Viewing Month: May 1988

Tabell’s Market Letter – May 06, 1988

Tabell’s Market Letter – May 06, 1988

Tabell's Market Letter - May 06, 1988
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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 .y 6, 1988 Tnecon'!R!ctlon-betw!en-markl!tctiowofth-e-1920sanli un u, ,ue 'uu, WI. Hro, no Lea In this space more than two years I;lgo. Following the market crash of last October, a reasonable replication of the October 1929 drop, such comparisons have become wldespread—perhaps deservedly so, since some of the similarities are eerie. The following table covers weekly action following the 1929 and 1987 highs. The first week of decline in both cases is designated as week zero. The high and low DJIA close for each week is shown, as is the highest single dayts volume for the week. As can be seen, 1929 figures are adjusted. The levels for the Dow are multiplied by an adjustment factor which makes the 1929 Dow high of 381.17 equal to the August 1987 peak of 2722.42. Volume figures are similarly adjusted upward. This adjustment makes it possible to view 1929 in a more-ar-Iess familiar context. wk No, Date ADJ DJIA ADJ HI VOL High Low mill shs Date oJ IA HI VOL High Low mIll shs o Sep 7 1929 2722.42 2641,00 27647 Aug 28 1987 2722,42 263935 213.50 1 Sep 14 1929 2677,85 2616,57 251.78 Sep 4 1987 2662,95 256138 199,90 2 Sep 21 1929 2659,71 2579,50 242,59 Sep 11 1987 2608,74 2545,12 242,90 3 sep 28 1929 256408 2463,16 246,31 Sep 18 1987 261304 2524,64 19570 4 Oct 5 1929 2460.51 232245 279,46 Sep 25 1987 2585.67 2492,82 220,30 5 Oct 11 1929 2520,22 2464,08 211,78 Oct 2 1987 2640.99 259057 193,20 6 Oct 19 1929 2506,72 231317 203,13 Oct 9 1987 2640.18 248221 19870 7 Oct 26 1929 233202 2135.33 640,75 Oct 16 1987 2508,16 224673 33850 8 Oct 31 1929 1953.48 1643,22 81541 Oct 23 1987 2027,85 173874 608,10 9 Nov 8 1929 184042 1657,94 35697 Oct 30 1987 1993,53 179393 308,80 10 Nov 15 1929 163365 1419,10 385.64 Nov 6 1987 201409 194529 22830 11 Nov 22 1929 17742. 1625,30 155.98 Nov 13 1987 1960,21 187815 206,30 1–I—–12NOI'1!ji! !j17'8..,1 cl-i-6 8 Oo-g3-l-8-()751-Nov—i!i)-l9 8-7—H-4 9.,.H)'-l,-B 9-i-ll9-;-2i——!-. 13 Dec 7 1929 188170 1726.29 234,29 Nov 27 1987 1963.53 191046 19950 14 Dec 14 1929 1872.70 173657 24934 Dec 4 1987 184897 176674 268,90 15 Dec 21 1929 1782.57 1649,08 27558 Dec 11 1987 190252 1812,17 23140 16 Dec 28 1929 1721,00 1661,65 173,52 Dec 18 1987 1975,30 1924,40 276,20 17 Jan 4 1930 1777.35 172172 20671 Dec 24 1987 2005,64 197845 203,10 18 Jan 11 1930 1785,78 1754,86 11911 Dec 31 1987 1950,10 1926.89 170,10 19 Jan 18 1930 179657 1759,36 15126 Jan 8 1988 2051,89 191131 209,50 20 Jan 25 1930 1850,28 1766.36 172.97 Jan 15 1988 1956.07 191611 19790 21 Feb 1 1930 1917,06 184199 18579 Jan 22 1988 196386 1879,14 18170 22 Feb 8 1930 1943,13 1903,70 216,75 Jan 29 1988 195822 1911,14 275.30 23 Feb 15 1930 1944.63 1918,13 182,31 Feb 5 1988 1952.92 1910,48 