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Technical Market Action After six days of the anticipated rally took place on Thursday. The industrial after rec.ching a low of 161. 61, closed at 164.94 – up on the day. The rail averago cl.osed 1.00 h.ighcr at 45.69 after reaching a 10w of 44.00. Volume was just equal to the previoun day at 2,220,000 shares. the averages broke out of the 175-165 truding range on the dovmside, a majori ty of the individual i SSlles still have , pc.ttern that could turn out to be It buse pattern. These patt.erns llsually take It long pcriud of time to form and cover a wide price range. l'or instance, t.he distribu- tional on averages and on individual issues for this decline Has formed betVlGon January and If/ay of this year. During thi.s period the indus- trial average fluctuated between 213 mid 185. Individual stocks in the 50 price range fluctuated in a ten point area in a buildJng up of a distribu- tional zone. It mus b be expected that the same process \li11 tlUce place in building up an base period. It is a bit too early at the moment to attempt to name the limits of this range. This mUCh, hOl'mver, can be said. In the paGt, the New York 100-Stock average has the best of price objectivee for the longer term while tho other Uleruges have been excellent in forecasting pri.ce ob,jectives for the shortrlr swings. On Wednesday, this aver;ge reached a low of 1l6.12 and presumably was somewhat lOVier on Thursday. The I'lri.ter's technical work indicates that the downside objective for the preS81T, bear markt on this average is the 112-109 ,rea. Obviously, per- . fect acwracy is not to be expected and the ultirate' l017 may be a point or two em either si.de. ,lhether this objectivb .is to be reached immediately or after a further rally is not indicated. However, the important thing to be borne in mind is that the average has reacted from a hi gh of approxima- tely 137. Thus the has already reacted 21 pain ts. It is possible thilt a furthr.r correction of frol'l 4 to 7 points may be seen but, at l16, the average has already completed 75 to 85 of the correction. In indivi- dual issues, undoubtedly mmy have reached or are 'fGry close to their lo\'/s. It is these issues that have been ment.Ioned in previous buying rnnge letters. Other stocks hav\) somewhat further to go. 'rhE.ir b1\yingrnnges vlill be listed as the levels are approached. Would use periods of t.o accumulate recommended issues as buying ranges nre reached. Expect a wide trading over the next few as individual issues and the av('rages l'lLlild up bas!) at'8RS in a yet to be defined rnnge. EDMUND VI. TABFLL October 10, 1946 SHIELDS & Closing Do\,,-Jones Industrials DOO7-JQne s Rails Don-Jones 65-Stock l64.94 45.69 59.34 The opinions e.pressed in this letter are the personal interpretation of charts by Mr. Edmund W. Tbeli and are not presented as the opinions of Shields & Company.