Technical Market Action For seventeen months – since September 1946 – the general market averages have held in an extremely narruw trading rnnge. The length and narrowness of the range is unusual and, in my opinion, very significlnt. In the past twenty-five , years there have been only thrse occasions in which the market held in a comparable narrow range for a comparable period of time. On each of these occasions, the long trading range was eventually followed by a sustained price rise. In fact, tte three bull markets follovung these thrpe previous narrow trading rp.nges were the three most important bull markets of the pnst twenty-five years – namely 1925-1929, 1935-1939 and 1942-1946. It might be interesting to compare the present trading range with the three previous trading ranges. In terms of the New York Times 50-Combined Stocks average, the present range has been twenty points – between 125 and 105 – for a period of secventeen months. After re'ching a high of 93.06 in October 1922, the New York Times average reacted shrply in November 1922 to 80 and closed the year at 86.53. For the entire year of 1923, the averago held in a fifteen-point range between 92.52 high and 77.15 low and closed the year at 84.15, a,loss of two points from the previous year. This action was very similar to the action of the same average in 1947, a twenty-point ranee and a clOSing that was practically unchnged from the previous year. This narrow range perSisted for the first six months of 1924, for a trading range of sixteen points over a period of twenty-two months, and in July, 1924, the market started on an advance that eventually turned out to be the biggest bull market in history. By October of 1929, the New York Times average had reached 311.90. In July 1933, the New York Ties average reached a high of 98.05. This was followed by a sharp decline to 73 in October 1933. The market remtined in this approximate twenty-five point tradinil range for the balence of 1933, el of 1934 and the first six months of 1935 or a totl of 23 months. This range was penetrated on the upside in July 1935 and the ensuing upswing carried to highs of 144.44 in November 1936 and 142.93 in March 1937. This 1933-1935 trading range bears some striking resemblances to the present period. The double bottoms of October 1933 and August 1934 are Similar to the October 1946 and May 1947 lows. Also, a later decline in March 1935 held seven points above the previous low just as the recent reaction also held seven points above the May 1947 low. Also, the year 1934 compares with 1947 as a year of a narrow price swings and a practically unchanged clOSing. It is also interesting to note that both the 1922-1924 and 1933-1935 tmding ranges Vlere at relatively hiGh levels compared with the lows of previous years. The 1922-1924 rane-e of 93-77 compares with a low of 58.35 in 1921. The 19.3.3-19.35 range of 98-73 compares with a 1932 low of .33.98. This seems to refute the current bear argument that a bull market never starts from a relatively high level such as prevails today. The 1940-1941 trading range is different than the two previous patterns because world-Shaking events caused a temporary do.side penetration before the ultimate advance started. After reaching a high of 114.27 at the strt of the war in September 1939, the market held in a very narrow range all through the sitzkrieg period. The fall of France caused a sharp reaction to a low of 82.32 in May 1940. J. subsequent rally to 96.60 occurred in October 1940. For the balance of 1940 and until November 1941, or 0. total of seventeen !lonths, the market held in this fourteen point range. Then, starting in December 1941, c. series of unfavorable war developments, including Pearl Harbor, the fall of the Philippines, the invasion of the Dutch East Indies and the fall of Singapore, caused a downside penetrution that ended five months later at 64.1.3. From thr.t level, the market started a four-year advanc to a high of 148.50 in the New York Times average in May 1946. ' I t is the opinion of this letter th.t the trading runge of the past seventeen months is also a prelude to a similar importnt major upswing in prices and that the first four months of 1948 will be the last buying opportunity before the rise. It is possible that the low of the year may have already been reached in January at 112 on the New York Times average and 170.70 on the Dow-Jones industriale or it may be necessary to again enter the lower part of the trading rnnge before the major uptrend starts. In either event, the present period of irregularity presents an opportunity for a careful review of your securities. Individual stocks show quite diverse patterns and even in a major advance, many issues will show only relatively minor price appreciation when compared with others;/, I o.m in the process of preparing an analysis of a selected list of issues with outstanding technical patterns and favorable fundamental backgrounds. The list includes semi-investment stocks as well as growth and speculative issues, These stocks should show much greater percentage eppreciation in a najor upswing than the genere.l average. The analysis is too lengthy to include in this letter, but it will be forwarded to you when completed, upon written request to the writer of this letter. EDMUND VI. TABELL February 2,'1948 SHIELDS & COMPANY 'he personal Interpretation of charls by not presented as the opinieM of Shields & Company.

