EB Watch List Update Report

Dear Members: Market Update: The market has gone from being extremely overbought to fairly neutral with all of the major indexes lower but well off session lows. Even with the great deal of selling last week and into this morning traders are remaining reluctant, much different than the mood just a few weeks ago. The VIX shot above 19 this morning a level last seen in November, 2016. In fact the VIX has now doubled from the low's seen in early January; from extreme euphoria to increased worry. The most popular reason being tossed around for the recent weakness is the big increase in government bond yields. In fact the yield on the ten year treasury note has increased almost 50 basis points from the beginning of the year as worry about inflation has picked up. Interestingly, in looking at the chart on the ten year treasury note, it is showing that it's stretched. In other words maybe bond yields have risen too quickly and are due at least for a pause. In looking at the S&P it got as low as 2733 which is roughly 15 points above its 50 day moving average which should be considered important support. So the question in the very near term becomes; are traders convinced that there's been enough selling or is there more to come? For sure you can see the hesitancy to get aggressively long here compared to the never ending buy on the dips we saw for many months. If the selling does resume we'll want to keep an eye on that 50 day on the S&P because if that goes we could see even more selling. From a reward to risk perspective we would be better off if the S&P did test the 50 day as it could spur more interest. So it makes sense to tread lightly here, see what develops as the day progresses, and continue to focus on those stocks that could hold up the best if the selling does intensify. Companies reporting earnings Today (February 5) Before Market Opens BAH, BMY, HES, PCRFY, GOLD and SYY After Market Closes: CRUS and SWKS Companies reporting earnings tomorrow (February 6) Before Market Opens: AGN, ADM, BP, CMI, DNKN, EMR, GM, LH and SAVE After Market Closes: AKAM, APC, BZH, BBOX, CERN, CMG, TCS, DIS, EXTR, GILD, JCOM, NTGR, NEU, OI and SNAP ADDITIONS TO WATCH LIST We added KMI to the Watch List on Friday with an Intra Day stop of any move below $17.20. It moved below that level today so is being removed from the Watch List. We also added IBM to the Watch List this morning with additional information below. Going to keep a close eye on the market and will let members know if any new additions to the Watch List. Also we will be adding a lot of stocks to the Candidate Tracker in the near future and will keep you posted. BRIEF COMMENTS ON WATCH LIST STOCKS SHORTS: None at this time LONGS: Large Cap Watch List IBM - Stock was added this morning at an entry price of $157.44 with a price target of $168 and a stop of any INTRA DAY move below $156. Mid Cap Watch List BB - Stock moved below the INTRA DAY stop of $12.30 so is being removed from the Watch List. Small Cap Watch List None DELETIONS FROM THE WATCH LIST BB and KMI are being removed from the Watch List At your service, John Hopkins EarningsBeats