Viewing Month: April 1990

Tabell’s Market Letter – April 06, 1990

Tabell’s Market Letter – April 06, 1990

Tabell's Market Letter - April 06, 1990
View Text Version (OCR)

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEM8ER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 —-..-,,.-..,..OnMonday'ofthis'week-t11e- Dow 'Jorre s-lndustrIa!-AverAapgrei'lCI60,s.,1;9a9a0t'27\)O457t hisIigure –.,,–d capping a decline which had begun in mid-March and preceding a rally attempt in the latter part of last week. The aveage was, at that point, on familiar ground. It had passed through the 2700 level for the first time in the current bull market some eight months previous, on, to be precise, August 10, 1989. Had the average closed a few pennies lower on Monday, it would have moved through the 2700 level for the 13th ti!e in those eight months. All this is by way of saying that, as measured by the popular averages at least, the equity market has been doing nothing for some two-thirds of a year. The high for the period—also the Dow's all-time high—was achieved on 1990's first trading day at 2810.15. The low of the range was 2543.24 attained on January 30, delineating a spread of less than 10 112 from low to high. The 2700 level was reasonably close to the central point of that range, the average price for the period being about 2682 and the median price, 2686. On 92 of the 166 trading days in question, the DJIA closed somewhere between 2650 and 2750. It is perhaps worthwhile to trace the history of those eight months. As noted above, the average's first move through 2700 was on A,ugust 10. This followed by two days the bull-market peak for our breadth index, a peak which has not been exceeded since. (More on this subject later.) After a short pull-back, a 56-point rally on August 24 produced a newall-time high at 2734.64, exceeding the peak of August, 1987. For those of us who have forgotten that trading activity in excess of 200 'million shares is indeed attainable, it may be noted that the rally took place on 225 million shares of volume. The advance continued to 2752 on September I, and after a mild retracement, went on to its first major high on October 9 at 2791.41. We were then once more reminded of the sort of thing today's market structure is capable of producing. Four days later, the Dow had declined some 8, almost all the drop taking place on the now-famous Friday, October 13. A subsequent series of fluctuations between 2600 and 2700 in November nroduced enQ!!grhworrf-1!a -base to suggest a renewed aftack- orl- the summer's high, and the familIar year-end rally- was just that. The entire October-January advance was then retraced, the low for that advance being tested at January's bottom. As had been the case in November, a base in the 2540-2650 area, built up in February, suggested another rally attempt. That rally indeed ensued, attaining a 2755 close on March 19. We have since been confined for three weeks in a narrow range between that level and the ubiquitous figure of 2700. It is. of course, a truism that trading ranges exist ultimately to be broken, and whether this one will be breached on the up- or down-side constitutes the most vexing market question at the present moment. The position of this letter has, since last January, been that investment policy should tilt toward protection against a downside breakout at the cost of not taking full advantage of a possible upside move. This course of action is being suggested by a number of market indicators—most notably breadth—which, as noted above, peaked two days before the current trading range began. At present levels, the averages are well above the midpoint of the eight-month trading area. Our breadth index, by contrast, is close enough to its January bottom that a couple of bad days would take it to new lows. Volume action has been little better, and the downtrend for a long-term average of NYSE-volume figures, noted in this space three weeks ago, has continued. All of this is taking place during a timeframe when, cycle theory suggests, the bull market should be reaching a relatively mature stage. We should probably, continually remind ourselves that the present upswing dates from late 1987, a period which lies, at this writing, two-and-a-half years in the past. lt is, of course, possible, given today's relatively high level of market liquidity, that a further attack on previous peaks might be made. The first clue that this might be in the offing would be provided by a move out of the mini-trading-range which has lasted through March and April. a move to some 2760 on the Dow ………This would set the stage for yeLanother test of the October-Januaryhighs. – Even were such a test to take place. though, there is little to indicate that a move significantly above previous bull-market highs is in the cards. The eVIdence of market deterioration mentioned above. plus the presence. for many stocks. of major overhead supply. mitigates against sharply higher new highs. Were large numbers of issues to demonstrate the ability to move through that supply, the probabilities could be altered. We intend to await such a demonstration before recommending changed strategy. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials (12 00) 2708.78 S & P 500 (12 00) 339.79 Cumulative Index (4/5/90) 4852.23 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 offer or the soliCitation of an offer to buyor sell any security 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 olthe statements made herein Any action to 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 securities menboned In thiS or any future Issue, and such poSItion may be different from any views now or hereafter expressed 10 thiS or any other Issue Delafield, Harvey, Tabell tnc , 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 secunty mentioned herein IS available on request

