Tabell’s Market Letter – November 02, 1990

Tabell’s Market Letter – November 02, 1990

Tabell's Market Letter - November 02, 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 November 2, 1990 The chart below has appeared in this space many times in the past. Despite the fact that it is somewhat busy in appearance, we feel that it is a useful tool for analyzing a given market cycle in terms of Ilast history' CYCLE PERIOD (Iow-hlgh odyonce) I peak cycle date ,- J U UWUi1.'1 , H-! 1 -, J S d.cll …. 01 , 10… b.a. fllQtli;.t, ftall th. CUrt … t cych 1'Jh Toiol cycle odvonce (tU Oct 11 1990 295 6 …, 910 4t!. t1BOct '1' …. ,92 0 91 bon '3 The usefulness of the chart derives from its employment of a uniform horizontal and vertical scale for measuring a number of past cycles. The most recent cycle, measured by the Standard & Poor's 500, is shown by the zig-zag line at the lower left. Its upward phase occupied 659 trading days from December 1987 to July 1990, during which period it advanced 64. The low, so far, for the downward phase occurred on October 11, 1990, after a 20 , 62-trading-day decline. The horizontal bars at the top of the chart show the length of the ten previous cycles, measured from low to low, with a vertical tic-mark denoting the occurrence in time of each cycle's high. The percentage advance and the date of the high are also shown. It can be seen that the 64 advance of the current market is on the low side, with only 1966-1968 and 1978-1980 having moved ahead less. The upward phase's two-and-a-half year length is about in line with five of the last six cycles, although considerably shorter than the four previous ones. The tic-marks at the lower right of the chart are scaled to show the percentage decline of previous markets, all measured from this cycle's 368.95 high. We have already declined further than did 1953, 1984, and 1978, and we are down about the same amount as in 1957 and 1966. However, the fall so far has been considerably milder than 1962, 1970, 1974, 1982 or 1987. Bear markets are often short affairs and, as the dates at the bottom of the chart show, the three-month length of the pesent decline is not very unlik,, that of r. nun,ber of past bear markets. It has, however, occupied considerably less time than did 1970, 1974, 1978, or 1982. What is interesting is the gap in the length of downswings between the nine months of 1983-1984, and the year-and-a-half of 1976-1978. This would seem to suggest that there are only two plausible lengths for the current bear market. The first would suggest that it hss either bottomed already or will do so before the end of the first quarter of 1991. Failing this, it could last until early 1992. It is worth noting that the four long bear markets were a part of the flat secular trend which characterized the market from 1966 to 1982. The shorter downswings were part of the prior 1942-1966 phase, during which the market rose some 9 1/2 annually on a secular basis. Thus the markets action over the current cycle may tell us a great deal about the supercycle background. That background consists of a trading channel riSing about 14 a year. A bottom in the next few months would leave It essentially intact, whereas a longer downswing would penetrate it Dow Jones Industrials (1200) 2478.96 ANTHONY W. TABELL S P 500 (1200) 308.51 DELAFIELD, HARVEY, TABELL INC. Cumulative Index 11/01/90 4153.16 AWTth No statement or expresston of opInion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the sohcltabon of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convenience of the subSCflber 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 herern Any action to be taken by the subscnber should be based on his OWlllnvestlgatlon and Information Delafteld. Harvey, Tabell Inc, as a corporation and LtS officers or employees, may now have, or may later take, positions or trades In respect to any secuntres mentioned tn thiS or any future ISsue, and such posLtlOn may be dlfferenl from any views now or hereafter expressed tn 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 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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