Viewing Month: July 1991

Tabell’s Market Letter – July 05, 1991

Tabell’s Market Letter – July 05, 1991

Tabell's Market Letter - July 05, 1991
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—–…– ,\ TABELLS MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC 609) 987-2300 – ——————.- — — – .– July 5. 1991 In terms of the conventional wisdom last week. New York become a suburb of Tokyo Monday's 52-point rally in the Dow was widely explained by a Japanese upside explosion in response to a lower bank rate there. Wednesday's and Thursday's loss of a major portion of the ground gained was likewise attributed to a plunge in the Nikkei. The market technician. perhaps naively. could hardly have been surprised by the rally off a close just above 2900 last week or by the decline from the 2972 level at mid-week. It. indeed. would have been expected behavior well before Commodore Perry's arrival in the Orient. It was essentially a compressed repetition of what has been going on since this Spring. As we noted last week. the Dow closed on March 6 at 2973.27. It then dropped to 2855. rallied to 3004 in mid-April. declined to 2876 at the end of April. reached 2971 at the beginning of May. and fell to 2865 in mid-May. It moved briefly above 3000 in early June. only to retreat to the 2906 level at last week's end. We apologize for belaboring this point. but it is. in our view 7 crucial. The fluctuations mentioned above have produced the pattern shown on the 20-point-unit point-and-figure chart of the Dow below. -. Our readers are by now aware of the basic tenet of point-and-figure charting that the width of a market congestion area is roughly proportional to the ultimate move following a breakout from that area. If the area at 3020-2860 trading range is to be considered a top. possible counts can be taken at either A-B or C-D and various objectives between 2520 and 2320 are readable. These targets correspond to the strong support in the 2600-2400 area in l 1 l iwhich the Dow traded between September and January. LI The 50-point unit chart at the left reveals a pattern which confirms the aforesaid count. It also gives some idea of the reasons for concern 1.'17'JIIIIII were the support from last fall to be penetrated. . . The .putative top formation would indeed be maSSive. .. 2000 We do not, at this time. foresee such an eventuality. Indeed we think it an even-money proposition that the current trading range will hold with an ultimate breakout on the upside. If the 2600-2400 support level appears likely. It needs to be stressed. though. that the threemonth range is fast becoming the major factor in determining what the market IS likely to do for the rest of 1991. ANTHONY W. TAB ELL DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials 2942.98 S & P 500 374.95 Cumulative Index 6045.58 AWTJb No statement or expression of OpInion or any other matter herein contained IS, or IS to be deemed to be, dlreclly or Indirectly, an offer or the sollclla1lOn of an offer to buy or sen any secunty referred 10 or men1lOned The matler IS presented merely for the convenience of the subscnber While we believe the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor ollhe slatemenls made herein Any acllon to be taken by the subscriber should be based on hiS own Investlgalton and Information Detafleld, Harvey, Tabellinc ,as a corporation and Its officers or employees, may now have, or may later take, POSitIOns or trades In respect to any secuntles mentioned In thiS or any future Issue, and such posItion may be different/rom any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabelllnc, which IS regIstered With the SEC as an Investment adVisor, may give adVIce to Its IIwestment adVISOry and other customers Independently of any statements made In thiS or In any other Issue Further Informallon on any secuflty mentioned herein IS available on request

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Tabell’s Market Letter – July 12, 1991

