diff --git a/test/bytecode_2.7/05_for_try_except.pyc b/test/bytecode_2.7/05_for_try_except.pyc
new file mode 100644
index 00000000..decefe67
Binary files /dev/null and b/test/bytecode_2.7/05_for_try_except.pyc differ
diff --git a/test/simple_source/bug27+/05_for_try_except.py b/test/simple_source/bug27+/05_for_try_except.py
new file mode 100644
index 00000000..f96bd16f
--- /dev/null
+++ b/test/simple_source/bug27+/05_for_try_except.py
@@ -0,0 +1,11 @@
+# Issue #38 in Python 2.7
+# Problem is distinguishing 'continue' from 'jump_back'
+# in assembly instructions.
+
+# Here, we hack looking for two jump backs
+# followed by the end of the except. This
+# is a big hack.
+
+for a in [__name__]:
+    try:len(a)
+    except:continue
diff --git a/uncompyle6/scanners/scanner2.py b/uncompyle6/scanners/scanner2.py
index 6b49dba2..28ead94a 100755
--- a/uncompyle6/scanners/scanner2.py
+++ b/uncompyle6/scanners/scanner2.py
@@ -32,7 +32,7 @@ from xdis.bytecode import findlinestarts
 import uncompyle6.scanner as scan
 
 class Scanner2(scan.Scanner):
-    def __init__(self, version, show_asm=None):
+    def __init__(self, version, show_asm=None, is_pypy=False):
         scan.Scanner.__init__(self, version, show_asm)
         self.pop_jump_if = frozenset([self.opc.PJIF, self.opc.PJIT])
         self.jump_forward = frozenset([self.opc.JUMP_ABSOLUTE, self.opc.JUMP_FORWARD])
@@ -164,6 +164,18 @@ class Scanner2(scan.Scanner):
                 elif op in self.opc.hasjrel:
                     pattr = repr(offset + 3 + oparg)
                 elif op in self.opc.hasjabs:
+                    if self.version == 2.7 and op == self.opc.JUMP_ABSOLUTE:
+                        target = self.get_target(offset)
+                        # FIXME: this is a hack to catch stuff like:
+                        #   for ...
+                        #     try: ...
+                        #     except: continue
+                        # the "continue" is not on a new line.
+                        n = len(tokens)
+                        if (n > 2 and
+                            tokens[-1].type == 'JUMP_BACK' and
+                            self.code[offset+3] == self.opc.END_FINALLY):
+                            tokens[-1].type = intern('CONTINUE')
                     pattr = repr(oparg)
                 elif op in self.opc.haslocal:
                     pattr = varnames[oparg]