Viewing Year: 1989

Tabell’s Market Letter – January 06, 1989

Tabell’s Market Letter – January 06, 1989

Tabell's Market Letter - January 06, 1989
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..,. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 085435209 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 January 6. 1989 '- Following a 24-point 'slide' on-the-first-trading daYof '1989 ;ctheYear-end 'rally–in-ally– '.- -', ''– emerged, and a new postcrash high' was chalked up on Thursday. As discussed last week. the vigor of this rally will provide one clue as to the market's potential for the year ahead. It occurs to us as 1989 begins that there still remain a couple of aspects from which we hJ)ve not yet discussed its prospects. One such aspect is the decennial pattern, in which market patterns are analyzed in terms of the ending digit of the year. There are some interesting facets to such a classifaction. such as, for example. the fact that all nine years ending in 115 11 since the Dow was first computed have been advancing ones, and the average advance for those years is 35. five times as great as the 92-year average. Unfortunately. the pattern for years ending in 9 does not tell us much. Five years of nine have been up, but two-thirds of all market years have. historically. been up years. Some analysts have suggested that 9 years tend to be turning points. e.g., 1929 and 1949. but we suspect this maybe coincidence. Probably of more significance is the fact that 1989 will be a post-election year. The following table shows what the stock market did in the 23 most recent such years. It shows the average price for each month on the Dow as a percentage of the previous December's close (i.e., 110 means the market was up 10; 90 means it was down 10). Year president Jan Feb Mar Apr May Jun Ju1 Aug Sep Oct Nov Dec 1897 Cleveland 1901 McKinley 1905 Roosevelt u1909Taf,t 1913 Wilson 1917 Wilson 1921 Harding 1925 Coolidge 1929 Hoover 1933 Roosevelt 1937 Roosevelt 1941 Roosevelt 1945 Roosevelt 1949 Truman 1953 Eisenhower 1957 Eisenhower 1961 Kennedy 1965 Johnson 1969 Nixon 1973 Nixon 1977 Carter 1981 Reagan 1985 Reagan D 84 82 82 79 79 85 92 104 107 101 95 98 R 96 97 97 104 101 109 104 101 99 92 93 89 R 101 106 112 115 107 108 114 117 115 118 123 134 R 9,99.7 921,Ola.51.07 1.0–1 31.lA–1IA.L411.4 D 97 92 91 92 90 85 88 91 93 90 88 88 D 102 96 100 99 98 102 98 93 88 83 75 74 R 104 105 104 107 107 96 95 93 96 100 105 111 R 101 100 100 99 104 107 111 115 118 125 128 128 R 102 103 104 103 105 105 115 120 122 107 78 82 D 103 94 96 108 136 157 167 164 167 155 161 166 D 102 105 105 100 96 95 100 102 89 77 70 70 D 99 93 93 91 89 93 97 97 97 93 89 84 D 101 103 103 105 109 110 108 109 117 122 125 127 D 101 98 99 99 98 93 98 101 102 105 108 l11 R 99 97 98 94 95 91 93 93 90 93 95 96 R 97 93 95 97 100 101 103 98 94 89 87 87 D 103 106 109 111 113 112 112 117 115 114 118 118 D 102 102 103 104 106 100 100 102 106 108 109 109 R 99 99 97 98 101 95 89 87 88 88 89 84 R 101 95 94 93 90 88 89 87 89 95 86 81 D 97 94 94 93 92 91 90 87 85 82 82 82 R 100 98 102 104 102 103 98 96 89 89 89 91 R 102 106 105 105 106 108 111 109 109 112 118 125 The most obvious conclusion suggested by the table is. unfortunately. that such years appear to have a fairly significant bearish bias. In 13 of the 23 years, the average price for December was lower than the previous December's close. This is in direct contrast with the record noted above for all years since 1897. The market was up in 57 of those 92 years, or 62 of the time, thus suggesting that the post-election pattern, with 'only 43 advancing years, is a bit unusual. Nor does Mr. Bush's party affiliation help. Until President Reagan reversed the pattern in 1985, the market had been down in the year following the election of a Republican in every post-election year since Hoover. (This bias was apparently not present in the first part of the century with the accessions of Theodore Roosevelt, Taft, Harding, and Coolidge, all producing good years.) It will be interesting to see whether the 1985 reversal is repeated in 1989. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2198.21 S & P 500 (1200) 281.48 Cumulative Index (/5/89) 3985.80 AWTebh No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indlrectty, an offer or the soliCitatIOn of an offer to buy or sell any secunty referred to or menlloned 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 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 mvestlgatlon and mformallon Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later take, pOSitions or trades In respect to any securities men1lOned In thiS or any future Issue, and such position may be different from any views nowor hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS registered With the SEC as an mvestment 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 securtly mentIOned herem IS avaitable on request

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Tabell’s Market Letter – January 13, 1989

