The Washington times., 1936-03-30

Any Operations" continue to be on the bull Lewis Hansy
sde and the most active issues those that Ten of
the dozen active issues last week made gains including
-four automobile stocks and three utilities This shows per-
Sistent bullsh tendencies
But majority of stocks traded in during the past month
7have lost ground The number of different traded
in has declined The total volume of trading has ireguary
but perssenty receded Clearly the momentum Of the big
that has since last March has been checked
The question is: market met definite final
resistance level or has merely entered temporary trading
rrange3 If the LATTER will the result merely period Of
consolidation to be followed by renewed advance will
there have to be corrective reaction and "shak
ing out,
In to these questions my guess that the high of
March only temporary resistance level that the
market in trading range Further doubt that any re-
action of than per cent is likely within the six
weeks, and do not consider that much to be probability
y seems reasonably clear that distribution
ecurred in late February More recently however the
action merely suggests uncertainty while there has been
marked general drying Of volume of trading there has
been abnormal divergence between the movement prices
sand volume from day to day or hour to hour.
1t seems to that the market in sort of transitional
nphase
81 In the first place. the positions taken by wealthy persons
rim the high priced leaders being corrected Those who
bought merely to avoid taxes and put funds in
Of storm cellar find taxation schemes working
saganst them They also find with abnormaly
hgh price earnings ratios offer little attractions or hedge
against initiation, they shifting their positions
In the second place people making the transition from
fear Of monetary natcn hope Of redt initiation" This
that there is less hedging and Speculation
Credit initiation is thought of merely business expansion
specuator for raise in prices tendency to seek
stocks which behind the market which show possb
ties of increased earnings. r...
The main hope of the market lies in combination of
Government spending and business recovery and probably
the two things commonly coming regarded
the Since there prospect that Government
spending will become progressively greater between May and
aNovember it likely that business recovery will also
occur On this assumption the market would enter new
phase of Credit nflation after waiting and readjus
ment here. .c'
may take weeks however, complete this transition
Much switching involved putting stocks up others
down. Uncertainties taxes etc. will buying
"oand selling For awhile may wise to figure
that the chances Of gain too small offset new
commitments
would not take speculative position based the
on Of general rise in the market would however dis
urb intermediate positions well selected issues and believe
that sound issues selling for less 20 their earnings
per share, may be found which worth buying.
General Motors continues relatively u S. Steel
should hold above 6 but if breaks go it might drop S.
American Can again under 120 will it find support again
Atchison has broken of triangle on the down side
American Tobacco find investment buying under 92
i
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