 r. -z Jo 3.1 S 9.2; Ocl 0.13 5.;; 50 40 0.7-1 0.08 Nov 0.80 'J.84 ;5 35 0.38 0.63 DeL' 1.31 '1.23 64 6 1.2; I 7'-' 7'-' ToLal 0.57 5.59 620 168 The final two columns represent bits of arcana of interest only to statisticians. The two statistics, z-score and Chi-Square, are standard tests of statistical significance. Both attempt to measure the probability of attaining by chance a subset of given characteristics from a larger set of values whose properties are known, in this case the 1088 known values of monthly percent changes in the Dow. The z-test relates to mean and the Chi-Square to fixed attributes, in this case, direction — up or down. In the case of September, we have a record of 90 months with a mean change of -1.3. In 37 Septembers, the Dow was up for the month, and in 53 it was down. The z-test tells us that the chances of choosing a sample of 90 with a mean of -1.3 by pure chance from the 1088 months are considerably less than 1 in 200, and the ChiSquare figure shows the same thing with respect to choosing a sample with 37 up- and 53 downmonths. The table quite clearly shows that, in terms of mean, September shows the highest degree of statistical significance of any month under study, surpassing even the well-documented tendency toward a December rally. A couple of sidelights are, perhaps, worthy of note. Part of the downward bias in September stems from its including two of the' worst declines of the 1929-1932 period, September, 1931, the second worst (after October, 1929) month in stock-market history, and September, 1930. However, interestingly enough, the tendency towards a weak September has become especially pronounced since the start of the current secular bull market in 1974. The Dow today is almost five times its level at the low of that year. Yet, since 1974, eleven out of thirteen Septembers have been downward months. Thus the weakness of early September, 1987 conforms to the historical pattern. AWTebh Dow Jones Industrials0200) 2580.04 S I P 500 (1200) 318.62 Cumulative Index (9/3/87) 4008.27 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL, INC. NO statement or epresslon of oplfllon Of any olher malter herem contamed IS, or IS to be deemed to be, directly or Ifldlfeclly, an oller Of the sollcllatlon 01 an offer to buyor sell any security relerred to or mentioned The matter IS presenled merely lor the convenlCnce of thesubscnber While we believe the sources of our Information to be reltable we In noway represent or guaranlee lhe accuracy theroof nor 01 Ihe statements made herem Any action to be faken by the subscriber Should be based on hiS own rnvestlgatlon and mformatlon Delafield. Harvey. Tabell Inc. es a corporation and tts officers or employees. may now h.we, or may later take. pOSllions or trades In respect to any securities mentioned Ifl thiS or any future Issue. and such posItion may bo dlfloren! from any views now or hmeaUere… pressed In Ihl; or any other Issue Delafield. Harvey, Tabell Inc, which IS registered wllh lhe SECas an Investment adVisor, may give adVice 10 115 Iflveslmenl adVISOry and othe' CUSlomers Ifldependenlly of any 51 elemenlS made In thiS or Ifl any other Issue Furlher mformatlon on any security menlloned herem IS available on reQuest

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Tabell’s Market Letter – September 11, 1987

Tabell’s Market Letter – September 11, 1987

Tabell's Market Letter - September 11, 1987
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TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209. PRINCETON. NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE. INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 987-2300 September 11. 1987 1—II—————-WithhE'.,'e'0Ird-rOIslle1tnecrr1987nviin'come-to;-atleastaemperaryen,dl————I—) Tuesday's close, it is, perhaps, worthwhile to stand back and assess the damage. Quite simply, that damage appears to be rather minor. It is necessary to cite a few figures to suggest how ordinary the decline really was. The Dow last peaked on August 25, with a close at 2722.42, with the average at a new, all-time high, up some 43 from the 1986 close. Over a period of nine trading days, the index dropped 6.51 to this Tuesday. With the average at its current level, the fall was almost 180 Dow points, and the DJIA was off some 60 points during the day on Tuesday before recovering. We are provided with yet another example of how measuring declines in points causes us, unconsciously, to overestimate their extent, since we are still used to thinking of the Dow as selling around the lower levels which prevailed a few years ago. The ten-point unit point-and-figure chart at right is an attempt to track 9 the footprint of the average since the beginning of the year. The left hand auo side of the chart shows the sharp advance of the first few months of 1987 ,5 111111111111111I11111ownhliychp,rioofr cnooutrisce,abwleassefroilolouws eddecblyineth, e 1llj!IlI1lllEillItfrom 2410 in April to 2200. This low was later sucessfully tested and a base oo III formed, as indicated by the letter A are well aware that one of the doctrines of point-and-figure charting is that the extent of a lateral base tends to give '00 some clue as to the extent of a subsequent upside move. It is thus possible, as shown at B, to project an upside target of 2600, one that was 1\00 significantly overreached at the recent high, an event not uncommon in a strong bull market but still suggesting an overbought position. Eventually a top formed at C, with a downside objective, at D, of 2540. This level was reached early this week. The Dow, therefore, finds itself in a position which suggests little in the way of short-term downside risk. It is, however, entirely possible that the decline from 2700 constitutes the start of a complex top formation, especially since the breadth high, shown on the chart, occurred back in March, producing what is, now, a six-month divergence. Such a top formation could include at least one test of the previous high, and the buildup of such a top could well occupy most of the remainder of 1987. If the Dow follows this projection, the ultimate downside objective might be around 2300-2200, where, as the chart shows, strong support exists. An ultimate break below 2200 would be the only event that, technically, would validate the disaster scenarios which have become so common of late. The above is, of course, hypothetical and would have to be discarded were a new base to form suggesting a further high. However, with the advance continuing to be narrowly based, the top-formation thesis, in our view. appears more probable. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (9/10/87) 2607.62 320.03 3961. 33 No statement or expression of oplmon or any other matter herein contained IS, or IS 10 bedeemedlo be, directly or Indlreclly, an offer orthe sollcatlon 01 an offerto buy or sell any security relerred to or menhoned The matter IS presented merely for the convemence of the subscnber While we believe 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 mvestlgabon and information Delafleld, Harvey, Tabell Inc ,as a corporallon and Its otllcers or employees, may now have, or may later take, posrtlOns or trades In respect to any secuntles mentioned In thiS or any future ISsue, and such poSition may be dltlerenl from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With the SEC as 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 security mentioned herein IS available on request

