Tabell’s Market Letter – August 23, 1991

Tabell’s Market Letter – August 23, 1991

Tabell's Market Letter - August 23, 1991
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' I- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – I TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 – August 23. 1991 — – The financial community has digested a full plate with the recent events that have affected ,Wall, S treet-;!his .paRt wee!t.- eactilg. to.alomon.B I'llthers ,Inc.'s pJ'eac;ling s(),al!,.dal oez.lts Treasury-auction bidding tactics. and the coup that toppled Soviet leader Mikhail Gorbachev. – ,-followed quickly by the subsequent collapse in the Soviet Union of this short-lived coup. our stock and bond markets have absorbed these events surprisingly well. This is particulariy true when compared to the initial knee-jerk reaction of the Tokyo and Frankfurt stock markets. After declining 69.99 points on the DJIA on Monday. the market rebounded 88.10 points on Wednesday positioning itself slightly above the 3000 level through Thursdays close. approximately the same level prior to all of the excitement. From a market technician's perspective. these recent events are certainly not to be construed as full of sound and fury. signifying nothing. However. it is important to note that market action of the past week continues to be confined within a trading range which has contained the market since the early part of this year. This range is currently defined by the closing high for the Dow of 3035.33 on June 3. and the closing low of 2855.45 on March 21. The DJIA has remained within these confines since February 5. a period of 138 trading days. — I The familiar chart above depicts the 20-point unit point-and-figure chart of the Dow and continues to be instructive. The upside objectiVe of the base at (A-B) was reached at 3000. In the process of reaching this objective. the trading range formation mentioned above has evolved and is indicated on the chart (C-O). If this 3020-2860 trading range is to be considered a top. a possible count can be taken at (C-D) with an initial downside objective in the 2600 area — a return to the original support area (A-B). The potential downside breakout from this trading area is 2840 and must be kept in focus. It is. of course. easier to identify the existing boundaries and measure the duration of the current trading range than it is to predict how long in time and/or in which direction the ultimate breakout will occur. As this process continues to unfold. however. this range i becoming more and more important in resolving the direction of the market for the rest of the year. Keeping in mind 2840 on the Dow as a benchmark representing the downside breakqut of this tr8.ding area we view the stoCkmarket ina cautiously constructive rna-niler. — There continues to be a rotation of leadership of individual stocks and groups within the stock market as shown by the diverse technical patterns of individual stocks. For the stock market to proceed higher. decisively breaking out of the current trading range on the upside. the internal strength of these individual stock patterns must further improve and will be monitored closely. ROBERT J. SIMPKINS. JR. DELAFIELD. HARVEY. TAB ELL INC. Dow Jones Industrials (1200) S III P 500 (12 00) Cumulative Index (8/22/91) 3051.88 395.19 6273.09 RJS jb No statement or expressIon of opInion or any other matter herein contained IS, or 15 to be deemed to be, directly or indirectly, an offer or the solicltabon of an offer to buy or sell any security referred to or mentioned The matter IS presented merely for the convemence of the subSCriber While we beheve the sources of our informatIOn to be rehable, we In no way represent or guarantee the accuracy thereof nor 01 the slalemenlS made herein Any action to be taken by the subSCriber should be based on hiS own Invesilgalion and Informa\lon Delafield, Harvey, Tabelllnc, as a corporabon and Its officers or employees, may now have, or may laler take, positions or trades In respect to any securities mentioned In thiS or any future Issue, and such pOSI\Ion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, HaNey, laoon Inc, which IS registered With the SEC as an Investment adVISor. may give adVice to I\S Investment adviSOry and other customers Independently of any statements made In thiS or In any other ISSue Further Informabon on any security mentioned herein IS available on request

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