Tabell’s Market Letter – January 13, 1989

Tabell's Market Letter - January 13, 1989
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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 — —– — – – — —-'; – January 13989—- – ;-I- At the'beginning of December, some two weeks after the market had embarked on its latest short-term advance. we made an attempt to fit that rally into the context of 1988 market action. We said at that hme. Projecting (the 1988) environment through December, one might expect a high some 2 above October. say 2225, as a possible target for a year-end rallyll. The Dow closed yesterday at 2222.32, pulling back after spending most of the afternoon well above the 2225 level. Date ——— Dec 4 87 Jan 7 88 Jan 20 88 Apr 12 88 May 23 88 Jul 5 88 Aug 23 88 Oct 21 88 Nov 16 88 Jan 12 89 DJ Average ——- 1766.74 2051.89 1879.14 2110.08 1941.48 2158.61 1989.33 2183.50 2038.58 2222.32 This Swing ———0.00 16.14 -8.42 12.29 -7.99 11.18 -7.84 9.76 -6.64 9.01 C han g e Number Of Days From Hi From Lo This Swing Cumulative 2.84 2.30 1.15 1. 78 3.32 2.46 2.48 o0 22 22 9 31 57 88 29 117 29 146 35 181 42 223 18 241 38 279 The analysis we used a month ago was based on the table above, now updated, and suggested that market action since December 7. 1987. when the October lows were tested. had consisted of eight trading swings, four up and four down, averaging some 9 in extent. It pointed out that the three short-term highs in April, July. and October had each exceeded the preVIous one by about 2 and that each low had likewise slightly bettered its predecessor. It was suggested that another rally comparable to the previous ones, a 9 advance to some 2 above the hIgh of October 21. would produce a -2225objective.'l'his.,ventu . .lityhasMndcedf'..t , .. .n s p i 1 ' e d '— – – What has. unfortunately. not come to pass is any Cumulative Net Advances improvement in the dreary undertone which was typical Upswing Total Avg per Day of the 1988 stock-market scene. One way to measure the strength of a short-term advance is to accumulate the net difference of advances and declines over the course of that advance. The table at right shows the results of such an accumulation for the five rallies which have composed market action since December. ——————–Dec 4 87 – Jan 7 88 Jan 20 88 – Apr 12 88 May 23 88 – Jul 5 88 Aug 23 8 8 oct 21 88 Nov 16 88 Jan 12 89 ———– 6,109 277 7.348 129 5.007 172 3.304 79 3,494 92 1987. For the last previous rally. that of August-October. the average daily difference between advances and declines was only 79. On the current rally, thl'ough yesterday. that figure had improved very little and remains well below previous levels. Av e r a g e Upswing ——————— Dec 4 87 – Jan 7 88 Jan 20 88 – Apr 12 88 -May 23 88 – Jul 5 88 Aug 23 88 Oct 21 88 Nov 16 88 Jan 12 89 Da i 1 Y Total ——– 178.9 178.4 188.1 146.1 136.9 V 0 1 u m e (million shares) Upside of Total Downside of Total —— ———- ——– ———- 97.3 54.4 61. 3 34.3 87.7 49.2 67.7 37.9 94.8 50.4 64.1 34.1 74.8 51.1 51.1 35.0 66.4 48.5 48.4 35.3 Volume figures offer no more encouragement than do the breadth numbers. The table above shows the average daily volume for each of the five rallies in the 1987-89 advance. dividing that volume into upside and downside volume. As can be seen. total volume has decreased on each of the fIve successive rallies. and this pattern has continued through the current upmove. In addition. upside volume for this rally is. by far. the lowest of the five both in absolute terms and as a percentage of total volume. Clearly. for the first two weeks of 1989 at least, the pattern of deteriorating breadth and momentum which characterized most of 1988 IS continuing. None of this is to suggest that there exists any immediate vulnerability, and. indeed, the opposite is the case. There still exists the possibility of an extension of the year-end rally to the 2300 level. which we previously suggested as one criteria for a positive 1989 proJection. Given the pattern indicated above, however, the sudden emergence. at this stage, of a broad and dynamic rising phase must be considered unlikely. ANTHONY W. TABELL DELAFIELD. HARVEY. TABELL INC. Dow Jones Industrials (12 00) 2221.61 S & P 500 (1200) 282.82 Cumulative Index (1/12/89) 4039.05 AWTebh 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 or sell any security referred to or mentioned The matter IS presented merely for the corlVenience of the subSCriber While we believe the sources of our Information 10 be rehable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Anv action 10 be taken by the subscriber 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 take, positions or trades In respect to any secuntles 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, 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 menlloned herem IS available on request

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Tabell’s Market Letter – January 20, 1989

Tabell’s Market Letter – January 20, 1989

Tabell's Market Letter - January 20, 1989
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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 January 20. 1989 It cannot be denied that 1989. so far at least. has been a pleasant year for the equity market. – In ,three weeks ..ihe-;-Dowllad. ,at-y,e,sterday's close.–1ovedup3 .2'LfrQm its .December 30, level. .This, move represented the continuation of a year-end rally that can be dated all the way back to lows posted over two months ago. Since then. the average. from a level of 2038.58. has now advanced almost 10. Before joy becomes totallv unconfined at this happy sequence of events. it should be noted that we have here nothing particularly new. Three of 1988's four short-term rallies posted larger advances. Recent action is, however. not without its impressive aspects. We are thinking here specifically of the fact that both currency and stock markets were able to shrug off disappointing trade-deficit figures and produce sharp rises in both stocks and the dollar. Now, if the market can ignore the next jump in short-term interest rates, we will really be impressed. We have taken up a great deal of space of late talking about short-term market swings, and it is perhaps worthwhile to step back and try to place the current trading pattern within a major-cycle context. To begin with, it must first be recognized that we are in a bull market. This may seem, at first glance. to be a reversal of position for this letter which, our readers are well aware, has tended to wax less than ecstatic over recent market action. Such, however, 18 not the case. The bull classification for the current market is. after all. the only logical one in terms of cycle theory. It seems to us absurdly obvious that October 19. 1987 (or its December. 1987 test). constituting the low point of what was arguably the second largest decline in stock market history, has to be identified as a major-cycle low. We have, moreover, documented the fact that the rally-in-a-bear-market thesis to explain trading since that time does not hold water historically. If October, 1987 was a major cycle low point. the ensuing period is clearly the upward phase of a new market cycle—in other words, a bull market. This thesis is confirmed by the traditional filter test for bull and bear markets, a 20 move. The Dow and the S & P 500 were both, this week. roughly 28 above their 1987 lows. So, a bull market we have. What we do not have. and this is this letter's rationale for – – continuingskepticism-;–is-a-very–good-buU-maTket. We will-not–bore-our-rcaders .'-f.urther-by-once-more—– reciting the litany of deteriorating breadth, momentum, and volumE' statistics which have accompanied the last ten months of the current upswing. In trying to cite an historical analogy to the present market I we have I in the past, referred to October, 1946 – June, 1949. We would not want to push this comparison too far, yet there are a number of points of similarity. It must be remembered that 1946 – 1949 was, indeed, a complete market cycle. As in the current case, a new low was made on October 9. 1946, at 163.12 on the Dow and was tested again some six weeks later at 163.55. There followed, throughout all of 1947 and the first half of 1948, a series of choppy up and down Swings, not at all unlike those of 1988. The bull-market phase of the cycle peaked on June 15, 1948, 20 months after the low. with the Dow at 193.16. 18 above its bottom. On the same date. the S & P 500 was 24 above its low figure. The advance displayed breadth and volume action even less impressive than that of today. The follOWing year constituted a bear market which retraced the entire advance. The subsequent cycle. 1949 – 1953, then produced one of the strongest upswings on record. That upswing was a product of the fact that 1946 – 1949. for most stocks. constltuted a rebasing period. Like any cycle, it consisted of bull and bear phases, but both were relatively flat. It was also a period durlng which leaderShip rotated back and forth as various stocks and industry groups built up the patterns that led to the advance of the 1950's. When one looks at individual stock patterns today, there is a clear impression that potential base patterns, similar to those which must have been tracing themselves out in the late 1940' s, may well now be forming. The question currently posed for the technician must center on the timing of the breakouts from those patterns. It is. of course, conceivable that such breakouts could begin to take place en masse over the short-term. This seems to us rather unlikely. It is the normal characteristic of bull markets that they attain maximum upside momentum in their early stages and generally lose that momentum as they move ahead. A bull market developing an acceleration phase in its advanced stages is a phenomenon difficult to locate in the historical record. Expecting an advance now 14 months old, which has been deteriorating for 10 of those 14 months, suddenly to erupt on the upside requires an optimism which we do not possess. None of this is to suggest that the present upswing is over. Twenty months after all, elapsed between October. 1946 and June, 1948. and the present rise is only 14 months old. Furthermore, the current trading range shows an upside bias that 1946 – 1949 did not. If the present pattern continues. individual stock bases will become more and more impressive, and we have no doubt that the eventual upside breakout from those bases will produce a market which will be exciting, indeed. However, the immediacy of that breakout remains, in our view, questionable. ANTHONY W. TABELL DELAFIELD. HARVEY, TAB ELL INC. Dow Jones Industrials 02 00) 2241.07 S & P 500 (12 00) 286.76 Cumulative Index (01/19189) 4094.61 AWTebh No statement or expresSIOn of opinion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or Indirectly, an offeror the soliCitation of an offerlo buy or sell any security referred to or menilOned The matter IS presented merely for the convemence of the subscnber While we believe the sources 01 our mformatlon 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, labelllnc, as a corporallon and Its offIcers Or employees, may now have or may later take, posrtlons or trades In respect to any secunties mentioned 10 (hiS 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, Tabelllnc., which IS registered With the SEC as an Investment adVisor, may give adVice to rts Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Informallon on any secuflly mentioned herein IS available on request

