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The Simple Accountant
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Harry Fotopoulos, "the Simple Accountant" is a twenty+ year veteran of corporate accounting and finance, much of it in manufacturing, but also including a stint with a tech startup. Harry manages two separate portfolios, one focused on current income, the other on total return. A... More
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  • Quick Weekend Update
    Although the most widely quoted U.S. equity indexes were flattish last week, there were quite a few developments that set some direction for our portfolios going forward. For me it was also a heavy week of work and soccer referee duties, and now we're off to Daytona for the 24 hour sportscar race, so my weekly analysis will be late and unlikely to be published until late Monday.

    For readers' benefit, I would like to capture a few thoughts now that we will expand upon in the forthcoming article:

    1. Fed Chairman Bernanke's public remarks were seen as a green light for gold and commodities bulls. I'm not entirely sure about the latter, but we immediately entered a long gold position after the speech.

    2. We saw big pullbacks in the big telecoms - AT&T and Verizon - both of which shed more than 4% on the week, and an even larger drop in Travelers. This led the Dow down, but the NASDAQ and Russell 2000 had pretty decent weeks. I still see a small correction as healthy here, and still maintain a bullish general stance.

    3. Asian stock markets ex Japan are showing some real signs of life. This is an area to watch.

    4. The Fed has put a floor under bonds. We're still not buying them because the yields are too low to generate decent income, but not selling our holdings because the risk of lower bond prices in the near future is small.

    5. The Fed extended the pullback in the U.S. dollar. Look for a short term bounce. Longer term...we'll see.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY, GLD, IWM, EEM
    Jan 28 9:03 AM | Link | Comment!
  • S&P Technical Update

    It’s been a week since the last update [on my Wordpress blog], and in the interim, the S&P 500 has been moving sideways in a tighter range, continuing to form a symmetrical triangle pattern on the chart. I am concerned that the 200 day moving average has been tested and failed three times, and now the index is backing off that level. We also see the MACD rolling over and on balance volume stalling out.

    This week has seen more troubling developments in the European bond markets, which are still dominating the news and moving the U.S. financial markets. The bond market is basically saying that the policy response has yet to address the problems sufficiently.

    With the balance of risk to the downside, and deteriorating technicals, my stance on the markets is moving to defensive. I just don’t like the action we are seeing here.

    (click on chart to enlarge)

    Tags: SPY, IVV, VTI
    Nov 17 8:32 AM | Link | Comment!
  • The Week Ahead: Europe Still Calls the Tune
    With apologies to readers, my regular weekly market analysis won't be available this weekend. I simply ran out of time. I would however like to share a few thoughts as we look to the week ahead:

    The S&P 500 is still at an equilibrium, but it's not likely to last. We shared this observation on the markets in general last weekend. Since then we have seen dramatic news driven swings, but the trading action shows (1) repeated failure at the 200 day - I commented on this in my Wordpress blog entry Thursday - and (2) the trading range is narrowing as shown in a symmetrical triangle forming between the 50 and 200 day on the chart. There is a good chance we break out of it this week. My trading plan is to look for the direction of the break to either add to longs, or stay defensive. The news will continue to drive the markets. As of this writing, Asian markets have made 1-2% advances in response to the new government formed in Italy.

    (click on charts to enlarge)


    We wanted to see the VIX come back under 30. Last week it closed just above, but it's moving in the right direction. Of course, any political blowup, bad bond auction, or other worrisome signal from Europe could drive it back up again.



    Even with oil near $100, commodities remain in a downtrend. Metals, grains, softs, all look technically weak. The precious metals included. 



    That's my quick take. The bias is still bullish for U.S. large cap equities and bearish for bonds and commodities, but it's a weak bias in each case. The market has been whipsawed around by events; to tune out the noise we need to stay focused on the data.


     
    Tags: SPY, DBC
    Nov 13 11:27 PM | Link | Comment!
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