Viewing Month: December 1991

Tabell’s Market Letter – December 06, 1991

Tabell’s Market Letter – December 06, 1991

Tabell's Market Letter - December 06, 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 16091987-2300 December 6, 1991 – —— A-cn.u.aai question regarding the'prospeet for'ilitiesanlie moment seem-s-U,–us tobe7Mis'-ilie SfOckmaiket aheado'r behind. We are prompted to this query by our reading of the daIly press–the entire press, it must be noted, not simply the fmancial page The most widely-used word therem is, it would seem, recession. which phenomenon tends to be cited lD the media as the cause of most of the world's major ills, some of these ills having only a tenuous connection with the economy. Our own reading of the Sunday newspapers last week left us hardly surprised by Monday morning's 30-point fall in the Dow and, indeed, gratified by the subsequent recovery. Like most stock market moves of late, though, tbat one failed to follow through, the averages by and large ending the week a bit lower than where they had started. The press's function, of course, IS to report current events The continued reference to the recession IS, therefore, CUriOllS, SLDce it seems to he the consensus among those who ought to know—professlonal economists–that the recession is over, has been over, as a matter of fact, for some six months. Economists, of course, seldom agree, but the current source of disagreement centers around the nature of the recovery presumably underway. A look at numbers, rather than words, also suggests that the recession has run its course. Real GNP (or GDP, Gross Domestic product, the successor the Department of Commerce is about to foist on us) bottomed In the second quarter. The Department's Index of Coincident Indicators, presumably the most efficient measure of the current state of the economy posted a low in March and remains well above that low despite a modest retreat from mid-summer levels. A casual newspaper reader, however, would have to conclude that the economic contraction is ongoing, Part of the confusion may in fact result from the timing of the reporting of peaks and troughs in the business cycle. We now know, of course, that the recession offiCially began in July, 1990. We were, however, not aware of that fact at the time. The official recogrntIon of the date came much later, in the Spnng of 1991. Likewise the end of the recession has not yet, m November 1991, been offiCIally announced, nor will it be for quite some time–until a recovery is long underway. Which returns us to the original question–Is the stock market ahead of or behind a busmess cycle turning point1 To those familiar with the historical record, there can be little doubt as to the stock market's normal behavior in this regard. It has almost invariably been nahead—tending, in other words, to lead turns in the business cycle. This mstorica1 tendency is so strong that the S & —p5)(thllS beeoofficiallycitedasone oLthe.elevenJeadingindicators.used to.fot !h.!'Sours-L!he-OJlomy.Desplte this ,anellon. ' the bulk of Wall Street verbiage generally winds up trying to forecast the stock market by reference to the economy, when all the data suggests it should be the other way around. There is little in the present picture to suggest that anything other than the normal sort of historical correlation between the busmess cycle in the market. The latter, as we all know, bottomed last October, with a secondary bottom, arguably the true n bottom In January of this year. If the normal sequence can be said to have been followed, it is perfectly logical to suspect that the recession ended 1D the early Spring of this year-March is as plausible as guess as any–and that expansion is now well under way Ag8.J.n, a simple-minded glance at the data confirms all tms. Construction activity, one of the weaker sectors of the economy, has been nsing. Factory orders showed a modest increase for October. Recently announced thud-quarter GDP was up. Unemployment, announced this morning, was flat. True, there are signs of weakness. Jobless claims, for example, continue to rise. Consumer sentiment has deteriorated. since last Spring (here the media's obsessive focus on the recession may be relevant), but remains well above the abysmal levels reached at the end of 1990 Many economic indicators are laggards and indeed the composite of such indicators is shll falling. This, however, is absolutely normal if we are now, in fact, 6-8 months into a recovery. Given all tms, one can examine current stock market valuation levels with a bit more equanimity. There is no need at this point to recite a litany of pIe-ratio and yield statistics. It is a SImple and, it seems to us. incontrovertible fact that the market is at the moment hIStorically high and is not too far away from belDg what can be called dangerously high. This, however, is not a great cause for concern if the market is right –if, m its sharp rise last Spring, it was exhibiting its normal tendency and forecasting a business cycle recovery . What, however, if the market is wrong. First of all, it must be noted that this does not happen very often. There have, however, been reVISions LD consensus estimates in the past, and there wIll be again. The end of the 1990-1991 recession, remember, has not yet been officially announced. Suppose that, just this once, the market is behind the public perception of economic reality as expressed in the news columns. That incorrectness, coupled with high valuation levels could produce–to say the Least—unpleasant consequences for stock prices We may be entering a period, therefore, when careful inspectIOn of economic statistics miy be useful-perhaps almost as useful as Wall Street tends to think it is. What will also be important though is the market's techmcal actton, for it is that action whIch will probably afford us the first clue as to whether the market is presently making one of its rare mistakes. ANTHONY W. TABELL, CMT DELAAELD,HARVEY.TABELL Dow Jones Industnals (1200) 2897.81 Standard & Poors 500 (12.00) 379.60 Cumulative Index (12/5191) 6400.03 In case readers are cunous regardmg the acronym follOWing the SIgnature me above. 11 lS noted thal u stands jar C1U1.rtued Market Techntczan We were lftstrument(ll m the devdopmem althu professfOna cemficanon program and are proud, havmg pasud the requtslU exanunanon, 37 years expenence nOlwuhsrandmg, to have, selves, qualified/or II HallUlg remained In our chosen professIOn for alJ those years, It goes wuhaul saymg that IW regard II as an honorable, scholarly, and dignified one, and we congratulate me Marlut TechmcUlIU AssocUltJon, winch admuusrers the CMT program,for lIS tjJortS mfosunng professIonal recogTUtionfor uchmcal marAzt analysIS No statement or expressIon of opinion or any other matter herem contained IS, or IS to be deemed to be. directly or mdlrectly, an oHer or the soliCitation of an offer to buy or seff any securrty referred to or men\loned The matter IS presented merely for the convenience of the subSCriber While we believe the sources of our information 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 Delafield, Harvey, Tabeff 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 or any future Issue, and such pOSIlion may be different from any views now or hereafter expressed In thiS or any other Issue Delafield, Harvey. Tabeff Inc, which IS registered wllh the SEC as an Investment adVisor, may give adVice 10 Its Investment adVISOry and other cuS10mers Independently of any statements made In thiS or In any other Issue Further Inlormallon on any secunty mentioned herein IS available on request

