TABEll'S MARKET lETTER 3S WALL STREET, NEW YORK 5, N. y, Digby 4-4141 The market concinues in a correctionary phase of the twenty-two point advance from the June lows. At the moment, tecqnical evidence pOints to the prot ability that the correctionary phase will be more in the nature of a consolidation than a reaction. I would expect any decline to reach its low not much below the 175-174 area. Obviously, this slight downtrend will be interrupted by occasional rallies. However, it would be better technical action if most of the work were concentrated in the lower area of the contemplated 183-174 trading range rather thar. around the top. The latter action might possibly build up a broader distrLbution area and indicate a decline of greater magnitude than now indl.caed. While the minor and near terla trend indicators show signs of doubtful or unfavorable act 1.0,-. the longer term'studies show no signs of deterioration. If the advice of the past few weeks has been followed, stocks in unfavorable groups have been liquidated in the 180-183 area and issues wjth favorable long term action have been retained. Would do no new buying until either a signal of the end of the correctionary phase is given or until the industrial average declines below 175. The following are in my recommended list and are attractive on prIce setbacks Better Grade Issues Stock Last Price A4l-ressogl aplr-lV'rlii-tigraph 33 5/8 Allis Chalmers 28 3/4 America Cyanamid 44 1/2 American Horne Products 27 '7/8 Amer-ican-geat-ing….. 35 3/8 ,A.t;.ctr1SOil,l'op-&. 88 3/4 Borg \arner 48 1/4 C.I.T.Financial 55 1/4 Commercial Credit 53 7/8 Endicott-Johnson 31 1/2 F'ederat!d Dept.Stores 29 General Time 21 1/2 Hewitt-Robins 14 3/8 Intertype 26 3/4 .J.ohns-Manv4-l-1e- 39 7/8 Kresge 41 1/4 Phelps Dodge 41 5/8 Shell Union Oil 36 3/4 Sperry-C0I'P,——-257i8- tahdard Steel Spring 15 Stock Speculative Issues Last Price American Airlines American Pr & Lt Avco Bro,ok-ln-)Jj'd;on-e-as Budd CompaflY Carrier Corp C1t-ies-Serv-ic-e Combustion Engineering Continental Baking Denver & Rio Grande Distillers Seagram Eastern Airlines r-ITl0-Gentr Inter. Min.& Chern. Lowenstein McKesson , Robbins lI!iagara Rudsor. Penn-DIxie-Cement Pressed Steel Car Radio Corporation Reynolds Metals st. Regis Paper Schenley Shamrock Oil C, Gas .,-st-ann'aPEi-Gas–4-p,f,!Q. Studebaker Sunshine Mining United Mer & Mfgrs We stern-P-ae-i-f-'i-c- 9 3/8 12 1/8 5 1/8 33 51'; 97P 14 1/2 1/2 15 23 16 14 5/8 26 1/2 28 1/2 24 36 7/8 13 21 5 1/2 11 lilt 20 6 3/lt 28 1/8 27 1/4 30 7/8 22 3/8 9 1/lt 12 1/8 26 lilt September 2, 1949 EDMUND W. TABELL WALSTON, HOFFl'LN &, GOODW I; T This memorandum Is not to be construed as an offer or solicitation of offers to buy Of sell any securities. From time fo time Walston, Hoffman & Goodwin may have an Interest In some or all of the securities mentioned herein. The foregoino material hal been prepared by us as a matter of Information only. It Is baled upon Informahon believed reliable but not neceuarlly complete, Is not guaranteed lIS accurate or final, and is not intended to foreclose Independent Inquiry. — t-

TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N. Y. Digby 4141 The industrial average has again entered the overhead resistance at 180-183. Thursday's high was 181.30 as compared with the August 18th high of 182.67, which was an intra-day high for the year. The inability of the rails to gain ground is an unfavorable near term factor. Thursday's 'high of 46.28 was below the August 18th high of 4'( .64 which, in turn, was below the August 10th high of 47.88. While the industrial average was able to reach the 1949 high in 'August , the rail average at its August high was more than seve pOints below the January high of 54.93 .. Over the longer term, this action may be of no great importance. But until the rails consolidate further and form stronger base patterns, it may hold down the general market. If the advice of the past few weeks has been followed, stocks in unfavorable groups have been liquidated in the 180-183 area and issues with favorable long term action have been retained. Would do no new buying until either a signal of the end of the correctionary pase is given or until 'the industrial average declines below 175. Would advise taking trading profits on the following issues in my recommended list. BETTER GRADE ISSUES Last Price Addressograph Multigraph Atchison,Topeka & S.F. Johns Manville 35 89 3/8 40 1/4 Originally Recommended 31 83 1/4 36-34 Cities Service Illinois Central Western Pacific SPECULA'rIVE ISSUES Last Price 52 1/8 26 5/8 27 1/4 Originally Recommended 40 24 1/2 20 1/4 September 9, 1949 EDMUND W. TABELL WALSTo', HOFFMAN & GOODWIN this memorandum Is not to be construed as en offef or solicitation of offers to buy or sell en\, securities. From time to time Walston, Hoffman & Goodwin mey have an Interest In lome or all of the securities mentioned herein. The foregoing material has een prepared by IlS as a metter of Information only It Is bosed upon Information believed reliable but not neceuatllv complete, Is not guaranteed illS accurate or final, and II not Intended to foreclose Independent Inquiry.