Technical Market Action cooditysharp decline in prices unsettled the stock market on Wednesday ane the industrial average closed 3.00 lower 't 170.95 nnd the rail averac was off l. 33 at 49.';37. At the Qr-y's low of 170.41, the industrial average had fractionally penetre.ted the Janur,ry 26th low of 170.70. The ra,ils, on the other hand, at 49.66, held frctionally' above their coparr.ble January 22nd low of 49.40, Volutle increased moderately to 1,200,000 shr.res. In last week's letter, we mentioned thr-t the technical patterns of a grElat many cOr.lmodities had certain characteristics of a brod distributional are, particulrly in M Wheat and May Cotton, nnd thet there Viere ilJplictions of a possible sharp break in conmodity futures. Wedesday's decline was quite severe with heat futures off the lii t of 10 cents no Corn down the 8 cents limit. illay Cotton was donn 131 points at the 10vA..,but rallied at the close Dnd Vies dorm 65 to 60 points on the day. The Dow-Jones'f-'0mr.lOdity Futures indEX ViaS down 4.32 at 160'.72. The !lore importRnt commodity futures have now penetrated the recent trading areas on the donside indicating that these areas are distribution tops and that lower prices in conodities are in prospect The long term implications of a sharp break in commodities, particularly in the food group, are bullish on stock prices. Food prices are out of line on the upside in the genEral economic picture – just as stock prices appear to be out of line on the downside. Of course, drastic breaks in cOfiodities are at first bound to cause some nervousness and uncertainty in the stock market but that will gradually turn to realiZation of the bullish effect of such a decline. The pattern of the stock market is, in my opinion, the reverse of the commodity pattern. COr.lmodities have had a sharp rise over the past year and built up a large distributional area ct the tops. The stock market had a 53 point decline sev8nteen months ago and since that tie has held in relatively narrow treding range near the bottom. Just as the commodity pattern turned out to be a distributonal top, believe the seve.nteen-month tre.Cing range in the stock market averages will turn out to be a long accur.lulation bottom. Of course, more time may be spent in the area and prices nay dip into the lower part of the 187-161 range into our oft-mentioned 170-160 buying area. Such a decline would enlarge the already broad potential base area. The most favorable technical action would be continued weakness and irregulari ty into early next week. That vlOuld not only broaden the base but would bring prices into the indicated 171-167 and 49-48 decline objectives mentioned in our letters of two or three weeks ago. Last week's lows of 170.70 and 49.40 were just at the top of these 10Vis and a futther dip seems inc.icated. last week's technical rally carried back to only the indicated 176-175 reSistance area. It would lso bring not only our short term Inarket gauges into an oversold position, but also the intermediate d longer term gauges. Such action could indicate the,end of the tiring accumu- lation area and a start of the maj or upswing. EDMUND Ii. TABELL February 4, 1948 SHIELDS & COMPANY The opinions expressed in this letter are Ihe personal interpret.tion of charts by Mr. Edmund W. Tallell and are not presented as the opinions of Sht.lds & Company. ;p

Technical Market Actio The cOlmodi ty mrcrkets were Vleak again on Friday with both Vlheat and Corn selling off the linits of 10 cents and 8 cents respectively for the third success- ive day. May 'iheat at Friday's close of 2.56 3/8 a bushel has dropped 40 cents from the high of 3.06 while May Corn has fz11en 47 cent.s from (;2.70 to 2.23 5/8. The distributionBl patterns mentioned in our letter of January 29th outline an ultimate objective of approximately 2.00 for Hheat and 1.50 for Corn. It would seem reasonable to assume that such a decline 'would be punctuated by technical I cooditis,rallies. believe the decline in particularly the food groups, is of long term bullish significance as far as the stock rrket js concerne. The stock market was, of course, nervous and uncertain on the first day of the cOrUno- di ty decline, but even now the effect s,ms to be 1I'el',rine off. On l!ednescay, with riheat and Corn off the limit, the industrials declined 3.00 QIl1 the r'ils 1.33 wi th 888 issues showing declines and 76 adve,nces. On Thursde,y, with both l'1'heat and Corn off the limit, the industrials declined 1.77 and the rails 52 cents with 723 liIssues declining and 130 advancing. On Friday, with \'ihe;at and Corn agdn off the limit, the industrials were off 37 cents and the rails closed 16 cents hiGher while 389 issues declined and 379 c,dvanced. Volume has been relatively smell on decline with 1,200,000 shares trGcled on both liednesclay and Thursday p.nd 920,000 shares on Friday. At Friday's low of 167.95 on the industrials and Thursday's low of 48.92 on the rails, both averages had reached