Download PDF

Tabell’s Market Letter – April 12, 1990

Tabell’s Market Letter – April 12, 1990

Tabell's Market Letter - April 12, 1990
View Text Version (OCR)

. TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS;' INC (609) 987-2300 April 12, 1990 – ,—–We. expendedsome, computertime,-thisweek .studyi1g7-1/2yearsof,price .ac.!ion..for.,..the50Q,,,,,,,…… current S & P component stocks. We calculated the individual percentage changes for each of these components for each of the 90 months since October, 1982. What we had expected to find was a sharply increasing standard deviation of individual stock returns about their mean a Standard deviation is a technical statistical term for what is essentially a Simple concept—the extent to whiCh individual components of a group vary around their average vaIuea We had noted the number of companies (banks are a recent example) which were turning in performances quite different from that of the S & P 500. We, therefore, expected to find the variation between individual returns to have increased sharply. ——– — —– —— — ——— —-Dati! St.P500 SIP Unw Roho 1 Chs Sf.. Dev Adv DC'c Brdt.h ——- — OCT 1982 133.71 137.0! 102.5 NOV 1982 138.54 144.64 11)4.4 DEC 1982 140.M 145.55 103.5 ' 13.79 10.56 20 10395 5.56 '1.41 319 113 10601 0.62 9.79 2U 193 10655 JAN 1983 lS.JO 149.95 103.2 3.03 '1. JJ 216 161 10770 fEB 1983 14B,06 155.55 105.1 3.73 8.B9 J06 124 1095.2 liAR 1983 152.96 161.4 105.5 J.79 8.JO 295 111 11106 APR 198J 164.42 172.15 104.7 KAY 1983 162.39 17.71 107.6 JUN 1983168.11 161).71 11)7.5 '6.64 8.28 82 11J90 1.48 8.23 26 204 11432 3.43 8.90 28 157 11559 JUL 1993 162.56 114.64 107.4 -3.36 7.65 118 300 11407 AUG 1983 164.0 tn.67 105.0 -1.13 8.03 193 257 11343 SEP 1981 166.07 176.1! 106.1 2.00 7.'16 302 154 11491 OCT 1963 163.55 171.03 10 .6 -2.89 8.62 164 287 11 68 NOV 1983 166.-40 178.06 107.0 4.11 7.19 3\8 131 11555 DEC 1983 16.93 175.6 106.5 -1. 36 6.67 190 26 1181 JAN t98 163.41 170.72 10-1.5 -2.80 8.12 152 307 11326 rEB 1984 157.06 160.32 102.1 -6.0910.13 85 381 11030 AR 198 159.\8 162.89 102.3 1.60 7.20 261 200 11091 APR 1984 160.05 161.74 101.1 -0.71 7. 6 228 233 1 HI86 I1AY 198 150.55 \51.22 JUH 1'i'8-i (53.18 155.!7 JUl 1984 150.66 151.6l AUG 1984 166.69 169.09 100. 1(O0L0..6 101.4 -6.50 7.69 15 390 10771 .,.Z.68 7.82 30B 155 10924 -2.3S 8.28 198 261 10861 11.52 7.79 17 11300 SEP 198 166.10 167.80 lOt. 0 -0.76 6.79 2JO 2S 11295 '—-l-,.-.,NOCoTv 1984 1984 166.09 163.58 168.84 167.15 C…..198-Ll67 24…1.l 77 JAN 1985 179.63 188.17 101. 7 102.2 1IO0-' .8 0.62 -1.00 – 9.5 7.02 27' ISS 117!.86 6.39 201 262 11325 7.a6–m-24'!l1u1! rEB 1985 181.18 189.63 104.7 0.77 6.48 '62 206 11982 KAR 1985 180.66 18'.54 103.8 -1.10 8. J3 199 274 11906 APR 1985 179.83 185.63 103.2 -1.02 6.56 201 !67 llR40 IIAY 1985 189.55 196.97 103.9 6.11 7.1t .00 72 12168 JUN 1985 191.85 199.90 104.2 JUL 1985 190.92 199.87 104.7 1.49 -0.02 6.13 7 ..\5 2eR 180 12.176 UZ 45 12253 AUG 1985 188.63 196.54 104. '2 -1. 