Technical Market Action .I The stocks in the cgricultural implement group have, in the great majority of instances, extremely favorable tecm,ical patterns. 10 issues in this group, Deere & Company and Oliver Corporutl.'Jn, are in our recommended list and are re- viewed below together with other leading issues in the farm equipment group. Case (J.I.) Co. has penetrated the upside of the long twelve month trading range between 30 and 40. A substantial base pnttern has been built up and the intermediate term indication is the 59-64 area. The 1946 high was 55. The 1947 high was reached on Monday at 42 1/2. The close was 41 7/8. Downside support ould be met around 40. Caterpillar Tractor, at Monday's closing of 55 1/2, was still considerably below the 1947 high of 64 – not to mention the 1946 high of 81. The stock is !l slower moving semi-investment t,ype issue with a potentiallY favorable technical pattrn. The first favorable indic.tion would be the e.bili ty to penetrate the July high of 62 and reach 63. In that event a rally to around 75 would be indicated. Deere & Co. is one of our recomllended issues. The 1946 top .in the 58-52 area indicated n decline to 31. Th8 October low was 32 and the May 10Vl was 31. The substantial base pattern built up i the 31-41 area was penetrated on the upside in July and a hi& of 43 1/4 reached. The recent decline held around 38. Monday's close l7as 41 5/'13. The stock apperrs to be in an uptrend wi th first minor resistance at 47-49 followed qy 56-59. International Harvester is the blue chip of the group. The stock reacted from a 1946 high of 102 to 67 and rallied hack to 95 in July. The recent low was 81 and Monday's close was 89 7/8. First indications are around the old high of .102. Ability to penetrate that lovel would be extremely bullish. Minneapolis Moline Power is' one of the more speculntive issues of the group. However, the technical pattern is favorable. The stock recnt1y penetrated the long 13-7 trading range on the upside and indicates 17-19. Monday's close was 14 1/8. Qliver Cor, is in our recommended list. The technical pattern is ex- \ tremely fa'orF,t1e. The long 18-25 accumulation range was recently penetrated on anthe upside, he first indicrtion is around the 1946 high of 36, followed qy eventual 45-50. ' International Minerals & Chemical, while not in the agricultural implement Group, is in the allied fertilizer group. The stock is one of the issues in our recommended list. Recent action has been ood. The stock reached its old 1947 high of 31 on Monday and closed at 30 7/8. A large potential base area has been built up and ability to reach 34 would indicate substantially higher .levels. Sto,ck appears to be an attracti7e purchase. The industrial average closed at anewbigh for the move at 180.08, due mainly to strength in the blue chip issues, Some profit-taking was noted in the more speculative stocks. The rails were also fractionally lower. After last week's strength, some further consolidation would be only normal. The intermediate trend is indicated as up and expect the next important move to be a testing of the July highs. I October 6, 1947 EDMUN,D VI. TABELL SHIELDS & OOMPANY Closings Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock 180.08 48.99 64.43 The opinions elpr.lSed in this letter ate tho personal int&rpretetion of chem by Mr. Edmund W. Tabell end oro ntt presented as the opinions of Shields & Company.