the downside objectives for the decline mentioned in our letter of January 21st. This descent in the inGustrials into our oft-mentioned 170-160 buying area marks the twelfth time that this hp.s occurred in the last seventeen months. If this 170-160 turns out to be an accumulation area, as Vie believe it is, this last entry has length&ned the base by 35-40 points. The previous pattern indicated a potential 210-215 if the July hih of 187 was penetrated upside. The present po ten tiel upside objective on a penetration of 187 Vlould be about 250./ ),'hile both averages have ree.cheu their approximate downside objectives, the market has not yet signalled an oversold condition on some of the moving average 'indicators. However, the short term indicator is very close to giving such a signal. An unch.nged market or a sliGht rally vlOuld give such a signal in the next two trading hours. The longer term indicators require a little more time but they are very close to no imporknt intermediate term turn. Subject to some furthr irregularity, the stck narkt, from a technical vievoint, indicates the possibility of an inportant nearby reversal. The analysis mentioned in our letter of Februry 2nd is in the process of preparation and should be ready early next week. It will consist of an nndysis of issues with favorable technical patterns. Due. to its length, it will not be inCluded in thls letter but can be obtained by written request to the I1ri ter of this letter. EDMUND Ii. TABELL February 6, 1948 SHIELDS & COMPANY The opinions expressed in this lelt'eT ere Ilte pet.onel Interpl'fJlelion of chart. by Mr. Edmund W. Tlibell end are no' presented as the opmionl of Shlekb & Company.

Technical Market Action . Weakness in commodities on Tuesday again overflowed into the stock market and the entire list sold down shurply on increased volume. The industrial avrage reached an intra-day low of 165.26 and closed at 165.65, off t4.17 on the day. The rails were also weak and reached an intra-day low of 48.04 and closed C-2..00 lower at 48.1). beat, Corn ru1d Oats all closed down the limit nd Cotton, which has I.hitherto held up relatively better than grains, also sold off the liit of 200 points. any of the minor commodities were also off ,the lilJit or down sharply. he break in commodit,y prices is an extremely' constructive happening for the stock market. It l'Iill result in a more healthy and sust.ined prosperity. . Almost every beurish potentiality and cause of uncertainty was tied up with the high price of foods. Now that it is correcting itself, the stock market should soon reflect the removal of this fear potential. The situation today is quite different from thrt of 1920-1921 in several r8spects. For inst3nce, in the 1920-1921 period, steel and industrial products \ere selling at ouch hifher loveJ.s than today, levels that were practically the equival,mt of tod.y' s gray markEt prices. Agricultural commodity prices have far outpaced the rise in industrial prices to date. The current drop in agricultural prices is briilging the pattern back into line with the general economy. In 1920-1921, we had to fill a backlog created by 18 months of war as against four years of World War II, debt increased 25 billion after the first war as against 200 billion now, indiViduals hold over 100 billion in bonds, savings, and other liquid assets as ag&inst only a fraction of that amount in the earlier period. With the nervousness, fear and uncertainty caused by the sharp sudden drop in cor.unodi ties, it is difficult to state the approximate figure at which the decline shaule halt. It was my expectation that the 171-167 area was the probable downside objective. Prices broke below this area on Tuesday. The rails, so far, have held in the 48-49 donside objective. The short term buy signal of Saturday, resulted in no re.lly of consequence. The longer term moving avrage indicptors hav' not yet given an oversold signal but could give such a signal shortly. bat is possibly needed at this juncture is a selling cliax with late tape and volume of 1,500,000 to 2,000,000. Shar6s. A check on the patterns of individual issues shows that vie ure nearing B major buyint; point. Subj ect to the usual rlavc of selling that usually indicates an important low, I am definitely ond decidedly bullish on the outlook for stock prices over the intermediate and longer ter!l. Viould take advantag' of present' price weakness to buy recommended issues and switch out of those whieh will show only minor price apprecia tior! in the next upswing. My analysis of issues with faeorable techncal patterns which was oentioned in recent letters is completed and is now in the mail. . February 10, 1948 EDMUND Vi. TABELL SHIELDS & COMPANY Closings Dow-Jones Industrials 165.65 Dow-Jones Rails Dow-Jones 65-Stock 48.13 59.89 The oJlinions expres.d In this letter are the penonel interpretation of cherts by Mr. Edmund W. Tabel! end &fa not presented as tho opiniON of Shields Company .—- — .

