Tabell’s Market Letter – January 27, 1989

\ 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