Professor Elam

Indexes Rally for Inside Day

Tuesday Oct 30, 2018

 

Transports lead so here is the chart. The DJIA and SPX recorded inside days.  Here the Transports had a nice 2.82% rally. PMO at bottom has yet to exhibit an upside cross over.

Oversold Indicators

Only 16% of SPX stocks are above their 50 day Moving Averages

The market has returned to the oversold bottom last seen in February.

 

Summation indices still falling. NASD means tech stocks and they roared to new highs and have been hit hardest as a group on the sell off.

New lows are still 8-9x new highs. And October finally comes to an end tomorrow. But the election next Tuesday is surely a wild card in how this ends.

 

NYSE sets lower low on the reversal yesterday

 

SPX looks better but no turn up in the PMO indicator at bottom on this chart as well

 

SA IMA Presentation November 15 2018

Monday Oct 29, 2018

On Thursday, November 15, 2018 we will be having our next networking dinner meeting. For both sessions, Lawrence Coffee and Mike Lovelace from Aventine Hill Partners will be discussing Business Intelligence and the amazing kinds of actionable information available to executives and leaders via desktop dashboards.

Microsoft Power BI is the topic. As we all know Excel is a big deal in the business world, It is a highly desired skill set for business in any industry. Power BI combines the functionality of Power Query and Power Pivot with Excel.

Many believe this is where the future is headed. It's used for data analytics, predictive analytics and trends. This wold be a great opportunity for Academics and Students to be introduced to a new system that many believe will be an integral part of business just as Excel is today.

 

I encourage you to share this with your students. We will be inviting local recruiters and professional members will also be available to network with. We are striving to have two to three students from each campus attend. This is the best way we can continue to provide resources to students.

Date: November 15, 2018

Place: The Old San Francisco Steakhouse at 10223 Sahara Dr., 78216. 
Time: Networking from 5:30-6pm; Dinner and Speaker 6-8pm. 
Admission: $27 for non student members and guests; $17 for students.   

RSVP: [email protected]  

FASB Adds SOFR to Interest Rate Hedge

Monday Oct 29 2018

FASB addds SOFR for interest rate hedging.

SOFR is the Secured Overnight Financing Rate.  This is being done after revelations that the LIBOR London Interbank Overnight Rate

was manipulated by fraudsters.

Reading the WSJ is one of my twelve steps to Conquer Accounting. I linked to another source but spotted the news in the WSJ today.

Berkshire Hathaway BRK has Poor Year

Monday Oct 29, 2018

 

BRKB had a parabolic run up in January, it then cratered all the way into July. Since then I made it back to the January high, and then

collapsed 10% with the overall market. Perhaps this whole year is a clue that something is out of whack. There is an article in the WSJ today quoting several observers that the best my be in already.

Weekend Update

October 27 2018

Industrials take out all four moving averages as well as the uptrend line from February  2018.

Transports are Worse

Transports Lead the Way Down , More Economically Sensitive

Russell  2000 Small Cap Stocks

Almost back to the February lows!

NYSE Sets New Low

 

Longer Term Views

Weekly DJIA

 

200 week MA above  20,000 is a reasonable target

Stocks Drop Further

Weekend Oct 27 2018

 

I also keep hearing that stocks have to continue rising because the economy remains strong. I've heard that at every market top in the last fifty years. But history doesn't support that argument. Stocks always turn down before the economy.

 

John Murphy, Stockcharts.com

In fact the Dow Industrials have declined 7.5% from the 26,600 high to 24,600 today. Personal computers have prompted the creation of many technical indicators. There is not space in this column to list all of them but many are now ‘oversold’ to the extent of making lower lows than last February. So is this any more significant than last February?

I agree with John Murphy’s comment posted above.   John is generally regarded as the Dean of Market Analysis. He did work at CNBC but was let go for occasionally urging caution, and he was usually right. Now he writes at stockcharts.com one of the most popular charting programs available.

