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Technical Market Action the industrial average broke thy199 support level on J uly 23ru, the intermediate trend waG i.ndicated as down..The next day, on July 24th, we iSGued a letter which we are reprinting in full'because, after over a month, the pattern ('ut.Lind then otill applj es now/ The letter fo110ws- By th 199 support level on 'l'ue3day, the .intermediate trend is now indicated as dOI'm, At 195, the industrail has now reacted approximately 18 point.s from the May top. How more decline is indi- cat.ed Tle question is not. easy to answer. l'11.ere are three possibili- ties. (1) COlmt indications point to the 19/,-191;' area as the first port level. t.t hwsday I S low of 194.79, the aver8ge was close to tl8.t level. If the market. turns aLlll and thL,; runge holds, (lnd the rail aver- age holds above 60, the bottom might be near present. levels. (2) The next. support point. is the Februaly lovi around, 185. If this point is lr! the industrials, it wouln seem that the rail average will also break 60 and in that event would indicate a reaction to 57-51.. (3) The third possibiLty is t.hat the Febt'llary low will be broken. In that event, the indjcations would be 182-174 on the Dow-Jones industrials, 57-',4 on the rails and 126-120 on t.he York TiMes average. T'le February low on this latter average waR 129. From the action of individual issues, would be more inclined to favor the second and third possibility, although the f.rst cannot be entirely rulen ou.t. Several indivirlual ioslles have broken out on the dovmside and indicate lower levels. Prominent in this category are automobiles auto accessories. Othl'r groups, including steels and metals, have held above support pointe but are very close to giving ,intermediate down trend Signals. TIl(' picture is uncertain enough to warrant R sideline poaiUon in all intermediate te-rm trading accounts until the pattern As for the long term trend, technical patterns still indicate hi,3her levels after the intermediate correction has passed. This is particularly true of thf' dUT'able goods issues and raj.ls. The prima! baStS en these groups indicate that prices considerably above the 1946 highs should eventua.lly be seen. Would not disturb long term holdings. , As i t turned Ollt, the first p03sihUlty worked out at that time as the market made a low of 194.33 on July 25 and then ralli en to 205.01 on . AU6'uot 14th. Last week the market reacted to 194.53 and July loVi. If this point. holds and the average sells 'lbove 205.01, the intermediate trend would bl' indicated as up. If tho' ,July low is penet!'utcd, such action would indi.cate a, continuat.ion of the intermediate declLnyand point to t11e second and thi.rd possibilHies outlined above. August 26, 1946 EDMUND W. TABELL SHIb'LDS & ClOSing Dow-Jones Indust.rials Dow-J lmcs Dow-Jonps 65-Stock 196.99 60.64 72.99 ,\ 1, & .,,, , ; ;. Lm ….. , ;……. Mr. Edmund W. T.bell and ere not pN,ented as the opinion' of Sh,eld. & c.o.,..p.ny.