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December 29, 1944
TECHNICAL MARKET ACTION
After reacting fractionally below the lower limits of the support
level at 149.25 - 148.50 in the Dow-Jones industrial average mentioned in the
last letter, the market reversed itself sharply and resumed the advance. At
Friday's close of 152.00, the industrials have rallied 4.07 points from
Wednesday's low of 147.93. For the first time, the action of the industrials
compared favorably with that of the rails which have rallied 1.72 points from
Wednesday's low of 46.58. The industrials are again close to the 152.53 closing
high and the 153.00 intraday high, both reached on ~ e c e m b e r 16th. The' rails
again reached n new closing high. Regardless of the sharpness of the advance,
the market has not yet signalled a top. However, would prefer a nearby consoli-
dating phase rather than an immediate straight line advance. A further sharp
rally would impair the technical pattern. This letter has not advised the sale
of any recommended issues since purchases were first made near the September
lows. Continued retention of recommended issues is advised.
The action of the steels and coppers over the past two days has been
the best in quite a period of time. Still consider these two groups behind the
market. Would add Carpenter Steel (around 33), a specialty steel issue, to the
recommended list.
Another stock with a favorable chart formation is Colorado Fuel &
Iron (around 25). Purchase is recommended.
Two lower priced issues that seem behind the market are Budd Manu-
facturing (at 10 1/2) 'and Radio-Keith-Orpheum (at 9). Present prices compare
with a high of 12 1/2 on Budd and 10 3/8 on R-K-O. Their technical patterns
seem to indicate that both issues, which have done little marketwise recently,
are in consolidating phases. A nearby breakout is possible in both issues.
EDMUND W. TABELL
SHIELDS & COMPANY
The op1n1ons expressed in this letter are in the personal interpretation of charts
by Mr. Edmund W. Tabell and are not presented as the opinions ?f,Shields & Company.
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December 26, 1944
TECHNICAL MARKET ACTION
For the tilne being, the market seems to have los-l; its upside momentum.
The tlsh for the move on the industrial average was reache'l at 153.00 on Sutur-
(lay, ')ecember 16th. Since that time, the industrials ha"e been unable to again
apDJ'oach that level a.'1d each successive dip has carried a :,il!.l.dc lower with the
10Vi of 149.88 reached la.st Thursday, December 21st, being exceeded by today's
low of 149.41. However, there has been Poe signal, as yet, that the internerJ:i.ate
trend has changed and, subject -::'0 sor.t" pOE ."Ll.'le correction, the trend
still must be considered as up. It nulcl appear that a fatrly strong support
level should be met in the 149.25 - If;.'. 50 zone. This zone is top of the resist-
anco '.::"'0'1 tho.t hal ted tho advance on several occasions since July. Normally, it
cOlhd lJe expecto(l to now offer resistance to any further decline. At today's
close of 149.66, t.'1e average i:; not far army from this expected support level.
The railS, by contrast, have succeeded in holding close to the highs.
The December 20th intraday high of 48.41 was passed today at 48.54, even though
the close was below the high closing of 48.16 reached on December 23rd. Indi-
vidual rail issues have acted even better than the averages. The writer's
recommended list contains seven rail issues, all i"lith substantial profits.
Retention of these issues is still adVised. The list follows.
Atlantic Coast Line
Delavarc & Hudson
Great Northern Rwy. pfd.
Illinois Central
Pere Marquette pfd.
Southern Pacific
Southern Railway
Recommended At
36 3/8
30 1/4
37 1/2
15 3/8
44 1/2
27 1/4
31 3/8
Last Sale
53 1//4
36 3 4
47 1/4
22 3/8
62 1/2
41 3/8
33 7/8
ObViously, after the sharp rise which hus taken place in this group,
some technical correction could occur at any time. There is some resistrulce at
approxlIDately the 50 level, but to arrive at this objective one must go back to
1937 The writer would rather rely on the indications of the base pattern
which suggests an eventual objective of 65-70 over the longer term. Individual
issues 'indicate even larger appreciation possibilities, with Illinois Central
shoving the greatest possible percentage appreCiation of the seven issues. On
further strength; profits might be taken on Atlantic Coast Line which nov; shows
almost 17 points gain. The near term objective in this issue is roughly in the
54-60 area. Proceeds from the sale of this issue could be transferred to Illinois
Central on. weak spots.