23730 24 Feb 21 1930 193363 188135 18857 Feb 12 1988 1983,26 189572 200,80 2S Mar 1 1930 195155 1874,63 164,47 Feb 19 1988 2014,59 1986,41 18030 26 Mar 8 1930 1968,20 1932,63 184,60 Feb 26 1988 2040,29 2017,57 21340 27 Mar 15 1930 1977,34 193020 22211 Mar 4 1988 2071.62 205786 236,10 28 Mar 22 1930 2003,76 1958,84 23001 Mar 11 1988 208107 202603 237,70 29 Mar 29 1930 204405 1993,48 251,68 Mar 18 1988 2087,37 2047,41 245,80 30 Apr 5 1930 2070,97 203748 294,76 Mar 25 1988 2067,64 1978.95 184,90 31 Apr 12 1930 2095,76 205955 282,29 Mar 31 1988 1998,34 197812 152,70 32 Apr 17 1930 210033 2086.97 218.54 Apr 8 1988 209019 1980.60 18980 33 Apr 15 1988 2110,08 200564 23420 34 Apr 22 1988 2015,09 1985,41 168,40 35 Apr 29 1988 204791 203233 157,00 As can be seen, both the Inltial 1929 coUapse and the October 1987 drop occurred in week 8 following the high and took the Dow to almost the same relative levels. At that point a divergence set in. Weeks 9.and 10 showed lower figures in …1929 ….while .)n the recent case. the market held. Volume expansion in 1929 was on the same order of magnitude as 1987 but a bit greater. The later weeks in each case also exhibit like patterns. In both cases. the market saw a recovery on light volume. The 1929-30 raUy peaked In week 32 at a level eqUlvalent to 2100, and the current high to date has been 2110 m week 33. We publish these fIgures at this point not to suggest that the similarities will continue, but to make it easier to detect when the two patterns flnally diverge. We have noted in the past our view that the differing economic conditions in 1929 and 1988 will eventually foster dissimilar market patterns. The time has come for such a divergence. If it is going to do so, to take place. AWTlt Dow Jones Industrials (12 00) S & P 500 0200) Cumulative Index (5/5/88) 2025.03 259.33 3714.85 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, dlrectty or Indirectly. an offer or the solicrtallon of an offerlo buy or selt any security referred to or mentioned The mailer IS presented merely for the convenrence of the subscriber While we believe the sources of our Inlormatlon to be reliable, we In no way represent or guarantee the accuracy thereol nor of the statements made herem Any aCllon to be taken by the subscTlber should be based on hiS own Investigation and Information Delafield. Harvey, Tabelllnc, as a corporation and ItS officers or employees may now have. or may later lake, poSllions or trades In respect to any secunbes mentioned In thiS or any future Issue, and such posilion may be different from any views now or hereafter expressed in fhls or any other Issue Delafield. Harvey, Tabel! Inc, which IS regrstered wrth Ihe SEC as an IfwestmenI adVisor, may give advlC 10 Its inVestment adVIsory and other customers Independently of any statements made In thiS or In any other Issue Further Informabon on any security mentioned herein IS available on request