67 7.32 189 2S1 12161 SEP 1985 lS!.08 186.53 102. -5.09 7.03 IIJ Oll He!7 OCT 1985 189.82 193.96 102.! 3.99 7.65 M7 120 1205 NOV 1985 202.17 21)8.39 103.1 DEC 1985211.28217.22 102.8 '.44 .24 6.H 6.28 W 1 12447 370 103 171 JAN 1986 211.78 220.98 10. 3 FEB 1986 226.92 238.52 105.1 1.3 7.93 7.S'l 7.95 m2!3'i' V!5 63 12818 13173 HAR 1986 238.90' 251 .fC 105.2 5.40 7.Hh J6 115 IJ..25 APR 1986 235.52 247.45 105.1 -1.57 8 .O 191 290 13326 IIAY 1986 247.35 260.66 105.4 5.34 7.25 37J 106 13593 JUN 1986 250,8 260.B9 104.0 0.09 8.59 232 !8 13577 —— — —- —-Dat.e SIPSOO SP Unw Rat.to —– – – ChJ St..Dey .—– -A-dv -D-D- Brdt.b – -\6aJUl 1986 236.12 239.80 101.6 -8.08 12.22 AUG 1986 252.93 256.35 101.4 6.90 7.88 M B SEP 1986 231.32 235.15 101.7 -8.27 7.79 8 428 13199 OCT 1986 243.98 249.86 102, .. 6.25 S,H 400 84 13515 NOV 1986 29,22 253.46 101. 7 1.44 . 6. J7 307 165 13657 DEC 1986 2-42.17 2-4J.37 100.5 -J.98 7.11 101 J78 IJJ80 JAM 1987 27-4.08 276.52 100.9 13.62 8.58 . 19 13831 FEB 1987 28,20 291.55 102.6 5.44 7.BO J58 12 141)65 liAR 1987 291.70 291.82 101.1 1.12 7.77 261 221 14105 APR 1987 288.36 289.2J JOO.3 -j. 9C 8.3 163 J2C 1J948 /lAY 1987 290.10 2';'0016 100.0 C.l3 7.J! 227 255 139!0 JUN 1987 304.00 31)2.51 9';'.5 JUL 1987 J18.66 JI7.76 ';'9.7 '4.26 6.81 97 14211 5.04 10.N6 36J 108 14466 AUG 1987 329.80 326.56 99.0 2.77 6.96 3!0 ISS 1631 SEP 1987 321.83 318.45 98.9 -2. 8 11.b6 161 32 14468 OCT 1987 251.79 235.84 93.7 -25.9.01 14.22 489 13983 NOV 19117 230.30 219.20 95.2 -7.06 9 .8 RS 400 1366B DEC 1987 2U.08 238.46 96.5 8.79 9.9 OS 8 139B9 JAM 1988 257.07 28.35 96.6 .15 10.08 338 151 IH76 rEB 1988 267.82 263.30 98.3 6.02 8.42 38S 101 IH60 HAR 1988 258.89 257.87 99.6 -2.06 8.12 16 31l 1431l APR 1988 261.33 259.37 99.3 0.58 6.53 24 233 14324 I1AY 1988 262.16 258.4-1 98.6 -0.36 6.00 218 257 1285 JUN 1988 273.50 273.41 100.0 5.79 7.82 J99 84 1600 JUL 1988 272.02 268.63 98.8 -1.75 a. JI 188 290 14498 AUG 1988 261.52 258.36 98.8 -3.82 6.50 112 375 IL35 sEP 1988 211 .ll…2.A7-'6S.-'i8'-4–s…s9..-b…..1J..-.36LlL…..B!l8a OCT 1988-278.'17 268.52 96.3– o.n- 8.2 276-190-14568– NOV 193B 273.70 260.2 95.1 .J .08 6. ,8 106 375 t299 DEC 1988 277.72 26.83 95.4 JAN 1989 297.47 280.i7 9. J 1.76 13.47 5.94 8.'16 '.11 165 56 141,45 14817 FEB 1989 288.86 275.31 95.3 -1.88 5.16 138 J117 14608 AR 1989 29-1.87 279.65 9. 8 1.58 6.92 292 191 14709 APR 1989 309.64 292.36 MY 1989 320.52 304.34 JUN 1989 317.98 OO.30 JUL 1989 346.08 323./3 94.4 95.0 94.4 93.S .'… 54 4.tO -1.3 7.80 5.66 6.l8 6.68 , .00 77 15040 'b9 92 15317 185 283 15219 39 15629 AUG 1989 351.,,5 330.82 94.t 2.19 7.01 299 185 15H3 5EP 1989 319.15 322.92 92.5 -2.39 9.11 166 320 15589 OCT 1989 30.36 305.76 89.8 -5.31 9. 