Tabell’s Market Letter – October 26, 1951

Wolston.lIoffl110n & Goodwin , , 1,- NEW YORK 5, N Y PHILADELPHIA 2, PA 35 Willi Street 1420 Wlnut Street DIGBY 01\ 4141 PENNYPACKER 5-5917 ,' /, i; TABELL'S MARKET LETTER I lOS ANGELES 13, CALIF. 550 South Spring Street MADISON '3232 SAN FRANCISCO 4, CALIF 265 Montgomery Street SUTTER I 1700 .-' ,I -., 1'7 , ' ; '' The market, at Monday's low of 259.46, on the Dow-Jones industrials,., 1, reached the downside objective of 260-255 outlined by the 277-270 distri- ,; V butional top. The sharp eighteen point decline placed the market in an . ;-.' oversold condition. My short term technical indicator gave a buy signal on ;,; Tuesday. The market reached a high of 266.79 on Wednesday . I would not ' I' expect the advance to carry beyond the 268-270 area at this stage. There is overhead supply in the 270-277 area that will halt any immediate rise. ', 1; , /,', must Before the market moves very far be formed. The downside objective in of either direction, a new pattern 277-270 top has been approxi- ' mately reached and there 1s no other indication of importance at the mo- ,,, ment. I believe the market for the next area between roughly 270 and 255. After few the weeks may hold in a trading pattern is completed, some ';, c lew will be given as to the direc tion of the next move. -;; , I ',' The longer term pattern is also uncertain. Since January, the market' ; has held in the comparatively narrow (13) trading range between 240.72 i' and 277.51. Recently, the internal action of the market has been poor. . ', Unless this action improves, the possibility that the entire 277-240 area i;', is a distributional top must be taken into consideration. If such proves ,;' to be the case, a further substantial decline could occur. The downside (. implications of such a pattern are not certain because the pattern is not ,. yet complete. At the moment, there is a potential of 230-225, but this ;-,1 would be changed if the pattern broadens by further backing and filling ,' in the broad trading area. ; I )., ' It is not certain that this is the pattern. I mention it only as a ,! ; possibility. However, if the market over the next few weeks fails to pene- ' F,c,, trate the 277.51 high of September and then breaks below made on the current reaction (259.46 so far), a downward whatever low is trend would be 'I , signalled. f' 7. Because of this uncertain pattern, I continue to advise the invest- ment policy advocated by this letter in recent weeks. For accounts inte- ;,;, rested in capital appreciation of six months or longer, I recommend that ;,' 75 of funds be held liquid as a buying reserve. The remaining 25 should be invested in secondary stocks with good long term technical patterns. ;' I reprint below issues of this type that were mentioned in recent letters j – American News Hall Printing , , /,-, , til Blaw Knox o Bliss, E.W. o Hazel Atlas Glass Hewitt-Robins .,f' ' Bucyrus Erie Burroughs Lerner Stores I 0 Marshall Field , .C a r r i e r McGraw Electric ' & Certain-Teed National Supply City Stores f New York Air Brake I' ,, ' , Columbia Broadcasting olumbia Pictures It OtiS Elevat CD Poor & Co. \-I1IL ,\1' 1'- …,c; ctllieov1''ess Elliott Company Smith, A.O. Standard Steel Spring Fruehauf Trailer Twentieth Century-Fox Gray Manufacturing Western Auto Supply ., ;, Oc tober 26, 1951 , f Dow-Jones Industrials Dow-Jones Rails 262.27 80.83 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN ;7 , nUl memorillndum II not to b. condrued on jln off..r or solicitation of offers to buy or 5ell any lecuriliel From hm. to time Wllliiton, Hoffman & Goodwin may , , ,' '\ have an interest ,n lorn. or 11111 of the ltIcuritin mtlntioned herein The fore90lnq material hill bun prepIII,ed by us 41 III mBtlr of information only It 15 b41ed upon information believed r.llable but not n,cenarily compl,te, Is not ;u4tanteed III accurate or final, and is not intended to foredou independent Inquiry '/..;' -l–;;!–;.;;;.')..-;;r. – – -;.-1 ';.1 -// '.- – J;;'- '- – . /. 7 -.,.- '—-' ,- -.-'..'t- —.,. '– —- .-. –\