The Washington times., 1934-06-11

mu1dClOu WAS
going on in the
second half of
May and early s ~:
June. They re- S lsS:E3 'a
gard the Friday Lewis Haney
push as a definite break out on
the up side, which is likely to
begin a sustained advance.
Others hold that there has
been no typical accumulation
period, and that the push up
has been due largely to short
covering and a drive by floor
traders, aided by Cd a temporary
Improvement in sentiment" based
on hopes of strike settlements,
and ca squirt Of industrial
activity caused by anticipation
Of strike shutdowns.
My own views are somewhere
between these two positions.
While I doubt that there has
been any broad and general
"'accumulatiOn," it cert ainly
seems fair to say that the mar.
ket had stabilized at a logical
level and turned very dull,
In . way that indicated abb
Bence of Lquidating pressure.
1t then showed ability to abb
sorb selling ION minor rallies,
and finally to rise above the
trading range.
Probably the best way to re-
gard the period from May "A to
June 2, is to consider it as a
secondary" recovery and reaction
following the April-May decline.
The absence of volume on June l
and 2, and the gain in activity
last Friday may then be regarded
rs favorable.
But I would not be too sure
about a large and sustained rise
from here. The action on Satur-
day, as the averages neared the
limits which I suggested last
Thursday, is a warning that this
is no runaway market. But more
important than that, IS the alb
gence of any strong bull argu-
ments with. respect to business
and earnings. It may turn out
that the summer reaction in bust
ness will be less than feared. The
fact remains, however, that most
Of the recent pickup in steel max
ing has resulted from strike fears,
which can hardly be a sustained
basis. This is also a factor in
car loadings. May automobile
sales were hardly bullish.
The Presidents recent message,
with its emphasis on collectivist
reforms and Government debt
and taxes, will not, on second
thought, seem bullish from any
angle except initiation.
For the near future, it seems
probable that stocks will meet re-
8istance at about the 100 level of
the Dow Jones industrials. Not
TAR from here, one might expect
that market to consolidate its posi-
tion during several days of stabili-
cation in preparation for another
attempt at a push up, the success
Of which, if it comes, I am at pres
ert inclined to doubt.
At the worst, however, no large
reaction now seems probable, and
If a little dip should occur soon,
we would probably see the Friday
Saturday level again.
Those who during the past
month have bought and held care
fully selected stocks are now "Sit-
ting pretty" and may well keep
their positions.
In considering new buying
here. / would be inclined to
look for stocks which are "be-
hind the market" and which are
still fairly prices with refence
to earnings. Probably some are
to be found among the railway
equipment, building supplies,
merchandising, oil, dairy and
chemical issues. / doubt il all
the gold mining stocks have yet
seen their highs, though careful
selection is required in this
group as in all others.
Allowing for the numerous un-
certaintieS which exist, the gen.
eral policy of buying cautiously on
dips, with an eye on initiation pos
sibilitieS, seems fair enough.