Tabell’s Market Letter – February 18, 1946

Technical Market Action Monday's market was off sharply with the industrial average closing 2.76 points lower the losing 1.58. The day's losses were sharper then any of the declines witnessed early last week. At Mondays close, the averages had lost a good portion of the Thursday to Saturday rally which totalled 5.67 points in the industrials and 2.14 in the rails. The erratic market action of the pa.st week, with sharp and rapid declines followed by equally sharp end rapid recoveries, is typical of intermediate distributional markets. The question is whether the market is ready to decline immediately or Whether there must be additional backing and filling to further broaden out the top before the real decline ensues. Am more inclined to believe the latter course will be followed. Monday's decline could easily further. The first support level is the 197.65 10Vi of last week. If this point were penetrated it would Signal rn1 intermediate downtrend us last weeks high of 205.35 did not penetrate the 207.24 high reached earlier in the month. However, even if this occurred, would -hot expect the averages to move much below that level at this time. Top count indications point to 196-193 us a possible objective. In addition, the 195-190 area. is an extremely strong support zone which shoulc1 hold up at lea.st against the first downside In other words, would expect possibly some further weakness into the 200-195 area followed by a. rally. Would continue to liquidate intermediate term holdings on strength. February 18, 1946 EDMUND W. TABELL SHIELDS & COMPANY Closing Dow-Jones Industrial- 201.63 Dow-Jones Rails 65.37 The opinions expressed in this letter ere the personal interpretation of chart by Mr. Edmund W. Tabell and are not presented as the opinion of Shields & Company