Technical Market Action ve since the market breek of over a year ago this letter has con- sistently stressed tllO points. The first point was that the 160-170 level of the Dow-Jones industrla1 averac was a long terr.l buyinC range and thct the base formed in that aree Vlould ultimstely be the founc.ation for a new bull market. The 160-170 areE. was reached at least a dozen times with 10Vi levels of 160.49 in October, 1946,Md 161.38 in MRY of this year. The second point was the.t the market leoaders of the nevI dvnnce would not be the sensationp movers of the 1942-1946 (ldvanee, such as the movine picture issues, dep!lrtment storcs,liquors and other luxury item issues, but that the neVI leaders would be found in the ,TOUpS that were comparative laggards in the 1942-1946 advance This letter favor'ed such groups as the steels, agricultural implements, mahine companies, oils, building stocks, chf'.lDicals, etc. We further stressed this selectivity by mentioning that eV(n in the same groups, some stocks had attrctive technical patterns while others in the same group had relatively un- favorable patterns./For example, we have mentioned, on occaSion, that Phelps Dode appeared more attractive than Anaconda, tht Illinois Central and Northern Pacific appeared more attractive th(!ll Pennsylvania or NeVI York Central and that Youngstovm Sheet & Tube appeared more attractivc than Beth1,her.! Steel. How this selectivity has worked out can be noted in comparing the two tables below. The first or left hand column is composed of issues in our recommended list with prices at the 10lVs of May 19th, the day the averaee reached 161.38, compared with Friday's close. The second or right hand column is composed of issues thd had relatively unfavorable patterns. Low !.lay 191,h Friday's Close Low Friday's May 12th Close Barnsdall Oil Bliss (E.W.) Borg Warner Chrysler Citi ES Service Electric Pro & Lt. F1.intkote General Cable Illinois Central Inter. Minerals Joy Manufacturing Mullina .,Mfg. National. Supply Rayonier Sharon Steel Texas Pacific Coal Union Bab' Union Pacific Wheeling Steel Youngstown Sheet &.T 21 1/8 18 1/2 37 5/8 45 7/8 25 3/8 11 1/4 24 8 18 1/8 22 1/4 28 1/8 143/4 12 5/8 17 3/8 24 3/4 25 1/2 25 1/2 122 31 54 311/S 33 53 ')/4 62 ')7 1/8 18 1/4 38 12 1/4 27 32. 39 3/4 231/4 19 1/4 28 7/8 37 38 3/8 361/4 139 1/2 48 1/8 75 5/8' Air Reduction 29 7/8 American Can 863/4 American Telephone 159 5/8 Bridgeport Brass 13 . Cerro de Pasco 30 Consolidated Edison 25 Continental Can 35 Cornins Glass 34 3/4 Decca Records 15 3/8 Eversharp 12 5/8 Gt.lVesterl'l Sugar 22 1/8 Inter. Nickel 29 1/2 L2JJlbert 28 1/4 Lo&vr' s 20 Nopco Chemical 42 1/2 Norwich Pharo 13 Oppenheim Collins 20 Paramount 22 3/4 Penns,rlvania R.R. 17 7/8 Twentieth-Cent. Fox 26 3/4 29 86 156 1/2 12 7/8 30 1/2 25 36 24 3/4 1313 1/2 23 1/4 29 27 1/4 19 7/8 36, 13 163/4 221/2 17 7/8. 25 3/4, Thus, it i6 evident that stocks in thG first column, bought at the MEW lows, show substantial profits at today's prices. On th othr, the stocks in the second column with the averages almost twenty points highar, show little or no profit or n loss. Believe that the market will continue to be selective. While a great many issues have completed tileir base patterns and indicate substantial uptrends, other issues are in the early stages of accumulation and require a long period of backing and fillin before a O/orthwhile move is indicr-ted. 'At this stage of the market, a great deal can be lost by riding th '1ronc horse or holding onto laggard issues in the vain hope that they wiil join the adVance momentarily. The market on Friday continued the advance started on the previous day and closed at a new high for the move from the September lows. The rails have been lagGard but would eJqject this group to join the advance shortly. October 10, 1947 EDIJUND W. TABELL SHIELDS & COMPANY The opinions 6xpreuec in ..his I.ffe, are the personal interpretation of cherts by Mr. Edmund W. Tabell end ere not preutnted as the opinionl of Shields & Comp .I'1'1.