At: the .risk of being repetitious, the VITi tar again draws your attention
to the steel and'copper group. These issues have done nothing marketwise since
they were mentioned over a week ago. However, the basic patterns are favorable
and eventually, if the average is to move ahead, these two groups Should parti-
cipate. The greatest risk is the possibility of poor timing. There are support
levels in these issues not too far below the market that should hold in the event
of a general market dip.
,
.There are few issues that have been subject to year end tax selling.
Western' Union A, which at today's close of 43 1/2 is 9 7/8 points below thc 1944
high of 53 3/8 and 2 1/2 points above the 1944 low of 41, may be one of the group.
Here again, there is a rather firm support level not too far below present prices
and the technical pattern suggests the possibility of a rebound after selling
pressure is released.
EDMUND W. TABELL
SHIELDS & COMPANY
The opinions expressed in this letter are in the personal interpretation of charts
by Mr. E):lmund W. Tabell and are not presented as the opinions of Shields & Company.
December 20, 1944
TECHNICAL MARKET ACTION
Hcdnesday's market, during the noon hour, experienced a sharp and
rapid shakeout on heavy volume with prices down one to three points. Losses
Here partially regained by the close. After more than two .7eeks of rather
rapid advill1ce, with only nominal corrections during that period, the short
c8rm technical position of the market was weakencd and vulnerable to un-
expected news of the German drivc. Would not place other than minor signi-
ficru1ce to Wednesday's action. As yet, the market shoVls no definite indication
oi having reached an intermediate top. However, it must be remembered that
Let Saturday's intraday high of 153, thc industrial average had rec.ched the
'ower level of the anticIpated 153-156 objective and the rail average, although
':'n a long term uptrend, he.s advanced approximately 15% during the past month.
rhus, while no intermediate term sell signal has yet been given, a certain
of caution should be exercised at this stage'of the market.
If thc advance is to be resumed, it would seem that some of the
laggard groups should participate teLa greater extent than hitherto. The
Dow-Jones industrial average is heavily weighted with st8cls, ch.3;uicals, oils
and mining stocks. As yet these groups have had only minor advances. It
would seem to be a difficult task for the industrial average to reach the 156
level or higher nithout the help of these groups. On the other hand, in the
event of a further decline, caused Crl additional surprise news, these issues
should not be as as those that have alrcady had sharp advances.
Thus, it seems that these laggard issues should be the buys under
present conditions.
The steel group has been reviewed in previous letters. Bethlehem
Steel, Jones & Laughlin, Republic Steel, U. S. Steel and Youngstown Sheet &
Tube all have potentially favorable technical formations.
Anaconda, Eagle Picher and Kennecott have been mentioned in the
metal rold mining group.
In the chemical group, Allied Chemical, now 156, was recomlilended at
153. Dow Chemical appears attractive in the 115-120 area.
Cities Service hes been recomnended in oil group.
Other laggard issues with promisinG technical patterns include Allis
Chalmers and American Car & Foundry, also Western Union A.
EDMUND W. TABELL
SHIELDS & COMPANY
The op1n10ns expressed in this letter are in the personal interpretation of
charts by Mr. Edrnund W. Tabell and are not presented as the opinions of Shields &
Company.
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December 16, 1944
TECHNICAL MARKET ACTION
The market hesitated on Saturday, but both the industrial and rail
a"erages have reached new highs and the utility average joined the procession
by penetrating the previous 1944 peak. The advance over' the past tVIO weeks
has been rapid, particularly in the rails, and it is probable the.t vIe
have occasional periods of ty at this stage of the market caused by
profit ta.l<:ing and switching. However, the work shol7s no indication, as yet,
af an intermediate top, eVGn though the industrial averagc has almost reached
the near term indication of 153-156 and the rail average has passed the ex-
pected resting spot of 45-46.
