The Washington times., 1923-01-31
3 MOVEMENT It's
ARE NOTED IN
MARKET
Cousins Analyses Measure
ments to Present Condi-
tons in Wall Street.
By w. 8. COUSINS.
Copyright, 1923, by Cosmopolitan
News Service.)

(COpyrlShC, 1885, Dy NOSHlOpOAlLAu
News Service.)
NEW YORK, Jan. 31.-We have
seen that the stock market must
be considered as having three
movements, all going on at the
same time: the narrow, daily fluctu-
alton, the secondary short swing,
running from two weeks to q
month or more, and the main bull
or bear movement, occupying from
two to three years. What concerns
us now is to apply this measure.
ment to present market conditions,
and to attempt to make some logi-
cal deductions which may be Of
value to investors who are not. SO
much interested in the daily fluc-
tuations, as in the broad swings Of
prices in the major movement.
Starting from point that is well
remembered by all, the panic Of
1907, we find that the bear market
of that year, subsidized in December,
and was followed by an upward
movement which lasted until Au-
gust, 1909, the next major bear
market ended in July, 1910; the bull
market October. 1912; the bear mar
ket in November, 1919, and the
final bear market completed in
August, 1921.
Economic Developments.
It will be seen that these cycles
preceded by about six months the
prominent developments OF the
postwar period: The inflationary
high wages period Of 1919, the buy
ers' strike Of 1920, and the gradual
SWrAv t. a..
dustry that has characterized 1921
and 1922.
The chart shows that we are
at present recovering from a secon.
dairy reaction in the partially COM
pleted bull market which began in
August, 1921, and has still some
time to run. Here is the showing
Of the averages on the dates under
review.
August. 1921, fndustrials, 1913;
railroads, 93.99.
November, 1929, industrials, 92.40;
railroads, 82.17.
January 80, 1928, industrials.
S1.33; railroads, 74.98.
Now let US consider the chart in
its relation to the other important
economic indices, bank clearings,
railroad earnings, employment, ETC.,
all Of which are combined to make
the composite business chart. It
will be seen that the line on this
chart is swinging sharply upward,
in manner suggesting sustained
improvement in general business
and industry. The speculation line,
as has been pointed out, recedes
this line by about six months, and
skilful reading of the latter will
| help to decipher the former.
Lower Prices Possible.
Another important point to con.
slider is whether the slow and
steady market, in which prices
| move within narrow radius, 10 q
period of accumulation or distribu.
| ton. If the former. prices will be
carried much higher before the
break; If the latter, market history
| shows that the next move will be
in the direction of lower prices.
In this respect the market may
be compared to rain cloud, which
will absorb just so much moisture
| before precipitation begins. When
You feel the first rain drops, dig up
your old umbrella and your rain
coat, and You are not SO apt to get
wet. In the stock market continu-
Gus liquidation after a long period
of accumulation is evidence that the
bear movement is about to be ush-
cred in.
What of the future?
Wall Street leaders, chart readers
or otherwise appear to be in agree
ment that the bull movement has
not run its course, and will prob
ably continue for the balance Of the
year. A great deal will depend on
the outcome of the foreign compli-
cations and the trend of legislation
at home. If Congress, which has
been in continuous session since
1915, can be persuaded to close up
and give the country a rest until
December, the outlook will be much
more hopeful than If it remains in
session all summer wrangling over
business legislation.
Finally, the end Of the present bull
market will come while business Is
still booming in every department,
and surface indications are Of the
most favorable character. Remem-
Der that the stock market is one lap
ahead Of actual business accomplish
ments and is an advance agent of
either prosperity or gloom.
Remember, also, that no infallible
guide to stock market movements
has ever been devised, especially in
relation to individual stocks. Sue
cess in the stock market Is attained
only through the ability to make a
correct Interpretation of a myriad of
factors bearing directly on security
prices. and those who cannot do this
| F.,NI z1~