EB Watch List Update Report

Dear Members: First, mark your calendars for next Tuesday, January 22, when we will have our Quarterly Earnings webinar where we examine stocks that have recently reported earnings as well as those about to report. I'll be joined by StockCharts.com Senior Technical Analyst Tom Bowley and we'll spend some time discussing ways to take advantage of our Chart Lists. There's no need for members to register and you will be sent room instructions prior to the event. The webinar will be recorded for those of you unable to attend the live event. Also, with the market closed Monday, the next Market Update will be on Tuesday. Market Update What's got the market so excited today? Apparently talks between China and the US to help avoid the impact of tariff wars which has spooked the market. What else was making traders nervous? The prospect of additional interest rate raises by the Fed. But, the Fed signaled recently that they would be more measured in their decision making - i.e., won't raise rates unless absolutely necessary. What worries remain? Some would say the government shutdown but everyone knows at some point that will be resolved. So now that the major worries have been accounted for the market has turned its attention to earnings. We saw Netflix report its numbers after the bell last night and so far the stock is lower by over 3%. That's not too bad considering the company missed revenue expectations and considering the stock had risen by 50% since its December 26 low. It's worth noting that the VIX is lower again as it nears its 200 day moving average for the first time since early December. But one could argue here that the VIX is nearing "oversold" territory; no relief since the December 24 market low. And now the S&P is closing in on its next level of resistance near 2670, having risen 13% in just over 3 weeks, a great year by any measure. So traders have gone from being petrified in late December to being very confident in a very short time span. What should we expect next? First, with earnings season about to kick into high gear traders will be looking to see if overall expectations are exceeded. If so the market could continue its march higher. On the flip side, considering the monster move off the bottom with no relief, any hint of missing expectations could put a halt to the rally quickly. Remember that a lot of traders exited the market when it hit its low December 24, many remaining on the sidelines. Will they suddenly emerge now that the market is in overbought territory? It's very possible considering the masses generally pile in after the bulk of gains have been made. Bottom line: the move to the upside has been very impressive. But trying to extract more gains at this level is risky at best. And shorting has been an exercise in futility, at least the past few weeks. So being in cash while waiting for much better opportunities seems like a pretty good idea. Companies reporting earnings today (January 18) Before Market Opens: KSU, SLB, STT and STI After Market Closes None Companies reporting earnings Tuesday (January 22) Before Market Opens: FITB, HAL, JNJ, MBFI, SWK, STLD and UBS After Market Closes: COF, IBM, AMTD and ZION ADDITIONS TO WATCH Will keep you posted on any further additions to the Watch List. BRIEF COMMENTS ON WATCH LIST STOCKS SHORTS: ERF - Stock is higher by 1.6% as it gets swept up along with the rest of the market. As a reminder we have a stop of any CLOSE above $9.40 or any INTRA DAY move above $9.50. LONGS: Large Cap Watch List None Mid Cap Watch List None Small Cap Watch List None Deletions from Watch List None At your service, John Hopkins EarningsBeats