Tabell’s Market Letter – August 19, 1988

Tabell’s Market Letter – August 19, 1988

Tabell's Market Letter - August 19, 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 (6091 987-2300 August 19. 1988 ———-1— – –I t-is-t-lle–teehniciaa'-s-jeb -to—..intee8t -himself L-iRrcane …s tatis tics 80we…shouldnot b-e accused of being off our rocker for having it occur to us. this week, that a great many recent trading days had seen more than 500 NYSE issues wind up unchanged on the day. This was brought to our notice. quite honestly. by the accident of 500 being a round number. but it did lead to some interesting exploration. Examination shows that 500-plus unchanged issues has, indeed, been a frequent occurrence lately. the figure having been attained on 36 of the 84 trading days since April 21. Prior to that (with two holiday-related exceptions) there had been no such day since 1985. when 20 cases were clustered over a three-month period between August and October. Through yesterday there have been. in market history. 500 or more unchanged issues on a total of 90 trading days. the first in 1982. There appeared. moreover. to be a tendency for them to occur in clusters such as the present one. We decided, therefore, to look at the phenomenon over a longer period. For the figures to be comparable, it was, of course, necessary to express the number of unchanged issues as a percentage of all issues traded, and based on current trading patterns. where around 1950 – 2000 issues usually change hands. 500 translates to about 25.5. We then looked at the 16.888 trading days since 1926. and discovered that 2667 (or 15.8) had seen unchanged issues amount to more than 25.5 of the total. The tendency of the phenomenon to occur in groups was striking. We defined a cluster of such trading days as a continuous series during which there occurred no two instances more than 25 days apart. We found no fewer than 6 clusters of 100 days or longer with 2071 or 78 of the number of days occurring within such clusters. 1063 days occurred during a six-year period between 1939 and 1945. and there was a 342-day strmg in 1951-1954. A check of other sources disclosed that we were not the first to inspect this particular phenomenon. It is discussed in a highly-re,commendedrecent…book….;T;;h;e;;;;En;;cy;;clopedia;of…..-l 'J'-echnicaIMarket-ndicatoFS (-DGw- Jones-Irwin) by Robert W. Colby and Thomas a …… . ………………………….cr……….u…..nt..cz……………..Itt………. A. Meyers. Their analysis of the data is shown in the table at right. It tends. interestingly enough. to suggest that large Ull;HlIIIiED ISSIlS ,DEI MIl' IA PERIOD MIlnu IIIIUART tn! to MRCII Ift7 . . . . . . Rta . . . . . . . . . . . . . . . . . . . . . .u . . . . . . . . . . . .n . . . . . . . . . . . . . . . . . . . . . . . . . n . .U nUU numbers of unchanged issues are bullish for mERPRElI'ITlOII SIViIlIItVSTIJR'S TlfIE milE the longer term, and. conversely. that ——-.. small numbers of unchanged are bearish. GREJlR TIWI OR This significance holds true only for fIlM' EWN. 1D I .IH longer periods as the table shows. For 3 !lDIITHS PDfTHS 12 IIONIHS one-month and three-month periods. the significance of the indicator is shown as neutral. which essentially means there is no discernible statistical significance. As we get out to six-month and twelve-month periods, however, extreme values appear to become valuable indications. Colby and Meyers' terms. very bullish and I1 very bearish suggest a less-than-one-in-lOOO probability that subsequent stock-market action occurred purely by random chance. Our own analysis of a slightly different time period suggests that 22.5 or more of total issues traded being unchanged produces a 68.67 probability of the S & P 500 being up a year later …versus an overall probability of 62.52. The average 0.000 0.139 0.154 0.lb4 0.17'1 0.119 O.IU 0.1'1 D.ln 0.202 0.20B 0.213 0.219 0.215 0.212 0,240 0.241 0.' 0.271 0.2'2 0.139 0.154 0.1 0.172 0.119 o.m 0.\91 0.191 0.202 0.208 0.213 o.m 0.225 0.212 0.240 0,248 0,251 om 0.2'2 o.m IIMRIl IlEUUAt. UUTRAl IIEUTRAI.. MUTRAL MUIRA\. NEUTRAL mil NEUTRAL mITRAl IlEUtRAl HUTRAl IiUTRAl NEUTRAL NEUTRAL IlEUTRAl IlUTRAI.. SUSHILY IULlISH rtUTUt IIUTRAl. IUTRAl 'lERl BEAIUSH 'lUTRAl SLl6HTU BEARISH IIUIRAl NEUTRAl IIEUTRAl, nUlRN.. NEUTRAl MUTRAl MUIRA!. IIEU1RAL IIUlRAI.. NEUTRAL MUlRAl SlI&HTLl BIlLllSII !fEUTRAI.. IfEUlRAl IlEUTRAl !lUTRAI.. BEI'IRISH vm rEMISH YERr lIMISH BEARISH 'lERY SEMISH ym BURtSH YERY IEARISH 'lERr BEMISH BUlRISII VERY BUlliSH VERT BEMISH 'I1IY IURISH IEUTRAl IEMISH SliGHTlY BI.lUSII nulRAl. IEUTRAl IJ!RY JEMISH I(UTRAL IlEUTAAI.. IEUTnl SlISHTLY BULliSH IIEIIIRAL SlI6Hll Y BIJllISH I(lITRAl VERY BUUISH BIlLISH YRY IIUlUSH IIEUTRAI.. VRY MliSH ItlllSH VERY BtJl.lISH IIEUIRAl YERY BULlISII SLl6HTlT BULliSH VERY nliSH MLISH IllllSH vERy IULlISH ,. -iULlISll percentage change in these cases 18 10.56 versus an overall average of 6.32. While today's dull trading. therefore. tells us little about the immediate outlook. it appears to be a fairly bullish indication for the long term. ANTHONY W. TAB ELL DEL …. FIELD. HARVEY. TAB ELL INC. Dow Jones IndustrIals 0200) 2033.25 S & P 500 (1200) 262.05 Cumulative Index (8/18/88) 3789.99 No slatement or expression of opinton or any other maner herein contained IS, or IS to be deemed to be, directly or mdlrectly, an offer or the soliCitation of an offer to buy or sell any security referred 10 or mentioned The maner IS presented merely for the conventence of the subScriber White we beheve the sources of our Informai!on to be reliable, we In no way represent or guarantee Ihe accuracy thereof nor 01 Ihe statements made herem Any action to be taken by the subscriber should be based on hiS own InvestlgallOn and Information Oelafteld, Harvey, Tabell Inc, as a corpora\Jon and lis officers or employees, may now have, or may later take, positions or trades m respect to any securities men\Joned m thiS or any future ISsue, and such posrtlon may be dlHerent from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc , which IS registered With the SEC as an Investment adVisor, may gIVe adVice to ItS Investment adVISOry and other customers Independenlly of any statements made In thiS or In any other Issue FUr1her Information on any securitY mentIOned herem IS available on request

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