Tabell’s Market Letter – September 22, 1948

Technical Market Action The rail average has, as yet, failed to break the August low of 58.24 and thereby confirm the secondary downtrend signal given by the industrials. Similar divergence in the past has often signalled a reversal in trend. Another favorable portent, is the fact that the industrial average, at Tuesday's low of 176.94, had only fractionally penetrated the August low of 177.40. Firmness on Tuesday and Wednesday brought the averages further away from the lows. The industrials closed at 179.16, up 55 and the rails were 58i higher at 59.78. It is too soon to be certain, but the action of Tuesday and Wednesday so far favors the constructive side. As mentioned before, a downside penetration would indicate, at the worst, a continuation of the secondary downtrend to '176-171 in the industrials and possibly 56-53 in the rails. While the b'etter than market action of the rails has been quite evident, another group, the steels, have also shown excellent resistance on the decline. An average of the five leading steels reached a low of only 50.06 in September, against a low of 49.6 in August. This isoted in the tabulation below. August Low September Low 1948 High Dow-Jones Industrials 5 Steels U.S. Steel Bethlehem Steel Republic Steel Jones & Laughlin Youngstown Sheet & Tube 179.16 52.0 79 1/4 35 3/4 29 5/8 35 1/4 80 1/2 177 .40 49.6 75 1/4 34 26 5/8 33 3/8 76 3/4 176.94 50.6 77 1/4 34 7.,/8 28 1/8 33 5/8 79 1-9-4.49 83 1/2 38 3j431 7/8 37 – 87 1 2 The following steels are in my recommended list. They are Armco (28 1/8), Byers,A.M. (20 3/4), Colorado Fuel (18 7/8),Copper- weld (18), Eastern Stainless (15 3/4), Inland (44), Jones & Laughlin (35 1/4), Sharon Steel (38), Wheeling (49), Youngstown Sheet (80). Due to its improved technical pattern would also add U.S. Steel (79t) to the list. Any weakness in the general market should be used to add to holdings. EDMUND W. TABELL September 22, 1948 SHIELDS & COMPANY The opinion, ellipressed in .hlli laHer ere the personal interpretations of charis by Mr. Edmund W. Tabel! lind ere not presented liS the opinions of Shield. & Company. o