Evening star., 1932-08-07
so Per Cent Recovery Shown
Above Low Mark Recorded
June |, 1882.
NEXT TREND is PUZZLE
TO STUDENTS OF FIGURES
Readers Wonder if Quotations Will
Follow Former Pattern or Push
on Higher.
BY FRANK H. MCCONNELL,

VI dllIlOSG any hCA4 SdIlLGCd AllNCoL-
ment company in Wall street there
usually sits a serious-faced statistician
of somber mein, who, surrounded with
graphs and charts, tries with varying
degrees of success to read the future.
These men, who form as distinct a
type in Wall street personnel as their
more eccentric cousin, the mathemati-
cally minded foreign exchange dealer,
are sitting on needle points today. They
are pin pricked with curiosity as they
watch with intense interest the labori-
GUS movement of prices on the New
York Stock Exchange and, translating
them into a common denominator
which is accepted as the average day
to-day price level of the general mar
ket, watch this figure chart its waver-
ing course.
The chart today is interpreted by
these students to show that the market
is an extremely important price area
at this time. Many believe that the
next several weeks will furnish some
indication whether the back Of the bear
market has at last been broken. They
are waiting and watching for what they
consider will be the stock markets own
answer to this question.
Some Scoff at Theory.
Probably nobody can say with posi-
tiveness whether the chart readers
craft is based on scientifically sound
theory. Some bankers and investment
leaders believe the chart readers graphs
help to show whether rising or falling
markets are in store. But many other
shrewd Judges scofT at the chart theory.
This much the chart reader can say:
The bear market has followed thus far
a fairly consistent pattern in its long,
irregular decline. Since Autumn, 1929,
the stock market has suffered seven
major toboggan slides. After each of
these, it has regained as much as one
half of its previous loss on what is
described by them as natural rebound
like that caused by dropping rubber
ball on the Recommendations, how
ever indicating any change in the long
major trend.
The market row, however. for the
first time recovered substantially more
than half Of the previous slump, which
lasted from March to June. After each
of the previous six SlumpS, the rebound
was unable to get decisively through
the half way point. Sometimes 1t was
turned back sooner, but the halfway
level presented an impenetrable area,
where the market was turned downward
again. to plunge to new low levels. At
the close today the market had been
able to regain about 81 per cent of its
March-June loss. Some chart readers
felt that this may represent basic
change, particularly II the market man
ages to hold or extend its gains during
the coming weeks.
The stock market, using the Asso-
ciated Press Standard Statistics Co.
market averages as an indicator, has,
since September, 1929, charted the fol-
lowing course.
From high point of 2535, reached
on September 7, 1929, the market COL
lapsed to low point Of 140.2 on
November l3. 1929. This was a decline
of 1893 points.
The market then rallied to a high
point of 205.8 on April 10, 1890, a gain
of 656 points, or 81 per cent. There
after, it broke to 154 on June "a, 1880,
loss of 5l.8 points.
Midsummer Rally Faded.
A subsequent rally carried the market
to 1876 on September 10, 1880,
recovery of 80 per cent. 1t then col
lapsed to HAT on December 16, 1880,
a maximum swing of $50 points. The
rebound carried to 1443 on February
26, 1881, 4 recovery of 296 points, or
so per cent. After failing to penetrate
the halfway mark, the market broke
to 96.9 on June 2, 1881, drop of Ala
points before rally developed which
carried 1t up to 1912 on July 8, 1881,
gain of 24.3 points or 25 per cent.
This Midsummer rally, like its pred
ecessor in 1880, quickly faded and the
market tumbled down to 700 before
any substantial rebound appeared. This
drop amounted to 5l2 points. The
later recovery extended to November 9,
1881, when the average figure reached
9l.5, gain of 2l.5 points, or AZ per
cent.
The market again showed weakness
as the recovery netted about one-half
of its previous major loss. and broke
precipitately to 6l3 on December II.
1881, loss of 30.2 points. Next rebound
carried to 7l.3 on March 5, gain of
10 points or 33 per cent. From that
point, the market crumbled away
| rapidly to new low record for the
bear market when the averages stood
on June l, 1882, at $50. The loss was
26.3 points.
Since June l the average has recov-
cred 70 ATS, the highest since the end
of March, and has thus recovered about
81 per cent of the March-June loss.