Technical Market Action STOCKS WITH FAVORABLETCHNICAL PATTERNS It is my opinion that the stock market is in a long period of accumul.tion, and that the trading range of the last seventeen months is, in technical language, ‘e. base formation prior to an important upside move. ile that is the pattern of the various markt averages, the patterns of individual stocks are quite diversified with some stocks having cocpleted their accumulation periods and seemingly ready to ‘move ahead hile other stocks have incomplete or relatively unfavorable patterns and have little appeal to the investor or speculator. Thus, it would appear that selection will be of price importance over te period of the next two years. With this idea in mind, I have checked the technical patterns of more than 1200 listed issues and eliminated every issue that did not meet the following requirements. (1) A broad potential base pattern that suggested a possibility of 50 appreciation for better grade or medium grade issues and 75 to 100 for the more speculative stocks. (2) A pattern that suggested that at present levels,prices were at or near an important buying point. It was my original intention to select thirty or so stocks, including in the group some investment issues, medium grade stccks, speculative stocks and very speculative stocks. After checking over my technical patterns, however, I soon dis- covered that I had embarrassment of riches. There were some 250 issues that met the requirements noted above. To select thirty issues out of such a large group was difficult, so ! tried to make the task Simpler qy eliminating the investment and very speculative groups and concentrting on medium grade end speculative issues. Below are the thirty-one issues finally selected, together with a brief analysis of each. There are seventeen medium grade issues and fourteen speculative stocks. These issuel have technical patterns that suggest.a possibility of substantial price appreCiation over the longer term. It is possible that they may spend some more time in the present broad trading ranges and purchases should be made during periods of irregula- rity sUch as the present. , While these thirty-one issues are the final recommendations out of more than 250 candidates, I question the ability of anyone person to select the thi!ty outstanding issues from such a basic group. For that renson,I am also adGing some statistics on the eliminated issues at theend of-thisltter. 17 RECOMMENDED .MEDIUlA GRADE ISSUES ADDRrJSSOGRAPH-MULTIGRAPH 1947-8 Approx 1947 Range Price Div. 1947 Earnings l’h. 2.35 7.8 Company manufactures machines for addressing,mailing,office printing and dupl.cating from type and accessories such as type, plates and cabinet drawers. CapHalization consists of 4.38 million in funded debt and approximately 754,000 sharBs of common. The technical pattern is favorable with a substantial long j;erm head and shoulders formation. The stock is at a strong support level and a penetration of the 1946-1947 highs would indicate an ultimate price objective in the 50-70 level.. BIGEloOi’I-SANFORD CARPET CO ……’ 1R9a4n6ge 1947-8 Approx 1947 1947 Range Price Div. Yield Earnings 8Jt – 53 66 – 461 56 4.00 7.1 OO. oV . I b loLl Company is a leading manufacturer of carpets and rugs. Long term eDt is apprOximately 5 millions followed a smsll issue of preferred and 309,109 shares of common. Outlook for the industry is good due to long deferred demand. Technical pattErn is attractive and stock is at good support level in 56-54 area. BORG WARNER CORPORATION 1946 Range 1947-8 Approx 1947 1947 Range Price Div. . Yield Earnings Company is 613/4 – 36 55-375/8 46 I engaged in manufacture of automoYt;Lv2-e 2.05 parts, 4.4 -8.50-E- ( . ‘StI’f’ household products)!i specialty steels and parts for agricultural machinery and industrial power trans- mission. Output is diversified and new products have been added. Company recently paid ’75 cents quarterly and at indicated rate of 3.00, yield is 6.5. Excellent technical pattern. Stock is at,strong support level of 46-44 and potential base pattern indicates new high levels. Capitalization consists of 192,100 shares of 3! preferred and 2,336,740 shares common. Tht oplntON expressed In thts letter .,. the personal intel’JH’atatlon of charts by Mr. W. Tebell .nd ere not presented as the opinions of Shields & Company. \. Technical Market Action .IxlEHLER.