Tabell’s Market Letter – April 21, 1947

Technical Market Action Monday's market opened sharply higher on heavy volume. The opening prices Vlere around the best of the day with the industrial average, at the day's high of 171.47, up 5.05 fro.l Saturday's close, .!hile the rails, at their high of 45.39, werE .,1.07 above Saturday's close. The market sold off fractionally after the first hour, but held Ground fairly l1e11 until the final hour vlhen a brisk sell-off sharplymaded the day's gains. At the close, the industrials were ;.1. 06 higher at 169.50 vlhile the rails \ -ere 39 cents higher at 44.71. Volume was heaviest in the upswing of the first hour with 11 turnover of 480,000 shares. 260,000 shares wore traded in the final hour sell-off and the total for the day ,las 1,150,000 shares. At the day's high of 171.47, the downside gn.p of last Mondn.y between 171.35 and 170.42 was closed. However, iAonday's sharply higher opening left an upside gap that was not completely closed by the last hour sell-off. The gap is between Saturday's high of 168.58 and liJonc.lD.y's 10\'1 of 169.52. Monday's rally brought the industrial average to the upside resistance level mentioned in last week's letter, nae1y, 170-172. Favorb1e action would be a nearby closing of the new gap with the iecline halting at the top of last week's range between 168 1/2 and 168. Ability of the average to hold at this point woulLl indicate a possible rally to 173-175. Inability to hold above 168 vlould indicate another t(;sting of the October 10Vi. The rails continue to act poorly. Ihile the Dow-Jones industrials, as well as the cOJlbined averags – such as the Hew Ycrk Herald-Tri bune and NeVi York Times avera..es, continue to holti. above their October lows, the Dow-Jone;s rail average reached a new low last week at 45.58. Can see tha possibility of J.loderately 10Jer prices in the rdl average Vlith the decline botto.;)ing out in the 42-41 area. The industrials and cOllbincd c.verages continue to hold above their October lows. As long as this level hulds, the divergent action of tho rails does not alter the possibility that the present decline is sjlllply an extension of the SepteJber to DecerJber bas pattern. In fact, such a cdvergence, after a 10n up or donn narket, often signals D. trend reversal. ED1\IUND \.. T ABELL SHIELDS & COulPANY April 21, 1947 e10sing Dovi-Jones Industrials Dow-Jones Rails DOV1-Jones 65-Stock 169.50 44.71 60.16 tit1M opinions exproued in letter ere the penonaf interpretetion of ch…. I;rr Mr. Edmund W. labell and are not presented . the opinions of Shl.ld, , Com,.,