Viewing Month: September 1990

Tabell’s Market Letter – September 07, 1990

Tabell’s Market Letter – September 07, 1990

Tabell's Market Letter - September 07, 1990
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TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – ' –.z – – – –.– — – Septembe.r,,7 .'1990 -.. The appearance of the table below. which shows the number of times the market was up and the number of times down for each month since the first computation of the Dow in 1897. is somewhat out of season. It normally shows up in this space some time in late spring in a discussion of the summer-rally phenomenon. that rally occurring with noticeable regularity but. as we often point out. being less ubiquitous than is widely believed. One Month Periods 11897-19901 —————————— End Month ——— A–d-v-a-n-c-e-s -D-e-c-l-in–e-s Average i Chg. ————– January 59 34 1.08 February 45 48 -0.27 March 56 38 0.73 April 51 43 0.88 May 47 47 -0.24 June 49 45 0.66 July 58 36 1. 48 August 62 31 1. 65 September 36 56 -1. 28 October 50 42 -0.12 November 55 37 0.69 December 67 26 1.38 Two Month Periods 11897-19901 —————————— A–d-v-a-n-c-e-s Declines ——– Average ——- — Chg. —- 60 33 2.48 53 40 0.82 45 49 0.38 55 39 1. 67 50 44 0.75 48 46 0.39 58 36 2.14 62 31 3.39 54 38 0.44 40 52 -1. 35 54 38 0.64 64 29 1.96 TOTAL 635 483 0.55 643 475 1.14 The summer rally this year. as everyone is aware. was conspicuous by its absence. July. which. as the table shows. has a fairly strong upward bias. barely managed to eke out an I,,….,,-,..''m(aj'dnvta;hnc;e;in'o.f;-tlhee-scsQltehnaanar1'o.verAtuhg'euspt'.astw9h4ichyeparosss'esssaews' ath'1e11hi-g-dheecslitnea-iv1eirtahgee-Dpoewrcwein1tiacghe mclhlaUnegteh-oef-maonlymr-'-' the second worse August in market history. exceeded only slightly by August. 1974. Stock-market bulls should hope that the tendency to ignore seasonal patterns continues for at least another month. As we have not'ed in this space. the most persistent seasonal tendency for the market is not the summer rally or even the well-documented year-end rally. It is the tendency toward a September decline. A breakdown of the monthly price changes for 1.118 months since 1897 reveals some interesting figures for statistics fanciers. Most are inclined to equate record-setting severe declines with either 1929 or 1987. Actually. the worst monthly decline in market history occurred in September (note the month). 1931. a 30.7 drop. The second and third worst figures were just over 23 in March. 1938 and April. 1932. October. 1987. also down around '23. was the fourth worst. and October. 1929 was next. Just as the early 1930's produced notable down months. they also produced record recoveries. History's best month was April. 1933. when. in celebration of the repeal of prohibition. the Dow advanced 40. July and August. 1932 were the next best upside months. the market moving ahead by 26.6 and 34.8. respectively. This produced an astonishing 70 gain over a two-month period. and it may well have been this upside explosion which first caused analysts to think in terms of a summer rally. Let us. however. return to September. For 92 Septembers since 1897. the Dow has been up 36 times and down 56. The average percentage change for the month has been -1.28. the worst record for any month by a considerable amount. As noted above. September. 1931 was the worst stock-market month of the century. and the best September was a 13.5 rise in 1939. Since 1969 there have been only four cases when the market moved up in September. As we said before. applying the standard tests of statistical significance reveals that a downward September is the market's stroge9t seasonal characteristic. Note that -the table above reveals the market's long-term upward bias. 635 months since 1897 have produced a market rise. and only 483 have shown declines. One would thus expect individual months to show an advancing tendency. and all but February and September do. However. fewer than 40 of all Septembers have been up months. A chi-square test indicates that the probability of such an event occurring by chance is less than one in a thousand. Likewise. the probability of finding 92 random cases with a mean of -1.28. the figure for September. also approaches the one-in-a-thousand category. No seasonal tendency is without exceptions, and September has indeed produced an up market 36 times in 92 years. However. seasonal probabilities. especially when coupled with the market's recent action, do not produce a rosy picture. ANTHONY W. TABELL DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials 0200) S & P 500 0200) , Cumulative Index (09/06/90) AWTebh 2622.52 323.47 4682.65 No S1alement or expression of opinion or any other matter herem contained IS, or IS to be deemed \0 be, directly or Indirectly, an cfter ortha sohcrtallon of an offer to buy or sell any secunty referred to Of mentioned The matter IS presented merely for the convenience of the subscnber While we beheve the sources of our Informallon to be rehable, 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 Delaltefd, Harvey, Tabell fnc as a corporation and rts officers or employees, may now have, or may later take, pOSitIOns or trades In respect to any secutlbes menlloned n 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 S registered With the SEC as an Investment adVisor, may give adVice \0 rts mvestment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Information on any secutlty mentioned herein IS available on request …

