Evening star., 1938-06-17
MARKET IGNORES
ADVERSE
UnfavorabIe News Exerts
Little Effect-Volume
Signs Bu|Iish.
BY GEORGE T. HUGHES.

srecial Dispatch to The Star.
NEW YORK, June lit is a
mixed picture that the stock market
presents. According to the charts, the
trend is still downward but volume in
dications are bullish. Moreover, the
market seems to have developed q
considerable degree of indifference to
unfavorable news.
Taking the chart reading first, since
the top of the April rally each success
sive reaction has touched lower level
and each subsequent rebound has
stopped below the one Immediately
preceding it. Using the Dow-Jones in
dustrial average as the measure. the
market made 1888 low at 1895 on
March 81. 1t recovered to l2l00 on
April Is, dropped to 1000 on May
2, rallied to 1l943 on May 9, declined
to 1O774 on May 81 and turned up
ward again to 11574 on June 9. The
pattern. it will be seen, is bearish.
IAVfuCfS 1hCluot W SCh.
At the close of June 16, however,
stocks wers less than two points under
the June high. II they can better
that point on the present rally it would
be possible to argue that turn had
come.
The other side of the story is the
very evident fact that real holders of
stocks are not disposed to sell, no
matter how unfavorable the outlook.
For purpose of illustration We may
take General Motors. Monday of this
week the newspapers published the
text of Chairman Alfred P. Sloans
letter to the stockholders accompany
ing the quarterly dividend check. in
which he expressed very gloomy view
Of the future.
Mr.. Sloan declared that if the pres
ent trend continued next seasons bus
iness would, on an annual basis. ap-
proximate the volume of the industry
in 1882, which was the low of the pre-
vious depression. Advices from the
trade that filtered in from Wall Street
were almost as pessimistic
Stock Receivers Quickly.
Now look at the action of the stock.
General Motors closed last week at
20. up 4 on the week The day after
Mr.. Sloan's statement it dropped
point to 20. That, at least, would
seem logical. The next day it came
back to 287s. On Wednesday it de-
serted the list of "15 most active is
sues" closing up Is at 20, and on
Thursday it left off at 29as.
1t is impossible to read into that
showing of the market for General
Motors anything other than determi-
nation on the part of shareholders
to maintain their positions, confident
that over the longer period such
would be the profitable policy. So far
as this case is representative, and it
is fairly so, the market is no longer
vulnerable. That is one of the signs
Of sold-out condition that comedies
with the end of bear movement.
OF course, the case is not proved.
Forecasting market movements of
stocks is about as hazardous an oc-
cupation as there is.
The inactivity which so distresses
the brokers. and which is responsible
for Stock Exchange seats selling at
the lowest in 20 years. is nevertheless
to be taken as another suggestion Of
completed liquidation.
In January there were 10 sessions
with over million shares: in Feb
ruary there were 2; in March, when
the market was plunging downward,
there were 9; in April there were S;
in May there were 3, and in June to
date there has been none. Even
allowing for the practical outlawing
of short selling, this is a remarkable
showing.
tcopyIjRht, 1888. by the North American
Newspaper Alliance. Inc.)