Technical Market Action After early firmness, Monday' s market worked lower in the final hour of trading and closed 1.16 points off on the industrials and 1.09 on the rail average. Volume totalled 1,440,000 shares. It wins the fifth successive trading day on the downside. From a technical viewpoint, there are two possible developments at this stage of the market. The first is a continuation of the decline to the 197-195 area. At the moment, the tops formed by the industrial average indicate no greater decline than the above mentioned figure. This would be a correction of approximately 5 Which has been just about the size of most corrective reactions in recent months. The second possibility is a halting of the decline around the 201-200 area, followed by a rally and a broadening of the top. Am inclined to favor this latter possibility as it-is in line with the thought that the market may be in the process of forming an intermediate distributional area. So far, the top area formed indicates no more than 197-195. More backing and filling would be required to materially broaden the top. From the foregoing it would seem that the market could be bought for c trading turn between approximately present levels and 197. However, as far as the intermediate term trend is concerned, would exercise extreme caution and employ only a portion of available funds at this stage of the market. Recommended issues should be retained but liquidated on strength. EDMUND W. TABELL February 11, 1946 SHIELDS & COMPJ.NY Dow-Jones Industrials 201.14 Dow-Jones Rails 65.11 The opinions pressed In this letter are the personal interpretation of charts by Edmund W. Tabell end ere not presented .s the opinions of Shields & Company.

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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

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