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Tabell’s Market Letter – December 13, 1991

Tabell’s Market Letter – December 13, 1991

Tabell's Market Letter - December 13, 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) 987-2300 December 13, 1991 Yeru-ed forecast .time has rolled around once more, and readers will recall our custom of dividing our forecast into two parts— the first conslstmg of a review of the past year's market. Vacation plans require that this letter constitute the review portion. Our forecast-,vi!l2.ppear-on January-3rc!; — . – — !'– – – – – –,.-.— – – …. – 1991, as will become apparent, is not a terribly hard year to summarize. Such a summary properly begins on October 11, 1990, . OTC INDUSTRIAL J900 when the DnA reached a low at 2365.10, which turned out to be the end of what was, in every aspect except length (It was less than J800 3101) three months long.), a fairly typical cycle bear market. The conventional explanation for this decline. which took the average down some 3601) J500 21 . was Iraq's seizure of Kuwait. The subsequent recovery carried intI early January, when the announcement of U.S. military action Sal' 500 3400 3300 set off what might have been a plunge to new lows. However, the success of that action 3200 brought about a dramatic turnaround. By 311)0 March 6th, the Dow had reached 2973.77, up 25 from the October low and over 20 m 3000 just eight weeks from the January bottom. In away, the year can be summarized 2900 by noting that that ten-month-old figure is Just slightly higher than today's level. The bulk of 1991 action took place in the first two months, – –i'ollowedby-the year'B.liIl.Cfeaturetlie -t'en-'C-O–'-' –2100 month trading range with the largest short-term 2600 swing in those ten months, at least until the most recent drop, being under 6. DOW JONES INDUSTRIAL AVERAGE 2OO The range, it must be noted, had a slight upward bias. The March high was exceeded in April at 3004, in June at 3035, in ''4h—r–r-..,–,—r—,r–r–r-..,–,—r—,r–r-J- HOO August at 3055 and, finally, at what has been the bigh to date, at 3077 .15 on October 18th. The S & P 500 essentially mirrored this action, outperfonoing the Dow in the Spnng, lagging in the summer as it failed to reach a substantive new peak until well into August. The year's other salient feature, from a technical point of view, was the distinct unprovement, for the first time since 1983, in the relative strength exhibited by secondary stocks. Inspection of the action of the OTC Industnal Index on the chart above makes this point obvious. WIule the Dow was advancing 21 between January and April—and the S & P, 25–this NASDAQ index was moving ahead an astonishing 49. The index rested over the summer– a new bigh was not made until August—but action has picked up somewhat since. A 9 rise has been scored between the April and October highs while the senior averages tacked on only a couple of percentage pomts. This better relative strength has continued in recent weeks, the OTC average having held above its late November highs while the Dow moved to a new post- April closing Iowan Tuesday. – . . All this is -of moderate 'interest, but the important feature of 1991 is the long, flat pattern displayed by the maior averages. We Illustrate that pattern, using the Dow, in a different format— the 20-pomt-unit, pomt-and-figure chart displayed above It is a pattern which, we think those familiar with p & f techmque Will agree, is, at least potentially, ommaus. The saving grace at the moment is the fact that the average has not yet performed the final action necessary to suggest that the pattern OlIght be a distributtonal top. a decISive downside breakout. The proper mterpretation of this trading range is, we thmk, the most critIClai task facmg the market techniCian today. We Will attempt to assay such an interpretation in our 1992 forecast. ANTiiONY W. TABELL, CMT Dow Jones Industnals (1200) 2919.05 DELARELD,HARVEY,TABELL Standard & Poors 500 (1200) 384.58 Cumulative Index (12/12/91) 6341.78 No stalementor e)(presslon of opinion or any other matler herem contained IS, or IS to be deemed to be, directly or Indirectly, an offeror the sohcltatlon of an offer to buy or sell any secunty referred to or mentroned The matter IS presented merely for the convenience of the subscnber 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 herem Any action to be taken by the subscnber 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 menhoned In thiS or any future Issue, and such pOSition may be different from any views now or hereafter e)(pressed In thIS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With the SEC as an Investment advisor, may give adVice to Its Investment adVISOry and olher customers Independently of any statements made In thiS or In any oher Issue Further Information on any secunty mentioned herein IS available on request