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Tabell’s Market Letter – January 27, 1989

Tabell’s Market Letter – January 27, 1989

Tabell's Market Letter - January 27, 1989
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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 January 27, 1989 The rally which beglln on November 16 was extended further yesterday and thIS mormng. At 'Ihur.sdays….closeof21.,O.7 …. the .Do had8dvanced…12 .4 over–48trading daYB. These numbers…..r.emain- –within the framework of the typical post-crash rally. but Ii number of encouragmg things are taking place. Among them is the attainment, intra-day at least, of the 2100 short-term objective mentioned in this space two weeks ago. extending the year-end rally to 10 above the December low. normally an encouraging sign. We noted last week. only semi-facetiously. that we would be impressed if the market could shrug off higher interest rates. It did this to some degree on Thursday when a rIse In durable goods orders brought about the predictable weakness in long bonds. Equities, however. were able to advance. spurred by good 1988 earnings reports from B. number of leading companies. This rationality is a refreshing contrast to the bad-is-good syndrome of 1988. Market improvement is often accompanied by shifts in leadership, and there is some sign, although stiU preliminary. that this is taking pltlce. The tables below show the 4-week and 26-week changes for a number of 8 & P industrial groups as of this Wednesday. The one on the left shows the 30 best-performmg out of a total of 95 groups over 26 weeks and is ranked in that order. The right-hand table is ranked on 4-week changes and shows the best-performing groups for that timeframe. 4 VtE LHAkbE ,0 kEH HAkbt 4 Mttl MAhbt iO tt r1ANbt bW, NAKE lOBAL'u fO tHllN ,Ail ,,filuM et 211 ISll &1 2 O; ;; .4 HuM ,Jul , Ull RANl I ,… 4l.0j ,1.,,1 uur .,,' ntp.lTH LRt-MhL HI.OfWUkEo ,OO,IH. tKII jet 8 Ha ,m I .rib ll.lS4 15,4i tliuK Jui 2i Udu ,All I m. O -( IDIl 5 ii.I.1 Al FkElbMi fOoo; U i OJO 1, i.1il j J5 400 4 '1.I. buLii ,ONIAIN WE d.4S' 11.160 i -0.201 ,I 4.181 HAMUfA,TUm HOUlm mlllm MElAl I blA11 1 1141, ,I I I4i I li.lii l.i5I I,' IA.INbl , lOAM (HPAHIEI 10.,4, i 10.,.4 24 13.181 12 1;.,,3 PUllUTIOH ,0NIROl .; 'Jl; I 1u ,40 AlOMINUM i ;.,41 18 11.0\2 1 BROAOmUjll!'IA .(l-!-1'-f-'1.llp.'-c1–.;50l-MA(!!!HINE'-.!.!T,-,Ol-lI -C;L-'1'-,,019 ''–';!!U-!IIO' Hl11lE PROOUm 11 1.10, 9 b.2,J illU,Al bA, !U I 9.1 11 1).881 SEifRAIEI AlLOHOliL kAll,OAUI 'J11; 131 3.00, 10 18.m 11 'b.'ib bAMIb L,MPlNIEi liTtkT!IENT 11 8.159 12 i. i5l I, l7.m 21 II 11; IAYIm I lOAN ,0MPAlIEI I 10.,.4 11 Ii bUl aiL. bA, OKilliNb I, ;.ill 60 . ;;0 10FT DimS HOUlliOlD PROUm RES1KAT) IAKINI,OMYAMItl tlh.lRuMHLiM)lRUKtkiFliluh ALUMINUM AIR TRANSPORT fOOO iHlESAlm EHHkiAlNHENl 90 Ull ,1 UI4 2J II i i5, ,.,0u I.u5 i 2J 7.l.hl ;4 -u. i2 l\ 753 1J 441 H 18.100 l Ii .jH I. 11.b 1/ Ii illl 18 Ii 051 19 111 llS lu II 110 21 15 Lll MO,PlT!l N,hAitM,!i ,0KrANlb mAIl ITuRb,ORU ilAl itllKlbtl Al'UMUlh fHlUoIH i.b,, OiHEi HAJui SANl, Alit filtibni ,O,A,i HtOII itA TiLt rKuuULh 14 UI, II 6.4.1 '.B,It1 l\ JO'l ,i 11.1 b.dtl I; i 001 0 1.0J 11 i 5i, 22 i,HJO d lUll 11 1 9UI 4 152 10 1'.919 l -u Jiu 45 Ubi J 35.401.1 ,1'.501 S 1.Zjj MUliHUE mURAN,E 41 5 111 11 14 15. AIR TkAhiPOR! 1j 1.1.i 19 1'.11, hOSPITAL MANAHNENT ,mANIE H 8.5il 15 14 III MOU,EHOl; f I A 14 I lui .; Uli TO.I h,1.TUKP.L bAS lu ,41 Iv b.O 14 15; 25 IJ dl BRulERAGt IlKMl Cr1El'ilAL-ilH 15 I 10, 20 i u4u 1; 15.4 15 l,i27 liOmibE IIRMS 15 i.l06 ,,1,4,; (UMMEitlAl mil,,, ,I 1 G14 41 9.6.0 HuME 8UIlom ,1 5.')' 1I I) 153 mEL 1.1 .5 I.iii HETAlI mmllNEuUI uHIE iUU1PHENl & Sri'lib 5 11.m li l b70 1; 11 ;lu l'l 1, lIO fu, ,hAIN 5Mbt) '''; ,lU b III ,)1 811 51 b.JtI HllIlE APPAkH mI. 41 4,;,0 3, II II' The immediate impression gained by looking at the left-hand table is that it is dominated by consumer-goods industries, for example, Tobacco. Food Chains. Foods, 80ft Drinks, Restaurants. etc. It IS striking that a number of these groups. which have ranked among the top 30 in performance over the past SIX months, have dropped toward the bottom of the list when measured over the most recent one-month period. While all the groups shown at left bettered the 10.3. 26-week gain in the Dow. a great many of them were unable to equal the 4.6 gAin which the Dow had posted between December 28 and Wednesday. The right-hand table, on the other hand, shows a number of flnew ll names. Among the most interesting, in our view, are Aluminum, Machine Tools. Oil and Gas Drilhng. Coal. Chemicals. and 8teel. Many of these groups were among the worst performers over the past half-year, but have, in the last month, moved into the top third of the lit. Market leadership on the part of such cyc1ical stocks would be an encouraging sign in our view since. as mentioned last week, it is these issues which possess the multi-yetlr bases which could produce important upside moves. ANTHONY W TABELL DELAFIELD, HARVEY, TABELI, INC. Dow Jones Industrials (12 '00) s P 500 0200) Cumulative Index 0/26/89) 2326.07 294.14 4111.91 AWTebh No statement or expression 01 opinion or any other matter herein contained IS or IS to be deemed to be, directly or Indirectly. an offeror the soliCitation 01 an offer to buy or sell any security referred to or mentioned The maner 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 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 Informatlon Delalleld, Harvey, Tabelllnc. as a corporabon and Its officers or employees, may now have. or may later take, positions or trades In respect to any secun\les menlloned In thiS or any luture Issue. and such posllton may be different Irom 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 01 any statements made In thiS or In any other Issue Further Informallon on any security mentioned herein IS available on request

