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Technical Market Action Considering the b1l-rrage of 'strike neViS released over the Vleek-end, market action on Monday .as relatively favorable. Both avera,;es closed lO\ler ..,-ith the industrials do,on ;l. 52 and the rails dO'i.n 49 cents but volUJ.le has srJall at 650,000 shares. Pessimis.lI is still rife and the present situation is being cor.lpared with 1920 when both commoditv prices and stock prices declined sharply until early 1922. In this connection, ;,e drm; your attontion to an oxc611cmt article in the April 7th edition of th8 New York Times entitled Not Recesoion but Transition by EdV/ard h. Collins. I.Jr. Collins points out that th consumer or soft goods field has had a tremendous booLl and that it is only nOriJal that sone re-adjustnent shoulJ take place. On the other hand, the producer or heavy goods have just started to turn the corner. ThG last paragrph of N. Collins article is quoted below What is happenin.,;, in short, is simply that the balance between consumption boods and producer goous 113 bein redressed in falTor of the latter. This hardly Sug';8Sts a close analogy \lith 1920. It is true, the transition nay not be as slJooth as onc night vlish, but that it is definitely under way can hardly be questioned. Neither clln it be seriously doubted that it points to a bOOI,l in durable and capital boods vlith potentialities of the first nagnitude. This line of thought coincides almost exactly Iiith the technical pattern of the narket as outlined by this letter Since the Septenber break. Advice has been to buy the heavy and allied linGS in periods of itarket softness. The soft goods issues, except for traainb turns, have been avoided. Believe that the w'Irket leaders of the next phase of the advance will be in h'Javy industry fielcJ just as the 1942-1946 'bull r.\al'ket I-;aS led by tho consumer goods …….. As for near term action, believe that there is a ood probability that the 171,,-176 support area laentionoo in last weeks letter .lill hold. J.iontLay's 10Vi was 174.82 and the close 175.59. Ability to hold around 174 and then penetrate the recent hi,,;h of 179.68 Vlould be an extre1.lely favorable development. A decline belovi 174 would be temporarily unfavorable anel indicate a testing of the i1nportant 172-170 level Vihich YdlS the support point of botil the January and March deClines. Individual stocks ith favorable technical action include Consolidated Vultee, Deere Corapany, Ea,,;le Picher Lead, Evans Products, Hovie Sound, National Supply, Republic Steel and United Air Lines. April 7, 1947 EDMUND II. TABELL SHIELDS & COMPANY ClOSing Dow-Jones Industrials Do'w-Jones Rails Dow-Jones 65-Stock 175.59 47.90 62.89 The opinions expreled In this letter ere the pOl'1Onid intlltpretftltion of c.h.rts by Mr. Edmund W. Tabolt end ere not presented the opinion. of Shield. & Compiny.