Tabell’s Market Letter – July 12, 1991

Tabell's Market Letter - July 12, 1991
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TABELL'S MARKET LETTER 5 VAUGHN DRIVE. CN 5209, PRINCETON. NEW JERSEY 085435209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 July 12, Iq91 Change IS an inevitable rule in financial markets. We were reminded of this fact recently when it was announced that the New York Stock Exchange would open for business a half hour earlierat 9 00 -A''f',1-;' . Suchxtensions'-a-re-notcommon-occurrences –The-Lopenl-ng .. wa8 moved bRCk to 930 A.M. from 1000 A.M. in 1985, and the close extended from 330 P.M. to 400 P.M. in 1974. The 1000-330 trading day had been first instituted in 1952. This replaced the pattern of a 1000 A.M. – 300 P.M. session on weekdays plus a two-hour Saturday session, trading hours which dated all the way back to 1873. As good a way as any to remind oneself of the evolution in financial markets is to page through the Wall Street Journal and visualize just how many of the tables printed there would have been totally absent — or at least radically different — not so many years ago. The first major set of statistics that one comes to in this exercise is the three-page listing of NYSE transactions. The table contains such niceties as bold-face type for issues with a large change in price and underlines for those with notable increases in volume. It is well to recall that these are of quite recent introduction along with such handy features as the ticker symbol, dividend, yield. and price-earnings ratio for each stock. Adding these items meant detection of the opening price. a the tradeoff many technicians are less than ecstatic abouL Something over 2.000 issues are shown to have traded in recent sessions as compared to. for example, the 800 that might have been shown in. say, 1950. This relatively small increase, though. masks the huge rise in total shares listed since that time. The total market value of all NYSE-listed issues now exceeds some 3,000 trillion. a figure almost 100 times as great as at the end of World War II. The next WSJ table also occupies close to three pages and lists similar information ,for the NASDAQ National Market System. This similarity is a fairly recent innovation. Prior to its advent only bid and asked prices for OTC securities had been shown. The fact that the OTC market has become the most important home for secondary securities is emphasized by the fact that the price table for the American Stock Exchange is the least changed for all the major listings. 1occocl'yingjust. one pge. and. showing under800 . issues. traded, a l.evel, lower than. that oc;f'-'the- 1 1960's. . '- . It is, of course, the emergence of derivative products which has brought about the greatest proliferation of new market statistics. The page full of options quotations is the oldest entry in this category, and it is surprising to recall that these instruments have now been around for some 18 years. It was not that long ago that commodity exchanges were rather dusty, out-of-the way enclaves, trading in such items as wheat, corn. and cotton. These classic commodities remAin. but have been augmented by such exotica as precious metals and assorted petroleum products. It is. however, stock-index futures, unheard of a decade ago, which have had the most profound recent impact on securities trading. It is common for the total market value represented by the S & P 500 futures contract, on a given day. to ex.ceed by a substantial amount the market value of actual stocks traded on the exchanges. An even greater volume is regularly turned in by interest rate futures, notably those in Treasury Bonds. Indeed the subject of bonds suggests a whole new area of recent changes. The listing in the WSJ of a bond-market data bank. together with assorted tables on interest rate statistics, represents a relatively new development. reflecting the more recent view of bonds as trading instruments rather than assets to be held until maturity. There exists today. moreover. a bevy of financial instruments representing monstrous sums of money which trade without the benefit of any listing in the Wall Street Journal. One thinks. for example, of interest-rate swaps. a delightfully arcane instrument that few understand. Swaps. in turn, have managed to sire — we kid thee not — swaptlons. We think the sort of evolution discussed above is a subject worth examining. It can be examined from a number of aspects. Parochially. the information explosion represents a challenge to the technIcian. We have come a long way from the years where it was possible to post a few – hundred-charts by handand run aLfew-numbers througha-desk calculator in order to follow most of the U.S. financial market. Luckily. the same device that is largely responsible for the Information explOSIon is available for its analYSIS. That device is. of course, the computer. The Investor also finds himself faced with a growing multiplicity of choices. Not only have available domestic investment instruments multiplied, but the growing internationalization of markets has provided a whole new range of opportunities. It is, of course. in response to such internationalization that trading hours are being increased and wtll. it is widely agreed, continue to increase. moving toward eventual 24-hour trading. Ultimately, of course. it becomes necessary to make value judgments about all this. Many of the new developments are, inarguably, desirable. Others are inevitable. The utility of some. we firmly believe however, can be questioned. All of this. as noted above, is worth ponderIng. and we hope to do so from time to time in this space. ANTHONY W. TABELL DELAFIELJ), HARVEY, TABELL INC. Dow Jones Industrials (12 00) 2952.59 S & P 500 (1200) Cumulative Index (7/11/91) 376.32 6087.40 No statement or expression of Opinion or any other maner herein contained IS, or IS to be deemed 10 be, directly or Indirectly, an offer or Ihe soliCitation of an offer to buy or sell any security relerred to or mentioned The maner IS presented merely for the convemence 01 the subSCriber While we beheve the sources 01 our Information to be reliable, we 10 no way represent or guarantee the accuracythereol nor of the statements made herein Any acllonto be taken by the subSCriber should be based On hiS own investigatIOn and Ini0rmatlOn Delafield, Harvey, labell Inc, 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 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 Fur1her mformatlon on any security menlloned herem IS available On request

