Tabell’s Market Letter – June 07, 1948

Technical Market Action There is quite a bit of nervousness about and quite a bit of bearishnes. The reason for the current uncertainty appears to be founded on the fact that the market has made little or no headway since the sharp run-up of mid-May when the industrial average confirmed the previous bull msrket signal of the rail average. Since May 15th, a mstter of seventeen trading days, the industrial average has held in a narrow line formation with a high of 192.31 and a low of 187.46 I continue to believe that this area is a consolidation area rather than distribution. Individual issues and the averages have not built up top patterns. In fact, while the general market has been consolidating, numerous individual issues have continued to advance. Even in the event of a temporary downside penetration of the range, I doubt if any reaction would carry below the 187-185 support area. On the upside I believe the next upward phase will carry above my original prediction of 195-200 for the first upward swing. This objective was based on the thought that the first advancing phase would carry to that level in a short period .of time and that, technically, the market would need a broad corrective reaction. I now believe that the consolidation of the past seventeen days has cancelled the necessity of a correction at this time, particularly as the msrket did not become heavily over bought by a quick runup to 195-200. After some possible further irre- gularity, I expect a continuation of the rise to above the 200 level, with chances favoring-about 205 before a real correction takes place. It must not be forgotten that we are in a major uptrend with considerably higher prices indicated over the longer term. Obviously, such an advance will not bein a straight line. It never has been. The msrket will have periods of consolidation and correction. These periods should be welcomed as opportunities to add to holdings. At some pOint there will be a worthwhile correction of the advance. However, in my opinion, it will come from a higher level of prices than that obtaining at the moment. Our recommended list of issues continues to show better than msrket action. A number, however, have had pretty good technical corrections from their recent highs. I am listing some of these below. I believe they can be purchased around present levels. Recent High Last Sale Atlas Corp Baltimore & Ohio Bigelow Sanford . Byers (A.M.) Carrier Corp Consol.Rwys of Cuba,pfd Deere & Co Foster Wheeler General Rwy Signal Gimbel Bros Gulf,Mobile & Ohio Illinois Central Kansas City Southern Phelps Dodge Rheem Mfg Schenley Dist United Merchants & Mfgrs U.S.Plywood Wheeling Steel Worthington Pump 25 1/8 16 1/2 37 1/4 25 3/4 19 3/4 27 3/4 46 1/8 38 1/2 29 25 19 1/4 39 7/8 43 1/2 57 5/S 24 1/2 35 5/S 21 1/2 37 3/IS 50 7 S 25 5/S 23 14 1/4 33 23 1/8 17 1/4 24 1/4 41 35 26 3/S 21 5/S 17 36 3S 1/2 52 5/S 22 5/S 31 1/2 19 1/4 34S5 31//S4 22 112 June 7, 1945 EDMUND W. TABELL SHIELDS & COMPANY The opinions expressed in rhls letter lira lhe personal interpretation of charts by Mr. Edmund W. Tabel! and are not presented as the opinions of Shields a. Company, ,-