EB Watch List Update Report

Dear Members: MARKET UPDATE We are witnessing something quite rare, especially in the Dow, with the oscillators extended as much as they have been in a very long time. It's not just that stochastics are near 100 and the RSI is closing in on 90; that alone is rare and a major sell signal. It's more that the Dow has now been overbought for the past 3-4 weeks, and at extreme levels. The NASDAQ and S&P are overbought as well, but the blue chips , which have led the move higher, are overbought at levels rarely seen. The bulls will say this is because things are "different" now; earnings are strong, tax reform is in the making, investment alternatives are few and far between, interest rates remain low. All of this might be true, but in fact, a lot of this has already been factored in. It's the beauty of technical analysis where index charts generally show what's going on out there, from fundamentals, to currency and interest rate factors, to future expectations. And a reliable way to gauge whether an index is extremely overbought or oversold is looking at that tried and true combination of stochastics and RSI, and right now they are at historically high levels. This won't last forever; it never does. And the longer it goes on the greater the chance for a more significant correction. As I've pointed out a lot lately this doesn't mean the market can't go higher; it can. But each day the market remains on the extreme overbought side of the spectrum, being aggressively long becomes more risky. You will also notice I haven't suggested getting aggressively short either, especially in the heart of earnings season. Instead it makes more sense to accumulate more cash, "just in case" and to be very selective here, which is exactly what I plan to do. Companies reporting earnings today (October 23) Before Market Opens BOH, HAL, HAS, ITW, KMB, STX After Market Closes: CR, OI, RMBS and ZION Companies reporting earnings tomorrow (October 24) Before Market Opens: MMM, BIIB, CAT, CIT, GLW, FCAU, FITB, GM, INFY, JBLU, LLY, LMT, MAS, MCD, NVS, PCAR, PII, PHM, R, SCHN, SHW, SWK, AMTD and UTX After Market Closes: AMD, AMP, T, COF, CSL, CMG, DFS, ESRX, ILMN, JNPR, NBR, NUVA, RGC, STLY and TXN ADDITIONS TO WATCH LIST Now that earnings season is well underway we will soon be adding a lot of stocks that beat earnings expectations to the Candidate Tracker. Will keep you posted. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: You will notice we've got a "clean slate"; that is no active trades at the moment. This is intentional. That will change as earnings season progresses but for now with the market flat out stretched we are going to lay low. SHORTS: None at this time LONGS: Large Cap Watch List None Mid Cap Watch List None Small Cap Watch List None at this time DELETIONS FROM THE WATCH LIST At your service, John Hopkins EarningsBeats