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Tabell’s Market Letter – December 20, 1991

Tabell’s Market Letter – December 20, 1991

Tabell's Market Letter - December 20, 1991
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TABELL-S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEM8ER NATIONAL ASSOCIATION OF SECURITIES OEALERS, INC (609) 987-2300 – December 20, 1991 – At rhf..-tart nLthisye;ar -the..stockmarke0lacLalreadybegan itsremarkable-rebound .. ,The Dow Jones-Industnal… — l- – Average from the October 11, 1990 low of 2365.10 has advanced to date a very respectable 30. II posting a recent alltime closing hIgh of 3077.15 on October 18, 1991. Since the recent October high the stock market has once agam paused. after posting a 200 point retreat. leaving investors with the uncomfortable task of dealing with an uncertain stock market that is asking some difficult short-term questlons–Is the 6.93 decline since the October high in the DJiA over If so, will the DJiA be able to break through Its old Iugh of 3077.15, made just 43 trading days ago on October II If not, and perhaps most important, will the DJIA finally penetrate the 2840 level, the bottom of the trading range in which the DJiA has stubbornly stuck since February The correct answer to the above questions may be found by examining the recent market change, Often a market cbange is accompanied by shifts in sector and group leaderslup, and there are indications that these sbifts are in fact gradually taking place. The table below compares the period from January 1991 to date witb tbe most recent eight week cbanges for S&P industrial groups as of tbis Wednesday The start of tbe eigbt week period is coincident with the DJiA record October higb of 3077 15. The figures on tbe left show the 30 best-performing groups out of a total of 95 from January 1991 to date and is ranked in that order. The table on the right is ranked on eight week changes and shows the best performing groups for tbat period. S&P INDUSTRY GROUP PRICE 1 CHANGES P&RCENTAGB CB1lNGES FOR Dec 18 1991 FROM Oct 16 1991 FROM Jan 2 1991 GROUP NAMB JlAN1I t CHG. RANX t CHG SOFT DRINKS 1 16.529 15 48.S57 TOYS 2 15.454 2 10' 696 HOUSEWARES 3 11.835 5 67 530 l HEALTH CAR.E-MISC RETAIL. SPECIALTY-APPAREL , 11.71.6 5 10 466 9 53.995 3 86.BB4 cs …,.,,, li..,.,,;;!;!i FOODS MOLTI-LINB INSURANCE HOMB BUILDINti HOUSEHOLD PRODUCTS HEALTH CARBCOHPQSITB MBDICAL PRODUCTS &. SUPPLIES LIFE INSURANClt HEALTH CARE-DIVBRSIPIED PROPEltTY-CASUALrI'Y INSURANCE SHOES POLLUTION CONTROL COloIroNICATION EQUIP/MFRS BLECTRONICS'DEFENSB GENERAL MKRCKANDISB CHAINS BBVERAGES ALCOHOLIC TELEPHONB (NECK) ADTO PARTS-APTKR MJWtBT INSURANCE BROItERS SLBCTRIC COMPANIES RETAIL STOUS(DROG) RESTAURANTS MACHINE TOOLS OFFICE EQUIPMENT &. SUPPLIES 8 6.904 9 6.846 10 6.490 n 6.316 1.2 6.176 13 5.977 14 5.705 15 5.662 16 5.572 17 5.241 18 5.075 19 4.036 20 3.825 21 3.724 22 3.'21 23 2.804 24 2.348 25 2.284 26 2.274 21 2.150 28 0.746 29 0.608 30 -0.781 30 340.729 48 18 591 25 39.747 72 5.015 26 39 156 16 4814040 36 28.207 31 34 363 63 10.804 4 83.176 66 7.540 18 47366 41 24 703 7 56.397 340 29.965 81 -2.307 6 56.699 84 2.818 56 15.966 42 23.581 35 29.1401 80 -1.145 20 44.922 S&P INDUSTRY GROUP PRICE , CIlANGES PERCENTAGE CHANGES FOR. Dec 18 1991 FROM Oct 16 1991 FROM Jan 2 1991 GROUP rwm RANIt CHG. RANK t CHG. SROJERAGB FIRMS 50 4 662 1 ll1.215 TOYS. 2 15 454 2 104.696 RB'l'AIL SPECIALTY-APPAREL 5 10.4066 3 86.884 SHOBS 17 5.2401. 