Tabell’s Market Letter – December 29, 1972

po – – – . -.. I TABELL'S I MARKET LETTER — – —– 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIVISION OF MEM8ER NEW YORK STOCI( EXCHANoe, INC MEMBER AMERICAN STOCK EXCHANGE December 29. 1972 -For some-yearsnow, we-havestudied-.the fam-i-!-iarseasona-l tendencyofthe-stock -mar-ket-to stage a year-end rally, and it has been the custom of this letter each December to pOint out some of the conclusions that can be derived from a study of this phenomenon. We have suggested that an exhaustive study of chart patterns since the Dow-Tones Industrial Average first was computed in 1897 indicated that such a rally, h01.'.everminiscule, invariably had taken place. A number of intereSting facts about the market action of the year-end may be noted. (1) – As stated above, an identifiable year-end rally has taken place in every year since 1897. This rally often has been of great magnitude with advances as great as 28 having been recorded. It also, on occasion, has continued with only minor interruptions for as long as six months into the new year. However, on other occasions, it has been of only a few days' duration. reaching a top extremely early. Thus, in 1960, 1962,and, most recentlY,in 1970 the rally reached a peak in the first week in Tanuary. In 1961.1964,1967, and 1971. it continued into February or March. In 1971, the rally continued through mid-March. (2) – There has been a persistent tendency for the rally to begin early in years when the market has been up, and late in years when the market has been down. In recent upward years, 1959, 1963, and 1967 are examples, the rally commenced from early December. In 1962, 1966 and in 1969, it began late in the year. This year's rally, typically, began in late November. (3) – The important thing to watch in connection with market action in the early months of the new year is tlTe-low forth-e'previo\lsDecember–This-iuvrtra-s- been-broken'in-fortythree – – years out of the past seventy-two. However, in twenty-five of these forty-three cases, itwas broken in Tanuary and February. Since 1937, it has never been broken later than mid-March, with the single exception of 1965. Thus, if the market is able to hold above its December low for the first 2 1/2 months of the year, chances become good that this low w ill not be broken. For example, in 1960, 1969 and 1970, the December low was broken early in Tanuary. In 1963, 1964, 1967. and 1971, and, most recently, 1972, it never was broken. 1965, as noted above, was unusual with the December, 1964 low of 850.19 being broken in Tune when the Dowreached an intra-day low of 832.74. (4) – In years when the December low has been broken, the subsequent trend has been downward two-thirds of the time. 1960, 1962, 1966, and 1969, of course, are typical cases. Again, 1965 was an exception. 1970, of course, was a down year in the first half. (5) – The magnitude of the rally is an important clue as to the year's market trend. For example. an advance of 10 or more from the December low has been followed byan upward or neutral market in thirty-one of the thirty-six years that such an advance has occurred. An advance of less than 10 from the December low before an identifiable correction takes place has been followed by a downward market in t wenty,four of the thirty-six years. 1963, 1964 and 1971, the year-end rally approximated 10, and in 1972 it was 17. In 1960, 1962, and 1970, for example, it was less than this figure. (6) – The length of time in which therally continues intothe,new yearalso is important. For example, in nineteen ye;;'s the raily continued into MaiCh or later. – In seventeen of these nineteen years the eventual trend was upward. In 1964 and 1972 the year-end rally continued into March and in 1961, 1963, 1967 and 1971 into February. In the coming year. therefore. the December low of 1000 is an important point to watch. If this low is broken. it would be a strong indication of probable market weakness. A like indication would be failure of the Dow to advance 10, or to approximately 1100. On the other hand, if a rally continues into February or March, or reaches above 1100, an extension of the upswing might be indicated. Dow-Tones Industrial (1200 p.m.)1018.36 S&P (1200 p.m.) 117.75 AWTrk ANTHONY W. TAB ELL DELAFIELD, HARVEY, TAB ELL No statement or expres.slon of opInion or any other matter herem contOlned IS, or IS 10 be deemed 10 be, directly or mdl-ectly, on offer or the sollcltoTlon of on oHer to buy or sell any secUrity referred 10 or mentioned The motter IS presented merely for Ihe convel.enC1i of the subscriber While e believe the sources of our Informa t.on to be rel.oble, we In no way represent Of guarantee the occuracy thereof nor of the statements mude herein Any action to be token by the subSCriber should be based on hiS own investigation and Information Janney Montgomery Scott, Inc, os a corporotlon, ond It off,cers or employees, may now have, or may later toke, POSitIons or trodes In respect to ony seCufltles mentioned .n thiS or any future Isue, and such POSitIon may be different from any Views now or hereafter el'pressed In Ihls or ony other Issue. Janney Montgomery Scali, Inc, which IS registered wllh the SEC as on InveUmcnt adVISor, may give adVice 10 Its Investment adVISOry and othel CVitomers Independently of any stotements made I thiS or In any other Issue Further information on any secvrlty mentioned herein IS Qva.loble on request