Detroit evening times. (Detroit, Mich) 1921-1958, 1941-10-27
Stock Buyers
Go Slowly, Is
-Haney's Advice
BY LEWIS HANEY


~ Seldom does one find more
uncertainty about anything than
now exists concerning the near
future of the stock market.
Plausible arguments may be
made in favor of an advance.
Equally plausible arguments are
made for a decline.
Perhaps the answer Is that
no great change in either direc-
ton is in early prospect. Prob
ably the next considerable move
depends upon developments
which are still completely I'M
certain.
Under these circumstances.
one should be very hesitant
about taking speculative posi-
ton at this time"
Among the general questions
which arise are the following.
Perhaps an attempt 10 discuss
them briefly may throw some
light.
ID Is the bad news" all
out? Well, no one can be at
all sure. Are Moscow and the
South Russian fronts safe Is
Japan backing down? Is bust
ness getting better7 The labor
and taxation prospects i'm
proving? i. for one. don't know.
But / must admit that some
unfavorable possibilities are
ratheEeaSy-te- SeeT------
Or suppose one asks, 81
What bullish news may he in
the offing and perhaps infla-
tionary developments may result
in a resumption of the climb Of
commodity prices. and bring in
creased profits 10 some COM
panies. II so. however, will tax
gatherers or trade unions not
get them7 What viii war
economy do to business? Would
ace be a bullish factor now?
~f3D One may even debate
whether this is bull market
or a bear market" Some people
do. Here is about the only ques-
ton which seems to bring one
10 any helpful conclusion. II
seems pretty clear 10 me either
that there is no bear market. or
that if it has been one it is near
bottom.
We are not in a bear market
in any old-fashloned technical
sense. Low prices and high price
earnings ratios are the rule. A
condition Of great liquidity pre-
walls. A l2-month moving aver
age Of stock prices is just about
where II was AT its low In April.
1888. Its actor" is like II was
in the Spring of 1895 or Of 1924.
both Of which periods preceded
large rises
-Btit-etierf- mere, ,-rrr -rr1ay pau<c
20 consider the question. under
existing political and financial
conditions. can we have a bull
market" in the old-faShioned
sense? How sure can we be? So
he cautious.
On the bull side Of the mar
ket. one can say that the decline
of recent weeks has discounted
a good deal Of uncertainty.
Some OF tho usual signs OF
"bottoming out have appeared
az a definite lower resistance
level.
The short position has not
been retired.
London and Amsterdam mar
ketS have remained relatively
strong.
The probability Of increased
production and prices next year
have been puhlicized by a gov~
eminent bureau.
- Commodity prices have
But there are bear arguments,
as follows: The market has now
had a fair rally, and filled the
gaps" left in the last decline.
A secondary reaction would
now be natural There is some
suggestion Of declining breadth
accompanied by an increasing
proportion of volume in a few
stocks.
The TTTmer resistance level OF
115 Dow jones' is still a few
points down. The war news
looks uncertain. Mobilization
day" is here for us. as seen in
the drastic rationing of copper.
Business activity in general is
off. The labor situation in steel.
coal and various manufacturing
industries is threatening.
II you know the answer, 60
ahead. / don't; so / advise go
slow
j : PaDer Mill