Tabell’s Market Letter – April 16, 1992

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 April 16, 1992 We stated conclusively last week, buttressing our argument with a chart, that the stock market was vulnerable to a correction, – foin!! fiJrthel' toSt!geec;t Jh2.t.Sl!cb jI .(orrection might carryasJow 8!i1thp..-300(1.2900 level. The-Dow.! which had lose4 gn th y before . we wrote the letler at 3224, promptly advanced over 125 points by this Wednesday. Now 125 points these wiys is under four percent, and we therefore remain only slightly embarrassed. Nonetheless, we must now decide whether to abandon our skepticism or to keep it in place for the time being. When one looks at anything other than the Dow, the rally becomes a bit less impressive. The S & P 500, at Wednesday's close of 416.28 remains below its two-month-old high. Our daily breadth index peaked on the same day as the S & P back in February and remains far enough below that high so that a number of days of positive breadth will be required to produce a confirmation. Least impressive was the fact that when the Average touched above 3300 for the first time m its history on Tuesday there were all of 59 daily new highs scored on the NYSE. (The figure improved slightly to 94 on Wednesday.) How low was this on an historical basis To find out, we took aU the days since 1951 when the Dow had posted a new 200-day high, as it obviously did on Tuesday and Wednesday. There have been, for the record, 899 such days. The 59 new highs on Tuesday constituted 2.63 of the 2,243 ISSUes traded. Only sixteen days in the past forty years had shown a lower figure. Intuitively, we thought this less than encouraging, so we listed out all of the 30 new-DJIA-high days on which the new-high percentage was less than 3. They are sbown in the table below. New of Percent Change 1n DJIA After Date DJIA Highs Issues Tr 1 Month 3 Months 6 Months 12 Months DEC 26 1952 288.23 11 1.01 -0.59 -0.09 -7.76 -2.89 DEC 30 1955 JUL 30 1959 JUL 31 1959 488.40 673.37 674.88 34 2.86 -4.27 4.15 -0.03 -0.18 36 2.98 -1.49 -5.98 -4.15 -6.13 22 1.84 -1.75 -5.52 -4.30 -6.45 AUG 3 1959 678.10 33 2.78 -2.02 -5.30 -5.76 -706 DEC 31 1959 679.36 26 2.04 -8.35 -8.48 -5.00 -9.96 IIJA'. 5 -685 47' II I-I- 'OI J Ol. -,'60,-,,-.-l7 og—,–56,..,. -5 .6ll-.llO..9()' I 0 DEC 13 1961 734.91 36 2.72 -3.15 -2.75 -17.83 -1182 FEB 15 1963 686.07 37 2.82 -1.82 4.92 2.64 14.47 SEP 19 1963 743.22 33 2.54 1.02 3.12 9.82 13.71 DEC 5 1963 763.96 40 2.98 0.74 5.48 708 15.91 JAN 28 1964 787.78 30 2.26 147 4.30 7.82 12.12 FEB 7 1964 FEB 11 1964 NOV 9 1972 NOV 16 1972 OCT 7 1983 OCT 16 1985 791.59 792.16 988.26 1003.69 1272.15 1369.50 39 2.95 1.97 4.43 6.04 12.84 27 2.03 2.74 4.80 6.08 13.17 40 2.22 4.55 -2.13 -3.80 -1.39 50 2.79 2.35 -3.04 -9.37 -5.47 19 0.95 -423 -0.24 -7.97 -4.65 46 2.32 4.33 11.11 29.97 28.26 OCT 30 1995 JON 16 1987 OCT 10 1988 OCT 18 1988 JAN 5 1989 JAN 6 1989 JAN 9 1989 JAN 11 1989 JAN 13 1989 MAY 15 i990 MAY 29 1990 JON 15 1990 APR 14 1992 1375.57 2407.35 215896 2159.85 2190.54 2194.29 2199.46 2206.43 2226.07 282245 2870.49 2935.89 3306.13 58 2.86 7.28 11.78 33.01 30.74 58 2.93 3.17 7.01 -26.61 -18.30 48 2.52 -1.59 1.46 676 24.15 44 2.24 -3.83 3.07 7.03 24.68 53 2.71 6.54 5.22 15.33 25.06 48 2.43 6.24 4.74 14.15 22.93 59 2.97 5.53 4.79 11.77 22.56 55 2.81 6.20 4.46 11.16 21.97 59 2.96 270 3.84 10.62 2171 38 1.89 3.81 -2.25 -11.75 3.19 51 2.55 -098 -10.81 -11.34 3.51 37 1.85 2.18 -11.01 -11.09 1.15 59 2.63 0.00 0.00 0.00 0.00 The results turned out IDlxed. As the table shows, m the majonty of cases. 18 of 30, low numbers ot new highs resulted m desultory markets over the coming year. There were two periods in the forty years, though, when the market was able to surllve such occurrences—in 1963-4 and in 1988-89. The rest of tbe time small numbers of new highs tended to suggest below-average market results. Whether this will be the case at present we would not care to guess. Nonetheless, it is certainly possible to suggest that the paucity of new highs on the week's advance IS less than encouraging. ANTHONY W. TABELL, CMT Dow Jones Industnals 3366.50 DELAflELD. HARVEY, TABELL Standard & Poors 500 416.04 Cumulative Index (4/15192) 7295.48 No statement or e)(presston of opinion or any other matter herem contained IS, or IS to be deemed to be, directly or Indlrectty, an offer or the sollctlallon of an offer to buy or sell any secunty referred to or mentioned The matter IS presented merelV for the convemence of the o;ubscnber While we believe the sources of our mformatlon to be rehable, we In no way represent or guarantee the accuracy thereof nor althe statements made herem Any action 10 be taken by the subscriber should be based on hiS own Investigation and Information Delafield, Harvey, Tabelllnc, as a corporation and lis officers or employees, may now have, or may later take, poSllIOns or trades In respect to any seCUrities mentioned In thiS or any future Issue and such poSllion may be dlHerent from any views now or hereafter expressed In thiS or any other Issue Oelafleld, Harvey, Tabelllnc, which IS registered With the SEC as an Investment adVISor, may give adVIce to Its Investment adVISOry and other customers mdependently of any statements made In thiS or In any other lSue Further Information on any security mentioned herein IS available on requesl