-JJ.RVIS CORP. 1946 Range 1947-8 Approx. 1947 Range Price Div 377/8-23)’4 39t-283/4 30 1.62i 1947 Earnings 5.4 J7….9G’ -E- castJg pro5cfThe company is a merger of Doehler Die and Vi. B. Jarvis die castings for automobile and consumer durables markets and chrome plated automo- bile parts, plumbing accessories, refrigerator, hardware, etc. Technical pattern is excellent and at present levels stock’is near 1947 low. Potential base pattern suggests possibility of ultimate 50-60. Stock reached high above 1946 in past year. , Capitalization consists solely of 1,042,644 common shares. FLINTKOTE COMPANY 1946 Range 1947-8 Range Approx. 1947 1947 Price Div Yield Earnings 46 7/8 – 25t 3-24 ‘/8 ‘ 1. 50 4.5 Products consist mainly of roofings,’shingles and related lines. A-ls6”OOn-E’ fnctures protective coatings, paperboard, tile products and road construction prod- ucts. Large backlog indicates sustained earnings. Recently pai 50 cent dividend indicating a possible 2.00 rate and 6 return. Technical pattern is good and potential base indicates a possible 60. Capitalization consists of 98,000 shares of 4.00 preferred and 1,183,921 common. HEWITT-ROBINS, INC. 1946 Range 1947-8 Range Approx. Price 1947 1947 Div. Yield Earnings 39 -22 29 -20 22; 1. 00 4.5 -4-.-5e-E Company produces mechanical rubber product;-‘ onveYing machinery, coe and power transmission belting, various types of hoses. Also has entered sponge rubber field with Restfoom. Demand for products should continue strong, with possi- bility of added earnings from Restfoam division. Capitalization is small with slightly over 2 millions in debt and 278,714 shnres of common. Upside’penetration of long 29-20 trading rll.llge would indicate substantio.lly higher levels. INDUSTRIAL RAYON CORP. 194 1947-8 Approx. 1947 1947 –!!R!Qanngg!’!.e—!Ran!!!!lg;e—‘!P!riigc!’!.e–Div. Yield Earnings 52 – 32)’4 50 – 35t 42 2.50′ 5.9 -877Jr Mll.llufactures rayon yarn by Viscose process. 3’1 Slightly more thll.ll half a’b business is production of high tenaCity yarn for use as tire yarn. Stock is selling high in relation to pre-vlar levels but industry h,s shov.n great growth Il.lld costs have been reduced. Capitalization consists solely of 1,518,650 shares of common. Technical’ pattern is good. Stock recently penetrated trading range on upside and has reacted back ito range on recent markt irregularity. INTERNATIONAL MINERt.LS & CHEMICAL 1946 Range 1947-8 Range Approx. Price 1947 1947 Div. Yield Earnings 45 -27 2U6 i 6.1 it4.35 Company and its subsidiaries are principally engaged in production of potash, phosphate rock, superphosphate and complete and mixed fertilizers. Also has line of industrial chemicals and food products. f,ith resumption of exports, high demand and new lines, earnings Should continue to rise. Stock has extremely long potential bas, area with range. an indication of large percentage appreciation on u, pside penetration of MESTA MACHINE 1946 Range 1947-8 Range Approx. Price 1947 1947 fuM Earnings 6lt -397/8 47t – 357/8 38 2.50 . 6.6 45’fOO-E’ Company manufactures steel mill eqUipment Z1 end equipment used in oth3e.r0m-etal industries. Requirements of steel industry as well as foreign business Should be substantial. Low for last ten years in stock has been 24. Technical pattern attractive with long trading range i ;4-47 area. Capitaliza.tion is simple with slightly less than one million shares of common outstanding. . -2- The opinions upreued in this letter are the personal tnterprelation of ch.rts by Mr. dfttund W. Tabelt and arG not presented as the crpinions of Shields & Company. Technical Market Action MONTGOMERY H.IJ\D & CO. 1946 Range 1947-8 fumge Approx. 