EB Watch List Update Report

Dear Members: Market Update: The NASDAQ has been the king of the hill for quite a while but it's finally showing cracks as it joins the Dow and NASDAQ in falling below key technical levels. It's not helping that Facebook, a major market leader, has run into a buzz saw and in the process is dragging down a lot of other stocks that heretofore have been seen as mostly immune to the types of issues that have recently plagued the Dow and S&P. That has now changed so all of the major indexes are now moving lower in sync. It got me thinking about the lack of trade alerts we've had out lately even though our primary focus is on the "best of the best"; companies that beat earnings expectations. On the one hand, these types of stocks should hold up well no matter the market environment, and in some ways that is true. On the other hand when the market is struggling like it has lately it's still difficult for the stellar performers to hold up before being dragged down with the overall market. A great example is a stock like Ciena that had great earnings, gapped up sharply and continued higher for a solid week, looking like no pullback would be forthcoming. However it's softening some as it finally succumbs to the negativity and technical damage done to the market, pointing out that sooner or later the best of the best do come down to earth at one time or another. So yes, CIEN is on my radar screen. But even though CIEN has held up well relative to the overall market it's not immune to technical breakdowns that now include all of the major indexes with the NASDAQ finally below both its 20 and 50 day moving averages. The other problem is the VIX which has remained elevated since it started to climb in late January and today is up almost 20%. Remember how it traded close to 10 and below for months on end? Now it hasn't been below 10 for three months which shows traders have been worried for a while, even with all of the major indexes hitting record highs during that period of time. I'm pointing all of this out since a key part of trading has to do with knowing when to retreat when the market is out of sorts. And this is why we have been extremely picky, choosing to focus more on preserving capital. That's much different than the mode we were in between September and late last year when we had a lot of alerts out that performed quite well. Thus we need to accept the current environment we've been dealt and avoid heavy losses by keeping stops tight on those alerts that do make in on to the Watch List. And I'm hoping this current bout of selling will actually serve us well. We just need to continue to be patient until there's a more positive tone to the market. Companies reporting earnings Today (March 22) Before Market Opens: ACN, CCL, CAG, DRI, LE and MIK After Market Closes: KBH, MU and NKE Companies reporting earnings tomorrow (March 23) Before Market Opens: None After Market Closes: None ADDITIONS TO WATCH LIST Will keep you posted if any new alerts. Will continue to be very picky. 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 CHS - Stock is holding up well relative to the overall market and a close above of $8.95 would be bullish. Deletions from Watch List None At your service, John Hopkins EarningsBeats