The Washington times., 1930-06-17
QUICK TRADES
MAY GIVE
PROFITS
Leading Stocks Expected to
SeIlALoWer in Stock Mart;
Recovery to Be Slow
BY THE SPECTATOR

BY THE SPECTATOR
I am willing to bet the family
bankroll that there will be further
liquidation in today's early trad
ing on the stock exchange. /
canvassed most of the more I'M
portant houses after yesterdays
close, and asked brokers whether
they were sending out many mar
gin calls. In practically all cases.
they replied that many accounts
had been weakened in the break
and that margin calls were an
absolute necessity in order to pro-
tect the positions of the houses
concerned.
Therefore, expect to see lead
ing stocks sell at least point
lower this morning.
I also believe that purchase of
stocks for trading turns is war
ranted today. That. however, Is
only half of my advice. Here Is
the rest. If you buy this morn
ing, and rally appears, sell at
whatever profit you can get,
whether it be a point or five
points. This is no time to buy for
the long pull.
Commodities Sagging
One of the chief influences to-
ward weakness in the stock mar
ket is the continued weakness Of
commodity prices. July wheat
broke below 81 buShel yesterday.
while cotton prices were at the
lowest point since before the war,
with the exception of the bumper
crop period in 1927. Silk futures
were at new lows. Until COM
modities regain strength, I look
for no sustained recovery in the
stock market,
Among all the brokers ques-
toned yesterday afternoon, not
one offered any ray of hope for
immediate improvement of the
market. Rallies? Yes, we will
have rallies, they said, but they
are useless except as opportu-
mites for traders to sell.
Stop Loss Orders
Nervousness of traders in re-
cent weeks has been responsible
for placing of large volume of
Stop-loSS orders. Such orders
were touched off yesterday when
stocks broke from 5 to 20 points,
and the. resultant selling helped
the break, along. New Stop-loss
orders are in the market, of
course, but these, too, will be re-
leased. if stocks break through
the resistance levels that are
likely to be established in today's
trading.
Support offered the market by
bankers was speedily withdrawn
when the decline became break.
In some quarters, the reaction
was called IAN orderly decline" I"
but It was anything but orderly
to traders who hadn't time to get
out until stocks hit their lows.
Public Utilities
I would steer away from public
utility shares for the time being.
Their high ratio Of market value
to cllrrel-U earnings makes these
stocks peculiarly vulnerable to
beari$h attacks. While the util-
ity group includes some Of the
highest grade issues on the big
board, issues which I think are
fairly priced, they are likely to
offer little resistance to deter
mined. selling drives, and I think
discretion dictates care in selec-
ton Of. securities at this time.
There was one thing we missed
yesterday. No administration
spokesman came forward with
the statement that business is
fundamentally sound"
The Oil Price War
just at the time when every
one seemed convinced that
harmony in the oil industry had
been restored, Texas Company
announced a cut of 3 cents a gal
lon in gasoline in the Pacific
Coast territory. Other import
ant producers followed suit, and
the result was a drive against
oil shares. Until such time as a
commission or committee is en-
powered to control the oil
industry, the public that buys oil
stocks will be the chief sufferers
from the repeated battles among
the leading producers and re-
finers.
Tobacco shares have been
called depreSSion-proof. In fact,
I have limited as much. But
these. shares were smashed with
the others. No stock is proof
against such selling as appeared
yesterday. .,',''.'
A Debatable Question
Most people in the financial
community-and many outside
are wondering whether the sell
ing of the last few days was for
account of professional bears or
was genuine liquidation induced
by fears of business develop
, ments. There is q sharp division
Of opinion on this question. It
will be impossible to decide the
matter until Thursday, when a
fair indication will be furnished
by the report on brokers loans.
Motor shares have been suffer
eng from short selling, for the
I