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Tabell’s Market Letter – February 03, 1989

Tabell’s Market Letter – February 03, 1989

Tabell's Market Letter - February 03, 1989
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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 February 3, 1989 – – – – – It,has'beentheworking-hypothesis'ofthis Ietter;–as -the-'-1988'yearend-rally'continued -. – – . through the month Of January, 1989, that what we were seeing was not essentially unlike the rallying phases which characterized 1988. The implication was that the 1989 market could well turn out to be quite similar to its predecessor, a series of up and down swings, perhaps, as had indeed been the case in 1988, showing a slight upward bias. There has emerged some evidence in the past fortnight (although not quite as much as one might expect) that we are currently experiencing something rather different. As of Tuesday, which happened to be the last day of January, the Dow had advanced 14.9 from its November 16 closing low of 2038.58, and the rally had lasted for 51 trading days. Neither was a record. The 1987-1988 year-end rally was 16.1, and the January-April advance lasted longer—57 trading days. What distinguished this particular instance from its predecessors was the persistence of the advance. Consider the fact that there have been, since the October 19, 1987 low, exactly 37 trading days on which the Dow posted a new closing high. Thirteen of those days occurred in January, 1989. This is not an irrelevant statistic. The characteristic pattern of 1988 was the sporadic occurrence of tiny groups of new highs. There were three in January, six in early March, two in mid-March, three in April, four in June, and four in October. The aftermath in each case was that the market rolled over, corrected the bulk of the advance and then moved ahead to another minuscule new peak. By contrast, the entire month of January has been a persistent series of new highs—such highs occurring on 13 of 19 trading days since January 5, with no interval during the month longer than two days in which a new closing peak failed to occur. Amid this exceptional surface strength, it must still be noted that breadth and volume action remain at levels less than spectacular. We called attention to this fact three weeks 1ago.andjheimpr'nremenlsincethaLtime..hasbeennegligible.SinceNovember16,theaver-age daily net difference of advances and declines has been only 116, well below the levels shown on advances in early 1988. In the entire 51-day advance, there has been one trading day with over 1100 advances and two days with rising stocks between 1000 and 1100. Upside volume through Tuesday was just barely over 50 of total volume. a figure not at all atypical of 1988, and one considerably lower than the norm for earlier bull-market rallies. Moreover, while the averages are sailing merrily ahead to repeated new highs, the number of new highs on individual stocks leaves something to be desired. On January 27, 164 new 52-week highs were attained, the best level since the summer of 1987. The number, however, was just over 8 of all issues traded. The usual experience in Ii truly dynamic rally is to see the new-high percentage somewhere well into the double-digit range (over 20 in really powerful markets, like October, 1982). Such levels have not even been approached so far. All this said, the market—as measured by the averages at least—continues to advance. As the advance goes on, the number of upside breakouts by familiar large-capitalization stocks continues to increase, so that it can be argued that the leadership for the advance is impressive. There is, however, a certain circularity to this reasoning. The impressive patterns are found in stocks in the averages, and it is indeed the averages which are moving ahead. The broad-market picture remains less impressive. The overwhelming impression—and here we agree with the hundred or so commentators who publicly shared our feeling this week—is that a large number of institutional money managers are finding themselves embarrassed by excessive amounts of cash. Such money, of course, tends to flow into those stocks which can be bought quickly and which require a minimum of analysis, i.e. blue chips. Thus, the leadership of the current advance. Now one of the sermons we have repeatedly preached in this space over the years involves the unwisdom of fighting the tape, and we intend to heed it ourselves. There is no indication that the supply of institutional cash fueling the rally has dried up. There may be fewer stocks advancing than one would like, but there exists, obviously, a passable number, and a policy of following the blue-chip leadership can result in a portfolio with which one can feel reasonably comfortable regardless of market vicissitudes. At the very least, while it is still possible to hold reservations about the current upswing, the strength of the January rally suggests that time will be needed before anything in the way of major vulnerability develops. Dow Jones Industrials (12 00) S P 500 (1200) Cumulative Index (2/2189) AWTebh 2333.39 297.03 4192.99 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, directly or mdlfeclly, an offer or the solicrtatlon of an offerlo buy or sen any security referred to or mentioned The mat1er IS presented merely for the convenience of the subsCriber While we beheve the sources 01 OUt Information to be reliabte, we m no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by the subSCriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabell Inc , as a corporation and Its officers or employees, may now have, or may later take, positions or trades m respect to any securities mentioned In this or any luture Issue, and such poS!\IOfl may be different from any views now or hereafter expressed In thiS or any other Issue Oelafleld, Harvey, Tahelllnc, which IS registered Wlththe SEC as an Investment adVisor, may gIVe adVice to ItS Investment adVISOry and other customers mdependently of any statements made In thiS or In any other Issue Further information on any securrty mentioned herein IS available on request