In the letter of December 9th, the writer expressed his op1n10n that
the steel stocks suggested the possibility of beine in an accumulation area.
He suggested purchase of the tV{O market leaders, Bethlehem Steel and U. S. Steel,
even though some patience may be requircd ,before an upward move VlIlS started.
That opinion is again reiterated today l7i th the addition of a number of other
issues in the steel group. The metal and mining stocks also appear to be in
somewhat the same technical position as the steels, with long relatively narrow
tr,ading ranges extending back OVer two years or more. Here again, no definite
indication of an uptrend has been sienalled, but the pOSSible accumulation area
is nde, and support points arc not too far below the market. The greatest
danger in purchasing the steels and metals seems to be that the timing may be
wrong and that purchases may have to be held for a period of time before the
advance starts.
In the steel group, in addition to Bethlehem and U. S. Steel, Jones &
Laughlin, Republic Steel and Youngstown Sheet & lube also have attractive patterns.
In the metal and mining group, Anaconda, Eagle Picher and Kennecott
seem to be in ,the most favorable position.
EDMUND W. T ABELL
SHIELDS & COMPANY
The opinions expressed in this letter are in the personal interpretation of
charts by Mr. Edmund W. Tabell and are not pr8sented as the opinions of Shields &
Company.
December 9, 1944
TECHNICAL MARKET ACTION
Since the last letter, the industrial llVero.ges penetrated not only
the August-October resistance, but ulso the bull market high of July. This
penetro.tion occurred not only in the Dow-Jones industrial uverage, but o.lso
in the New York Times combined fifty-stock average and in the NeVI York
Tribune one hundred stock average. This penetr[:tion re-affirms the ,inter-
mediate uptrend amI signifies in the writer's opinion eventual extension of
the "dvance to at least the 153-155 area. However, Saturday's advance ViaS the
seventh advance in a like number of trading days. It would seem probable that
there may be some consolidation of the rise before the advance is immediately
resumed. The rail average is now in the 45-46 area and here again 8. short
resting period may take place. (
A number of individual issues also penetrated resistance levels during
past few days. One'attract{ve technical situation, in the opinion,
vi" is Pressed Steel Car (noVl about 17 1/2). Technically, this issue is no\"\' in a
lonG term upturn and considerably higher prices are eventually indicated from
}he chart pattern. Purchase of the issue is advised. Another stock with an
technical formation is Cities Service. At present levels of 14 1/2,
the stock is nearer to the year's low (121/2) than to the year's high of
17 3/4. The formation suggests accumulation, and while no immediate move is
indicated, the is favorable. Still another stock with in-
vi possibilities is Reynolds Metals. The stock is now in the 15-16
res:is tance area. Ability to penetrate this area viould indicate a long term
uptrend.
The steel stocks also suggest the possibilit,y of bein& in an accumu-
area. Would confine purchases e.t the moment to the market leaders,
V Bethlehem Steel, now 64 1/2, and U. S. Steel, now 60. i.t present levels these
two issues are in the middle of relatively narrolV trading r!lIlges which have
persisted for over two yeers. There ure support levels fairly close to the
market (55 in U. S. Steel and 59 in Bethlehem) thp.t should hold in any minor
market correction. While these two stocks have not yet definitely indicated
an uptrend, purchase would seem v/[lrrc.nted present levels, even though some
patience may be required.
/ In the higher priced group, the technical pattern on Allied ChelJ1ical
suggests the possible imminence of a fairly sizeable move. This possibility
would be confirmctlif Vlere able to penetrate resistance around
the 152 area. j, rally to 153 .lOuld suggest the start of a fairly sizeable move.
The stock for a high priced issue has been in an extremely narrow trading range
of seven points for a considerable period of time. Present price is apprOximately
152.
