Tabell’s Market Letter – June 16, 1989

Tabell’s Market Letter – June 16, 1989

Tabell's Market Letter - June 16, 1989
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'1l' (BUED..D..'S IRZIE'1l' D..1E'1l''1l'IER 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 June 16, 1989 —–EEspecially g-iven-'o -T-h-uraday!s–weak-ness.- it….is .-..hard…..to 'avoid–tflempres8ion… that….there….has…been….some 1 change in the character of the market, although that impression is difficult to quantify. The Dow. after all, made a new bull-market high as recently as Monday,. However, this high. at 2518.66. was virtually identical to the one posted on June 2. and not all that much above one posted over three weeks ago when the average moved above 2500 for the first time,. A modest flattening of the uptrend is, thus, perceptible. One can conveniently divide the major cycle so far into two phases, the first of which moved the DJIA from 1766.74 in December, 1987 to 2183.50 last October. The second began on November 16 at 2038.58 and brought the average to its Monday high. Coincidentally, in percentage terms, these two advances are identical to within a tenth of a point at 23.5. However. the most recent one took place in far less time, and the advance has been at an annual rate of 45. It is the technical condition of that second-phase advance shown at the right by a 10-point point-and-figure chart on the Dow, which should now be our major concern. As the chart suggests, this is the third noticeable interruption in the rise so far. The first one took place during February and March, with the average holding in a trading range between 2240 and 2350. New highs in April were followed by a much smaller consolidation between 2370 and 2420, and we now have the most recent cilooO 1—t—–lpause.-bclweenOand2510r.—————————————————————I- This range has. as yet, not been violated. and there is, at the moment, no suggestion that It is anything more than another consolidation. Were a downside penetration to 2460 to take place, a decline to the support around 2420 would be indicated. There are, of course, many ways in which this pattern could broaden, and it will need to be watched. At this stage, however. neither it nor individual tops on most stocks suggest anything particularly worrisome. .–,-h–u-l-g-e—– Nov 10. ——- feb Hlgl1 ——– .S. ClI.g .Mu—lo-w- 001 JORU I,d us 2038.11 2341. U II.I 2213.01 S LP tOI,ulh 163.81 29!.!3 13.11 281.11 S , P Itdnt. 302.l 346.41 IU9 331.41 On JOles trm 890.91 1011.91 1!.l1 lIOU9 Do. Jms UtU 181.11 190.91 I 19 \81.1 ASE Index m.31 32123 lUI 321.12 OTt hdustrlah 316.30 101.20 11.01 390 30 -I-.C-h-g Apr High ——– I Chg —– .M-e-,–lo-w. .41 1111 99 1.8 231\.33 1.11 30UI 1.81 m.\9 1.31 311.49 1.81 3\1.31 1.!1 IU 01 13.31 1I\!.66 1. II 191.80 1.03 \91 18 -1.18 34\.11 U2 341 66 '3.91 421.10 901 m.30 —–I thg —– lilt Rlgh ——— S thg 10.-tl-1—1–C-h- 1.91 2111.61 6.11 13.11 -1.41 311.91 1. \3 1.11 m.ll uo 13.93 23.41 '1.80 11\8.3\ 16 30.00 0.11 201.10 1. )3 13.11 0.11 366.16 6.1 18.31 -0.33 141.80 U 1168 As the table above shows. the action for the various averages on the bull-market leg since November has been remarkably similar, and there are only tentative indications of a possible shift in leadership The three major averages. the Dow, the SAP 500 and the S&P Industrials have posted almost identical percentage advances over the seven-month rise. and their action on each up and down swing has likewise been similar. Through the high of last April, at least, it has been the Dow Jones Transportation Average Which has been the star of the show. posting a rise half again as great as that of the IndustrIals. Some suggestion that it may be running out of steam arises from its somewhat larger decline in early May and slower rise since that time. The performance of the Dow Jones Utilities has, of course, been poor on an absolute basis, but much of this is explainable by their characteristically lower volatility. Interestingly. on the last leg up, from the beginning of May, this normally staid indicator has been the best performer. ThIS. we think, has some implications for interest rates. This subject was discussed at length in this … space back on May 5th. It is notable that, so far, the two speculative indices, the AMEX and OTe Industrials, have failed to outperform theIr senior brethren. It has long been an open question as to whether the secondary sector of the market is going to have its day in the sun during this advance. There appears, in summary, to be no suggestion of any major change in market direction or character, other than the possibility of a consolidation and 4-5 correction. along the lines of February-March. Further eVIdence of deterioration would have to manifest itself before anything worse than this could be foreseen. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) S l P 500 (12 00) Cumulative Index (6/15/89) AWT cg 2479.29 319.88 4620.45 No statement or expression of opinion or anyother matter herem contamed IS, or IS to be deemecllo be, directly or Indirectly, an offer or the sohcltatlon of an offer to buy or sell any security relerred 10 or menllOned The matter IS presented merely for the convenience of the subSCriber While we beheve the sources of our InformallOn to be reliable, we In no way represent or guarantee the accuracy thereol nor olthe statements made herein Any action to be taken by the subSCriber should be based on hiS own Investigation and InformaMn Delafield, Harvey, Tabetllnc, as a corporation and Its officers or employees, may now have, Of may later take, positions or trades In respect to any seCUrities mentioned In thiS Of any future Issue, and such pOSition may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabell Inc , which IS registered With the SEC as an Investment adVisor, may give adVice to ItS Investment adVISOry and other customers Independently 01 any statements made In thiS or In any other Issue Further Information on any secunty mentloned herein IS available on request

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