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Technical Market Action After reaching intra-day lows of 198.90 on the industrials and 61.Bl on t,he rails, tIle market rallj ed on Monday and recovered a good portion of the losseG. Volume was small, both on the decline and the subsequent recovery and tfJtnllp.d only 660,000 shares. Mon(lay's decline was the fourth successive day of decline for the industrial average and the thl rd fur the rails. This is about the usual time durE.tion for mtnor moves and would expect further recovery starting in thE' next, day or so. A1l'o at the dlLY's low, the industrial average hud Itg11.in reached the important 199 1e-vel, at which pcint the average met support in the May and in the JUnE. declines. Tae ,July di.p was the only t.ime in almost four months v;h'm thls sur,port level dld not hold. /The decline of the last three days has not destroyed the poterotially favora.ble technical patt..,rn mentioned in lost week's letter. In fact, if the level aroun(! 199 holds, the p'ltt')m has strengthened7 Monday's intra-day low of 1913.90 vlith the 198.98 low of md, 17hn matched up wHh the July 101' of 194.33, the forma-t;ioll still suggeA1;c the possibility of a head md shoulders bottom. As mentioned l,efore, this would be an extremely strong pattern ane; lndlcate the probability of n very important point in market. Ii, on the other b.nd, the av('!'().ge breaks sub&tantialJ.y b.)low the 199 level, a testing of the July low would be in order. \'Ilile this would destroy the poten- tir.lJ.y fav')I'able pattern above, i. t would not tecome disturbing until the ,Tuly low was pene t.atGd. In thut event, the lndication vJOuld 11e a continuut.ion of t1P aowntrend and a t.ef.tin(; of the February low. Still fa-vor trading purchases on cur-Lmt irregularj ty in anticjpation of thl market h01riing r,round )Jresent 10Vis and the July low being th bottom of the int.eTIllediatc d.,cline. Ap. to tradine mE'dium3, still favor hel.v; lnc.utry iSGu80 and rails. The action of th,' rails has bf'n impressivE' in the P'.l, rlecline. A of utiliW issues have also improved tr,chn-Lu,,, action )'ecently; Like l'Jner.ican Power & Lit'.lIt whieh, at Monday's clOSE' of 18 3/B, i3 available 4 1/8 points below the yea.-' s high of 22 1/2. August 19, 1946 ED1F.UND 1'. TABELL SHIELDS & COMPMIT Closing Dow-Jones Industrials Dow-Jones Rails Dow-Joner c.5-Stock 200.19 62.26 74.34 .The opinions expressed ;… thjl lett.r are the personal interpretation of cherts by Mr. Edmund W. Tab.1I lind are (It prflS8nted as the opinions of Shields & Company.