The Washington times., 1930-06-19
BEARS TRYING
TO CRASH
MARKET
Two Out of Eighteen Broker
age Firms See Continuance
Of Rally Started Yesterday
BY THE SPECTATOR

OF Rally Started Yesterday
By THE SPECTATOR
! A rally in the stock market is
quite possible today. On the face
Of things, q recovery would seem
to be- Sin the cards." after the
crash Of prices in the last few
days.
Unquestionably, there is a
large short interest In the
market, probably the largest
short position that has existed
this year. Therefore, the market
Is in excellent technical position
for q recovery.
On the other hand, we are
faced with the fact that many
margin calls were sent out last
night and that the situation in
the commodity markets and the
basic Industries is anything but
encouraging.
In brief, the business situation
is as bad as it has been at any
time this year. Balanced against
this fact is the readiness Of the
stock list to rally with the first
sign of real support. I cannot
predict what. will happen. Your
guess is as good as mine. :.
I still feel, however, that pur-
chase Of leading stocks for trad
Ing turns within q week Is war
ranted at this time. But don't
forget my recent advice: Buy
them when they seem to be at
the bottom, and sell them when
they rally sharply.
Electrical Equipments
Many traders may feel that,
with General Electric and West
inghouSe selling far below the
years highs and these concerns
being among the nations leading
corporations, their securities should
be bought at this time. DO
not agree with such reasoning.
Electrical equipment companies
invariably experience d let-doWn
of business IN the summer
months. Both these concerns
have passed the. peak Of their
production for 1880 and are likely
to feel the seasonal dulineSs. In
addition to this, the present con-
ditfon Of business is likely to le-
suit in q slump for General Elec-,
trio and Westinghouse that Will
be considerably worse than the.
usual summer showdown. Common
stocks of both companies have
been favoIite targets for the
bears in recent weeks, and i
think they. win sell lower. I.
would shy away from them for
the. preseht.
Who said the public was out
Of the stock market? II that
were true, who lnloaded nearly.
$500. 900 shares yesterday. The
public always owns stocks.
Who Buys Stocks?
.sThe professionals and the pub
lie are liqlidating," remarked,
one operator. But who Is buy
inr stocks from the professionals
and the pIIblic?' The question
is pertinent, and can be answered
In only one way. i do not be-
lieve banking interests bought all
! of the stock that was sold yeSter-
day. 1t must not be forgotten,
however, that q division Of Opin-
ion is necessary to make markets.
For every trader who thinks
stocks are low enough, there is
another who thinks they are go
ing lower. The latter sells, while
the former buys. 1t has been so.
for many years, and will con-
time to be so as long as the
stock exchange exists.
Out Of Is brokers and special
lists whom interviewed in per-.
son and by telephone after yester-
days close, only two predicted an,
extension Of the rally that ap-;;
peared In the last few minutes Of
trading.
Bearish News 81
There was nothing in the news
developments to encourage bullish
sentiment. The weekly report of
railroad car lOadings showed a
decrease and indicated lower earn
ings for the carriers. Copper
sold at 1I1a, cents q pound. a
drop Of " Of q cent. CommOd-
tiles, including cotton. grains
and silk, were weak through most
Of me session. A cotton broker
age house announced its inability
to meet its OBLIGATIONS. Iron Age
joined the officials in the steel
production centers in predicting
further curtailment Of operations
and more dullneSs than the sum-
I1ier letdown usually brings. And,
finally, it was reported on good
authority that the banking pow
erS had decided to let the decline
take its course, on the theory !
that artificial support could not
benefit the securities markets in
the long run.
Many traders and investors
who, two weeks ago. were willing
30 bet their fortunes that Stand
ard Of New Jersey would resist
selling, have seen that issue drop
sharply as the result Of the. Cali
fornia price war.
y. 8. Steel
Steel common continues to lead
the market, both on rallies and
0thaCkS Many a ho0e fide In.