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Tabell’s Market Letter – February 10, 1989

Tabell’s Market Letter – February 10, 1989

Tabell's Market Letter - February 10, 1989
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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 February 10, 1989 in Equity maret actin since the crasE!f October. 1987 has had. from a technical point of view. some strangets 77nd- they flaveoeen–notea thisspacelt- is– arguable -urat 7 oas-eCi on–Iundamental;;s…..– also, the market pattern has been somewhat unusual. This is apparent whether one takes a longer-term or shorter-term VIew. Date S & P 500 Earnings PIE Dividend Yield May 29–;1946 19.25 .90 21.4 .68 3.53 Oct 9, 1946 14,12 .89 15.9 .69 4.89 Jun 15, 1948 17.06 1.71 10.0 .85 4,98 Jun 13, 1949 13.55 2.38 5,7 .98 7.23 Jan 5, 1953 26.66 2.40 11.1 1.41 5.29 Sept 14, 1953 22.71 2.51 9.0 1.42 6.25 Aug 2, 1956 49.74 3.60 13.8 1.80 3.62 Oct 22, 1957 38.98 3.47 1l.2 1.76 4.52 Dec 12, 1961 72.64 3,05 23.8 1.96 2.70 Jun 26, 1962 52.32 3.37 15.5 2.04 3.90 Feb 9, 1966 94.06 5,19 18.1 2.72 2,89 Oct 7, 1966 73.20 5.51 1.3 2.89 3.95 Nov 29, 1968 108,37 5.66 19.1 3.03 2.80 May 26, 1970 69.29 5.63 12.3 3.17 4.58 Jan 11, 1973 120,24 6.42 18.8 3.15 2.62 Oct 3, 1974 62.28 9.11 6.8 3.59 5.76 Sept 21, 1976 107.83 9.25 11,7 3.76 3.49 Mar 6, 1978 86.90 10.89 8.0 4.66 5.36 Nov 28, 1980 140.52 14.64 9.6 6.07 4.32 Aug 12, 1982 102.42 14.17 7,2 6.81 6,65 Aug 25, 1987 336.77 14.42 23.4 8.52 2.53 Dec 4, 1987 – – – – – Feb-7988- 223.92 29903 15.86 24.25 14.1 124 8.66 9746 3.87 3;16——-I Some of the longer term aspects are highlighted in the above table. covering 40-plus years of market action. Using the S & P 500, it shows each major bull market high and low together with earnings and dividends for the latest reported trailing 12 months. These figures are used to derive pricelearnings ratios and yields. A rather obvious progression is apparent. Starting on June. 1949. with a pIe ratio of under 6 and a yield of over 7. each successive bull market peak—and likewise each subsequent bear-market low—tended to produce a higher pIe for the 500 and a lower yield. By the 1961 high, the result of this process was a pIe of well over 20 and a yield of under 3. The next decade-and-a-half was a reversal of that process. Each bear market showed a lower pIe and a higher yield. and. finally, the market bottoms of 1974. 1978. and 1982 produced figures not all that different from those of 1949. After 1982. the process that had tRken 12 years to complete in 1949-61 was repeated in five years between 1982 and 1987 with an almost astronomical jump in common stock evaluations. At pre-crash highs, the pIe ratio found itself again at 1961 levels, and the S &; P 500 yield was the lowest in its modern hIstory. The crash. as has been widely pointed out. removed much of the overvaluation. At the post-crash low. the S &; P was sellIng for a relatively modest 14.1 times earnings and yielded 3.87 percent. Action since that time has been particularly interesting smce, While stock prices have risen, they have not increased as much as earnings. and the multiple at Tuesday's high, 12.4 times estimated 1988 results. is lower than the figure at the crash low despite an mtervening 34 advance. This sort of action is fairly unusual since earmngs mUltiples during bull markets tend to expand, accelerating the effect of rising earnings. Once more, the 1946-1949 period provides the only recent instance of similar action. At that time. earnings generally improved (up 167 from the end of 1946 through mid-1949). but the price trend remained flat. Today a 68 earmngs jump has produced a price rise of only half that much. It is difficult to tell what all of this portends for the future. If one wishes to make a , super-bullish case, it is certainly arguable that mUltiples could expand further. An eighteen multiple coupled with a 10 earnings increase could produce an S &; P of 480 (equivalent to Dow 3760). On the other hand. the yield ceiling. at around the 2.8 percent level. is an oft-noted phenomenon and one that has consistently turned back bull markets since the early 1960's. Based on current dividends. the S &; P would start bumping up against this ceiling at only a bIt more than 10 above its present level. Since this IS a technical letter, no attempt has been made to forecast what earnings or diVIdends might be for 1989 and beyond, and indeed, barring a major recession, such a forecast may even be relatively unimportant. As the table suggests, the difficult question of where the market will be willing to value earnings and dividends may be the crucial one for 1989. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC, Dow Jones Industrials (12 00) 2307.50 S p 500 (1200) 295.31 Cumulative Index (2/9/89) 4230.31 No statement Or expreSSion of opinion or any other matter herem contained IS, or IS to be deemed to be, directly or Indlrectty. an offer orthe sohcltatlon of an offer to buy or sen any secUrfty referred to or mentioned 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 or guarantee the accuracy thereof nor of the statements made herem Any acllon to betaken by the subSCriber should be based on hiS own Investigation and mformaMn Delafield. Harvey, Tabellinc. as a corporation and Its officers or employees, may now have, or may later take, positrons or trades In respect to any seCUrities mentioned In thIS or any future ISSue, and such posrtlOn 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 lis Investment adVISOry and other customers mdependently of any statements made m thiS or In any other Issue Further Information on any secunty mentioned herem IS available on request

