The Washington times., 1935-05-27

M 3 &c n May
rise. Some indications of a "cli.
max" were shown. Again on last
Friday an upward thrust failed.
including an attempt to run the
rails up.
But the volume of trading has
fallen off on the reactions. The
averages have held above the i'm.
mediate resistance level. The Sat-
urday weakness was checked.
On the whole, It seems I'M
likely that there will be much
of a move in either direction in
the near future. The market
acts tired, but at the same time
1t seems possible that it can
consolidate" its gains without
any serious reaction.
OF course, all reasoning about
market probabilities is subject to
Washington moves. Inflationary
possibilities remain, which could
touch off a squirt. Restrictive col.
lectiviSt regulations are pending
which would cause selling. But my
thought is that the President will
want to avoid rocking the boat
much either way for a while.
The bears can point out that
the averages are sticking at the
peaks of April and July, 1884, and
show signs of double top at this
upper resistance level.
The majority of stocks have
been making no progress. The
group of most active issues have
lately shown more declines than
advances. The earlier leaders
have acted tired, and a poorer
equality of leadership has been
tried. The performance in the
railway group on Friday was both
artificial and unconvincing.
Probably the Senate il Iestiga-
ton of railway finances is as
bearish as the hoped-for presiden-
tial message would be bullish, and
railway traffic figures are not
stimulating.
On the other hand, the bulls
can say that the indications given
by the volume of trading are IA
vorable, and show no tendency to-
ward liquidation or selling pres
sure. It is not entirely clear that
the tendency to concentrate activ-
ity on the up side has ceased.
Brokers loans are relatively low.
Money is as easy" as ever, and
the problem of getting my appre-
ciable return on funds is as great.
Schemes for Government spend.
ing are being rushed. The recess
sion in industrial activity is mod
crate, and not likely to go much
further while the New Deal poll
ticians have billions of borrowed
dollars to strew around.
1t must be admitted that the
rise since March has now
about fulfilled the usual ex-
pectatiOns Of q normal enter
mediate" market move, and that
q good technical reaction is ex-
pected by many observers.
But the rise has not been a
normal one. It has been based
chiefly upon money and credit
conditions and anticipations Of
initiation. The bonus veto is q
mere incident, and does not essen
TALLY change the picture, as is
shown by the slight effect it had
upon prices. So I can see no
reason for anything more than a
technical reaction here.
Sooner or later, I think that
"they" will have to let the market
down considerably in order to
give the public better chance
to get in. I am inclined to eX.
pect better buying opportunities
before the summer is over. But,
for the present, I would watch
the range between the highs OF
May Is and May %, and the lows
of May 10 and IA. Penetration
on either side should indicate the
trend for the next week or two.
If General Motors can't soon
make the grade above 321S,
U. S. Steel above IS, Telephone
above IL, American Can above
1877, and AtchiSOn above AZ, the
expected reaction should follow
shortly,