EDMUND W. TJ,BELL
SHIELDS & COMPANY
The expressed in this letter in the personal interpretation charts
by Mr. Edmund W. Tabell and are not presented as the opinions of Shields & Company.
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December 6, 1944
TECHNICAL MARKET hCTION
Volume was heavy for the first three of the week and prices
continued to show a rising tendency. The average renched a new high of
44 1/2 on Tuesduy, but the advance in the in<1ustrial U.v(;rltge W>..S tcgt'.in stopped
at the approXinmte l,)vol of the /,ugust high (149.2S) und the October high
(149.20). This Tuesdr.y's high lins 149.23. Ability to penetrate these hiCh8
would not only indicl'te a minor uptrend in the industrial ,"vere.ge, but would
also ereatly strenethen the probabiJities that the July high of 150.B$ would
be passed. If that eventuality occurred ':.he rise should continue to the 153-155
area. However, until such a penetration takes plnce, G cautious tradinG r-tti-
tUde seems advisable, Would expect a restin" period for th" rnil average in
the 45-46 area. ;
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In a letter dated September 18th, whc."l the avcr"ges.:,WEirC: near, the
late summer lows, the; writer recommended (.. group of tl'lCnty-five mediumpi;iced
stocks. Those issues were recommended becvuse the indi virlunl' techniC:ii pntterns
indlceted eventuul substo.ntial price appreci: ... tion over the intermediate- term.
retention of the. is ndvised- notwi thst-:.nding the fD.ct
of the l.ssues have shOlm Wl.ae gc,l.ns. The list is reprinted below.
Close
STOcr. 9./.18/.44
Alleghany Ludlum 27
American Bunk Note 20 3/8
Junericr.n Chain 25
Line 36 3/B
Bluck & Decker ;:1 1/2
California 27 3/4
Campbell hy;mt 19 3/s
Columbie Pictures 18
Commercial Solv:nts 15 1/2
Delavn\re & Hudson 30 1/4
Gen. PreciSion Equip. n
Great Northern Ry. Pf. 37 1/2
Hercules Motors 211/4
IllinoIs Centrr.l
15 3/8
Interstute Dept. Stores 171/2
Lima Locomotive 381/4
Liquid Cerbonic 271/4
Motor Wheel 20 1/2
Ne\\-port Industries 17 7/8
Pere lflerquette Pi'.
44 1/2
I .. O. Smith
35 3/4
Southern Pncific
27 1/4
Western Union It
44 3/4
\iorthington Pump
29 5/8
Youngstown Sheet & Tube
37 3/4

Close
High'
l2./Cill 124:1-19.44
28 1/2 31 1/2
21 5/B 23 1/8
25 3/4 27 5/8
44
44 1/2
23 1/4 25 1/8
263/4 30 5/B
19 5/8 21 7/8
,
22 1/2 ?2 1/2

16 18 3/8
33 37
2" 241/2 .<-
42 1/2 42 3/4
23 7/8 29 1/4
18 1/2 19 1/2
18 3/8 20 1/4
49 3/t.
50 1/8
28 1/2 29
21 3/4 23
18 3/4
22
55 59 3/8
48 493/4
37 1/2 38
44 1/2 53 3/8
.37 1/8 41 1/2
38 1/2 42 3/4
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19.:17-1936
,
43 3/1.
55.1/2
_'33'3/4
55 1/2
38

48 ')/4
40 1/4
45
24 5/8
58 3/8
33 3/4
56 3/4
41
38
37 7/B
B3 1/2
267/B
27
41 3/4
91
72
65 3/B
961/2
47
101 7/8
Anaconda Wire & Ce.ble (36 1/2) nnel Southern Railway (31 3/B) also
have attractive technical patterns nnd ere "dded hereilith to the list. Barber
Asphalt (29 3/8) would olso appear nttrc.ctive on ;:, return to the 27-28 arec..
i\dvice to hold the issues mentioned in the above list is bused on longer t",rm
indicutions and does not nec6ssarily apply to shorter term trading turns.