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Tabell’s Market Letter – September 14, 1990

Tabell’s Market Letter – September 14, 1990

Tabell's Market Letter - September 14, 1990
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TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 September 14. 1990 We are. regularly. accused of being out of the office at critical and exciting market junctures. and this accusation becomes relevant since we wlll. shortly. be embarking on a four-week vacation … '.,.- There is p' unfortunately .v,!!,1,y…litPe w,e.,cansay;by wayof,avaledictory. W,e, knowo.llythat.on July .,,, 17. a market process got underway. that process having carried theDJIA down some 17 to a low. so far. of 2483.42 on August 23. There are a number of reasons why this action should be disturbing. The beginning of the downswing. in mid July. took place 33 months after the major bottom attained in October. 1987. This is an interval totally consistent with the normal lifespan of a cycle bull market. It began after an almost-one-year breadth divergence which has been commented on by us and just about every other published technician. Under these conditions it is certainly possible to have Borne doubts as to whether August 23 will turn out to be the ultimate low of the current cycle. Under these conditions. it is generally best to avoid precipitate action and allow the market to tell its own story. This it has. in the three weeks since August 23. most assuredly not done. Our colleague. Bob Simpkins. wlll be writing this letter in our absence and he. along with the reBt of our staff. will be trying to interpret the market story as it unfoldB. What will they be looking for It may appear trite to say that. with the Dow off 17 from its high. they wlll be looking for a market bottom. It is. however. well to recall this fact. Many technical indicators are useful only at tops. An entirely different set tends to be brought into play when we try to identify market lows. It is these indicators to which we will be paying attention over the next month. The task is complicated by the fact that the nature of bottoms has changed somewhat in recent years. The standard characteristic of market lows up until the 1970's tended to be an identiftable selling climax. October. 1957 is one textbook example. The Dow closed on October 22 of that year at 419.79. off 20 from its July high. For the .ten days ended the previous day. declines had exceeded advances by an amount equal to 31 of issues traded. Volume on the climactic day was almost twice its normal level. and the Dow. over the last ten days of the period. was down almost 7. All these were normal indicators of a climactic oversold condition. Following this I,w. October 23 saw a 4-plus rally-onequally;…heavyvolufile. – -' – – ,.—.- -….. – – — -,- – '- . This pattern. a panic decline followed by an equally sharp recovery. was characteristic of pre-1980 market bottoms. Similarly characteristic was a subsequent test of the lows. a test Which. in 1957. took place on December 17 at 425.65. More recently. readers wlll recall. the 1987 low exhibited this pattern in even more extreme form—a precipitous fall on October 19 through mid-day October 20. a day and a half of an equally sharp rally on October 20 – 21. and a subsequent test of the lows in early December. . As the institutionalization of the stock market became more pronounced in the 1980's. important lows began to assume a slightly different shape. Selling panics were often absent and the fireworks. by contrast. tended to occur on the upside. emerging out of the blue following a market which had been drifting slowly lower. We have long theorized that the reason for this is that the operative fear in modern markets is that of the under-invested institutional money manager who fears lagging the Standard It Poor's 500 in a rising market. In any case. the new sort of pattern is exemplified by 1982. When the Dow reached its low at 776.92 on August 12. it had been declining slowly on desultory volume for some months. The next couple of days saw only a modest rally. indistinguishable from a host of other minor upticks that had preceded it. Finally. August 17 saw an upside explosion with an almost-5 gain. all this taking place on record-setting volume. February 1978 and July 1984 saw not dissimilar lows. The current situation. moreover. is fraught with still further ambiguity. Many of the elements of a 1960's-style climactic bottom were present on August 23. but not all were in evidence. The 10-day advance-decline total reached 30 of issues traded. but much more extreme levels had been reached in 1987. 1966. and 1962. The ten-percent. ten-day change of August 23 qualified as a deep oversold. but volume. only 1.38 times its normal level. was tepid. ' What then are the elements to look for over the coming weeks One will be the occurrence of a more easily identifiable selling climax. This should include another day (or days) of 1400 or more declining issues. with volume running somewhere in the 350-mlliion-plus range. This sort of action. followed by a snapback. would give us some indication that the process which started begun in July was, at least temporarily, over. Failing the occurrence of another climactic-type period. it would be helpful to see a test of the August lows with a demonstrated ability to hoid above the approximate-2500 level. Were this to be foliowed by upside action showing above-average breadth and volume. the technical picture would turn suddenly quite optimistic. To date. nothing of this sort has occurred. The averages. for three weeks. have held in a trading range centered around 2600 and broke out of this trading range on the downside in Friday-morning trading. This may indicate an imminent test of the lows. Obviously. the major elements of the 1990 stock-market story have yet to unfold. ANTHONY W. TAB ELL DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials (1200) 2564.85 S It P 500 (12 00) 316.22 Cumulative Index (9/13/90) 4664.94 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 orthe soliCitation 01 an offer to buy or sell any security referred to or menliOned The matter IS presented merely for the convemence of the subscnber While we beheve the sources 01 our information to be rehable, we In no way represent or guarantee the accuracy thereof nor olthe statements made herein Any aClion to be taken by the subSCriber should be based on hiS own investigation and Information Delafield, Harvey, Tabelltnc ,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 posilion may be different from any views nowar hereaftere)(pressed In thiS or any other Issue Delaheld, Harvey, Tabelllnc, 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 mentioned herein IS available on request

