The Washington herald., 1921-06-23

NEW YORK. June 22.-The reac-
ton which came into the market
this afternoon after . continuance
Of the recovery for about three
hours proved two things: In the
frst place, it showed that sentiment
In the speculative community mas
NOT improved to the point where
traders will overlook an opportu-
nifty to take quick profits, On the
other side of the picture there was
ample proof of the stuooorhness
Of the short interest. lndustr1ai
ana railroad stocks advanced 70
4 points further before attempts TO
check the recovery proved success
full. Strength was again most prom
inent in issues which had borne
the brunt of the decline running
up to the close on Monday. In the
afternoon reaction these same Is
sues yielded most.
Those observers who believe i'm
plicitly in stock averages and pas.
performances were fearful lest the
decline below the low level of last
December lead to utter demorallza-
tion. A sustained rally was needed
The first question was whether the
recovery started yesterday morn
ing would continue until the close
If did. The next and probably,
more important test was whether
today's market will begin where II
had left of on Tuesday. II did
this, also. These two phases OF
the recovery having been dehnitely
established, the belief among the
followers of rast performances was
that it would carry further. There
was more than technical ANALYSIS
OF figures behind this belief. A bit
Of psychology entered into it. II
was expected that the rally would
cause a cessation of liquidation; that
il would frighten away the more
timid bears and would cause many
to switch from the short to the long
side Of the market. -.
Although IL is conceded that the
heavy reaction of Monday and OF
several previous sessions was due
in a large measure to actual liquida-
tion OF stocks, the Street, believes
that there is still a considerable
short interest outstanding. This
probably represents no small part
Of the original short interest and
only IN a minor sense the seconu-
a-y lines with which the bears en-
gineered day-to-day reactions. The
action of American Woolen furnish
ed an example OF the obstinacy OF
the bigger operators on the snor'
side. This stock was made the
center of concerted attack late
yesterday because the shorts saw
their profits slipping away in alarm
ing fashion. Considering its pur-
pose, that attack was not success
full. for its effect was purely local
and did not have the desired effect
of breaking the whole list.
Immediately after the market
opened this morning there was evil
dence that the bear party was not
going to give up without a strug-
gle. They picked out American
woolen and made a second attempt
to use II as a club to break the
back of the recovery. This stock
started with a net gain of 4 point
at SIX. At this juncture the SELL
ing began to make itself felt. Wool
en- falling by fractions until it reach
ed 66k. There il met strong sup
port and the shorts were forced
to abandon the drive. The stock
shot up within a short time to ssh
Not only did Wooden itself refuse
to stay down, but while it was be-
ing sold for loss of a point from
the opening price. other stocks wera
advancing. In the second still an
other drive was made on wool. wi h
the same result as in the Garlic.
attack. 1t dropped back to 6eK
but recovered quickly to 6s.
Inasmuch as Mexican Petroleum
| had contributed SO much to the
drastice decline running up to Mon
day of this week. the consensus
in Wall Street was that the gen.
eral recovery could not continue un-
less that stock either took a lead
| ing position or at least Remained
| firm. Mexican Petroleum was really
the first stock to ignore the at