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Tabell’s Market Letter – July 19, 1991

Tabell’s Market Letter – July 19, 1991

Tabell's Market Letter - July 19, 1991
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TABELL-S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 9872300 ,'nf' t' i'f';;;t . – , ' '.' J uly 19. 1991 -, – L. – ,; , f'''1 ,'. . ., , We return this week to the subject of the trading range which has contained the market-sinde ,the…… early part of this year, That range is currently delimited by the closing high for the Dow of 3035.33 on'rJune 3-;and the -closing-low'of'2855. 45-on- March-2-1.—This constitutes-a percentage -range, c. from low to high, of 6.3 percent. or. more properly. a log difference of .0611. The DJIA has remained within SImilar confines since February 5. a period five months or 112 trading days long. We set 'our, cpinpu.ter this week to search for similar trading ranges in which the average remained in this narrow a ,Scope ,. for an equal or longer time. Since 1948, the present is the thirteenth such occurrence, and- these. ff … – suc'h ,thirteen instances are shown in the darker bars on the chart below. (In 1964, two successive ranges. the second at higher levels. followed each other.) , .. 'J/ DOW JONES INDUSTRIAL AVERAGE , 6Sk kb6 kb-6 bb- E-r-r-r-r-r'-'-r-r-r-r E e eeeeee eeeeee ee e eee A glance at the chart will show that trading ranges per se have limited usefulness as predictive tools. Indeed of the twelve prior instances of such ranges. six were ultimately broken on the upside and six on the downside. Nor can we glean any particularly useful information as to how long the present impasse might continue. Six previous ranges remained in effect for periods approximately.,. equal to the present one. and six others lasted notably longer. ranging from 150 trading days in of', 1964-1965 up to 237 trading days. or almost a year, between February 1961 and January 1962. It is possible to classify each of the twelve prior patterns as either reversals or continuations. A market that enters a trading range from below and breaks out on the upside is a continuation pa'ttern as is. naturally. its downside counterpart. A market that enters and leaves in different directions is, of course, a reversal and there are five such reversals t all of them qualifying as intermediate -major tops or bottoms. Of these reversals, four were major tops, oocurring in February 1961'- 'January 1962. September 1964 – April 1965. January 1976 – October 1976. and April 1983 – February 1984. ' The only major bottom is the base formation between December 1957 and May 1958. . .. By contrast, of the Seven continuation patterns, five were upside continuations and in only two cases did a market both exit and enter its trading range in a downward direction. The present . instance. since the Dow entered its trading range following a sharp rally, will be another instance of a continuation pattern if'the eventual breakout''''takes- place on the upside. – 4' There are three particularly interesting instances of patterns that are, technically. /' continuations. In both 1948-49 and 1953. the Dow broke out of long sideways trading areas on the downside. but within a month reversed itself and started upward again. in both cases from what turned out to be major bottoms. Something of the converse occurred when an upside penetration from a lateral trading range occurred In September, 1962. The market continued to move ahead for 3 months. ,but in December reversed itself as the 1968 – 1970 bear market was launched. . This. it seems to us, is a phenomenon of which we should be careful in 1991. The recent containment of the market in the rough 2855-3035 range is well advertised. and It may well be that such a breakout will caUSe a sharp follow-through. either up or down, which could. shortly thereafter, run out of steam. It will, therefore, be of critical importance to assess the internal strength of the market when the Ultimate penetration finally occurs. ANTHONY W. TABELL DELAFIELD. HARVEY, TABECL INC. Dow Jones Industrials (12 00) 3015.88 S & P 500 (1200) 384.59 Cumulative Index (7/18/91) 6204.54 No statement or expression of oplmon or any other maner herein contained IS, or Is to be deemed to be, drrectly or Indirectly, an offer or the solicltalion of an offer to buy or sell any secunty referred to or mentioned The matter IS presented merely for the convemence 01 the subSCriber While we beheve the sources of our Informalion to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any aclron to be taken by the subscrrber should be based on hiS own mvestlgatlon and Information Delafield, Harvey, Tabell Inc, as a corporation and lis offICers or employees, may now have, or may later take, poSItrons or trades In respect to any secuntles mentioned In thiS or any Mure Issue, and such posilion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey, Tabetllnc, 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 securlly mentioned herein IS available on request

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Tabell’s Market Letter – July 26, 1991