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Tabell’s Market Letter – September 21, 1990

Tabell’s Market Letter – September 21, 1990

Tabell's Market Letter - September 21, 1990
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.,…… TABELL'S MARKET LETTER 600 ALEXANDER ROAD, CN 5209, PRINCETON. NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 September 21, 1990 .—–,,———- — -, – It is called a bear market, and bear markets can take time to-co'mplete and- c'ul continue to go- lower, neither of which option is enjoyable. The decline since July 17, which ended with a climax-type oversold sell-off on August 23, posted a low to date of 2483.42 in the Dow Jones Industrial Average, and this low is now in the process of being tested. With a triple-witching hour facing us today, the likelihood is that this could be happening sooner rather than later. It has been almost three years since the major market bottom of October-December, 1987. Since then, the market has advanced 72.52 to a high in July, 1990 of 2999.75 before correcting 17.21 in August. What appears to be happening is the correction of a normal bull-market cycle. It should be helpful to examine the current position of the stock market in the context of cycle theory. The chart below shows an updated version of the present position of the current major-market cycle, which we believe began on December 4, 1987 at 223.92 on the Standard Poor's 500, reaching a high of 368.95 (64.77) on July 16, 1990 and correcting to 307.06 (-16.77) on August 23, 1990. The history and shape of the previous cycles are shown by the horizontal lines at the top of the chart. The lines are drawn to the same horizontal timescale as the chart itself, and each cycle is measured from low to low. The high for each cycle is shown by a hash mark along with its date and the total percentage advance. CYCLE PERIOD (Jow-hl;h advance) I peak cycle date —— r …..-t……LL..JIW-'.w w.w..L'IlIa1 N' .. , -101131 c,c1. dy. ,…, It .. —– – -……-;—I-, n 88 n 81 n 10 n II on 12 n 13 The average length of these cycles, measured from low to low, has been approximately 46 months and appears to be shortening. The present cycle from December, 1987 to date is now 33 months old. There have been instances of cycles In the 50-55 month range. Proponents of the four-year cycle have been tested in recent years., Since we are measuring a cycle from low to low, it has been difficult to Identify recent cycles, not in terms of historical percentage advance orrdecline. but in -teriiisr-of approximate four-year identifiable periods of duration. Our -. apologies to these purists, but in order for us to properly measure recent market history, we would argue it necessary to fit the past two completed cycles into the compressed period of five years, four months as shown in the chart above (August 1982-July 1984 and July 1984-December 1987) The present action of the stock market is totally consistent with the normal lifespan of previous cycle-bull markets, both in terms of extent and duration. The immediate question facing us is, Will a test of the August 23 low turn out to be the ultimate low of the current cycle ROBERT J. SIMPKINS, JR. DELAFIELD, HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2522.28 S & P 500 (1200) 311.35 Cumulative Index (9/20/90) 4509.90 RJSebh Nostatement or expression 01 opinIOn or any other matter herein contained IS, or IS to be deemed to be, duectly or Indirectly, an offer or the sohCltalion of an offer to buy or sell any secUrity referred 10 or mentIOned The matter IS presented merely for the convenience of the subSCriber While we beheve the sources of our .nformallon to be rehable, we In no way represent or guarantee Ihe accuracy thereof nor of the statements made herein Any acllon to be taken by the subscrrber should be based on h.s own Investigation and Informat.on Delafceld, Harvey. Tabel1 Inc ,as a corporation and .ts officers or employees, may now have, or may later lake, pos.t.ons or trades.n respect to any seCUrities mentIOned In thiS or any future Issue, and such poslt.on may be d.fferent from any vtews now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabel1 Inc ,WhiCh IS registered With the SEC as an Investment adVIsor, may gIVe adVice to liS Investment adVISOry and other customers .ndependently of any statements made In thiS or In any other Issue Further Informat.on on any secLlrrty ment.oned herein IS ava.lable on request

