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, ,Wolston.Hoffmon& Goodwin, NEW YORK 5, N, Y 35 Wall Street DIGBY 44141 PHILADELPHIA 2, PA 1420 Walnut Street PENNYPACKER 55'77 TABEll'S MARKET lETTER LOS ANGELES 13, CALIF 550 South Spring Street MADISON 93232 SAN FRANCISCO 4, CALIF 265 Montgomery Street SUTTER 1-2700 The market moved in a'wide 'range during'the past week. From a high of 236.06 'on Monday, the industrial average aeclined to 223.82 on Wednesday and subsequently retraced about half of the decline to reach a high of 230.42 on Friday. The market has been swinging back and forth in a wide range for ovr ,'two months. Since October 1st, the market has had ten moves up or down of five pOints or more. At this week's low of 223.82, the industrial average . had almost retuned to the August high of 222.17. It is tt,(Se nervous rapid moves that l-;-'c caused me to be extremely cautious in recent letters. Since mid-Septembel' the market has been ;-.ing 'ing back and forth in a range bounded by the Novemter 26th high of 23 .63 and the November 6th low of 220.59 on the industrial average. On several composite averages, particularly on the New York Times 50-Stock Combined , ,average, the market has made a triple top at the highs of 157 reached twice in October and on November 24th. As a result, a very sizeable potential top has been formed. From a technical point of view, a downside penetration of the 147 low of November would indicate the possibility of a decline to 137 followed by 124. Translated into terms of the Dow-Jones industrials, the first figure would mean about 210-205 and the second about 195-190. The graphs of individual issues seem to indicate that the first figure is the more probable in the event of a downside penetration. The graph patterns of individual issues show quite diverse patterns. Quite a number of issues show vulnerable patterns similar to that of the averages. Other issues show only minor tops and even in the event of a general market depline should meet support not much below present levels. There are many issues of this type that we are still retaining in our recommended list published in last week's letter. Examples are National Supply, Bullard, Fruehauf, Lowenstein, Fansteel,and some of the airline issues. Most of these stocks have had only moderate advances. Other issues have had sharp advances and have reached their upside objectives. We have advised profit taking in these issues in our recommended list. Examples are General Motors at 54 and Standard Oil of New Jersey at 90. There are other issues that have advanced sharply but have not yet reached their objectives. These issues are still retained. For example, Reynolds Metals recommended at 22 and again'2t 33 reached a new high of 42 3/4 on Friday. However, it has not yet reaeLed its ultimate objective. Some consolidation may be needed in issues of this type before the advance is resumed. There is no change in the general advice of this letter. Would con- tinue to be 60 liquid in intermediate term trading accounts and 25 liquid in investment accounts. Would make no new purchases except for very short term trading purposes until the market declines or the pattern clarifies. In last week's letter we listed the better grade and medium grade issues in our recommended holdings. We did not have room to list the speculative group. This group is listed below. The figure in parenthesis is the originally re,commended level. The other. figure is Friday's close. SPECULATIVE GRADE American Air (9 3/4) ll, American Air,pfd.(68) 72, Amer.xport Line (23) 17, Amer.& Fgn Power,2nd pfd.(14) 15 3/4, pcan fWeoleng 33 1/8, BGnu\-1-um7(-) 29L Braniff Air 8) 10 3/8,-Btldd-G-G'- (9) 15, Capital Air (9 3/4) 9 7/8, Central Fdry. (lO2'l 7 7/8, Gfticagcr;- Ind& i 14 7/8Deny 16 1/8, .- las cic StoJ Nut (9 1/8) . 10L ande 2 Eversharp ( ) 10 464 3/ , 8 ) Eastern Air.(15 3/ 14, Goodall-San- 8 ford (14) 16 3/4, GruJ Mfg. ( 10-9) 10, G-1rl.-f,MeM-l 111 /iH 19 3/8, Long Bell Lumber A (27) 24, National Air.(8) 11, Northwest Air.(12 3/) 10 3/4, , Pan-Amer.(9 3/4)8 7/8,'R-K-0 (7) 7 3/4) Reynolds Metals (22-33) 42, L s- Servel (13) 8 3/4, Spiegel (9-11) 11, Sunshine Mining (10 Stores,2nd 1/8) 10 pfd.(lO 1/8 3/4) T1W0A, (17) 18, Western AiUrn.i(t8ed) Air.(14 10 3/8, 3W/4y) an18'ot7te/8,(1U4)ni1te3d. December 1, 1950 Closing Averages Dow-Jones Industrials Dow-Jones Rails 228.89 69.82 EDMUND W. TABELL WALSTON,HOFFMAN & GOODWIN Thi, memorandum Is not to b. (ostrnd a. en off., or .ollcltatlon of offers to buy or seU any secutltl. From lim. to time Waldon, Hoffmu 3 Goodwin may hue an Intarut In some or all of the lecurltio. mntioned herein. The lorego1n9 material hal been prepared by UI as a matter of information only. It is ba58d UDon information believed rellabl. but not necessarily complete, II not 9uarante.d 115 IIccurate or final. and II not Intended to lorecl08 independent Inquiry.