EB Watch List Update Report

Dear Members: MARKET UPDATE The market remains strong and it remains overbought. The two can last together for a while, especially as we move into a seasonally favorable period of the year and also if traders simply refuse to sell their positions. The Dow seems the most vulnerable with stochastics at 96 and a RSI at 80. That is very technically overbought. The VIX is up slightly and it's still above its 20 day moving average as traders show they are a little more nervous than even a week ago. Nothing major but at least traders are on guard. What's a trader to do in this type of market? First, you need to focus on the "best of the best", those stocks that are in favor and might be the last to fall should the market pull back. Next, it makes some sense to take on fewer positions and shares; it's always best to be aggressive when stocks are cheaper and no one wants to go long instead of going all in when the market is at lofty levels and more vulnerable. It also makes sense to lock in profits, raise stop losses on those positions that have made nice moves. It is possible for an overbought market to become less overbought if it moves into an extended consolidation period. In other words, we don't necessarily need a big pullback for oscillators to reset. But periods of extended consolidation make it tougher to trade successfully; churning can be rough on the pocketbook. Remember we've had a very nice string of winners; we don't want to load up and have a big string of losers and at a minimum we want to continue to keep our stops tight while minimizing losses. Bottom line is we'll continue to be very selective for now and until we get better opportunities than are present at the moment. A little boring but there's nothing wrong with having some extra cash on hand just in case we actually do get some unexpected selling. Companies reporting earnings today (October 11) Before Market Opens FAST After Market Closes: None Companies reporting earnings tomorrow (October 12) Before Market Opens: C and JPM After Market Closes: NONE ADDITIONS TO WATCH LIST We added ZUMZ to the Watch List yesterday with additional information below BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: None at this time LONGS: Large Cap Watch List CRM - Stock is up slightly and a close back above $96.32 would be bullish. Mid Cap Watch List GWRE - Stock is up slightly and a close back above $79.02 would be bullish and put us another step closer to our target of $81.40. Small Cap Watch List GIII - Stock is down by over 2.5%. If it closes below its 50 day moving average, currently at $27.57, it will be removed from the Watch List. ZUMZ - This stock was added to the Watch List yesterday with an initial entry price of $18.31 and a second entry on any pullback to $17.90 with a price target of $20 and a stop of any INTRA DAY move below $17.70. DELETIONS FROM THE WATCH LIST None At your service, John Hopkins EarningsBeats