4 83.176 HOOSBWARBS 3 ll.835 5 67 530 –..-.i-;-..,-,-; mJOR RBGIONAL BANXS HEALTH CARB-MISC ELECTRONICS INSTROHBN'l'ATION RAILROADS CONTAINER PAPBR CONTAINER MBTAL &. GLASS SOPT DRINKS MEDICAL PRODOCTS Ii SUPPLIBS DRUGS CATION EQUIP/MPRS COSMETICS OFFICE BOUIPMBNT SUPPLIES TEXTILE APPAREL MFRS. RETAIL S1'QRBS COMPOSITB WaS (COMPOSITE) MANUPAC.l'CRED HOUSING HOM! BUILDING HEALTH CARE-COMPOSITE GAMING COMPANIES TOBACCO RETAIL SPECIALTY FOODS KEAL'I'H CARE-DIVERSIFIED 52 -4.969 4 11.716 40 -2.965 49 -4.6ll 69 -10.508 51 '4.740 1 16.529 13 5.977 7 7.971 19 4.036 6 10.145 31 -0.781 45 -4.019 32 '0.830 6B -10216 61 9.755 10 6.490 12 6.176 56 -6.175 34 1.396 57 -6324 8 6904 15 5.662 8 56.307 9 53 995 10 50.840 11 50.701 12 '9 517 13 49.067 14 48.857 15 48.1U 16 47.9401. 17 47.366 18 45.312 19 44.922 20 44.630 21 43.533 22 41.547 23 39.802 24 39.747 25 39.156 26 38.840 27 37.861 28 37.389 29 340.729 30 340.363 An obvious observatIon gained by looking at the left-hand table is that it is dOmInated by the consumer non-durable sector of the market. Substantial gains in groups related to retail, food, and drugs have been registered from the first of the year to date, well above the Standard & Poor's 500 Average. However, a number of these groups have dropped in rank when measured from the Iugh III the DJiA which covers the most recent eight week period. These would include groups related to banking, contamers and retail. The right-hand table, while continuing to favor the consumer non-durable sector. shows a number of interesting new names. These include insurance brokers, machine tools, telephone and household goods. Many of these groups -were among the worst performers this year, but have, in the last eight weeks, moved mta the top third of the list. This-group rotation IS important to monitor In order to identify internal changes occurring within the stock market. It IS these changes that could give us the SUpportlDg eVidence needed in determining the short-tenn direction of the market. currently contained by the benchmark closmg Iugh of October 18 at 3077 15 and the closing low posted on March 3 at 2855 45 Robert J. Simpkins, Jr. Delafield. Harvey. Tabell Inc Dow Jones Industnals (12.00) Standard & Poor's 500 (1200) CumulatIve Index (12/19/91) RJSaa 2927.55 385.77 6331.96 No statement or expression of opinion or any other matter herein contained IS. or IS to be deemed to be, directly or IndIrectly, an otler or the soliCitatIon of an offer to buy or sell any security referred to or menlloned The matter 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 01 the statements made herein Any action to be taken by the subscnber should be based on hiS own Invesllgabon and infOrmation Delafield. Harvey. Tabelilnc. as a corporation and Its offIcerS or employees, may now have, or may later take. postllons or trades In respect to any securrtles mentioned In Ihls or any future Issue. and such pOSItIOn may be drfferenl from 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 Investment adVISOry and other customers Independently of any statements made In ths or In an)! other Issue Further information on any security mentioned herein IS vallable on request

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