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Tabell’s Market Letter – May 13, 1988

Tabell’s Market Letter – May 13, 1988

Tabell's Market Letter - May 13, 1988
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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 16091987-2300 May 13, 1988 What if it doesntt matter at all We are referring, in this case, to the market crash of October 19, 1987 J and we want to explore. -at -least;-the -theoryth-at–ttre- crash -may7lln-e-xpectecUy–proQuce no really- significant- aftereffects- .— — –……. – – The argument can be advanced that this has been the case to date. For all of the fireworks of last October it is necessary to recall that 1987 will go down in history 8S an up-year for the stock market. The Dow currently finds itself at levels it attained for the very first time in January. 1987. Is it conceivable then, that the period from early 1987 to date, which saw the DJIA advance to over 2700 in the first eight months of last year and then give up almost 1000 points, more than half of them in a single day's trading. will wind up being recognized as only a blip on some sort of longer-term market trend Such a theory hardly seemed plausible at the moment of the crash. The natural reaction. after October 19 had occurred. was to relate it to what was. in fact. the only truly comparable period in stock-market history—i.e 1929. Our own reaction was to produce just such a comparison. We noted on October 23. the market managed to shatter. last week, most of the records achieved 58 years ago. Monday's 500-point drop in the Dow took it down 22.61, almost twice the 12.82 of October 28, 1929 The 26.17 fall over Friday and Monday was a two-day record, bettering the October 28-29, 1929 drop, 26 to 23 This comparison, of course, refers only to stock-market trading occurring over one week in October, 1929. We have set forth repeatedly, in this space. our own belief that most people who use the 1929 appellation today are in fact. consciously or unconsciously. using it as a code word covering a great deal more than than a sharp drop in the stock market which took place 59 years ago. They are certainly referring to, at the very least. the entire market collapse. which. with a total absence of fireworks in the latter stages. took the Dow from 386.10 in September, 1929, to 40.56 in July, 1932. Indeed. 1929-as-a-code-word covers even more than just the stock market experience. It involves the greatest economic contraction in U.S. hlstory, a depression in which Gross National Product was cut in half over a three-year period. It probably includes also the almost-ten-year aftermath to that depression, which saw only a modest recovery. and which included yet another severe contraction 1–lI–jn .lR37.olR38.lndeed ,wetendto a gl'ee. with thetheo,,-y–whic hhold s…thatonly4hti mulus,.f-World–'-I War II. more than 20 years later, was able to bring the American economy back to full resource utilization. Thus the market collapse of October-November, 1929, many would contend. was nothing more than a trigger. It acted only to set off a chain of events which essentially continued through the entire decade of the 1930's. Many forecasters seem to feel that the 1987 stock market may also carry the seed for a series of equally unpleasant future phenomena. So far, such phenomena have been non-events. We worried in December about the effects the crash would have on Christmas sales. There was no such discernible effect. The same was true of housing starts. Indeed, the only area of the economy obviously affected by the crash so far has been the stock market itself. We noted last week the uncanny parallels between market action in 1987 -1988 and that of 1929-1930. Until this spectre is laid to rest. there will exist justiflable concern regarding both the market and economic futures. Meanwhile. the market can be said to have a few things going for it. Foremost is the aggregate of individual base patterns for many stocks, stocks which show sufficient accumulation to suggest, at the very least. a test of former hIghs. As we have noted. upside breakouts from such patterns have not been common. but the patterns. meanwhile. continue to broaden. We are, at the same time. looking at the second half of a Presidential election year. a period. which, historically, has tended to be a good one for the stock market. If the theory of contrary opinion is to be believed. the current plethora of bearish commentators suggests that stock-market surprises might come on the upside rather than the downside. None of the above represents a forecast. since we continue to feel that uncertainties remain far too great to warrant an aggressive investment posture. It is meant. simply. to suggest that an hypothesis calling for an extended upside move at some time in 1988 is not totally untenable. ANTHONY W TABELL DELAFIELD, HARVEY, TABELL INC. AWTebh Dow Jones Industrials (5112188 close) 1968.00 S & P 500 (5112188 close) 354.86 Cumulative Index (5111188) 3645.69 Note Due to the writer's attendance. along with his associates. at the annual Market Techmcians' Association seminar, the above remarks were prepared on Wednesday. May 11. No statement or expreSSion of opInion or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offeror the solicrtatlon of an offerlo buy or sell any security relerred to or mentioned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our Informabon to be reliabte, we in no way represent or guarantee the accuracy thereof nor of the statements made herein Any actIOn to be taken by the subscnber should be based on hiS own Investlgatton and Information Delafield, Harvey, Tabel1 Inc, as a corporation and Its officers or employees, may now have, or may later take, pOSltlons 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 hereaffer expressed in thiS or any other Issue Delafield, Harvey, TabeJi Inc , which IS registered With the SEC as an investment adVisor, may 91ve adVice 10 Its investment adVISOry and other customers independently of any statements made In thiS or in any other Issue Further InformatIOn on any secunty mentioned herein IS available on request \

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Tabell’s Market Letter – May 20, 1988