EDMUN D \';. TABELL
SHIELDS & COMPiJlY
The opl.nl.ons expressed in this letter are the personol of chnrts ,
by Mr. Edmund II. Tltbell C11d r.re not presented as the opinions of ;Shic1ds & Company
.
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December 2, 1944
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TECHNICAL [;\ARKET ACTION
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-.-,' This letter, the first of n series to be issued pt short interv-uls,
will attempt to forecast the price trends of the general market averages, and,
on occasion, will or sales of individual securities, either
for term holding or for short term trcding.
The opinions expressed will be based not on the fundamental or statis-
tical outlook for the securities or cOlllmodi tics mentioned, but simply on the
writer's interpreta.tion of their teclmical market action, a.s shorm on charts
and graphs of the market averages and individual securities. Summarized briefly
below is the technical outlook for the mnjor, intermediate, and minor trend of
the market.
The ma.jor trend of the market is fev-orable. Over the longer term,
substantiully higher levels are indicated for both the industrilll and ruil
averages. The rail average, from a technical ViewpoInt, is in 11 definite up--
trend, end 11 price level c.pproximp.tely in the 65-70 zone of the Dow-Jones r:lil
average (now 43) is indicated. The industrial n'verage has not, as yet, defin-
itely confirmed tpe uptrend, but the action of individunl industrid issues
tends the belief that such II confirmntion will eventually occur.
, .
The intermedlate tn:nd of the mnrket is '1'he first phase of
started in April, 1942, :nd ended in July, 1943. During thnt
fifteen.month period, the Dow-Jones industrir.l p.verc.ge mUied approximately 53
pOints, from 93 to 146. After a 16 point decline to 130, the second phase of
the bull market skrtod in November, 1943, has so fe.r reached a high of
approXimately 151 in July, 1944. The present level is approximately 147 1/2.
'<bether or not this second phese is comph.ted is net cleD.r. By passing the July
high last week, the rail Ilverllge re-confirmed the uptrend ,.nd tions point
to the 45 level before another resting period. The indus-
trial c.vern!;e, h01vever, htls been une.bIe to penetrate nut. only the July high of
150.88, but Dlso the August high of 149.;'$ :'n": the October hl eh of 149.20. Pene-
tration of these highs would indicr.te un extension of the se,cond phase to ret
least the 153-155 level for the industrial The dOl.nside point to be
'Ililtched is the September lew of approXimlltely 142 1/2. Penetr:ltion of this low
Viould indicate e further reaction to the 138-137 e.rea in the industrir,ls. Briefly,
the outlook for the next four to six months envisions" cOhlparatively nnrrol'l
trading runge, bounded by the extremes of 155 md 137 on the industriDl p.vero.ge,
':.lth6ugh there is no indication, as yet, that these extremes will be reached.
During such a period of uncertain price fluctuations, better profit possibilities
should be found in special si tu,':.tions rather the.n the general or mp.rket
.).eaders.
The minor trena, as measurecl b'J the aaily or even weekly flu C tUf, tions
of the is always difficult to interprGt teclmicDlly, und is, in the
writer's opinion, the least profikble to foll<)I". It will be mentioned, however,
in these letters and in speciul releases. At moment, the minor trend in the
rail average is up. There is no definite trend in the industricl average. For
the past six weeks, this average has fluctucted in narrow area between
roughly 149 and 145. Until these points ponetrated, there is no indicntion
of the direction of the next minor move in the average. Here c.g<!in, from a
trading viewpoint, speci,,,l situations should outp::>.oe the market le:l.ders.
ElYIAUN D \I. T ABELL
SHIFLDS & COMPANY
The exprcssbu in this lEttsr ,'ft thG __l interp'J."Gt,tic.n '"",1 cM:l .. .:;
11-/.1'1t'". ,o.mund T:,bell ;-.ro n( t prt:St.Ett:...: "8 thE: cpiniups II 5hicloJG & ny.
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