Technical Market Action The general market strength of the last two days has added several of our recommended issues to the list of stocks that are in an individual market of their own as evidenced by their ability to reach new high territory since the decline of last year. ,Q.bell Wyant & Canggn, when it reached 31, indicated a term uptrend to an eventual 46-49. First important resisnce is around the 11'I.gh ;ioll G;he 38-40 territOl'Y. This auto equipment issue showed earnings of 28 for the first six months of 1947. Wednesdays high was 32 and the close 31 5/8. The stock was originally recommended in the 24-22 buying range. Coloo Fuel & Iron also indicates a long term uptrend to Hednesdays close was 16 7/8 and the high 17 1/4. The stock has held for a whilo in the 10-16 trading range and the penetration to 17 is very important technically. Originally recommended for purchase in the 12-10 area, the stock indicates substantially highor levels. u. S. & F,oreign Securities, originally recommended in the 16-18 buying range has penetrated the long 21.16 trading range and indicates, from a technical viewpoint, an eventual objective of 32-37. First resistance is at 2728. Wednesdays close was 22 7/8 and the high 23. This leverage investment trust issues is an attractive purchase' for those interested in buying a cross section of the market. U, S. Pipe & Foundry has been advised for purchase in the 35-38 buying range. On Wednesday, the stock broke out of its long 35-44 trading range to indicate a long term uptrend to 70-75. First temporary resistance should be met in the 55-60 area, Wednesdays high and clOSing Was 45 3/4 Several other issues are near important signal points for example Adams Express at 19 and 1flnationa1 Mineral and Chemical at 34 would confirm the previously favorable technical pattern and indicate long term uptrends. ns recommended for purchase 19'3/4 in our letter of August 11th, issuooits report for the first nine months of 1947and showed earnings of 6.57 a common share. The stock is in a technical uptrend and indicates 35-37. Wednesdays close was 24 1/4. The buying interest in the market has increased sharply in the paat two days as is evidenced by the volume of 1,810,000 shares on Tuesday and 1,930,000 on Wednesday. After a rally of 2.24 on the industrials and 1,08 on the rails on Tuesday, the market met some resistance to the advance and closed 55 higher on the industrials and 4lower on the rails' on a heavy turnover. However, some resistance is to be expected at around the 183-185 level and any teChnical correction at this point, when, as and if, it occurs, should be only slight. Doubt if it would reach 181-180. The action of the rails is disappointing but believe they will join the market advance. In fact, they appear to be a good short term purchase. In a recent letter, we mentioned that the stage seemed set for a sharp rise but that the one missing element was a public willing to buy securities. The volume of the past few days seemingly indicates that the public may be changing. Conider that possibility of prime importance. EDMUND W. TABELL October 15, 1947 SHIELDS & COMPANY Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65 Stock Avg. 183.28 49.71 65.48 The opinions expressed in thiS letter are the personal iterpretation of h4m by Mr. Edmund W. Tabell end fire nat presented as the opinions of Shield, & Company.

Technical Market Action There arc sixty-eirht issues in eur recemmended list. Mest ef these 5Cl)KS were dvised for purchase in the 170-160 area ef the Dew-Jenes industrial wm, an area fihich, fer ever tV/elve menths, 1e have considered as a longer buying area. Others wert advised at various times when their technical n-cns appeared attractive. Of thesG sixty-eight issues, ferty-one have given HlllH'lDUW.D1.1J.J. market siVlals. That is, they have penetrated their long trading areas on the upside by bettring their previous highs and indicate longer uptrends. -Most of these issues have shown substantial price appreciatien we have been stressing these issues in recent bulletins and published a list them in eur letter of octo,er 8th. However, it might be ,,;ise at this time to take a gle.llce at the other twent,r-seven issues in our recemmended list. These ssues have petentially favorable technical patterns. They have been in long trading ranges and, at their lows, had reached the long term downside indicators outlined by their early 1946 distributional patterns. In other werds, they have the same potential patterns as e forty-ene faveraple issues enly they have not proven themselves. They are listed belov;-, tegether with their trading range ef the past year and the upside penetration point and tbe'last sale. It will be neted that a great many ere very close to an upside confirmation while others are a censiderable distance aV/ay. Trading Range Breakeut Last Sale Adams Express American Cyanamid American Pewer & Light American Metal American Water Works Atlas Corperation Chicago. Northwest Crane Company Eastern Alrlines Electric Autolite , Electric Pewer & Light Evans Products Fensteel General Cable General Metors General Railway Signal Heudaille Hershey Hewe Sound Illinois Central International Mineral Jones &- Laughlin Libbey-Owens-Ferd Murray Corporatien Revere Copper Simmens Company Standard Gus 4 pfd Werthingten Pump 18 – 14 55 – 40 16 – 10 32 – 24 18 – 12 26 .