EB Watch List Update Report

Dear Members: Market Update: Day two of selling with all of the major indexes lower as we get ready to close out the week. Interestingly the selling today is more focused on blue chip stocks with the Dow struggling to stay above its 200 day moving average. But overall the selling has been fairly contained considering the strong move off the recent bottom. Speaking of the move off the bottom it is worth noting that the S&P is pretty much where it was back in October. In other words, no gain in the market since that time. So talk of the market going up too fast over a short period of time might be overstated. I'm still of the mind that it would be better to see stocks even lower, especially some of the stocks that knocked it out of the park when they reported earnings. These are the types of stocks that we'll want to zero in on when the reward to risk is sufficient to take on a trade. The VIX is higher again today, up over 6% and back above its 200 day moving average and showing that traders may have gotten too complacent during the recent rally and thus an overdue pullback. But I am starting to believe that those who think the selling will be deep may end up being disappointed. To me an ideal scenario would be one where the S&P pulled back to its 20 day moving average, currently at 2665, and held. It's certainly a level that might get some traders off the sidelines. If that level were to go then there would be a decent possibility that the 50 day would come into play, another 50 points lower. But the bid beneath the market has been so strong of late that I'm thinking traders will be itching to get back on the long side sooner rather than later. There's no need to rush into anything here; we can watch and see what develops the next few trading days. But barring an unforeseen, negative development out of the blue, I think US stocks are now seen as a fairly safe place to put capital to work. Companies reporting earnings today (February 8) Before Market Opens: CBOE, EEFT, EXC, GT, HAS, PSX and RDN After Market Closes None Companies reporting earnings Monday (February 9) Before Market Opens: DO, KMPR and L After Market Closes: FMC, OHI and RNG ADDITIONS TO WATCH LIST Some stocks are on our radar screen but would like to see even better entry levels. Will keep you posted on any additions to the Watch List. 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