TABELL'S MARKET LETTER 35 WALL STREET. NEW YORK 5. N. Y. Digby 4-4141 , On sharply increased volume the market reached new high territory during the past week. The industrials reached a high of 184.09 and the utilities were at a t)P of 38.11. On the other hand, the rail avenage, as has been true in the recent past,failed to confirm the strength in the other two averages. At the week's high of 47.58, the rail average was still below the August 10th high of 47.88. At the moment the market is a a very interesting point .. A line connecting the 1929 high of 386.10 in the Dow-Jones indus- trial average, and the 1948 high of 213.36, would be penetrated if the industrial average reached approximately 186. The figure varies slightly depending on whether 2 daily average or a weekly or monthly average is used. Also, a line drawn from the 1946 high through the 1948 high of 194.49 Ilas been slightly penetrated, or just about reached, depending again on whether a daily, weekly, or monthly chart is used. It is my oinion that both of these lines will be penetrated on the upside in the not too far distant future. Such a penetration would ind.catE the start of a broad upswing out of the accumUlation perioc of the last three years. However, I rather doubt that this acton will occur immediately. Temporarily, the market has become overbought and is in need of further correction or consolidation before an important upswing can be built on top of an already sharp intermediate upswing from the June lows. From a timing viewpoint, would expect the market to reach its 101 point some time in the next thirty days. This low may be at as high a level as 181-178, or as lOR as 175-171. In either case, I believe the low point should mark the beginning of a nore dynamic phase of the upswing initiated in June. We have advised taking some profits in the 180-183 area. Such profit taking was advt.sed in se',eral issues last week. Another is added in this letter Last Price Origlnally Recommended Standard Gas & El.4 pfd 24 5/8 This stock indicates higher levels over the longer term, but for the moment has reached its nearer term objective. September 16, 1949 EDMUND vi. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not to be constrlled as an offer or sollcJtatlon of offers to buy or sell any securities. From time to time Walston, Hoffman & Goodwin may hne an Interest In some or all of the securltles mentioned herein. The fOTetdoln9 material hal been preplued by us al a matter of Information only. It Is basad upon Information believed relil!ble but not neeess,ully complete, Is not gUl!ranteed liS aceurilte ot final, and Is not Intended to foreclose Independent InquIry.

TABELL'S MARKET LETTER The technical action of the past week has been mosDt igbeyn4c-41o41uraging. The decline of Monday and Tuesday brought both the short term and intermediate term gauges to a point that has corrected the overbought condition first registered in late August. On Wednesday, the short term gauge gave a buy signal. On Friday, the intermediate term gauge was very close to signalling a buy indication and confirming the shorter term gauge. The longer term gauge was strengthened by the fact that the industrial average, at the week's low of 177.63, had made a near testing of the two hundred day moving average at 175.25. The rails also are showing better action. At Friday's high of 47.93, the rail average fractionally bettered the August 10th high of 47.88. The rail average, however, is still considerably below the January high of 54.93 and the larch high of 49.86'. Ability of the market to give further constructive signals would not necessarily indicate that the market is on the verge of another important upmove of equal scope to the June-August rise. The inference to be drawn from the recent favorable action is that the market appears to be much less vulnerable to a severe decline than at any time within the recent past. Some more time may be required for some individual issues, to complete their potentially bullish formations, but there are many individual issues that have built up sufficiently constructive patterns to indicate a further rise with only normal corrective reactions. Such issues will be added to our list in followin6 letters and wires. I would switch out of the following issues in our recommended list Last Price.. Originally Reeoinmended American 'Seating Brooklyn Union Gas Sperry Corp 41 3/8 33 1/2 25 1/4 27 26 1/2 26 For repurchase advise the following issues in the recommended list Better Grade Issues Last Price Allis Chalmers American Cyanamid 30 3/8 46 3/4 Amer. Home Prod. 27 1/2 Borg Warner 46 1/2 C. 1.T. Finane ial Commercial Credit 54 3/8 53 3/4 Endicott Johnson 31 3/4 Federated Dept.Stores 30 General Time 20 1/8 Hewitt Robins 14 5/8 Intertype 28 1/2 Kresge 41 1/8 Phelps Dodge 42 1/4 Shell Union Oil 36 3/8 Stand.Steel Spring 16 1/8 Speculative Issues Last Price American Airlines 9 378 Amer.Power & Lt 12 1/8 Avco ' 5 1/2 Budd Company 11 Carrier Corp 14 3/4 Combustion Eng. 25 1/2 Continental Baking 15 1/2 Denver & Rio Grande 24 7/8 Distillers Seagram 16 1/2 Eastern Airlines 14 1/4 Inter.Min & Chern 30 1/8 Lowenstein 24 3/4 McKesson & Robbins 38 3/4 Niagara Hudson 13 1/2 Penn-Dixie Cement 22 1/8 Pressed Steel Car 6 Radio Corp 11 3/4 Reynolds Metals 19 3/4 St. Regis Paper 7 1/2 Schenley 29 Shamrock Oil & Gas 27 3/8 Studebaker 22 5/8 Sunshine Mining 11 1/8 United Mer.& Mfgrs 12 7/8 EDMUND w. TABELL SKil1fn'fl1all, n6r,b. JoghlJ III an offer or solicitation of offers to buLPl&JlrItlHOE 3m tUiLl'It,n' Goodwin may have an Interest In some or all of the securltlos mentioned harein. The foreqolng material ha5 been prepard by U5 as ,!' matter of 'nformatio,n only. It Is baed . IslIpon Information believed reliable but not necessarily complete, is not guaranteed as accurate or final -an, , t Intended to foreclose Independent Inqui ry.

