EB Watch List Update Report

Dear Members: Market Update: Another morning where it looked like the bears might get some satisfaction only to see buyers eagerly awaiting the pullback with most of the early losses erased. It's the kind of action you see when the bulls are making a case that any hints of a looming bear market are overblown. The talk of the market entering a bear market intensified just as stocks bottomed in late December and when the VIX had made its way over 35. Now the VIX has worked its way back down to 15 as worries that existed a few months back seem to have disappeared. This doesn't mean that the market can continue to move higher forever without some type of correction. But it does mean that we're now in an environment where pullbacks could be looked at as an opportunity to go long. It's also not inconceivable that the burst of selling we saw earlier in the session is the beginning of some type of correction. That would make some sense when you consider that the S&P is right below its 200 day moving average, a key technical level that both the bulls and the bears are keenly aware of. And its coming with all of the major indexes technically overbought and after the S&P has risen 16% in just six weeks. It's also coming after enough companies have reported earnings for traders to judge the overall earnings picture. And, it's coming with the knowledge that the Fed is now on the sidelines as well as the knowledge that the US and China are locked in trade negotiations. This is why the bears can make a compelling case that the impressive rally off the bottom has run its course and that this is as good a time as any to lock in profits. But the bid underneath the market has been extremely strong, to the point where the shorts are throwing their collective arms up in the air. And if enough shorts give up and move to the sidelines, that is exactly when the market will be free to correct. I'm of the mind that it makes no sense to take on new long positions at the moment even with the risk that the market could move higher. But I do believe that at some point when stocks to get cheaper there will be some very nice opportunities to get involved in those stocks that posted stellar earnings. So for now key resistance on the S&P remains at 2742. It got as low as 2724 this morning which happens to be support and if that goes 2700 would be next. Companies reporting earnings today (February 6) Before Market Opens: BSX, CG, CMI, FDC, GM, GSK, HUM, LLY, NYT, BTU, SPOT and TTWO After Market Closes CMG, FEYE, LNC, MET, PRU, RGLD, TRMB and VVV Companies reporting earnings tomorrow (February 7) Before Market Opens: CAH, DTE, DNKN, FCAU, GRA, GRUB, HBI, ICE, K, LH, MPC, MAS, PAG, PM, SNA, TTM, TMUS, TWTR, TSN, and YUM After Market Closes: EXPE, FISV, G, IAC, MHK, MSI, NWSA, PRI, SKX, TDC, VRSN and WU ADDITIONS TO WATCH LIST Please note that the Candidate Tracker has been updated and the Chart Lists will be sent out today to those who have previously requested. We will also keep you posted on any additions to the Watch List. At these levels it makes a lot of sense to patiently wait for a suitable pullback to get involved on the long side. BRIEF COMMENTS ON WATCH LIST STOCKS SHORTS: None 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