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TABELL'S MARKET LETTER 35 WALL STREET. NEW YORK 5. N. Y. Digby 44141 Weakness in the commodity markets has brought the stock market sharply below the trading range which it had occupied for the past four weeks. The industrial average reached an intra-day low of 172.91 on Tuesday, as against a 1011 of 170.35 on November 30, 1948. The rails at their low of 49.43 decisively penetrated the comparable November low of 51.91. In spite of the disappointing action of the market I see no reason to change the forecast for 1949 as stated in my letter of December 15, 1948. I repeat below that forecast – To sum up, I again predict that the market will reach its low point for 1949 in the first three months of the year. I do not believe the low will be much, if any, lower than the November, 1948 low of 171, and that it will certainly be above 160. I am still of the opinion that the range of the last twenty-eight months, between 160 and 195 in the industrial average, is an accumulation area and will eventually result in a price level somewhere around 240250. This fundamental pattern has not been changed by the results of the election. It has, however, been delayed. The market during the later part of 1949 should approach or pass the 1946 highs of 213 and be 'on the way to the aforementioned level. As for the short term action, the market has been in an oversold position for eight hours on my technical action indicator. However, as yet there has been no buying signal. Such a signal would be given if on Wednesday the market were able to reach, on an hourly average, a level above 174.73 on the industrial average. As for the rails, they are nO\'J in a very strong support level between, roughly, 50 and 48. Regardless of the short term action of the market, I still continue in the belief that the market is in a buying range jn or close to the 170-160 area. This has been my advice since September 1946. As for individual issues, I favor the stocks listed belo\'J. These stocks have been covered in previous letters or will be covered shortly. I believe these issues offer better than average appreciation prospects over the intermediate term. Thumbnail sketches are available on those issues marked with an asterisk – American Cyanamid American Home Prod Avco Borg Warner Burlington Mills Cities Service Cooper Bessemer Denver & Rio Grande Eastern Airlines Elec. Power '& Light Firestone Tire .Firth Carpet Flintkote Fruehauff Trailer Hewitt Robins Holland Furnace Closing 2/8/49 36 3/4 25 1/4 6 3/8 48 3/8 17 40 26 1/8 23 1/8 14 1/8 21 5/8 46 16 1/2 24 3/4 19 20 24 Closing 2/8/4 Inter.Min. & Chern. 25 1 8 Joy Manufacturing 36 Lowenstein 21 3/8 Paraffine Co 17 1/4 Penn-Dixie-Cement 18 3/8 Pressed Steel Car 7 Radio Corp 11 7/8 St. Regis Paper 7 3/4 Schenley 26 3/4 Sears Roebuck 36 1/2 Sharon Steel 33 3/4 Shell Union Oil 32 Sperry Corp 25 1/4 Standard Steel Spring 14 1/2 Sylvania Electric 20 3/4 White Sewing Machine 19 1/2 Youngstown Sheet & T 68 1/8 February 8, 1949 EDMUND W. TABELL WALSTON, HOFFMAN & GOODWIN This memorandum Is not to be conritued as an offer or solicitation of offen to buy or lell any securitlos. From time to tlmo Walston Hoffman & Goodwin may hn8 an Interest In some or all of the securities mentioned h.reln. The fore90l9 material has been prepared by UI as II matter of Information only. It Is based upon Information believed reliable bLrf not necessarily complete, I, not 'ilul!ranteed at accurate or final, and Is not Intended to foreclose Independent Inquiry.