Tabell’s Market Letter – May 20, 1988

Tabell's Market Letter - May 20, 1988
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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 1609) 987-2300 – May 20, 1988 The stock market's tendency toward perverslty—some W(nila—even'say-irrationality—was–amply—l- demonstrated in this week's trading. We have had hammered through our skulls over the past six months the absolute necessity for reversing the trade deficit before any stock-market progress could take place. The recent release of March figures showed, for the first time, real improvement in the trade numbers The Dow put on a two-hour rally of some 20 points and then collapsed However, the purveyors of conventional wisdom are never at a loss. A broad-tape news story conceded that the improvement' underscores the increasing competitiveness of U S. exports … but it also signals strength in the economy that could produce higher inflation Presto-changeo, inflation became the operative bugaboo, fuel being added to the fire by new lows in the unemployment rate. Stocks. obviously. were going down because the economy was too strong. Got it Our own major fear (fear, not forecast) regarding the stock market has always been deflation, rather than its opposite. Martin Pring. in an excellent speech at last week's Market Technicians' Association seminar, pointed out that commodity prices and bond yields—which should fall in a depression—both showed potential very long-term tops. However, the shorter-term outlook for these …series is beginning to seem just the opposite of toppy and may explain the current inflation fears. I ..l2!l. I -', I''., CRB INDEX -….. \'11\,VI'\/'- .rJInl.,..4'- '\ (I'yol , -2lIQ lV'''f,I''/'\l V\''t -/'- ( 't,. I The CRB Index of commodity prices this week confirmed penetration of a downtrend line going back to its November, 1980 high, and the short-term course for this most sensitive of inflation indicators ought to be upward. It should be remembered, however, that 1981 – 1986 saw a decline in the index from 340 to under 200, a drop of some 40 percent. It is conceivable that a long-term trend toward lower prices remains intact. As the chart also suggests, bond prices (we utilize the Dow Jones 20-Bond Average as a gauge) have been tailing off for the past few months. But this fall can be viewed simply as a retreat from the overhead supply remaining from the period when the average traded well over 90 in 1986 and early 1987. At the moment, the chart suggests strong support just under current levels and would point to significantly lower interest rates only if the October lows were to be penetrated. As technicians. ,thankfully. .we. ar.e. exempt ,from ..worry as to. whether inflationary or deflationary… worries should be the operative ones for the current stock market. As our readers know we foresee a continued trading range, possibly continuing for the entire remainder of 1988. During this range, hopefully, the market's Ultimate direction will become evident. This week's switch in excuses for a weaker market does not alter that technical picture. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. AWTebh Dow Jones Industrials (1200) 1959.88 S P 500 (1200) 252.62 Cumulative Index (5/19/88) 3631.44 No statement or expressIon of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the soliCitation of an offer to buy orse!l any securrty referred to or mentioned The matter IS presented merely for the convemence of the subsctlber While we beheve the sources of our Information to be reliable, we m no way represent or guarantee the accuracy lhereof nor of the statements made herein Any action to be taken by the subscflber should be based on hiS own Investigation and Informallon Delafield, Harvey, Tabelllnc, as a corporation and ItS officers or emptoyees, may now have, or may later tak.e poSitions or trades In respect to any securities mentIoned In thIS or any future Issue, and such polllon may be dlHerent from any vIews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabefllnc ,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 or In any other Issue Further Informa\ton on any seCUrity menltoned herein IS available on request

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Tabell’s Market Letter – May 27, 1988