- 22 26 – 15 40 – 27 24 – 17 65 – 51 19 12 25 – 16 22 – 11 14 – 8 65 – 48 32 – 19 18 – 13 38 – 31 30 – 19 33 – 23 39 – 28 59 – 43 15 – 10 24 – 14 4l – 28 37 – 18 68 – 47 19 56 17 33 19 27 27 4l 25 66 20 26 23 15 66 33 19 39 31 34 40 60 16 25 42 38 69 17 7/8 467/8 11 5/8 29 3/4 17 1/2 23 17 3/4 36 20 7/8 56 7/8 18 3/4 22 1/2 16 7/8 12 3/4 59 3/4 271/4 18 1/8 37 28 1/8 33 35 1/4 54 3/8 14 20 1/2 381/2 29 5/8 64 At the intra-day hiehs ef the week, up to. Friday, ef 184.56 and 50.59, both averages were within shooting distance of the July highs ef 187.66 and 51.92. Penetration ef these two peints would give Ii bull market signal. Obvieusly, we are new in an area of streng recistance to. the advance and a censiderable turnever of stock may be needed to penetrate the resistance area which marked the top ef the markt beth in February and July. So. far, the action has been faverable and offerinr.;s have been taken Vii th enly' smdl dips. Considering the fact that the majority ef the issues in eur recommended list have already penetrated their resistance to indicate lenger term uptrends,. we believe the odds favor similar actien by the rest ef the list and the general averages. EDMUND lV. TABELL october 17, 1947 SHIELDS & COMPANY Clesings Dew-Jenes Industrials Dlw-Jenes Rails Dew-Jenes 65-Steck 183.52 50.20 -65.61 The opinions elpressed in this letter are the perOnal interpretation of c.ham by Mr Edmund W. Tabell and are not presented lIS the opinions of Shields & Company.

Technical Market Action The rail averages are being watched closely qy market technicians as a clue to the direction of the next importent move in the general market. Ability to penetrate the July intra-day high of 51.92 or the closing high of 51.6.3 (depending on which SChool of thought one belongs) would indicate to most folior/ere of the Dow Theory toot a new bull market was in force. Mondlly's intra-day high ,ms 51.67 and the closing was 51.19. A little ground was lost on Tuesday, but at the closing level of 50.88, the average was within striking distance of its objective. However, although the rail averge is close to its high of July and only a few pOints away from the intra-day high of 5.3.65 and clOSing of 5.3.42 in February, individual rail issues show vry divergent patterns. For example, Union PaCific reached 152 .3/4 on Tuesday. At this level it was above both the February high of approximately 1.37 and the July high of approximately 147. The October 1946 low \Vas 110 and the May loVl 120. On the other hc.nd, Pennsylvania Railroad closed at 18 1/2 00 Tuesday. At that level it was more than seven points below the October low of 25 and just about at the May lon. The February high was approximately 29 and the July high apprOximately 2.3. Other exe.mples could be given of rails selling at or above their former highs While others are selling near the lows and still other groups are selling in middle ground. As in the industrials, selection is of prime importance. Only four rail stocks have been mentioned in our recommended list. Two of these issues, IllinoiS Central and Union PaCific, have Shown excellent action with the latter in new high ,territory and the former only a point away from the year's high. The other two, both issues of reorgenized roads, are Seaboard Airline and Chicago Northw()st which have been sluggish. Chicago Northwest has been particularly heavy and at its closing of 17 .3/4, was closerto the year's low of 14 1/4 than the high of 27 5/8. This issue has evidently been meeting heavy selling but its potentially favorable technical pattern is still intact. Seaboard Airline, at 18, also appears to be an attractive speculation on the probabili of an upside penetration by the rail averge. Other issues with potentially favorable patterns are Alleghany, pfd. which closed at 42 1/2 and would give an upside indication at 45 and Northern Pacific which closed at 21 5/8 and would give an upside indication at 23. Would avoid the eastern carriers. The market continues, on heavy volumeto batter at the 1947 highs in both averages. Believe a penetration will occur shortly followed by a quick runup,to approXimatel1190-l94; followed by 'a,correction to 197 'and then consolidation for a week or two and then a resumption of the rise. october 21, 1947 EDMUND V/. TABELL SHIELDS & COMPANY ClOSings Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock 185.09 50.88 66.14 Th. op1nions exprelled in this letter are the personal interpretation of charts by Mr. Edmund W. labell and are not presented as the opinions of Shield. & Company.

