Tabell’s Market Letter – October 31, 1986

TABELL'S MARKET LETTER ,I ,j – – — I 600 ALEXANDER ROAD, PRINCETON, NEW JERSEY 08540 MEMBER NEW YORK STOCK EXCHANGE, INC MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS,INC (609) 9872300 October 31. 1986 ,– The .';eek'Siiiii'rket-strength has 'brought Tfie Dow to the' vicinity' orth i8'1W'iliHial 7' 0'-,….,.-,.,,,.,.1– upside objective suggested in this letter. The next step could be a full-scale test of the all-time highs. the success of which we would be inclined to doubt. All this. however. is seasonally fortuitous, since, as we discovered by accident some five years ago, the month of November, for some unfathomable reason, appears to have predictive value. Action for the month of November itself has been almost precisely normal. In the 89 years since 1897. the Dow has been up 54 times in November and down 35. showing a rise some 61 of the time. This is close to the 57 rising average shown by all one-month periods since the Dow was first constructed. What is interesting. however. is what has happened following the 54 past instances of an upward November. The following table summarizes some pertinent figures. Perlod Length In MOYlths ————1 2 3 4 5 -6 7, 8 '3 10 11 12 ALL PERIODS FOLLOWING UP NOVEMBER Avg l Avg l Petl.ds Pet'lods l Pet'l..ds Pet'lods l Ch All Chg Fr;.lv'oIlng Up De.wYl Up Up Down Up Pet'lc,ds Up NClvembt' ——- ——- —– ——- ——- —- ——- ———- 610 466 56.7 37 17 6'3 0.53 0.'30 613 462 57.0 33 21 61 1. 10 2.22 627 447 58.4 3' 20 63 1.67 2.04 636 437 5'3.3 36 18 67 2.23 3.75 658 414 61. 4 38 16 70 2.81 5.02 647 555 654 424 — ,1.1.5 415 60.4 51 , 61 -2- 35 -0- 39 1'3 . 2-P 15 65 3.41 53 — .3. '3'3 .. 72 4.56 4.47 4. 84 5.70 6'2 426 50.1 38 16 70 5. 16 8.72 548 41'3 60.7 38 15 70 5.77 7.5'3 646 420 50.6 34 1'3 54 6.38 7. 18 656 40'3 51. 5 34 1'3 54 6.'37 8.65 The table shows the history of all market periods of one to twelve months in length since 1897 and compares it with the 54 periods of like length following an upward November. Taking the first line as an example. of the 1076 one-month periods since 1897. the Dow was up in 610 cases and down in 466. thus showing a rise of 56.7 of the time. In the 54 Decembers following an upward November. however. the average found itself up 37 times and down only 17. thus rising 69 of the time. The average percentage change for all 1076 one-month periods was just over one half of 1. For the 54 periods following an up November. the average advance approached 1. The table may be read in the same way for all periods of lengths from two up to twelve months. — , A glance through the table will show that the predictive value of November appears to be quite uncanny. For all twelve period-lengths. the market produced a greater percentage of rising periods following an upward November than was the case overall. For example. it rose 70 or more of the time over periods of five. eight. nine or ten months compared with an expectation of around 60. Likewise. the average percentage change following an up November comfortably exceeded the average percentage change for all periods of similar length no matter what the length of the period in question. The average December-January chang.Jol1wing an upwardovember. for. example. ,was.2. 22 versus an exp..eced average of 1.10. Now none of the above says the market cannot go down after an upward November. and it has indeed done so on numerous occasions. Certainly there are large numbers of other factors detailed at length in recent letters which go into the formation of our present market opinion. Nonetheless, the November record is significant enough to be of interest. AWT It Dow-Jones Industrials (1200 p.m.) S & P 500 (1200 p.m.) Cumulative Index (10/30/86) 1871. 77 244.39 3158.25 ANTHONY W. T ABELL DELAFIELD. HARVEY. TABELL INC. No statement or epresslon 01 opmlon or any Olller matter herem contained IS or IS to be deemed to be directly Of Inchrectly an offer or the solicitation 01 an oller to buy or sell any secunly relerred tOOt mentioned The mailer IS presented merely lor the convenience of the subSCriber White we believe Ihe sources of our mlormatlonto be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herem Any acHon to be taken by the subscnber should be based on hiS own Investigation and Inlormallon Delafield, Harvey, Tabell Inc, as a corporallon and Its officers or employees, may now have, or may later take, POSitions or trades In respect to any secuntles mentIOned In Ihls or any future Issue, and such POSition may be different from an/views now or hereafter epressed m thiS or any other Issue Delafletd, Harvey, Tabe!l Inc, which IS registered With the SEC as an Investment adVisor, may give advIce to ItS Investment adVISOry and othlY cuslomers Independenlly 01 any statements made m thiS or In any other Issue Further mformatlon on any security mentioned herein 15 available on reQuest