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Technical Market Action The market rallied again on Thursday ane, both the industrials and rails reached new highs on the from the July 10Vis. Volume showed a sliGht incras at 890,000 shares. After eight dayo of advancing prices, the two day decline of Monday ane Tuesday was relatively small. The indus- trials reacted only 2.91 after a rise of 9.08 while the mils reacted only 94 cents (tfocr a rolly of Volume indicctions have been sli5htly favor- llblc dGO ,ith a totLl of 1,430,000 shares on Monday-Tuesday d(;cline ag..inst 1,960,000 on the liec..nesday-Thursday rdly. Mter some week-m.d irregulc.rity would expect an extension of tho advance. The market, hOllever, is in a hec,vy supply area and would expect the rise to be selective. From the action of the market, beliove t.h intermediate down- trend reached its low on July 24th whon the industrial average hit 194.33 and the rails nere at a Ion of 60.26. Tclmical rf'csons for this vim1point are (1) The decline stopped at t!.lC i'i.r&t of the three sur,ort levels mentioned by the writer in recent letters, namely – the 194 – 1912 0.1'00. in the industrials and the 60 hvel in the rail uverai;8. Incidentally, at this level, the in- dustrials had retraced approY.imately two-thirds of th FebruaI'J to May rise 17hile the rails had lost all thoir gains nnd forme'; a double bottom at the FE'bruc.ry lo..s. (2) The rally in the industrinls rotraced, in eight cays, npproximatE'ly half of the thirty-Seven d!,y June-July decline. (3) Instead of the rclly meotinb at the loCical 199-200 level, the market pushed through heavy supply to 204. (4) T'llerc han boen a frf!ctional penetration of the int6rmediQtc dO\'.'lltrend line on the Dow-Jones industrial avorage, the Dow-Jon combine, CiveTfigo aml on the Ne.; York. Tir.les averc.ge. From this reasoning it volllc' see'. the uptr(;nd has resumed anu soft spots should be used for accumula;ion of selected issues. l.s mentioned before, fa.vor the heQvy industry shares some of the conawner issus could also move up sharply from an oversold position. As to the long te,rm trend, the market continuos to point toward higher levels. l,ugust 8, 1946 EDMUND IV. l'ABELL SHlELDS & COMPflNY Closing Dow-Jones Industrials Dow-Jones RnUs Do;/-JonGs 65-Stork 204.10 62.74 75.42 The opinions expreued in this letter are the personal interpretation of charts by Mr. Edmund W. robell and are not presented 0111 the opinions of Shiekls & Company.