Technical Market Action The market sold off sharply on Friday after the overnight announcement of the callinG of a special session of Conbress in Novenber. 'The industrial average lost 1.97 to close at 182.53 and the rails were off ,1.07 at 49.46. The intra-day lows were 181.55 and 49.46. Volume was 1,650,000 shares. Believe the decline is correctionary in nature. As r,1entioned in our letter of October 15th, sone upside reSistance was to be expected at around 185 but viould not expect any decline to -reach 181-180. Friday's low was 181.55. Some further irregularity may be met on Saturday after the President's speech, but would expect strong resiLtance above the September highs of 180-179. Would use further wealmess to add to holdings. A number of issues, during the strength of the past week, reached tlleir near term hesitation points mentioned in our letter of October 8th. For exanple, International Paper at its high of 59 3/8 reached the anticipated 59-61 level and Youngstorm Sheet & Tube at the high of 83 reache'! the 80-83 level. Texas Pacific Coal & Oil has sh01'm exceptional strenbth and has pushed above the anticipated 38-40 level. It, closed at a neVi high of 42 3/8 in Friday's weak market. Continue to expect, after sone possible further irregularity, an atter,lpt to penetrate the July highs in both averages. Would expect the carrythrough to reach the 190-194 level in the industrial averages. Would use current \'eakness to purchase recomraended issues in the industrig,l list. /From a percen tage point of view, the rails could show !5reater appreciution over the near term thn the industrials. Would not be surprised if the rail average would penetrate the July highs before the industrialSIn addition to thefour rails previously mntioned, Vlould add Alleghany Corpora ion, pfd. to the list. Friday's close Vias 41 1/2. The stock recently penetnted the 35-39 trading' area to reach 43 3/4. The February hibh was 44. Penetration to /,5 would indicate the possibility of a quick runup to 54-56. There should be strong downside support at 40-39. EDMUND W. TABELL October 24, 1947 SHIELDS & COMPANY Closings Don-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock 182.53 49.46 65.0; no opinions Gxproned in this letter are the penon.1 interpretation of cham by Mr. Edmund W. rebell and are not prosented as the opinions of Shield, & Company.

Technical Market Action A number of coopanies whose stocks are on our recommended list have recently reported earng6 for the nine months ending September 30th. These earnings are listed below together with the projection for the full year. This projection was arrived at b.Y the rather unscientific method of simply using the rate of earnings for the first three quarters for the last quarter. Admittedly; due to seasonal facirs-,' ,'this may result in some di-silortiori,s. btlll'the figures are interesting. Nine MonthsEarnings Projection Full 1'1!;7 Last Barnsdall 011 Colorado Fuel Doehler Jarvis Eagle Pichex F.lintkote General Cable Illinois Central Interlake Iron Mullins Mfg. National Supply Revere Copper Sharon Steel Union Bag & Paper Union Carbide Union Pacific Westinghouse Air Brake Worthington Pump , 2.82 1.13 a 5.66 3.52 4.91 2.09 7.39 b 1.77 6.57 4.67 4.91 7.71 6.91 5.7B 14.1B 3.08 13.84 3.76 4.52 7.52 4.68 6.56 2.76 11.04 '2.36 8.76 6.20 6.52 10.28 9.20 7.92 18.88 4.09 18.44 33 17 381/4 24 36 3/4 12 3/4 28 14 1/8 257/8 22 21 3/4 38 3') 1/2 106 47 371/2 62 a. Quarter ending September 30th. b. 8 mos. ending August Jlst. r All of these issues have favorable technical patterns and indicate subs- tantially higher levels. With price to earnings rtios of from approximately 13 to 1 for a growth investment issue like Union Carbide to ratios of 3 or 4 to 1 for more speculative issues, there seems to be ample room for price enhancement even though earnings may ease off somewhat over the next year. In fact, what is needed is not an increase in earnings but a change in a public psychology that is valuing earnings at a fantastically low ratio. A aluation of ten times earnings would result, in many instances, in a doubling of present prices even though earnings declined 25. All of these issues appear to be prooising vehicles for further price advancement. .' In checking over our list of recommended, issues, we have noted a number of issues that have been rather laggard and backward. Although these issues have potentially favorable patterns, it lvould appear that ,it would be advantageous to . , .switch into issues with a more promising immediate technical picture. American Metal was recommended for purchase in the 26-23 buying range. Tuesday's close was 29. Advise switching into Celotex Corporation which closed at 2B 1/2. Earnings for the nine months ending June 30th were 4.76 a common share and the stock has built up a favorable technical picture with a long potential base area in the 32-20 area. An upside penetrntion would indicate