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Tabell’s Market Letter – September 18, 1987

Tabell’s Market Letter – September 18, 1987

Tabell's Market Letter - September 18, 1987
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Y BIELL'S jUiJIR2 lEY LIEYYIEIRl 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987 -2300 The frequency of apocalyptic market comment has, it appears to us, been increasing of late. The most recent example may be the front page of Wednesday's Wall Street Journal which headlined a story on the bond market with the pronouncement, Debt-Securities Prices May Slide for Years, Many Analysts Think. The story went on to link the prospects for the stock market to the gloomy forecast for bonds. It is no criticism of The Wall Street Journal to suggest that, by the time a market opinion reaches the front page of that august publication—or, indeed, feature status in any medium with wide circulation—it may well be already discounted in the marketplace. We are, incidentally, somewhat skeptical of the purported stock market-bond market linkage. There is no doubt that bond prices have moved down sharply, with the Dow Jones Bond Average having sold at 95.51 on February 9th and having closed last night at a new low of 84.13. Correlation with the stock market seems less than apparent when we note that, on February 9th, the Dow Jones Industrials were at 2176 .84, on the way to a high at 2722.42 just 3 1/2 weeks ago. By that time, the bond market had already completed 2/3 of its decline. We are being asked to believe, in other words, that having responded to a 7.6 bond-market fall by rising 25, the stock market should now move lower in response to an additional 4 drop in bond prices. The above is cited not in an attempt to be wildly bullish, but to suggest that market comment at this stage should lean more in the direction of circumspection than that of extremism. Our readers are aware of our belief that the equity market, based on historical valuation standards is, to say the least, fully priced. We continue in this belief despite-t.heassorted-I'ationales–br.eaku p value ,Jorexample–currently–being l offered to justify present prices. We think it highly likely that the major averages may, at the moment, be forming a distributional top of some importance. We continue to think, however, that we are more likely to be in the earlier stages of forming that top rather than in the later ones. Looking at the short-term pattern, in other words, it may well be that current action consists of a test of the lows scored on the Dow last week. (Closing levels for the DJIA on Wednesday and Thursday were below their week-ago figures, but the September 8th intra-day low just under 2500 has not, as yet, been breached.) If this test is successful, a further test of the late August highs is hardly out of the question. This attitude of wait-and-see is further justified, we think, by the fact that, at its lows of a week ago, the market appeared to be at least moderately oversold. On September 9th, the familiar 10-day total of advances minus declines sunk to -4771, some 23 of total issues traded. This hardly qualifies as a deeply depressed figure—in the past, negative levels of more than 30 have been standard at major bottoms—but it may rank as being sufficiently oversold in terms of the recent record. Through 1974, it will be recalled, major lows were generally accompanied by climactic selling. This remained approximately true through the 1974 low but, beginning with the low of March, 1978, bottoms tended to be achieved by exhaustion rather than by selling panics. We had, in 1979, 1980 and 1981, climactic action taking place at intermediate lows rather than major ones, and, since 1981, we have seen no climactic lows at all. The September 9th figure constitutes the third lowest level in six years for the advance-decline oscillator, and the two previous occasions on which it was exceeded produced fairly decent short-intermediate term rallies. Likewise, the downside volume percentage.achieved on September 8th was around 82 of total volume, a reasonably high level, but not the 90 that we have generally used to denote a sold-out condition. Volume action, therefore, like breadth, suggests that a minor low may be close but that an unusually strong rally is not suggested. While a distributional pattern may be forming, in other words, we do not think that a serious drop is imminent less than a month after the averages have demonstrated sufficient momentum to generate an all-time high. We need, in other words, more evidence that that momentum has, in fact, been dissipated. AWT It Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (9/17/87) 2535.08 316.66 3959.01 ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. No statement or expression 01 opinion or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offer or the soliCitatIOn of an offer to buy or sell any secunty referred to or mentioned The matter IS presented merely for the convenience of the subsCriber While we beheve the sources 01 our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herem Any actIon to be taken by the subSCriber should be based on hIS own Investigation and Information Delafield, Harvey, Tabelllnc, as a corporalton and ItS ofhcers or employees, may now have, or may later take, posrttons or trades In respect to any securities menboned In thiS or any future Issue, and such postllon may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, TabeH Inc, which IS registered With the SEC as an Investment adVisor, may give adVice to Its Investment adVISOry and other customers Independently 01 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 – September 25, 1987