TABELL'S MARKET LETTER 35 WALL STREET, NEW YORK 5, N, y, Digby 4141 The old adage of so close to the trees that you can't see the forest quite often applies to market conunent. At times we become so engrossed in the steel strike or devaluation and Whether the market will move up or down three or four pOints that we forget the important long term picture. The market has been in an extremely narrow trading range for three years. At no time during that period has the market moved more than 10 up or down from a median of 177 in the Dow-Jones industrial average. The only comparable trading was in 1923-1924 when the market backed and filled within 10 of 95 for seventeen months. The sequel was the great bull market of 1924-1929 when the industrial average reached a high of 381.44 in September, 1929. I believe that the thirty-six month trading range between 160 and 194 is an area of accumUlation that will eventually be penetrated on the upside and will result in price levels considerably above the 1946 top of 213.36 in the industrial average. I believe that the three year range is a period of accumulation with stocks passing from weak holders to stronger hands because the whole period has been marked by ,a feeling of pessimism and gloom that has only been equalled at the bottoms of great bear markets of the past. Distribution of securities usually takes place in a period of optimism with low yields, heavy public interest and high valuation of assets and earnings. The direct opposite is true today. It is possible today to buy conunon stocks at a level that will obtain over 2t times as much dividend income as from an equivalent investment in high grade bonds. This is regardless of the fact that most stocks are earning dividends more than twice over. The only other times this has happened has been during such periods as 1932 and 1942 at the bottom of the depression and at the bottom of our war fortunes. Furthermore, the market has failed to reflect the changing value of the dollar and the great rise in the current replacement value of plant and equipment or the millio'ns of dollars of new equipment. Many dividend paying stocks are selling at less than net current assets,placing no value on the physical plant. The abnormal short interest is another indication of the recent pessimism. The short interest in July was equal to 2.40 days of average trading. This was the highest ratio since 1931. On September 15th it was still equal to 2.31 days trading. However, in the face of all the investor fears of the past three years there has not been enough liquidation to drive prices below the narrow trading shelf. In the face of the long awaited decline in business, the market again held at the 160 level in June. This was substantially above the low of 150 based on the previous individual lows of the stocks in the industrial average. It would seem that the fears obsessing in- vestors for the last three years have lost their potency and the June low of 160.62 may be the starting point of an advance that will carry consider- ably above the 1946 high of 213.36. In view of these bullish potentials it would seem that only the short term trader is justified in waiting for a lower price level at which to accumulate holdings. There is a tremendous amount of investment money now held in cash or bonds awaiting investment in the final stages of the business readjustment. There have been four opportunities in the past three years to buy stocks in the lower part of my oft-mentioned 160-170 long term buying level. With the large amount of investment money awaiting such a decline, it seems improbable that the opportunity will occur again. A more likely probability is that the ultimate realization that the market has already largely discounted any further business readjustment will result in an important upswing as sideline investors come into the market. This buying urge will be augmented by the large short interest Some further consolidation of the rise from the June lows may be needed before the advance is resumed but, for the long term investor, stocks are at a long term bargain level. September 30, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ( 1 This memorandum Is not to be construed liS an offer or solicitation of offers to buy or iell any securities. From time to time Waldon Hof!men & Goodwin may hove u infeferll some or all of the securltles mentioned horeln. The for0901ng material hlls been prepared by us as a matter of Information only, It is baled upon Information belJeved reliable but not ncceuarily complete, is not guaranteed a5 accurate or fina', and is not intended to forecloe independent Inquiry. )