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Tabell’s Market Letter – September 28, 1990

Tabell’s Market Letter – September 28, 1990

Tabell's Market Letter - September 28, 1990
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TABELL'S MARKET LETTER 600 ALEXANDER ROAD, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 September 28. 1990 As suggested lastweek the Dow .JonesI!1dustrillL Average penetrated sooner rather than later the August 23 low of 2483.42. posting a closing low on Thu'rsday of 2427.47—a correction to date of 19.08 from the July 17 high earlier this year. Examination of broader-based averages such as the Value Line Index (-24.88) and the NASDAQ Composite Index (-27.64) over the same time period does little to dissuade the investor of the severity of the decline. The market. having quickly answered for us the question posed last week. Will a test of the August 23 low turn out to be the ultimate low of the current cycle. should now be asked by us two obvious questions. First. How far will the decline go. and secondly. How long will the decline continue. The answer to the first part may be shown by measuring the past nine declines since the post-war period that were larger DJ II DAYS X CHANGE THIS SWING than 19. the decline in the market through Thursday. These percentage swings are shown in the table at right. together with the number of trading days in each period. 5 29 46 6 13 49 4 6 56 10 22 57 212 50 161 60 521 05 419. 79 0.00 -23 95 222.43 -19 43 a 857 1807 389 The average decline of these nine previous 12 13 61 734.91 75.07 periods is 29.32. This translates. in 6 26 62 535 76 -27 10 terms of the DJIA. to a correction of 880 2 9 66 995.15 85 75 points. and. if taken from the July 1990 10 7 66 high of 2999.75. would indicate a decline 12 368 5 26 70 744 32 985.21 631 16 -25.21 32.36 -35 94 il1 t\l. DJ!…A to .l!'..e2100 levl……..! a.!..e 1 1 L73 1051. 70, 66. 63 almost two-thirds of' the way toward that 12 -6 74 – 577 '60- 45 08- 1043 134 913 167 518 367 665 – 481—- objective. The 50-point-unit point-andfigure chart of the DJIA is helpful in putting this potential correction into perspective. The top formation. which. obviously. has broken out on the downside. indicates an objective in the 2200-1950 area. coincident with strong support present from the 1987 low. At this time. 9 21 76 2 28 78 4 27 81 8 12 82 8 25 87 1 9 27 90 1014.79 742 12 1024 05 776.92 2722.42 . ; 2427.48 75 69 -26.87 37 99 -24 13 250.41 -; ; -19 08 452 362 798 328 1273 38 693 51 it would appear that this support should limit the downside risk to this area. The second of the above questions is more difficult to answer because of the different types of market bottoms that have occurred in the past. The average number of trading days for the nine declines is 347. Assuming that there are 21 trading days in a month. the average length of the previous corrections would be approximately 16 months. Therefore. it is possible to extend in time the length of the present decline from the July 1990 high into the fall of 1991. However. it is. of course, not that easy. For example, the October 1987 decline lasted less than two months, and the June 1962 decline lasted a little more than six months before the low was reached. In both cases, these corrections were classical selling climaxes from an oversold condition and were over quickly. What we should expect, short term. in the market is a rally from its current. oversold condition. After- such a rally is completed, a test of the market's eventual low. -which we may have experienced this week. should be watched closely. Based on past market declines, for this process to be completed, we could expect a lower market some time into next year. Dow Jones Industrials (12 00) S & P 500 (1200) Cumulative Index (9/27/90) AWTebh 2418.56 298.15 4295.62 ROBERT J. SIMPKINS, JR. DELAFIELD. HARVEY. TABELL INC. No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed to be, dtrectly or tndtreClly, an offer or the soltcltatton of an offer to buy or sell any secunty relerred to or menttoned The matter tS presented merely for the conventence of the subscrtber Whtle we believe the sources 01 our mlormalJon 10 be rellable, we tn no way represent or guarantee the accuracy thereof nor of the statements made hereIn Any actton to be taken by the subSCriber should be based on hts own tnvesllga\!on and InformaliOn DelafJeld, Harvey, Tabellinc ,as a corporallon and Its offIcers or employees, may now have, or may later take, posItIons or trades In respect 10 any secunlles mentIoned In thIS or any future Issue, and such posrtlon may be dIfferent from any vIews now or hereafter expressed In thIS or any olher Issue DelafIeld, Harvey, Taben Inc, whIch IS registered With the SEC as an Investment adVIsor, may gIve adVice 10 ItS Investmenl adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Information on any securrty menltoned herelf'llS available on request

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