1947 Price Div. 1947 Earnings Enrnings of this 104 – ni’ 645/8 – 49 second largest mail orGer h5’0o\1nu1C’1sI3e 3.00 appears 6.0 to have -8,EKl-B- rcvrefd ) the downtrend in evidence since last quarter of 1946. Substandard merchandise ac- quired’ during war appears to have ben largely clecred out and buying policies have been conservative. Stock is selling at practically the low of last tilree years. Technical pattern potentially favorable and stock appears oversold. NEW YORK AIR BRAKE CO. 1946 fumge 1947-8 Range Approx. 1947 1947 Price Div. Yield F.arnings 69- – 3 4 – 321/8 36 3.50 9.8 -5…Ge-E- Company manufactures air brakes for railway cars and locomotives anhl developed with VJestinghouse Air Brake under cross-licensing agreement a new type of air brake which has been ordered to be by A.R.A. as standard equipment on all freight cars for inter-railroad transportation. Demand for air brakes by railroads should be strong for several years. Capitalization consists solely of 259,120 shares of common. A long potential acclliulation area has been built up in the issue over the past seventeen months and substantially higher levels would be indicated on an upside penetration. PHELPS DODGE CORP. 1946 Range 1947-8 Range Approx. 1947 1947 Price Div. Yield Earnings 48 – 293/4 48 .14- 361/4 4 4.20 10.0 e-E’ Corporation is third .1argest copper com’panyI.\f\he country. All bu ery small fraction of production is in United States. Produtive capacity has been subs- tantially increased through development of MorenCi ope pit mine. Reserves are large. Technical pattern best in copper group with ultimate possible price IE-vel of 75 or better indicated. Capitalization consists solely of slightly over five million shares of coon. SHARON STEEL CORP. 1946 , Rc.11ge – —1947-8 Approx. nirige –Price. 1947 Div. -Y-. ield 403/8-231/4405/8-24.14 32 2.00 6.1 10.89 , ‘JO Company procuces pig iron and a diversified line of steel products used by automobile, food packing, cheJlical, oil refini.ne, shippnlZ, household appliances and office furniture industries. All of these indu8’tries have good prospects. Company is in process of expansion and improvement program. Capitalizetion consists of 4 million in long term notes vnd 617,242 shares of common. Technical pattrn is good and stock is a.t strong support level. Upside penetration of 1946-47 highs would in- dicate possibili of ultimate 60-70 price level. SOUTHERN PACIFIC CO. 1946 fumge 1947-8 Range Approx. 1947 1947 Price Div. Yield Earnings 51 – 34 471 4’IL 4.00 8.5 This principal Pacific Coast railroad has not only sharply rEduced its funded debt and fixed charges in the last seven yars but it has also greatly in- creased its oash and working capita.l. Recent freight rate increase will add to earnings. Stock seems undervalued on technical baSiS, with a strong potential base pattern. Strong support level in 46-43 area. Stock recently made new high for 1947- 1946 period and present d appears to be excellent opportuni to purchase issue. SQUARE D COMPANY 1946 Range 1947-8 Renge Approx. 1947 1947 Price Div. Yield Earnings 25 1/8 -15 J/8 185/8 -1314 16 \no 1.30 8.1 3OO-E2.01 CI Company makes vt’.rious electriC devices and supplies including sVritclies, l..I panelboards, fuse cabinets, starters and molded insulation. Company has also strengthened its position in aircraft flight instrument field. Has been going through expansion progra.a. Capi tr.lization consists of 1,377,480 shares of com.’lon. Stock has been in narrow trading range of 18-14 seventeen months. Upside penetrt’.tion would be excellent technical signal and indicate possibility of strong upward move. -3- The opinions expressed ‘n this letter ere the personal interpretation of chart, by , Mr, Edmund W, r.bell .nd ar. not presented as the opinions of Shield. l Company.