7 131 355 15365 NOIJ 1989 345.99 307.34 88.8 0.52 '.24 2M4 193 15456 DEC 1989 353.40 309.94 87.7 0.85 7.34 282 206 ISJ2 JAN 19'10 J29.08 285.72 06.8 -7.82 9.0 JI 441 ISI2 rEB 1990 331.89 287.22 86.5 0.53 8.2 265 214 1193 MAR 1990 339.94 295.20 86.8 2.78 7. ')6 JJ' 153 15373 The results are shown in the table above. As the standard deviation column shows, there has been some increase, starting around last September, in the variance of the individual components a It has, however, been relatively small. What is perhaps most interesting in the table, though, is the result of a number of other calculations we were able to make, given the data at hand It was possible, for example, to construct an un weighted average of the 500 S & p components and to compare that to the S & P itself, an exercise performed in the first three columns of the table. The ratio of this average to the S & p clearly shows the relative underperformance of the unweighted index, something which has been gOlng on, roughly. since the summer of 1983. The oft-lemarked narlowness of leadership in the current market is indeed a long-term phenomenon and applies not only to the S & P 500 vs. the market, but to the S & pIS largest components vis-a-vis its smaller ones. We also were able, in our study. to calculate the number of advancing and declining stocks for each month and. from these, to calculate a breadth index for the S & P 500 components . A couple of interesting factors emerged from this-study, one being that January 1990 was a weaker month than many realized and. with 51 stocks advancing. was, in fact, the worst month in breadth terms except for October 1987 Unsurprising, but worthy of note, is the fact that this breadth index topped out back in August at the same time that conventional breadth indices did so. As we stated above, the phenomenon of narrow leadership has been widely recognized. but we do not think the fact that it is well-known changes its implications a We intend to remain cautious about the market's prospects until such time as some sort of improved breadth is able to 8ssert itself. ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials 2751- 80 S & P 500 344.18 Cumulative Index (4/11/90) 4843.50 No statement or expressIon of opInion or any other matter hereIn contaIned IS. or IS to be deemed to be. directly or indirectly. an ofter or Ihe solicrlatlon of an offerto buy or sell any secUrity referred to or mentioned The matter IS presented merely lor the COfwemence 01 the subSCriber While we believe the sources of our mformatlon \0 be reliable, we In no way represent or guarantee the accuracy thereof nor olthe statements made herem Any aCllon to be taken by the subscriber should be based on hiS own Investigation and Informallon Delafield. Harvey. Tabellinc. 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 pOl1lon may be dlflerent from any views now or hereafter expressed In th1S or any other Issue DelafIeld. Harvey. Taben Inc. which IS registered wrlh the SEC as an Investmentadv1sOf. may give advice to 115 Inveslment adVISOry and olher customers Independently of any statements made In th1s or In any other Issue Further information on any security mentIOned herein IS avaIlable On request

