EB Watch List Update Report

Dear Members: Market Update: We've had two days of buying after getting slammed with all of the major indexes higher. The market went from extremely overbought to extremely oversold so a bounce was almost inevitable. The VIX has fallen sharply as well after hitting rare air up at 50; that has not happened many times in the almost 30 year history of the VIX. In fact yesterday's rise to 50 is only the third time ever the VIX hit that level. Some will argue that the heavy selling in stocks coinciding with the sharp rise in the VIX has put a floor on the market. That's a possibility. But to me what we are seeing now is nothing more than an oversold bounce. Where the strategy for a very long time has been to buy on dips we could experience something different for a while; sell on any moves higher. One clue for whether the rally can continue is the 50 day moving average, currently at 2720 on the S&P. A close above that level could see some follow thru buying. But a close back below the 50 day could indicate that there's not much left in the bounce. Getting back to the VIX. Given the rarity of the VIX touching 50 it must be respected. It is possible that will be the peak for now but should the market get spooked again we could see a revisit of that level, maybe even exceed it which would cause even more selling. Not saying that will be the case but all of the sudden traders are looking for reasons to sell rather than go all in on the long side - i.e., locking in gains on the bounce rather than load up on stocks. The first level of support on the S&P will be 2638, Monday's low. If the bulls are able to keep the momentum going here we could see a move up to resistance right up near the 20 day moving average, currently at 2767. That's the range for the moment. Companies reporting earnings Today (February 7) Before Market Opens BLL, BCO, CG, CTSH, HAIN, HAS, HUM, ICE, JLL, KORS, BTU, RDWR, RIO and WD After Market Closes: ALL, FISV, FORM, FORR, IAC, INFN, MFC, NTES, PRU, RSYS, RDWR, RNWK, RGLD, SU, SYNA, TTWO, TARO, TSLA, FOX, VVV, YELP and ZNGA Companies reporting earnings tomorrow (February 8) Before Market Opens: BWA, CAH, CVS, GT, GRA, GRUB, HBI, K, KKR, MAS, NLSN, NYT, PENN, PAG, PM, SNA, SCGLY, TEVA, TRI, TZOO, TWTR, TSN, VIA, WWE and YUM After Market Closes: AIG, AIZ, CSL, EXPE, FEYE, KNL, LTRE, MHK, NCR, NWSA, NVDA, SWIR, SKX, TCO, TRMB, UIS, VRSN and ZG ADDITIONS TO WATCH LIST We added CMC to the Watch List with additional information below BRIEF COMMENTS ON WATCH LIST STOCKS SHORTS: None at this time LONGS: Large Cap Watch List None Mid Cap Watch List None Small Cap Watch List CMC - We added CMC to the Watch List yesterday at an entry price of $22.99 with a second entry on any pullback to $22.45 with a price target of $25.10 and a stop of any INTRA DAY move below $22.20 DELETIONS FROM THE WATCH LIST None At your service, John Hopkins EarningsBeats