Tabell’s Market Letter – February 19, 1982

– – – – – – – – – – – – – – – – – —– – — TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON, NEW .JERSEY 08540 DIVISION OF MEMBER NEW YORK STOCK EXCHANOE, INC MEMBER AMERICAN STOCK EXCHANGe February 19. 1982 A stock market which acts poorly is bad enough. Those of us who have been around for awhile -are'inured–t .-taily'-protracteQ-per!oqs'drinCwhicn–tb.m1frKet'supSide.–actioii'is ksomewnatlessCtl1aIi'7 – -' exciting. Presently. to make matters worse, however, the market is beginning to take on some of the aspects of bad melodrama. – Some three weeks ago. it will be recalled. we had The Great Upside Explosion. in which the Dow rallied some 21 points on 67 million shares of volume on January 28, followed by a further six-point advance on 73 million shares the next day. That was it. The market dropped 20 points the next Mon- day. did nothing for a week. and promptly turned once more due southeast. That particular decline was interrupted this week by another probable non-event to which those whose optimism is unrestrained may refer as The Test. These latest theatrics started on Tuesday. following the three-day holiday this week, with the Dow opening down some eight points at 825.06 — within a point of the September low of 824.01. There can hardly be an investor. at this point. who is unaware of the importance of that now-five-month-lld bottom. In the first hour of trading the market moved significantly below the September figure and remained there most of the day, but. in the last couple of hours. it managed to post an eight-point rally and thus avoid closing below the magic figure. The follow-through to this one was as non-existent as it had been in January. The market spent almost all of Wednesday trading below its Tuesday close. A rally attempt on Thursday was, by and large, erased in the afternoon. The first two days of this momentous action took place on the usual 40-some-odd million shares of volume which have tended to characterize the torpid trading pace of 1982 thus far. Nonetheless. however marginally, the test of the September lows is. as of this writing, still successful. At the risk of stupefying our readers with figures. we offer the following table which documents recent low figures for a number of averages. The first two columns show the level and date of the September low. For most averages, this was September 25 on a closing basis and the following day. September 28, on an intra-day basis. Shown in the next two columns are the level and date of the most ..— recentlow -.T-he;.datev-a-F-ies.a.considerably,-.dependinghieh-indicatorones!iookin-g-'-Sr-'–I ages made new lows on February 16 and 17. Others. as shown in the table, posted their recent lows a week or two earlier. The low for the Dow Jones Utilities is back in mid-January. Shown in the final tID columns is the mid-October low, enerally posted on October 26. September Most Recent Mid-October Average Low Date Low Date Low Date DJIA – Close 82'4.01 9725781 827.63 2/17/82 830.96 10726781 – Intra-Day 807.46 9/28181 817.26 2116182 823.63 10/26/81 DJ Trans. – Close 335.48 9125/81 337.28 1/26182 366.17 10/26/81 – Intra-Day 326.18 9/28/81 334.60 1/25/82 362.71 10/26181 DJ Utilities – Close 101.28 9128/81 103.61 1113/82 103.08 10/16181 S & P 500 – Close 112.77 9125181 113.68 2/9/82 118.18 10/26/81 – Intra-Day 110.19 9/28/81 112.06 2/16/82 116.81 10/26/81 S & P 400 – Close 125.93 9125/81 126.71 2/9/82 132.00 10/26/81 – Intra-Day 123.09 9/28/81 127.83 2116/82 130.45 10/26/81 NYSE Composite-Close 64.96 9/25181 65.71 2/17/82 68.58 10126/81 – Intra-Day 63.76 9/28181 65.70 2/16/82 68.25 10/26181 NYSE Ind.- Close 73.52 9125/81 74.28 2/17/82 77.86 10126/81 NYSE Fin.- Close 67.77 919/81 69.86 2/17/82 72.47 10/2818t AMEX Mkt Value – Close 276.76 9/25/81 271.68 2/16/82 305.64 10/21/81 – Intra-Day 266.40 9/28/81 269.87 2/16/82 302.95 10/22181 Viewed in this fashion, the pattern for the various averages becomes quite similar. For everyone of the indicators, except the Dow Utilities. the low of last October was penetrated in recent trading. However, for all but one, the magic September figure remains inviolate, the sole exception being the American Stock Exchange Market Value Index which may be demonstrating the downside leadership it spent two years showing on the upside. The above figures may come in handy for future reference, either in documenting formation of a bottom or for noting the ultimate penetration of each threshhold as the market moves lower. ' We have not included in the table, since it is not properly an average, the action of market breadth, which is at least of moderate interest. Most breadth indices had moved below their September lows prior to the aborted rally of January. They continued in this direction by moving again to new lows in this week's trading. As we have pointed out in recent issues of this letter, this sort of breadth action is precisely the opposite of what one would expect during the formation of a major-cycle bottom. As readers may have gathered from the above, we are inclined to view the market's two most recent attempts to display strength as something less than decisive. It remains. of course. possible that the September low will hold, and we hope we are open-minded enough' to be convinced of this case if bull- ish evidence accumulates. We do not, however, see such evidence as having accumulated in the past three weeks. ANTHONY W. TABELL Dow-Jones Industrials (1200 p.m.) 828.77 DELAFIELD. HARVEY, TAB ELL S & P Composite (1200 p.m.) 113.78 Cumulative Index (2/18182) 1059.79 No statement or expreSSion of OPiniOn or any other motter herein contained IS, or IS to be deemed to be, directly or Indirectly, on offer or the sol,cltal,on of on offer to buy or sell any ecurlty referred 10 or menhoned The molter IS presented merely for the conventence of the subsCriber While oNe believe the sources of our informa- tion to be reliable, we ,n no way represent or guarantee the accuracy thereof nor of the statements ml.lde herein Any action to be token by the subSCriber should be based on hiS own investigatIon ond information Janney Montgomery Scott, Inc, os a corporation, and Its officers or employees, may now have, or may later toke, positions or trades In respect to any seCUrities mentioned In thiS or any future Issue, and such POSItion may be different from any views now or herealter expressed In thiS or any olher Issue Janney Montgomery Scott, Inc, which IS registered With the SEC as on Investment adVisor, may give adVice to Its Investment adVisory and othel cUstomers Independently of any statements mode In thiS or In any olher Issue Further information on any security mentioned herein IS avaIlable on request