EB Watch List Update Report

Dear Members: Market Update The strength in the market since the December 26 bottom has been something to behold, particularly in the NASDAQ and especially with the prevailing and reasonable thought that the market had rebounded too quickly off the December 26 lows and was in desperate need of a pullback. But the bulls have had other ideas with beaten down stocks like Apple and Facebook moving up sharply after posting their respective earnings. Interestingly, Microsoft came up short when it reported yesterday with the stock lower by 2%, but traders don't seem to be fazed even though MSFT is the second largest market cap company in the world. In addition, Intel is lower by over 2.5% on a change in management. But traders aren't focusing on bad news these days; they want to focus on positive developments including the Fed pretty much stating yesterday that the two interest rate hikes they had planned for this year are now off the table. If the bears were looking for any type of ammo to make a case here it might be that the Dow has moved back below 25,000 which also happens to be right near its 200 day moving average. And they might also point out that the S&P is up against its next key level of resistance at 2700. Both of those are valid points. But when the market has its head down arguments that seem reasonable get tossed out the window. The next test for the bull will be after the bell tonight when Amazon reports its earnings. It's up 2% on the coattails of Facebook and Apple's earnings boosts with the bulls hoping AMZN will follow suit. Since tech stocks are leading the way higher here we should look at the next key level of resistance which is currently at 7332. And if traders continue their love fest with stocks we could see a test of the 200 day moving average, right near 7450. It should be pointed out that the NASDAQ was just shy of its 200 day moving average when it started its December plunge so the bulls would like to get all of those losses back. One final thing to point out. The VIX is down by 3%, not much considering the strength in the overall market. This could be one indication that traders are putting serious thought into taking some profits off the table which seems prudent at these levels. So, what would it take for traders to cash in at these levels and wait for better opportunities? Perhaps a late day reversal where the market turns red after being very green. Not saying it is going to happen but the market does have a way of reminding traders when things look very rosy. Companies reporting earnings today (January 31) Before Market Opens: FLWS, MO, BHGE, BLL, BAX, BX, APRN, BX, CELG, CHTR, COP, DWDP, ETN, GE, HSY, IP, MMC, MA, NOK, NOC, PH, RTN, RDS.A, SHW, S, TSCO, UPS, VLO, After Market Closes AMZN, CY, MCK, SKYW, SYMC and YUMC Companies reporting earnings tomorrow (February 1) Before Market Opens: AON, BAH, CVX, CI, D, XOM, HMC, HON, IDXX, ITW, JCI, KKR, MSG, MRK, PJC, ROP, SPG, SOHU, SNE and WY After Market Closes: None ADDITIONS TO WATCH LIST Will keep you posted on any further additions to the Watch List. At these levels we need to wait for much better reward to risk opportunities which could happen on a decent pullback. BRIEF COMMENTS ON WATCH LIST STOCKS SHORTS: OLED - Stock is fairly flat which is interesting given the strength in the market. For the third day in a row it moved back below its 200 day moving average earlier in the session before bouncing so clearly a close back below that level, currently at $101.29 could set the stock up to move lower. BRKS - Stock hit our second entry level of $31. As a reminder our stop is any CLOSE above $31.30. 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