Technical Market Action Ever since the narket break of alr.lost a year and a half ago, this letter has consistently stressed two points. The first point was that the 160-170 level of. the Dow-Jones industrial average was a long tern buying range and that the base forDed in that area would ultinately be the foundation for a new bull Jlarket. The 160-170 area was reached at least a dozen ti!'ies with low levels of 160.49 in October, 1946, and 161.38 in May 1947 and 164.07 last week. The second point was that the market leaders of the neVi advance would not be the sensational clovers of the 1942-1946 advance, such DS the moving picture issnes, departJlent stores, liquors and other luxury iteo issues, but that the nelV leaders would be found in the groups that were comparative laggards in the 1942-1946 advance. This letter favored such groups as the steels, agricultural implenents, nachinc conpanies, oils, building stocks, chenicals, etc. We further stressed this selectivity by Jlentioning that even in the same groups, some stocks had attractive teclmical patterns while others in the same group had relatively unfavorable patterns. For example, we have mentioned, on occasion, that Phelps Dodge appeared more attractive than Anaconda, that Illinois Central appeared more attractive than Pennsylvania or New York Central. 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 reconirnnded list with prices at the lows of May 19th, the day the average reached 161.38, conpHed Y/ith Wednesday's close with the averages at 168.04. The second OT.J right hand column is composed of issues that had relatively unfavorable patterns. LoY/ iay 19th Barnsdall Oil 21 1/8 E. W. Bliss 18 1/2 Borg Warner 37 5/8 Chrysler 45 7/8 Cities Service 25 3/8 Electric Pro & Lt. 11 1/4 Flintkote 24 General Cable 8 Illinois Central 18 1/8 Inter.Minerals 22 1/4 Joy Manufacturing 28 1/8 Mullins Mfg. 14 3/4 National Supply 12 5/8 Rayonier 17 3/8 Sharon Steel 243/4 Texas Pac.Coal 25 1/2 Union Bug 25 1/2 Union PacifiC 122 Wheeling Steel 31 Youngstown S & T 54 Wednesday's Close 33 1/4 25 46 55 7/8 32 1/2 14 5/8 33 3/4 9 7/8 28 1/2 24 3/8 33 1/4 20 7/8 20 21. 31 1/2 40 3/4 28 3/4 156 39 1/8 68 Low Ma;y 12th Air Reduct.ion 29 7/8 American Can 86 3/4 A..ler. Telephone 159 5/8 Bridgeport Brass 13 Cerro de Pasco 30 ConsoL Edison 25 Continental Can 35 Corning Glass 34 3/4 Decca Reords 15 3/8 Ever sharp 12 5/8 Gt.Western Sugar 22 1/8 Inter .Nickel 29 1/2 Lanbert 28 1/4 LoeY/'s 20 Nopco Chemical 42 1/2 NorY/ich Pharo 13 Oppenheim Collins 20 Parar.ount 22 3/4 Pennsylvania R.R. 17 7/8 20th-Cent-Fox 26 3/4 Wednesday I Close 23 3/8 77 3/4 149 7/8 10 23 3/4 22 33 18 1/2 11 8 5/8 20 7/8 26 23 3/8 161/2 331/2 12 1/8 22 3/8 18 5/8 17 1/8 19 3/4 The stocks in the first column show, in most instances, a fair gain at today's prices. On the other hand,some stocks in thE second column, with the averages almost eight paints higher, shaY/ substantial losses. After the present accumulation period is completed, believe the ensuing advance will be selective. While a great !lany issues have completed their base patterns and indicate substantial upt.rends, other issues are in the early stages of accumulat.ion and require a long period of backing and filling before a worthVlhile move is indicated. At this stage of the market, a great deal can be lost by holding on to laggard issues in the vain hope that they will join the advance momenta- rily. EDMUND j. TIIBELL February 18, 1948 SHIELDS & COMPANY Closings Dow-Jones Industrials Dow-Jones Rails Dow-Jones 65-Stock 168.04 48.80 60.70 The opinions expressed in this leHer are the personal interpretation of charta by Mr. Edmund W. label! and are not presented as 'he opinions of Shields l Company.