substantially higher levels. Celotex Corporation is a new addition to our list. Crane & Company was recommended for purchase in the 35-30 range and closed at 36 1/4 on Tuesday. Howe Sound was recommended for purchase at 36. Tuesday's close was 36 1/2. Believe both of thesissues can be advantageously switched into International Minerals & Chemical. This stock, which closed at 33 1/2 is already part of our recommended list. The pattern is favorable and the recent penetration of its long rading range indicates the possibilit,r of a more immediate move than in the two issues above. Electric Autolite, recommended in 54-55 r\an' ge, closed at 55 3/4 on Tuesd Libbey-Owens-Ford Glass, recommended in the 50-47 re, closed at 54 1/2 on Tuesday Both have been rather laggard and suggest switching into Worthington Pump. As noted above, earninss on this issue are at the rate of over lB a share and at Tuesday's closing of 62, the issue seems reasonably priced. October 28, 1947 EDMUND w. TABELL SHIELDS & COMPANY \ The opinions ezpreS6d in this letter are tbe peuonal interpretation of cham by Mr. Edmund W. labell end are not presented as the opinions of Shields& Company. r,

Technical Market Action Predictions of a falling off in business at some time in the not far distllt future continue to f.lske headline news. True, these dire predictions have been prevalent since VJ Day when government economists predicted vast unemployment early 1946 Qnd the President advocated a higher wage scale and a holding cr reduction in prices to maintc.in tho purchasing power of the nation. Subsequent events haVe proven the fallacy of that prediction. However, since that time, propheSies of deflation, then inflation, then deflation, then inflation have followed each other in rapid succession. True, the date of the business recession has been advanced from early 1946 to the fallof 1946 to the early part of 1947 to the latter part of 1947. So far, these fears have been unfounded. While individual industries have been going through a period of reaujustment end lower earnings, an equal or greater number have shown record earnings. National incof.le is at a high level and more people are em- ployed iliBn at any time in our country I s history. Cor.unodiWprices have failed to follow the exact pattern of World War I and are still at or near peak lev01s. SOf.le of the early prophets of eloom have reversed their predictions and expect a cate.strophe boom. The date for the recession has now been advanced to sometime in 1948, with after the mid-year being the I11ajority opinion. The writer of this letter does not pretend to be an econoist. Any opinions expressed have been based entirely on the technical action of the market and the supply and demand patterns of the nveages and of individual issues. This 18ter turned berish on the market in mid-1946 when the 199 level in the Dow-Jones in- dustrial average was penetrted. Since Septeber 1946, we hve indicated that the 170-160 o.rea of the same avcrabe was a long term buyinG area. Since that time,6vents have strengthened our conVictions. For the past Y0ur, the avrages have built up, in the approximately 160-187 area, a strong potential base area that indicates, together with other po.tterns, an eventual upside penetration of this base area followed successive rises to 210-215 followed by en eventual 275-350 in the Dow- Jones industrial avero.ge. Obviously, this pattern will require considerable time before its ultimate consummo.tion and will be interrupted sho.rp o.nd deep tecnnical corrections. It will be extremely selective with present indications favoring the heavy goods industries over the soft goods industries. Also, obviously, the ulti- I!l8.te objective of 275-350 is a wide tar(;et and will be subject to further refinement as the pattern develops. , In a nutshell, the market, to us, appears to be on the verge of an im- portent rise with selecivity of prime importrulce. IndiyiduJ.l stocks are in one of three positions 1. They indicate higher prices. 2. They indico.te a fl1rther period of backing and fillin before a rise is indicated, and, 3, they indicate lower prices. In our opinion,the vast majority of individual issues are in the first two categories. The number of issues in the third classification is small. An attempt to guess the allocations would be 50 in the first category, 40 in the second category and 10 the third category. Obvioilsly, the selection and timing of purche.ses will meen the difference between large bains and small profits. How does this technical pattern jibe with the predictions of a receSSion in 1948 This question is of particular importance at the moment. The writer con- cedes that an increasing number of astute, sound, conservative and able economists and counselors have predicted a decline of varyin depths at some time in 1948. Can this technical pattern still hold true io the face of such convincing opinions to the contrary I