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Tabell’s Market Letter – February 17, 1989

Tabell’s Market Letter – February 17, 1989

Tabell's Market Letter - February 17, 1989
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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 February 17, 1989 The appearance of the decennial pattern of years ending in eight and the January effect, each historically confirminghigherprices,have come.andgone.-The.-recent rallYrwhichbegan last fall-on '– – . -,November 16, carried into early February, closing at 2347.14 on the Dow Jones Industrial Average, a gain of 15.14 in the time span of 56 trading days Since this recent post-crash high occurred last week, a 65-point correction has stalled the 300-point advance. During this period, the market has been trying to digest from a large menu the many uncertain cross-currents available—the President's Budget Message, prime rate increases, inflation fears. and trade figures, on the one hand, versus a healthy economy, improved 1988 earning reports, and dividend increases in major companies on the other. As readers of this letter are aware, October, 1987 constituted a major cycle low, which by definition, classifies the current position of the market, advancing to date 35, in a bull phase. What has continued to bother us, in the simplest terms, about the recent advance, however, has been the concentration in large-capitalization stocks coupled with poor overall breadth of the market. Recently improved daily market breadth has broken a significant declining trendline albeit well below its March, 1987 high This, together with rotational changes in group leadership, could signal a opportunity for broader participation. With this short-term pause in the advance of the market, we might find some answers by examining the chart below. The NYSE, for Borne sixty years, has recorded the advances, declines. and unchanged of all issues traded. More recently, breadth figures have become available for common stocks only. This new series constructed as a breadth index (advances – declines divided by total issues traded) is shown in the middle third of the chart above. As expected, this common stock index behaves in a similar manner to that of the traditional total issues breadth index. By subtracting common stock issues from total issues traded. we are also able to develop a preferred stock breadth index, representing over one-quarter of the total issues traded. This interest-sensitive index is shown above in the upper third of the chart. Both of these breadth indexes are compared to the DJIA in the lower third of the chart from the August, 1982 low to date. A classical breadth divergence can be pointed out on the chart above where the common stock breadth index spent most of the second half of 1983 declining, while the DJIA went on to new highs in October, 1983. This divergence was followed by a correction, 15.39, in the DJIA, lasting until July, 1984. The preferred stock breadth index during this period, however, went to a new high, reflecting the ongoing strength in the interest-sensitive sector during the general market decline. By hindsight, we also know a breadth divergence occurred prior to the October. 1987 correction; i.e., breadth reached a high in March of 1987 while the DJIA went on to further highs which were not confirmed by breadth. Currently, although breadth action is improving for the short term, the common stock breadth index is still well below its high achieved on March 17 of last year. On the hand, it is interesting to note that the preferred stock breadth index, the interest-sensitive sector, representing a major component of the stock market, has been relatively outperforming the market and is approaching new highs for the same time period. If the market were to again break out of its narrow trading range on the upside, as it continued to do in 1988, improved market breadth would be needed to sustain the advance. However, to date, the leadership continues to be limited to high-capitalized stocks. ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TA BELL INC. Dow Jones Industrials (12 00) 2329.11 S & P 500 (1200) 295.80 Cumulative Index (2/16/89) 4213.64 No statement or expreSSion 01 opInion or any other matter herein contained IS, or IS to be deemed to be, directly or Indlrectty, an offer or the sohcltatlon of an offerto buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subscriber While 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 herem Any action to be taken by the subSCriber should be based on hiS 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 In respect to any securities mentioned In this or any future Issue, and such poSitIOn may be drfferent from any views now or hereafter expressed m this or any other Issue Delafield, Harvey, label! Inc, which IS registered wrth the SEC as an Investment advisor, may gIVe advice to lis Investment advIsory and other customers Independently of any statements made m this or In any other Issue Further Information on any secunty mentioned herem IS available on request

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Tabell’s Market Letter – February 24, 1989

