Tabell’s Market Letter – January 28, 1949

TABELL'S MARKET LETTER 35 WAll STREET, NEW YORK 5, N. Y. Olgby 4-4'4' It becomes rather boring, both to the writer and reader, to con- tinually discuss the meaningless Tluctuations of the market in a narrow trading range. The industrial average has held for nineteen trading days in in the an e 178-182 qually n a range. rrow ra For nge b the pre etween c1e7d4ingandtw1e7n8t12 -, s ix days During the market held these tedious tV/o months of sidewise movement, individual stocks have moved up and down without having any noticeable effect on the general market. There is heavy nearby reSistance on both sides of the market and the stalemate may continue for some time longer. However, I still be- lieve that the market lows for the year will be made in the first three months. In fact, it is entirely possible that the low was reached on the first trading day of the year, January 3rd, when the iQdustrial average reached an intra-day low of 174.37. In fact, ever since late August, 1946 the market has been in a stalemate. Ho Jo Nelson in his The Trader column in the January 24th, 1949 issue of Barron's, states the situation very nicely. He says – Not in over 50 years has the industrial-share index had for two consecutive years such narrow fluctuations percentage- wise as in 1947 and 1948. Additionally and significantly, the price range since prior to Labor Day, 1946, has been percentagewise the'smallest on record. Since August 27, 1946, the industrial average has fluctuated between 193 and 163 – 30 pOints, or 15 in 29 months. Nearest approach was in the 25-month'period between October 14, 1922, and November 10, 1924, when the average moved between 103 and 86 – a 17-point, or 16, range. Sequel to the long compression of 1922-1924 was the famous bull market of the 'twenties'. The stock market is not always rushing up hill and dOl'ln. There have been instances before of long, Sidewise movements. In no other similar period, however, have owners of stocks been so well compensated in the form of high yields. In a true bear market, bonds or cash can be proved superior media to stocks, but such has not been the case for the past few years. Therefore, patience, the rarest of market virtues, is still in order. In the meantime, 'individual issues continue to build up favor- able technical patterns. The issues listed below have been covered in previous letters or will be covered shortly. I believe these issues all offer better than average appreCiation prospects over the inter- mediate term. Thumb nail sketches are available on those issues market with an asterisk. American Home Prod. ,Avco Burlington Mills Cities Service -lfCooper Bessemer Denver & Rio Grande Eastern Airlines Electric Pr & Lt Firestone Tire Firth Carpet Flintkote Fruehauf Trailer Hewitt Robins Holland Furnace Inter.Min. & Chern. January 28, 1949 ClOSing 1/28/4 261/ 6 7/8 18 1/8 43 1/2 27. 1/2 25'3/4 15 22 1/8 48 5/8 17 1/2 25 7/8 19 3/4 21 22 1/2 26 5/8 Joy Manufacturing Lowenstein Paraffine Co Penn-Dixie-Cement Pressed Steel Car Radio Corp st. Regis Paper Schenley Sears Roebuck Sharron Steel Shell Union Oil Sperry Corp Standard Steel Spring Sylvania Electric White Sewing Machine ClOSing 1/28/49 3B 22 5/8 18 1/4 18 3/4 7 1/4 12 3/4 8 1/2 27 1/2 37 3/4 36 1/4 35 I 26 3/4 15 3/8 21 5/8 20 1/4 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN 4