The Washington times., 1934-12-17


were: ChrySler s. " $ |s
and G eneral ! $780,
Motors l to 112 x
points. National
Dis tillers "a levi. Hanev
point, Radio
11a points, and Loews l point
But Wilson A gained 2 points
other active stocks were Common
wealth and Souther, Celanese
McCrory and United Aircraft
This list illustrates how mixed
the market is, and how quality
leadership is lacking.
At this juncture, the chief ar.
Euments of the Bulls seems to
me to be as follows:
1. Little liquidating pressure
Is evident, and the volume is
not heavy on the declines.
2. The majority of stocks
traded in have risen on each
Of the last three days.
3. The most active stocks
from day to day show a ma
jOrity of plus signs, and have
become a larger percentage Of
the total volume.
4. The reaction shows signs Of
boiling just above the lows Of
November 1922.
S. Money" is extremely easy.
and the question, what to do
with it is extremely difficult.
6. Government ending IS
likely to benefit some corpora
tions, at least temporarily.
The Bear points are as follows:
/. The old dealers" have been
hesitant and relatively weak, while
the activity has been mostly in
speculative "Specialties."
2. The averages have fallen a
little below the line of upward
trend established since Septem.
ber.
3. Liquidation of utilities con-
tinues.
4. Tax selling is apparent in
these and the oils.
S. Labor uncertainties are dis
turbing.
6. The automobile situation is
beclouded by these. as we'll as by
competitive conditions and doubts
as to demand in 1885.
7. The spirit Of socialistic eX.
perimentation is still in the air.
The chief influence seems to
be in money and credit condi-
tions, not in business activity.
The latter presents little basis
for rise, but the extraordinary
and artificial plethora of funds"
leads men to seek outlets. This
state of affairs explains the
"selectivity" Of the market, and
the low yield of the old leaders.
On the whole, it can be said
fairly that buying has recently
shown less inclination to fol-
low rises, and that the most
active stocks have not been
quite so strong. 1t seems to
me that the Bulls are not quite
20 confident, but have not
abandoned their positions.
I am inclined to think that
not much further decline is indi-
Gated at the moment, and that
the possibility of spring rise
is something still to be considered.
But there are also possibilities
of labor trouble. and costly and
dubious "Social reforms" There
is little probability that normal
recovery" will be allowed.
Therefore, the prospects Of
higher stock prices are limited,
and Setbacks on "unfavorable
news" are to be expected.
Thus it would seem that Specu-
lative traders should confine buy
ing to dips" and take any
profits on relatively small rises.
Others should be most careful
in selecting stocks for purchase.
giving close attention to earnings
per share, freedom from labor
difficulty, possibilities of Govern
ment interference, and results of
further initiation (Which now
seems to be only question of
time).
A few comments on individual
issues may be helpful; Eastman
Kodak last week broke below 10,
and has been on the SkidS since
November 26.
Dupont broke below 90, and
acts as if the 91-92 level might
be reached.
U. S. Steel shows a definite
selling level at just under 80.
It acts as if in a trading range
between IS and 80. A triangle"
is suggested, however, and we
should know soon.
American Telephone, after meet
ing definite resistance at 10, has
been Supported at 105. Evi-
IDENTIFY many sold it after getting
the devidend. 1t does not appear
safe against further weakness.
The rails are holding stubborn
ly, but are forming a triangle" I"
out Of which they may break
either way, depending upon Gov
ernment action. Therefore not
safe.