Tabell’s Market Letter – February 24, 1989

Tabell's Market Letter - February 24, 1989
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TABELL'S MARKET LETTER t 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 February 24, 1989 r One of the background tasks which supports production of this letter each week is the intensive analysis of individual stock-price charts. The amount of information that can be gleaned from such a tIme- – –'–task wIll, periiips-surpMse .those who do riot-regulArly engalWiiiCtt–,clt -inaybe yelpfiJi-.tfhls to- – '-.- undertake a moderately exhaustive analysis of one particular price chart, pointing out its divergences and similarities versus other patterns now extant. J,6lJ 16fJ I IDb 15 o We have chosen for our example IBM, for no reason other than the fact of its 73 billion market value and its 3.7 weight in the Standard & Poor's 500. Un surprisingly , its pattern is not atypical of thE!, ayerage stock. As reaI.es J\Cn9w0J,ir-prelerredbasictoolfor-'.charLanalysis-.i.stheointanddlgul'e chart which, rather than being based on time, tracks each move of a given amount. Since IBM is unusually high-priced, we have chosen to analyze the five-paint-unit chart, in which each box on the chart represents a move of that amount. Let us start by disposing of ancient history. Between 1974 and late 1982, IBM remained in a range (adjusted for splits) between, roughly, 40 and 80, moving above this level in October, 1982 It is an axiom of p and f analysis that such a trading range followed by an upside breakout constitutes a base and that a plausible forecast is for an upside move equal to the width of the base. This is shown by the pattern at A This projection yielded an upside objective of 160 for the stock, and a high of 161 7/8 was reached on April 29, 1986. There ensued a small top pattern (B), and a new base (C), suggesting a new high at 165, a level moderately exceeded at the August 21. 1987 all-time high of 175 7/8. This high turned out to be the center of a top formation at D shortly before the October, 1987 break. In this respect, IBM is typical of the great bulk of stocks in that the 1984 – 1987 market was sufficiently extended to bring them to new, all-time highs. Likewise, the 1987 break was so all-encompassing that no individual stock remained unaffected by it. Most current patterns, therefore. can be compared in terms of their action from 1987 to date. IBM's downside objective was 105, a level it attained on October 19, 1987, tested in December, and approached again in March of last year. Many issues, like IBM, reached readable downside objectives at their 1987 lows. It needs to be noted. however, that charting is an inexact science. and it was arguable at that time (and may even be arguable today) that a broader count should have been taken, suggesting lower objectives. Subsequent action. shown at E. has shown many of the attributes of a base. and the requisite upside breakout from that base occurred on January 31, when IBM reached 130 7/8 and thus posted an upside breakout from the 105 – 125 range which had confined it. The upside target of this base is 215. In this respect also. it is similar to a great many other stocks in that its current price objective suggests new high territory. It should be noted, however, that not all of these issues have, as IBM has done, broken out of their 1987 – 1988 bases. The final point that must be made regarding the IBM pattern is that its base is approximately equal in width to the overhead supply existing from the tops of 1986 and 1987. (Supply, in point-and-figure analysis, arises from prior trading areas which may produce stock for sale.) It is the size of the existing bases versus the supply that constitutes, in our view, the major difference between individual stock patterns today. Quite Obviously, the more attractive issues are those in which the base IS a great deal larger than the supply area. The IBM chart is illustrative of some of the possible configurations which other patterns can assume today. Questions which may be asked about individual issues involve, among others. the extent of the base formed since October, 1987, whether or not the stock has broken out of that base, the size of the base in relation to the overhead supply, whether or not the base counts through that supply, etc. We will attempt to sort out individual patterns according to these criteria in future letters. Dow Jones Industrials 0200) 2257.50 ANTHONY W. TABELL S & P 500 (12 00) 289.83 DELAFIELD HARVEY TABELL Cumulative Index (2/23/89) 4195.79 No slatement or expression of opInion or any other matter herein contained IS or IS to be deemed to be, directly or Indirectly, an offer or the soilcltatlon of an offer to buy or sell any secUrity referred to or mentioned The matter IS presented merely for Ihe convenience of the subscriber While we believe the sources of our Informal1On 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 subscnber should be based on hiS own investigation and Informal1On Delafield, Harvey, Tabelilnc , as a corporation and ItS officers or employees, may now have, or may tater 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 e)lpressed In thiS or any other Issue Delafield, HalVey, Tabelilnc, which IS registered With the SEC as an Investment advisor, may give adVice to ItS Investment adVISOry and other customers II'Idependently of any statements made In thiS or 11'1 any other Issue Further Information on any secunty mentioned herell'l IS available on request

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Tabell’s Market Letter – March 03, 1989