believe it can. I believe that it is possible that the prEdictions of these able gentlemen could, to a certain extent, be correct and also that the market can move higher. I base my opinions on the fact that, at present prices, the market has failed, by a wide margin, to even start to discount the presEIIlt earnings. Even earnings 25 below the present rate, would, if valued at past ratiOS, result in a price. level at least 50 higher than present prices. For the last seventeen months, the market has moved contrary to the trwil of business and earnings. If on May 29th ,1946, when the averages hit their high of 213, one could have visualized the tremendous increase in earnings for the year of 1947, it would have certainly seEmed the logical thing to'buy rather then sell. Yet, marketWise, it would have been the wrong thing to do. Five months later, the murket was selling 52 points belovl the high of 1946. Prognostications of a moderate decline in profits may be correct, but a market that has failed by a wide marGin to discount the present earninGS could very well continue to move against the trend and worklharply higher. What of course is needed is a definite chanr;e in public psychology. It makes quite a difference, marketwise, if earnings are valued at a ratio of 5 times or 15 times. On 5 it means a difference between 25 or 75. Without attempting to assign a reason but speaking purely from a technical viewpoint,believe the market indicates substantially higher levels over the longer term. Continue to advocate the purchase of recommended issues during periods of minor price adjustment. EDMUND W. TABELL 19416 .. . oplnlOS expressed In this letter ar. the pe'onal SHIELDS & COMPANY inte,pretdtion 01 cherts by r. Edmund W. Tabel! end lilt. not presented as the opinions of Shields & Company.

Technical Market Action Today's letter is navoted to the technical action of the averages from early 1946 to date. Our discussion – for the sake of brevity – will be confined to the Dow-Jones industrial aver!.,e since it is the most universally known. The industrial average, during the first half-of 1946, was in a distributione phase and was building up a heavy top pattrn. The hit',h of 213 Vias reached in late May. The warning that the heavy volume in a relatively narrow range was distribution, was given in early July 1946 when the industrial average penetrated the important 200 resistanCe level 011 the downside. At this stage, this letter turned bearish. This \laming sienal was later confirmed in September, 1946, when market gave its famous bear market Dow Theor.y signal at 185. By combinin,i the various downside count indications of the three point, one point and half point fluctuations of the industrial average during the January to July distributional phase, the 170-160 area was arrived at as the indicated downside objective for the decline. 'This is the area which, for the past year or more we have conSistently ad- vi SEd as a longer term buying range. Since Septembr 1946, the market has dipped down into the 170-160 area on several occasions. Thus, the downside implications of the broad 1946 distribution he.vc, been reached. The actual 10Vis Vlere reached at 160.49 in October 1946 and 161.38 in May 1947. On three occasions thc, market has rallied back to the approximate Dow Th80ry bear market signal at 185. The February high was 184.96, the July high VIUS 187., and the October hif!h was 186.2.3. )'The industrial averag, as a result of the swings of the past year, has built up a twenty-five point trading range between, roughly, 185 and 160. The same pattern is present in the other market averages. Is this trading rtmge a period of accumulation or distribution The pattern is a broad one and a Sizeable move is indicated whe.'1 the range is decisivc,ly penetrated. An upside penetration would indica 210-215. A downside penetration would indicate somewhere around 145. The answer will not be given until the runge is penetrated in one direction or the other, eithor at 185-187 or at 160. This letter, has taken the stand, d continues to do so, that the eventual penetration will be on the upside. It believes that waiting for the averages to give a Dow Theory signal will result in losin, if present count indications are correct, at least half the nove. That is why stocks have been recommended for purchase in the 170-160 area rather than waiting for a bull market signal. If such a Signal is awai ted, it could result in such a buyinG Vls.ve that purchases could take place in the 190-195 one rather than the 185-187 zone, just as the DoVi Theory bear market signal r8sulted in such a selling wave that sales were closer to the 180-175 level thrul , Our' main reason for anticipating an upside penetration .is based on the alLlOi of indivicual stocks. Just as the averages built up distributional areas in the half of 1946, so did individual stocks. Just as the averaGes reached their downside