Tabell’s Market Letter – July 26, 1991

Tabell's Market Letter - July 26, 1991
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TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY OB543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 — — -.-….- July 26, 1991 Monday, July 15 turned out to be one of the more interesting days in recent stock-market history. The morning's newspapers confirmed stories that had emerged the previous Friday afternoon indicating that the Mutual Benefit Life Insurance Co. was about to be seized by New Jersey state insurance regulators. That piece of intelligence was totally overshadowed, however, by the announcement that Chemical Banking Corp. and Manufacturers Hanover Corp. had agreed to merge. This produced a mini-bull-market in bank stocks. Manufacturers Hanover closed the day up 6 1/8 points for a 26.3 gain, and Chemical posted a 2 7/8-point, 12.1 rise. A passel of other bank stocks shot up by 10 or more on the theory that, the ball having begun rolling, they might be part of future mergers. As far as the general market was concerned. it was nothing more than a ho-hum day, typical of the sort of soporific action which has characterized the market since February. The Dow was up ten points. and 996 stocks advanced while 595 declined. Volume was some 20 million shares lower than it had been the previous Friday. We are citing this particular day as one which appears to be perfect example of the mood of the present equity market. The market paid no attention whatsoever to the Mutual Benefit fiasco and ignored the fact that the CHL-MHC merger was at least in part due to serious difficulties with problem loans on the books of both partners. It focused instead on the presumed operating savings to result from the consolidation which. it can be argued. are insignificant compared to the larger issues. Another. not unrelated example of the same sort of thing was cited by Wall Street's resident cynic. Alan Abelson, in the following week's Barron's. He poked a bit of fun at the recent trend in corporate fashion toward announcing large non-recurring writeoffs along with the reQorting ' or Iiivoratile operating resuits;-1te cited the example of-the -AT & T restrucfuringiblY – – amounting to 4 billion. the announcement of which sent the stock up a couple of points. What we are suggesting. of course, is that. despite the occasional pounding taken by companies with disappointing earnings, the market seems inClined, at the moment, to ignore bad news and, at the very least. put a favorable spin on events, the implications of which are, at the very least, mixed. The seizure of the nation's 18th largest health and life insurer might, it seems to us, have been at least the cause of some sober reflection, suggesting, as it does, that the ills of savings & loans and banks may have spread to a whole new area of the financial community, one without an FDIC or FSLlC in place. The market, however, has proved itself again and again to be totally unconcerned with weaknesses in the U.S's financial infrastructure. It believes that, having muddled through third-world loans, junk bonds, and collapsing real estate prices, we will continue to muddle through whatever the future holds in store for us. We are not necessarily being critical of this view. It may J indeed, be the correct one, for the market is seldom wrong. Few market commentators active today actually remember the 1930's, but many of us were taught by those who remembered them, and a total horror at the prospect of credit contraction was instilled in us in those long-ago classrooms. A pessimistic view of credit conditions, therefore, is hardly rare in the financial punditry emanating from oldsters like ourselves. The market, though, seems to be suggesting that we have indeed learned the lesson of the 1930's and that the upside of the current crisis is that insured deposits, for all their cost, have at least forestalled the kind of public panic which characterized the collapse of sixty years ago. Whether the market will prove to be right in this instance we do not pretend to know, and, as market technicians,.wearenot required to worry about it. We remain secure in the bellef that the market itself will give the first clue of any possible change in the high level of investor confidence which seems to permeate it today. ANTHONY W. TABELL DELAFIELD, HARVEY. TABELL INC. Dow Jones Industrials (1200) S & P 500 (12 00) Cumulative Index (7/25/91) 2975.85 381.28 6161.78 No statement or expression of opInion or any other matter herein contained IS, or IS 10 be deemed 10 be, directly or Indirectly, an oHer or the solicltal Ion of an oHer to buy or 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 Informalion to be re!lable, we In no way represent or guarantee the accuracy thereof nor 01 the statements made herein Any action to be taken by the subSCriber should be based on hiS own Investlgabon and mformatlon Delafield, Harvey, Tabel1lnc, as a corporation and lIs officers or employees, may now have, or may later take, poSlllons or trades In respect 10 any seCUrities mentioned In thiS or any future Issue, and such POSition may be different from any views now or hereafter expressed In thiS or any other Issue Delafletd, 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 1n1ormatlon on any security mentioned herem IS available on request

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