Tabell’s Market Letter – September 25, 1987

Tabell's Market Letter - September 25, 1987
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III.ii.\1mIED..D..' S Ia1lII.ii.\iii IEII D..1EIIVIEIiI 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 September 25, 1987 The rrisi JS. Bachatlif;'!'rr;tively simple—hi th-aTif is ti'sually based -on a few- simple themes. It is Bach's ability to create an almost infinite number of permutations, combinations, and variations on these themes that make him one of the greatest of all composers. Technical analysis, certainly, is a good deal less stimulating than a Bach fugue, but it is, to a degree at least, similar in that it often consists of finding widely variant points of view from which to consider a few simple data items. One such simple item emerged early this week, as, on Tuesday, the Dow advanced 75.23 points, a percentage increase of 3.02. It is the technician's task to view this reasonably rare occurrence in a number of different contexts. It can be noted, first of all, that the rally took place from a logical starting point. The week's intra-day low of 2468.99 and the closing low of 2492.82 were lower than, but in the general vicinity of, comparable lows which occurred a number of weeks ago. As readers know, we have based our own short-term market outlook on the hypothesis that a base is forming in, roughly, the 2500-2600 area in preparation for a future test of the early September highs. Taken in this context, the Tuesday rally, which traversed much of the range of that base, was not all that surprising. It is necessary, however, to consider the implications of the rally's magnitude. We can start out by noting that, since 1926, a one-day advance of 3.02 or greater has occurred 175 times. On the surface, at least, this would seem to suggest that the Tuesday episode was not all that rare a bird. A further look, however, reveals that 146 of the 175, 3.02-plus 1- advances-.9pcurred prior to World War II. Only 29 cases have occurred since 1946, and the-41'c—–II years since have been characterized by long stretches of time during which no such rally occurred. For 11 years between 1946 and 1957 no one-day rise as great as Tuesday's occurred, and the same was true of the 6 1/2 years from November, 1963 to May, 1970. All of this tends, first of all, to support the often-made observation that equity markets in the 1920's and 1930's possessed many characteristics which differ widely from those of the mid-1940's to date. The important question, of course, centers on whether large, one-day rallies such as the one this week. possess any implications for the market's future action. The answer, based on recent years seems to be that they do posses some forecasting value and the outlook indicated is bullish. Between 1957 and 1986 there have been 27 such rallies. In 24 of the 27 cases, the Dow wound up higher after six months. The average advance for the 27 instances was 11.07. Roughly the same average advance is shown for the period 1933 to date. During these 54 years, there occurred a total of 87 large, on-day rallies following which the market was higher after six months in 70 cases. It is possible and, indeed appropriate, to carry the analysis of this phenomenon a step further. Much of the bullish bias attributable to the indicator seems at first to result from the fact that SUbstantial rallies often occur at major bottoms—part of a conventional selling climax. This can hardly be said of Tuesday's advance since it occurred following only a minor downswing from a new, all-time high chalked up just few weeks previous. In an effort to distinguish the two sorts of rally, we can divide the 172 cases into instances in which the preceding six months showed a rise and in which they showed a decline. The present case, of course, falls into the former category since. six months prior to its occurrence, the Dow was around 8 lower. This particular pattern—a sharp, one-day rally following a market that has been rising for six months— has taken place only 59 times since 1928. Of these, only 17 instances produced a lower market six months later, and all 17 of them occurred prior to 1941. Since that time, there have been 8 cases, all of them leading to a higher market after a half-year, with an average advance of 15.7. A rally of Tuesday's sharpness, therefore, seems to suggest an intact bull market or, at worst, one that is early in the topping phase. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (1200) 2559.56 S & P 500 (1200) 319.26 Cumulative Index (9/24/87) 3973.07 No statement or expression of opInion or any other matter herein contained IS, Of IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an offer 10 buy or sell any securrty referred 10 or mentioned The matter IS presented merely lor the convenience of the subsCriber While 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 subscriber should be based on hiS own tnvesbgallon and Intormatlon 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 securrtl8S mentioned In thiS or any future Issue, and such poSl\!on may be different from any vIews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabe!! Inc, which IS registered wrth the SEC as an Investment adVISor, may give adVice to rts Investment adVISOry and other customers Independenlly of any statements made In thiS or In any other Issue Further mformatlon on any secunty mentioned herein IS available on request

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