objectives, so have the vast majority of indiVidual common stock issues. I would, vnture the opinion that 90 of individual common stocks have reached the objectives outlined by their 1946 distributional areas. The remaininc few are, at their lows, very close to the objectives outlined. The third feature of the technical action of the averages, and this is the Lportant point, does not hold true in individu21 stocks. The third fes.ture is that the averages have built up a long trading range that has not yet been penetrated either upside or dovmside. This is not true of individual issues. Here the patterns' are exceudingly diverse. Some stocks reached their 10Vis in October 1946, while others broke sharply below October lows and reached their,lows in May. A much smaller number hav. made their lows in the past few weeks. tso, some issues have built up substantial base areas, in 11 great mnny cases indicating relatively higher levels than a comparable 210-215 in averages. Others have built up only relatively small range and are in need of considerably lnore backing and filling before an important move is indicated. Still others have formed little or no range areas and require conSiderably more time before a move is indicated. Also, a great many individunl issues have reached their dovmside objectives, formed substantial base areas and heve penetrated them on the upside thus indicating individual bull markets of their own. These issues, on the base count indications, still have considerably hiGher price objectives. Individual issues with this pattern include such important stocks as American Sneltin, Chrysler, Deere & Company, Gulf Oil, Standard Oil of New Jersey, Union Earbide, Union PaCific and Youngstown Sheet & Tube, to mention only a few. On the other hand, I cannot recall, offhand, one single issue that has reached its.dovmside objective as outlined by the 1946 tops, then formed a wide trading range and then penetrated the range on the downside to indicate that the range was distribution rather than accumulation. This type of action on individual issues hardly indicates, at this stage, an e.rea of distribution and lOVier prices. It rather indicates (1) higher prices and (2) extreme selectivity. EDMUND W. TABELL November 5, 1947 T. Mr. op;.;o ..p…..d ;n Edmund W. label! end tM. arlit lett a the not presented as'l'ltlJ1.en\o.p.ii;nlti;orn'ws .Oetfl'Slfja1YJJu1q/s,o1fJ'eooamrpt.&nbyy. 'z-

Technical Market Action , The arket continues to act in accorance with normal technical procedure. This letter has ceen expecting strong resistance to the decline at slihUy above the September highs of 180-179. The current correction reached a 10\7 of 179.93 on Thursday, October 30th and rallied be,ck to 183.57 on Wednesday, NoveJ11bcr 5th. The dip of the plst fev; days has been on sharply reduced volutle crlQ succeeded in reaching a low of only 180.61. Atility to penetrate h.st we8k's hibh of 183.57 vlOuld be cmstruotive and indicate a nearby testing of the July highs. Mon;ay's market was encouraging, particularly in individual issues. This action, coupled with the ability to hold abo the Octocer 30th 10\7, strengthens our correction that the next move will be toward hiGher levels and a nearby penetration of the 1947 hiehs. However, in this tlarket one can be correct in diar.nosing the moves of the averages but still realize only mediocre price appreciation unless the right stocks are selected. Seldom has such extreme selectivity been witnessed. As mentioned in a recent 18tter, the technical patterns of individual issues show extreosly diverse patterns. A ;;rGat many issues, probably 50, have built up tremendous base patterns and h!ive either broken out of thse ranges on the upside or seem on the verge of so doing. iillother group, possibly 40 of the market, requires sor.te further backin,; t'nd filling cefors the pattern is ,complete and the nnge penetrated on the upside. A third group, probably less than 10, have formed little or no hase patterns and still indicate lower levels. We have tried,in our recom!Jended list of issues, to select the stocks in the first group. The tlajority of recommendations have recently reached new high territory. A fevi h&ve betn disappointing hut the list has been above averag-e. Three issues, Phelps Dodge, Rayonier nnd Sharon Steel, reached or bettered the year's hibhs. list. For purchase at this point, suggest the following from our recommended Alleghany, pfd. Atlas Corporation Celotex Colorndo Fuel General Cable Cities Ser,!ice Chrysler Doehler Jarvis Sharon Steel Youni.istovm Sheet & Tube Ohio Oil Wheeline Steel U.S. & Foreibn Securities Worthington Pump November 10, 1947 EDMUND W. TABELL SHIELDS & COMPANY Closings Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock 182.21 47.59 64.25 Th. opinions expressed in this letter are the personal interpretation of charts by Mr. Edmund W. labell and .r. not presented a. the opinions of Shields & Company.