Tabell’s Market Letter – May 27, 1988

Tabell's Market Letter - May 27, 1988
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,- -I.! I '11liil i J lEO. 0 . ' S Iil1lI& lE'1I D..IEV'1IlER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 1609) 987-2300 May 27, 1988 – – . . . . -Borin g…–T-his -is -probably- th-e-.singleJ-wor-d most.. descriptive ….()fthe—prese nt… s tock-' market-scene .',, I The phones do not ring. Traders do crossword puzzles. The Dow does nothing. There is, of course, nothing new about this phenomenon. Anyone with any Wall Street experience has seen it all before, and it eventually goes away. This, however, does not make the process any less painful. Current volume figures, however minuscule they may be. actually overstate the level of activity. This is due to the emergence of yet another modern trading phenomenon–the dividend capture. May 18, for example, saw over 209 milHon shares traded. However, 64 million. over 30, was in a single stock, Philadelphia Electric. An old Wall Street adage runs, Never sell a dull market Since the past month or so certainly falls into this category, we set our computer, this week, to the task of trying to determine whether this admonition has any basis in fact or is sImply a charming bit of stock market folklore. It was first necessary to come up with a precise definition of dull, and the one we used, we freely admit, is arbitrary.. We decided, first of all, to focus on volume rather than price and decided that dullness could be defined by a tenday average of NYSE volume amounting to less than 80 of a 150day average thereof. A dull period was then defined as five or more days, without a fiveday interruption, meeting this criterion. This particular decision rule isolated 55 dull periods since 1949, the latest instance having taken place just this month when 11 of the 13 trading days between April 29 and May 17 fit our requirements. This episode was of rather short duration, SInce many of the 54 prior intervals had continued for 30 days or more, the longest, in 1951. lasting 57 days. Of the 54 previous instances recorded, we then measured the market change approximately one year -(250tadingday,,,at'''.-I'fI-3.,-Jr-6S,5k-ofAhose–cases-the-market-was-up'(me–year–..fterwartl-;-mrd—I-I in 17 cases (31.5) it was down. As is always the case with such compilations. however, it must be remembered that long time intervals, especially those as long as a year, have a bullish bias. There have been. since 1949, 10,052 separate 250-day intervals. For 66.2 of these intervals the market was up, and for 33.8 it was down. The figures for up and down markets following dull periods, then, are almost precisely what history would lead us to expect. We can, apparently, consign yet another old wives' tale to the trash bin. Such action, however, might be precipitous. We decided, despite the above results, to examine the past 54 occurrences on a chart. They tended, on such examination, to occur mostly during transition periods between upswings and downswings, happening only infrequently during welldefined up or down trends It thus seemed advisable to separate those instances where periods of dullness had occurred following bear markets from those taking place after bull markets. Again, an arbitrary definition was needed. We, therefore, defined a post-bear-market dull period as one which occurred when the market had been higher one year before. There remained 18 such cases. After 15 of them, the Dow, one year later. was up. A strange coincidence is that the three wrong signals all occurred within a 7-month period in the 1972 – 1974 bear market. Based on this re-examination, the latest boring episode took on more interest. However, still further work suggests that our newlydiscovered phenomenon appears to be becoming less useful. It is possible to identify 10 major bear-market bottoms since 1949, the first six of these having occurred through 1970. There was a dull period associated with everyone of those six bottoms. taking place prior to the low in four of those cases and only slightly afterward in the two others. The average gain -for the ..year.following&thesix-signals'was-17 andthe average gain measured from the signal to the end of the subsequent bull market was 59. By contrast no similar signal was associated with the four most recent major bottoms in 1974, 1978, 1982, and 1984. It remains uncertain, therefore, whether this particular piece of wisdom should be heeded in the present instance. It does appear, however, that the rule about not selling a dull market may be a bit more substantial than pure myth. AWTebh Dow Jones Industrials (1200) S & P 500 (1200) Cumulative Index (5/26/88) 1960.35 253.83 3652.44 ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. No statement or expression 01 oplf'llon or any other matter herein contained Is, or IS to be deemed to be, directly or Indirectly, an offer orlhe solicitation of an offer to buy or sell any security relerred to or menlloned The matter IS presented merely for the convef'llence ollhe subscriber White we beheve the sources of our information to be rehable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any achon to be taken by the subsCriber should be based on hts own Investigation and mformatlon Delafield, Harvey, Tabel! Inc, as a corporation and Its officers or employees. may now have, or may later take, positions or trades tn respect to any securTltes mentioned In thl or any future ISUe, and such position may be different 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 cuS10mers Independently of any statements made In thiS or In any other Issue Further Information on any secUrity menllOned herein IS available on request '.,11. I',. .l I.

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