Download PDF

Tabell’s Market Letter – April 20, 1990

Tabell’s Market Letter – April 20, 1990

Tabell's Market Letter - April 20, 1990
View Text Version (OCR)

TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 — April 20, 1990 Almfol'J,as a throwJl'!!'Y,lal't wee!, weenti,nd thatwe had.Elculd.n .Q!lw-igh!1 ,,e1!!ge of the IVe hundred S &.P components and that this average,-since mid-1983- atleRst, -had-quitii — decisively underperformed the S & P itself. As any market analyst would, we knew intuitively that such would be the case, but, on reflection, we began to realize that this simple fact raised some fairly profound questions regarding the nature of today's stock market, questions that will probably require more than just today's letter to explore in detail. To begin with, it may be worthwhile to recall the method of computation used to produce the Standard & Poor's 500 Stock Price Index, That index is often referred to as being capital-weighted and broad-based. The former adjective is factual; the latter description, as we shall see, is open to some argument.. At any rate, the method. of computation is as follows The price of each of the 500 stocks is mUltiplied by the number of shares outstanding, resulting in, for each issue, a total market value. These 500 market values are then added together to produce a market value total, which was, as of a week ago, a fairly impressive figure in the neighborhood of 2.3 trillion. This figure is then divided by a base in order to produce the average itself. This divisor was originally calculated so as to cause the 500 original components, at their 1941-43 average prices, to produce an index of 10. The base, however, is the means used to adjust for changes in capital (Not splits. Multiplication of price by shares eliminates the need to adjust for splits.) and has, therefore, fluctuated widely over the years. The well-known result, of course, is the fact that larger (in market value) companies have heavier weights in the 500, the largest one, IBM, accounting for 2.694 of the index at recent levels. The 10 largest companies account for 18 of the average, the 20 largest for 29, the 50 largest for just under half, and the 100 largest for close to two-thirds of the average's weight. Turning this calculation around, it is possible to state that 10 of the average's fluctuation is accounted for by 5 stocks, 50 by 56 stocks, 80 by 185 stocks, 90 by 274, or – justover ,half,f-tha.issues ,and..99by435 .Sit-yfive.of-the.component8rterefore,0—–'d – little other than to produce a nice round number such as 500. In other words. while the index is certainly capital-weighted, it is possible to question just how broad-based it is. The thirty companies in the narrower Dow Jones wind up accounting for a goodly portion of the weight of the S & P. Why does Standard & Poor's (along with the proprietors of a whole host of similarly calculated indices) go to all this trouble There are a number of theoretical answers including the one that the index reflects the changing character of American industrial leadership. General Motors was, for years, the largest 'component, and now ranks 10th. Numbe nine, interestingly, is Wal-Mart Stores, well down the list not too long ago. General Electric is, currently, making a run at the top spot. Regardless of theory, however, the S & P 500 has, de facto, become the standard against which portfolio management is judged today. Billions of dollars are shifted about—all too readily, many believe—based on managementts performance vs. the 500. This is not totally unfair for those managers deploying monster amounts of money. The 500 undoubtedly represents a fair measure of the investment universe available to them. The larger-market-value companies obviously tend to be easier to purchase. A good many of the smaller S Sa P components possess a total market value less than the average single position for some institutional funds. It should be noted, however, that this is not true for the individual investor, who can afford, theoretically, to be indifferent to which of the 500 companies, or a thousand or so others, he owns. (All but eight of the components have total market values of over 100 mUlion.) The S & P 500 has, therefore, largely become a measure of what is happening to the sorts of stocks that large institutions can buy. The fact that the S & P has performed better than its unweighted cousin may, therefore, be nothing more than a reflection of the growing institutionalization of the market. It is, moreover, no accident that a great many-funds, whose horizons must perforce be limited to the upper tier of the S & P, have chosen simply to index, or to use the current, polite phrase, indulge in passive management, maintaining a portfolio which does nothing more than replicate the action of the 500. Thus, it is arguable that the growth of passive management techniques may have itself caused improved relative performance for this kind of management. This apparent paradox will be worth exploring in future issues. ANTHONY W. TABELL DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2703.60 S & P 500 (1200) 337.43 Cumulative Index (04/19/90) 4813.89 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 offer or the soliCitation of an offer to buy or sell any secUrity referred to or mentioned The matter IS presented merely for the convemence of the subSCriber Whl!e we beheve the sources of our mformatlon to be rehab!e, we m no way represent or guarantee the accuracy thereof nor olthe statements made herein Any action to be taken by the subscriber should be based on hiS own investigatIOn 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 secuntles mentioned Ifl thiS or any future Issue, and such position may be different from any views now or hereafter expressed In thiS or any other Issue Delafietd, Harvey, Tabellinc , 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 security menlloned herem IS available on request

