Tabell’s Market Letter – May 28, 1982

TABELL'S MARKET LETTER 909 STATE ROAD, PRINCETON. NEW JERSEY 08540 DIYISION OF MEMBER NEW VOAK STOCI( EXCHANGE, INC. MEMBER AMEAICAN STOCK eXCHANGE – '1l'itnp-ossitiletoptiJjlih'9. . y 28-, 1982 lOr 'b y'H–.wltnout. Jp'l1g- a lew pres- entations WhICh seem to recur wIth a certam degree of regularity. The appearance of the table below tends to coincide with the rhododendron season, since it is generally issued as a prelude to a discussion of the summer-rally phenomenon. The table shows the number of times the Dow advanced and declined for each of the 56 one-month and two-month periods since 1926 and also he average percentage advance for each period. As can be seen, the market advanced in July m 36 of 56 years and in August in 35 years, or in considerably more than 60 of the instances in question. By contrast, for all months the markethas advanced only 56 of the time. The av- erage percentage advance for the 672 months since 1926 has been 0.43, whereas July has averaged a 1.88 advance and August a 1.26 advance. The two-month period ended August shows a similar upside bias. It is our custom to point out that this tendency toward a summer rise is not the most statistically significant item in the table. December is more likely to show an advance than either July or August, and the 'tendency toward a decline in September is lilewise greater than the summer rally probability. However, the predispostion of the market to advance in July- August and decline in September is, it seems to us, of special interest at this time. aQeMcQtbecds i12261281) IwcMootbeeods i122612811 EodMootb daDces Declioes Qe.cageZCbs … daQces DeclQes cagelLCb9 January 36 20 1. 03 Fpbrusr March Apri 1 29 27 -0.10 25 -0,05 25 1.09 Ms 28 28 -0.79 June 28 28 0.89 July 36 20 1. 88 Allsfust 35 21 1..6 September 34 -1. 37 October 9 27 -0.57 November 34 0.63 Deceolber 41 15 1 2 — — —– TOTAL 380 292 0.43 37 32 27 34 32 26 35 38 32 25 33 39 — 390 19 2.i. 29 24 30 21 18 24 31 23 –1-7 282 2.35 0.9 -0 !5 1.10 O.5.! 0.06 2,72 3.29 -0.15 -1.90 0.10 1. 87 —– 0.89 As our readers are aware, our current view of the equity market can be summed up in the statement that it is presently probing for a major bottom which may have already occurret! in March or may occur at some not-too-different level at some future date. The studies of the four-year cycle which we have been presenting in this space suggest that, if such a bottom has not yet occurred, it should not be delayed much beyond September. Now, presumably due to the tendency toward a summer rally, there is no case on recortl of a major cycle low's having occurred in the months of July or August. (The low based on average price in 1932 was in July, but the actual closing low was in June.) This raises some interesting questions regarding the test and lor penetration of the March 8 low, which we regard as a possibility. Either that test should come- within the-next-month, thuB completing the.bear -market cycle which be(Jl-n in November, 1980-April, 1982, or it is likely to be deferred until September. Any attempt by the market, therefore, to probe new low territory during June should be regarded with special significance. If the conventional signs of a major bottom present themselves and the ensuing summer rally is especially vigorous, we will probably be able to identify the resultant pattern as the takeoff point for a new bull market. Should the more recent tend- ncy toward low volume and desultory market action continue, together with a-tepid sort of summer rally, it then becomes probable that a major turning point might well be deferred until sometime in the Fall. Dow-Jones Industrials (1200 p.m.) 821.35 S & P Composite(1200 p.m.) 112.10 Cumulative Index (5/27/82) 1109.03 ANTHONY W. TABELL DELAFIELD, HARVEY, TAB ELL (,,- I ' No statemenT or expression of opinion or any other molter herein Contained IS, or 1510 be deemed 10 be, directly or Indirectly, on offer or Ihe solle.totlon of on offer to buy or sell ony security referred 10 or mentioned The matter 15 presented merely for Ihe convemence of the subSCriber Whde we believe the SQ1,HCeS of our mformo tlon 10 be reliable, we jI'J 1)0 way reprc5cnl or guarantee Ihe accuracy Thereof nor of the s\olemenls mude hercln Any action 10 be token by the subSCriber shOuld be bosed on hiS own investigation and InformaTion Janney MonTgomery ScalI, Inc, 0 0 corporation, ond ,Is officers or employees. may now hove, or may IOler fake. pOSitions or trades In respect to any SeCUritIes mentioned In thiS or ony future IHue, ond such position may be different from ony views now or hereafter c..-prcssed In thiS or any other lSue Janney Montgomcry Scott, InCh' which IS registered With, 'h'h SEC ,os on Investment adVisor, may glvedodhlce to Its In,',bm, '0' Od,.'ql,',Y, ond othel customers Independently of any llolements mode In t IS or In any Olhc( Issue urI er In ormation on ony secuflly menllone erem IS ova a e n …