Tabell’s Market Letter – March 03, 1989

Tabell's Market Letter - March 03, 1989
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U'&1B1ED..D..'S 1iUil& IFI IEU' D..1EU'''U'IER 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 March 3, 1989 , T frothy (at )est JyreceI1t, standard) ,o-,,markt. atmqsphere Villic1–chalac1epzedthe beginning of 1989 has entered, at least a temporary respite.—Th-e last post-crash high was scored on February 7. at 2347.14 on the Dow, and, by Wednesday of this week, the average had retreated 100 points from that figure. This was hardly calamitous, since 100 Dow points these days is less than 4 112, but for the technician the pullback is useful in that it provides a frame of reference. November 16, 1988 February 7, 1989 can now probably be defined as the latest of five rallying phases which, along with four intervening declines. have made up the curious market in which we have been immured since the test of the crash lows in December, 1987. If so, the table below becomes the final update of the data set which last appeared in this space some six weeks ago. Date ———– Dec 4 1987 Jan 7 1988 Jan 20 1988 Apr 12 1988 May 23 1988 Jul 5 1988 Aug 23 1988 Dct 21 1988 Nov 16 1988 Feb 7 1989 OJ Average ——- 1766.74 2051. 89 1879.14 2ll0. 08 1941.48 2158.61 1989.33 2183.50 2038.58 2347.14 This Swing ———- 0.00 16.14 -8.42 12.29 -7.99 11.18 -7.84 9.76 -6.64 15.14 C han g e From Hi From Lo 2.84 2.30 1.15 7.49 3.32 2.46 2.48 Number Of Days This Swing Cumulative oa 22 22 9 31 57 88 29 ll7 29 146 35 181 42 223 18 241 56 297 The latest rally was neither the largest nor the longest in the series, the December, 1987January, 1988risehaving,been .greater,.and .the ,JanuaryAprilcadvance 10nger. Itwashowever, – noteworthy in a single respect, its ability to forge into new high ground. Whereas past rises had ' moved only 1 or 2 percent above previous peaks before petering out, this one was able to move a full 7 112 above the October, 1988 high. This sort of move in the averages was clearly due to the large number of top-tier stocks showing action similar to that of IBM, which we analyzed at length last week, noting the stock's breakout from its 1988 trading range and attack on the overhead supply from its 1987 top. When one examines the internals of the most recent advance. a rather mixed picture presents itself. It would be nice to be able to say either that the upswing presented a distinct break with the pattern of 1988, or that it demonstrated a continuation of the deteriorating upside momentum inherent in that pattern. Unfortunately, the truth lies somewhere in between. The average spread between advancing and declining stocks for the 56 days of the advance was 122, notably better than August-October (79), but inferior to December, 1987 -January, 1988 (277) or May-July (172). The same mixed picture emerges when one looks at volume figures. Total volume improved over the levels of last summer and fall, but remained well below early-1988 levels. Upside volume constituted about half the total, just as it had during the other rallies of 1988, and downside volume on the advance remained around one-third of overall trading. There remains in our view, no clear-cut answer to the question of whether the recent upside move by many large-capitalization issues represents the start of a successful assault on the overhead supply or whether a further retreat and reaccumulation will be needed. As suggested above, breadth on the rally was not of the sort that has tended to characterize the start of major upswings. We went back this week and measured the extent of the rise in our breadth index to the highest levels reached in the first 56 days of the last ten major bull markets. This rise ranged from 19.3 points (in October, 1957 to 57 points (in August, 1982). The November, 1988-February, 1989 advance was 14 points. It is hard. therefore. not to conclude that much of the advance was a squeeze on institutional cash positions. confined. as it was, to large-cap issues. And, indeed. even among those issues. IBM. which we chose to highlight as typical just last week, was forced to retreat from its first attack on supply. It must now be considered to be in a neutral trend, one where a break below 114 would suggest a test of its 1988 lows. More bullish evidence may of course emerge and could even have begun to do so with yesterday's strength. Ability to bottom here would make the current correction the smallest one of the bull market. However. as suggested above, the portents remain mixed. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S & P 500 (12 00) Cumulative Index (312/89) AWTebh 2266.61 289.78 4190.54 No statement or eKpresslon of opinion or any other matter herein contained IS, or IS to be deemed to be, dlrectty or indirectly, an offer orthe soliCitation 01 an offer to buy or sell any secunty relerred to or mentioned The matter IS presented merely for the convenience of the subscnber While we believe the sources of our Information 10 be reliable, we In no way represent Of guarantee the accuracy thereol nor of the statements made herein Any action to be taken by the subscriber should be based on hiS own investigation and Informallon Delafield, Harvey, Tabellinc , as a corporallon and Its officers or employees, may now have, Of may later take, poSitions or trades In respect to any secUrities mentioned In thiS or any future Issue, and such posrtlon may be different from any views nowor 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 liS 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 – March 10, 1989

Tabell’s Market Letter – March 10, 1989

Tabell's Market Letter - March 10, 1989
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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 March 10, 1989 Two weeks ago, we devoted this space to an analysis of the chart of IBM, suggesting it was a fairly typicaT-current-pattern -We noted th8titssa1ient-features-were-a—1987top-.aA-sharp declin-e – -,,- . …- -(surprise!), and a subsequent base formation4 some not-uncommon variations on that theme Five other charts, also of Dow stocks, may illustrate 50 o .JO Ii' MINNESOTA lUNING. I'AIIUFACTURIHG 10 SEARS ROEBUCK l co 2 POINT The above two charts, Minnesota Mining at left and Sears, Roebuck at right, (all charts shown are on a two-point unit basis) feature, as did IBM, a 1987 top and a subsequent base. Both have broken out of that base. However the main difference in the two patterns, we think, is that the width of 3M's base in relation to its top is considerably greater than Sears'. The latter, so far, has been the better-performing stock having moved ahead 78 from its 1987 low, vis-a-vis a 54 move for 3M and a 46 move for the Dow. It is, however, appropriate to question whether the stock will be able to penetrate the heavy overhead supply between 50 and 58 without broadening its pattern further. Indeed, after reaching a high at 46 114 on November 3, Sears backed off and failed to participate in the recent rally. Minnesota Mining, by contrast, possesses a base wide enough to suggest that penetration of the overhead supply may be easier, even though it, indeed, has backed off from a peak just under 70. typi'cTahlecmolnlfjiogruitrya-tioofn-teinchnoniel!o.rIapantottehrensr,oodflliytsexvta\lrbiaitti'ontsh, ianSd;–O;IIIIIIIIIIIIIIII—1 it is our opinion that one of the most important points for I/o present-day analysis is the relationship of the base to \01- There exist numerous other variations. Bethlehem Steel, at /0 supply 11111111111111111prirgehvito, uiss oaverarhrietayd in that it has bettered its 1987 peak. It, however, has older supply to contend with, going back to the wo 1970's. (Its high was in 1976.) Nonetheless, the extent of its base suggests it may be embarking upon an upside move that BETHlEHEM mEl (ORP 2 POINT will multiple market cycles. Chevron, shown at left, displays certain aspects of the conventional pattern—a 1987 top followed by a base formation occupying late 1987 and all of 1988. It, however, along with most oil stocks, exhibits another important feature, a major base pattern traced out during the 1981-1986 period. The subsequent retracement constituted, for this stock. not so much a CIIEYROII Z POINT bear market as a pullback to a support level, and the existence of the older base suggests the possibility of long-term objectives higher than those indicated by the 1988 base pattern. A pattern like that of Goodyear, at right, is the rarest of the variations shown, although certainly not unique. The stock's first attack on the overhead supply at 66-76 turned out a total failure, and an important top than formed at 66-56, raising the possibility that the stock's 1987 low may be tested. From a technician's pOint of view. this sort of analysis is an obvious necessity in 2 POINT attempting to ascertain the relative merits of individual stocks and industry groups at today's prices. It also will be helpful, we think, in determining the course of the market. Most issues, so far, have been less than successful at their initial attempts to penetrate the 1987 overhead supply. Were many stocks to enter a pullback phase in unison. intermediate-scale market weakness might well be the result. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (3/9/89) AWTebh 2278.39 292.14 4248.64 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. No statement or expreSSion 01 opinion or any other matter herein contained IS,m IS to be deemed to be, directly or Indlreclly, an offer or the soilcltalion of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subscriber While we beheve 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, Tabellinc ,as a corporaliOn and liS officers or employees, may now have, or may later take, poSitions or trades In respect to any seCUrities mentJoned 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. 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 menliOned herein IS available on request

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