Download PDF

Tabell’s Market Letter – April 27, 1990

Tabell’s Market Letter – April 27, 1990

Tabell's Market Letter - April 27, 1990
View Text Version (OCR)

, .. 11' ISUE ILIL ' S lMilalRlIEV ILIEV'U'IER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC /609) 9B7-2300 April 27, 1990 Last week's most 1.6' market event must have been the penetration to a new closing .v au LOr .., ,vn , inruesdaY'stradmg-;-rniS–was ,theJowesCleveFattaiiied' bhlyutthn-;eUmr'n',,min Borne SIX weeks, at whlch time, In early March, the short-term rally to recent highs was underway. Along with the Average's drop, new lows were being posted by both daily and weekly breadth indicators. There was modest recovery in Wednesday's and Thursday's trading, but the basic pattern remains unchanged. It is, perhaps, appropriate at this time to review that pattern and state our own attitude regarding the market, which remains, as has been the case for some months, not particularly sanguine. We are not, it should be noted, apocalyptic bears. We are aware of the widely advertised prospects for financial crisis implicit in an illiquid junk bond market, failed S & L's, and collapsing real estate prices. It must be emphasized that, presently at least, there is no prospect for financial collspse built into today's technical market structure. On the other hand, the market looks—well, tired. It locks, in short, like a market which has risen better than 60 over a two-year period and is now b'eginning to show increasingly narrow leadership. It locks like a market whose most conspicuous recent technical feature is a potential double top. It looks like a market, in other words, where caution is probably the best policy .32 310. 3co 290 7, 1.0 2'8 III The above point-and-figure chart of the Standard and Poor's 500 shows, we think, the reason why we are cautious today. Despite the necessary difficutiy in identifying particular dates, we still think the point-and-figure format is the best outline of today's market pattern. Up until Point 1 on the chart, in August of last year, a major uptrend remained in effect, and there appeared to be little or nothing to worry about. At that point, however, breadth peaked, the market began to move laterally, and we had, at Point 2, the rather weird events of October 9 – 13 where a new high was followed by a collapse to new lows. Neither the decline nor the subsequent recovery was, in our view, predictable. but they contributed, nonetheless, to an emerging overall pattern. The year-end rally just barely attained a new.high at Point,,3,-in the process reaching the upside objective of the base at A-B. There followed the collapse to new lows at 322 in January, shown at Point 4. What we had by that point was a potential top, as shown at C-D, with a downside objective in the mid-280's. A new base, at E-F, then formed, but the upside target, involving a test of the old high, has, to date at least, not yet been attained. Instead, the index collided with the heavy overhead supply at 340-350 and has now pulled back. Indeed, there seems to exist, with the formation at G-H, the possibility of a test of January's low. Now, it is not impossible for new strength to emerge, and indeed a potential base in, roughly, the 320-340 area could provide the platform for a new advance. Were such improvement to take place, we would hope to be able to recognize it early enough to take advantage thereof. Until then, however. we continue to advocate a cautious market stance. ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL INC. Dow Jones Industrials (12 00) 2658.55 S & P 500 (12 00) 331.31 Cumulative Index (4/26/90) 4737.17 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or indirectly, an offer orthe sollcltallOn of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subscnber 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 subscnber should be based on hiS own Investlgallon and InformallOn 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 menlloned In thiS or any future Issue, and such pOSition may be dlflerenl from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabellinc , 'Nhlch 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 herein IS available on request –

Download PDF