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f-' ,-,'1 -I,';J;'-',; ,'-!'–,; Walston.Hoffman c,. Goodwin ' , –,-;—'– c,– -''-r- 1'11 ff /' ,-, ! cy;4mned U/eoe i ,- '1' '-, NEW YORK 5, N, Y PHILADELPHIA 2. PA LOS ANGELES 13. CALlF SAN FRANCISCO 4. CALIf, ';- ! ''-, 1- I 35 Wall Street r DIGBY 44104' ,Z–z, 1420 Walnut Street PENNYPACKER 55977 550 South Spring Street MADISON '31)2 265 Montgomery Street SUTTER 12700 ,.! 1l'! 'Ii./..-, \ TABELL'S MARKET LETTER k ;I – '.-, ,. I n,,-,1 , .;. r ;.,;ol Nervousness over MacArthur's ouster and a fear of a nearby end Z f'to hostilities brought selling into the market early Wednesday and the in- , cdustrial average reacted to a low of 247.70 and the rails to 80.99. The , ;. market steadied after the first hour selling. At the lows, the uptrend ;; tfrom the March bottoms of 242.06 and 78.65 still remained intact. As the tweek wore on, fears of peace appeared to dissipate and, aided by short i covering, the market rallied moderately on Thursday and sharply on Friday i! ';; to attain highs of 255.31 and 83.63. ;';;;, ;'f. At Friday's highs, the industrial average was less than two poin(iS (', away from the February high while the rails were more than seven pOints be— ( low the comparable top. Considering that the industrial average sells fOUIL t; times ,higher than the rails, and moves over ,a much wider range in terms of 'I;, ;,-,- points; this is a considerable divergence. It would appear that the indus –' trial average has enough momentum to test and possibly carry above the !c' 'February highs to reach 260-265. However, it appears doubtful at the mo- –, '-ment that the rail average will be able to penetrate the February high of ;c-; 90.82. ;- .- It still appears to me that, from a teqhnical viewpoint, we are –, ; -in a broad distribution area that may cQntinue to form for some further ; cc time. In some respects the pattern is 31-ping up somewhat like the 1946 ,- – '-, top. It will be recalled that the industrial average reached a high of – . around 207 in February and the rails 68. A sharp sell-off followed. The '-' industrial average rallied to a new high at 213 in late May but the rail '-average could do no better than reach its former high of 68. This was -'c followed by some further distribution at slightly lower levels and the .,.-September break. .' .'' The action of the market must be watched closely on the preseilt L– ',– rally. New highs accompanied by a weakening internal market pattern such , .- as fewer new highs and adva'ces in individual issues and declining volume 1 as compared with the previous advancing phase is usually a pretty reliable i- –indication of a deteriorating technical pattern. As yet, the present phas; ,– of the advance is too young to draw any definite conclusions. It may be , ;,-noted, however, that Friday'S volume of 2,120,000 shares was less than the i– , last heavy day of downside volume of 2,330,000 shares on March 12th. It , -was also well below the average volume of 4,500,000 shares in December and;- r 3,500,000 shares in January when the rally from 220 was starting. ' – From a short term point of view, the advance could carry some- -i;- wha t further. From a timing viewpoint, the advance is just entering over- i- bought territory and several more trading hours will be required before a ;-' short term selling signal can be given. .'-'.,. ' However, this letter concerns itself with the intermediate term ,– .;- of several months rather than short daily and weekly fluctuations. From r i atn inttermdeddiattehtelrdmi pOintAof vdiew, thtiS hard21Y;oaPiPeatrhs tiodbetthiealPSrWopeUrld i; i me 0 a 0 0 ngs. n a vance 0 even ( n e n us r 0 ' be only 6. iHth most individual issues at or near their indicated ob- ''- tjectives, a percentage advance of such a small amount is not worth follow- -ing,considering the risks involved. On the contrary, would rather lighten ; holdings on further strength and build up a buying reserve of 75 in inter…;,,- – mediate term trading accounts. — Large capital gains are made by buying stocks on \'ieak;eas after t– — sharp declines and not by following strength after an already st0ep ad- , ,-' vance. This requires conSiderable patience and ability to ignore the illusion of a perpetual advance. I still believe that a worthwhile buying i; ;- opportunity will present itself before the start of my expected advance to !– —; a level above the 1929 highs of 386. r,, April 13, 1951 Closings -'- – Dow-Jones Industrials Dow-Jones Rails 254.75 83.44 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ,– '- '- ' ,- , Thh memorandum it not to b. tOndrl/.d a. an off.r or solicitation han an Int.r.st In some or all 01 the Itlel/rltil. mentioned h.,.ln. of off.rs to bur or s.1I lhe 'oreQoln; material any s.turltiu, from tim. hIS been pr!pared by til to tim. Wahton, Hoffman IS ,a matt.r of Information o&nlyGooItdwIsinbameildy ,,' !t upon information beneved ,enabl' but not necessatil,. tompl,t Is not u.,anleed a, accurate or fInal, and Is not Intended to for.tlose Independent InqUIry, !4 f- r';; ';I,,,!JI,';r7, ,i,; ;''7;/,,71';'; I,';,,; -I ;t',;'dtl't;',;'5' I'; ,;,1,;7' ;, ; 1/';, ;',;'Y '; ,;' ,- ',', –'\ ..