The Washington times., 1931-02-06
MARKET DRIFTS;
AWAITING CUE
FROM TRADE
Expert Contends Securities
Will Lag Until Definite
Trend Is Set by Business
BY LEWIS HANEY,
Director New York University Bureau
of Business Research and Former
Economist of Federal Trade
Commission.

Commission.
The stock market continues to
drift sidewise. 1t is making one
of the flattest flat spots in sew
eral years-probably since the
latter part of 1927.
Which way will it jump? Or
will it jump at all? The only
sure thing is that nobody knows.
What we know is that specu-
lators have been trying to start
the market up. They bumped
into ceiling on January 9 and
again on January %, and since
then have not been able to make
progress
The usual rule is that if they
won't go up they will go down.
Apparently the constructive
forces are not yet ready to admit
defeat, however, so I personally
am content to wait while to
see what they can do.
Wait Definite News
I think the outstanding fact is
that the market is waiting for
definite news concerning the
business outlook. One sure thing
is that it will take Scme really
good news to put stocks up much.
AS long as most of the real busi-
ness news leans toward the un-
favorable, as in my opinion it
now does, the chances favor the
Set-backS rather than the run-upS.
What do we see going on in
the market? In the first place,
there are a number of pools or
Syndicates playing with such
stocks as Auburn, Foster Wheeler,
Worthington Pump, Vanadium
and Radio The chances for the
outside trader to make any money
by betting on the moves in these
issues are certainly slim.
In the second place, almost
every day there is unfavorable
news concerning some stocks such
as Nickel, Alcohol, Hudson and
various oils and coppers. These
react and then settle down at a
new level.
Then, occasionally, some COM
pany turns in a good earnings
statement for 1880, and it's stock
shows a little firmneSs.
But the only wide moves are in
cases in which there is a nervous
short interest outstanding and
the floating supply is small. !!
It's a Speciality Market
For the present, the market is
one of special situations. Indi-
Vidual issues rise and fall cratic
ally. The market as a whole does
nothing.
Perhaps the chief point you can
make on the bull side is that
liquidation is we'll taken. The
Stock Exchange report shows
brokers loans down per cent in
January, but the market averages
held up and gained at least per
cent. You must admit that, while
liquidation was going on, the buy
ing was as good as the selling.
No Business Pickup
The most unfavorable point is
that business recovery is distinctly
disappointing thus far. Commod-
ity prices are mostly weak, show
ing that demand is not up to sup
ply. The steel industry has done
next to nothing in the last three
weeks, and would call the last
Iron Age bulletin bearish. Rail
way car loadingS are down again.
Real estate reports are very un-
satisfactory.
1t speaks we'll for the technical
position, however, that the market
has held up as well as it has in
the face of such news, and I would
not sell short at present.
The averages" are now right
up to the old resistance level
again. We should soon know
whether they can push through.
The wise man will wait for this
definite evidence of strength be-
fore taking a position.