There are numerous reasons to suggest this is not an ordinary correction. And granted a market that has generally been up since 1949 can take a while to form a final top.   But consider these facts.

No bull market has lasted longer than the current ten years of this bull.

As noted last week, the US markets have been alone in continuing upward. China’s Shanghai has shed 50% of tis value since 2015.

We may be testing the entire Bretton Woods Agreement of 1944 which established the US Dollar as the reserve world currency. Only the US and Canada are not members of the relatively new Asia Infrastructure Investment Bank. China proposed the bank in 2013 and would certainly like to see the US out of   the picture currency wise.

The steel tariffs are now having the negative effects we warned of earlier this year. Manufacturers are having to raise prices which threatens the economic recovery. Recall we warned there are far more users of steel than producers of steel. So helping the steel producers penalizes many more manufacturers.

As politically evidence, social mood is not just negative it is fractured with polarization. That helped destroy markets in 1973-74 and is liable to do so again.

Oil and stock prices moved up in lock step the last three years so it is not surprising to see them falling together now. And as I observed in 2014, there is no lack of oil supply.

Finally a Dow Theory sell signal has been generated with Industrials and Transports falling under their 200 day moving average.

October is seasonally weak and month end draws near. While oversold, there is no sign of a turn to the upside yet.

49 Tips for a Successful Accounting Career

Weekend October 27, 2018

Mark Goldman CPA and CEO of MGR Accounting Recruiters has authored a short book on Accounting Success. He has created the podcast Where Accountants Go

for some  104 episodes.  49 tips is a reflection of what he learned speaking with Central Texas professional Accountants. I am placing a copy of 49 tips on Reserve in the TAMUSA Library. I suggest you stop in and take a read. Each tip is a short few paragraphs.  Here is my review from Amazon.com.

 

Full Disclosure I have known Mark Goldman for many years in my capacity as Assoc. Accounting Professor at Texas A & M University San Antonio. The accompanying photo shows Mark officially awarding a scholarship from the San Antonio CPA Society to one of my students. As a result of his podcasts, Mark's advice goes well for not only accountants but for other professional fields as well. I found myself nodding in agreement as I went from tip to tip.
Likes include
Clever drawings to accompany and illustrate the text, who did those?
Short concise and to the point, can be read in 90 minutes
Up until Tip 39, each Tip was completely displayed on one or facing pages
The Tips seem to be grouped in technical, working with people, and self promotion categories
Happily there is some overlap to make great points like Tips 5 &11 - get a mentor, find a career advisor
And the great advice never slacks off, Tip 49 is Praise in Public, Correct in Private
Mark emphasizes taking responsibility for your own career, Tip 43, If the Grass Looks Greener, Have you Watered Yours?
What would I change? Nothing really, I would suggest adding a Table of Contents for all 49+ Tips, they are short and it would allow a potential purchaser to get a feel for content as well as quickly locate a particular tip.
Thanks for sharing the results of your podcasts and experience. Aspiring and current CPAs should be grateful!

Audit Intern

Friday Oct  26, 2018

Hopefully this email finds you doing well on this Friday morning!   I am reaching out to you in regards to the upcoming Spring 2019 busy season and we are in need of one more audit intern.    We were curious if you knew of any students who would be able to work a Full-Time Audit internship during Spring 2019?  If you do, can you please have them send me their resume?  Below are a few key points about the internship:

 

1.      Students need to have completed Intermediate I and II

2.      January 2^nd through March 31^st, 2019

3.      40 hours a week M-F, no day classes can be taken during the internship

4.      Ability to travel is preferred but not required

 

I think a student in the Master’s program seems to be more suited to our working environment during busy season or someone who is only taking evening classes.  If you have any questions, please do not hesitate to reach out. We would greatly

 

Have We Completed Five Waves Down in the NYSE A/D?

Friday Oct 0ct 26