Technical Market Action /rn tho lc.st seventeen months, on three widely separate,d occasi.ons, the industrials have declined to an area bounded roughly by 160-165 in the Dow-Jones industrial average. In October 1946 the average rGcched a low of 160.49. Seven months later, in l'nay 1947, the average reached a low of 161.38. Nine months later, on february 10th, 1948, the average reached a low of 164.07. A comparison of the ' action of the market during the declining periods of April-May 1947 and January- February 1948 brinBs out 501e interesting points. Volume Vias lovler in the j/948 decline than in 1947. The number of new lows reached during the declininfhase in 1947 Vias much greater than those reached in the recent decline. The number of daily declines in the 1947 period was much greater than in the recent 1948 dip. On the other hand, the number of the daily advances in the face of a falling market has been larger in the recent period than in 1947. These signs indicate thd the narket is losing momenturl on the downside and thct the long trading range of the past seventeen months is an accumulation phase to be follov/ed eventually by sharply high6r prices. Frum the shorter term point of View, it is rathGr difficult to gauge the minor moves. The tops built up in the July-October area indicated a decline to the broad 171-163 area if 175 was penetrated. Our approximation of the declinEl ob,jective was 171-167 which proved to be a little high. However, the market has a sold ut appearance at the moment as eVidenced by the fact that the intermediate tarm moving average gauge gave an Gversold buy siQrral on Tuesday. Ability of the averages to penetrate the FebrullIJ 17th highs of 169.23 and 49.37 would confirm this indication. The rails, of course, are in a class by themselves. Their action in the face of the decline in the industrjals has been most impressive. RGcoended rail issues such as Illinois Central, Southern Pacific, Kansas City Southern, Gulf,Mobile & Ohio, Seaboard Air Line and Chice.go NorthVlest should be included in every portfolio. February 24, 1948 EDMUND \i. TABELL SHIELDS U COMPMY ylosini!s DOVl-Jones Industrials Dow-J ones Rails Dow-Jones 65-Stock 167.80 48.92 60.62 .. rho opinions expreued 'n .flis fetter are tfI& personal fnterpretatfon of cherts by Mr. Edmund w. rbe and are not presented as the opinions of Shields & Company. J.

Technical Market Action This letter has quite often drawn attention to the diverse technical patterns not only between different groups but also between individual issues within the same group. For example, in the past, we have drawn attention to the more favorable technical pattern of Phelps Dodge in comparison with that of Anaconda and of Illinois Central in comparison with Pennsylvania and New York Central. With the release of the 1947 earnings statement of Westinghouse Electric Corporation, showing earnings of 3.58 per share, it might be interesting to compare its technical pattern with that of General Electric. Westinghouse Electric was split four for one in 1945 so all prices mentioned are on the basis of the new stock. General Electric reached a high of 52 in early 1946 while Westinghouse's high for that year was 39 3/4. Both issues 9uilt up sizeable potential distributional patterns in the frst six months of 1946. At the October 1946 lows, when the DOVi-Jones industrial average reached 160.49, General Electric reached a low of 33 1/2 and Westinghouse reached a low of 21 1/8. On the subsequent rally to the February 1947 highs, General Electric's high was 39 7/8 and Westinghouse rallied to 28 5/8. On the decline to the May 1947 lows of 161.38 in the averages, General Electric declined to a new low at 32 while Westinghouse held at 22 1/2, as compared with the previous low of 21 1/8. This relatively more favorable technical action of Westinghouse over General Electric continued on the rally to the July 1947 highs when General Electric, at a high of 39, failed to reach its previous February high of 39 7/8 while Westinghouse penetrated the previous 28 518 high to reach 31. Again, on the recent decline, General ElectriC, at 32 1/8, came within an eighth of a point of its previous low,while Westinghouse held at 25 1/8 as compared with the May low of 22 1/2. This relatively more favorable technical action of Westinghouse over General Electric is not new. General Electric reached a high of 64 7/8 in 1937 but in 1946, with the industrial average at 213 compared with 198 in 1937, it could only reach 52. Westinghouse, on the other hand, at its 1946 high of 39 3/4, came much closer to the 1937 high of 41 7/8. On the downSide, General Electrc at its 1942 low of 21 1/2, sold below the previous 1938-1940 low of 26 1/4 while Westinghouse, a 15 3/4 in 1942, held at its previous 10Vi. The above facts, taken together with present patterns of both stocks, indicates, in opinion, that from a strictly technical viewpoint, Westinghouse Electric at Thursday's closing price of 26 1/4, has more attraction than General Electric at 32 7/8. The market turned down again on Thursday and lost all of the previous day's gains. Volume was small however, and at 620,000 shares was even less than the 710,000 shares traded on Wednesday's advance. A few issues were able to move against the trend and the market continues to have a more or less sold out appearance. However, nothing is indicated until both averages are able to decisively penetrate the recent range. On the upside these points are 169.23 and 49.37 and on the downside,164.07 and 47.48. Thursday's closings were Industrials 167.52, Rails 48.75. EDMUND W. TABELL February 26, 1948 SHIELDS & COMPANY The opinions oxPrOJied In thb leiter aro Iha personal interpretation of cherts by Mr. Edn'lt.lnd W. Tllbell and IIro not presented as the opinions of Shield, & Company. – —