EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Monday: None Tuesday: CCL, MKC, PVH, WAG MARKET NOTE: I've discussed in prior reports the need to consider hedging of positions - covered calls, put insurance on the S&P, etc. Today's action demonstrates the need for a more defensive strategy. It's nearly impossible to determine exactly when to short as being long during a bull market generally makes sense. But the warning signs have been there, including the rising VIX, which is at it again today. I'm also glad I resisted the temptation to add more stocks to our Watch Lists, instead waiting to see if made confirmed breakouts on our major indices. We didn't as failures could be seen in many places on Friday, including the S&P 500 and Russell 2000. ADDITIONS TO WATCH LISTS: There are no additions to our Watch Lists today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: SJM - Trading at the low of the day, but remaining in positive territory and bucking the overall downtrend. 95.50-100.00 is the current trading range for now. Large Cap Watch List: FFIV - Negative divergence has finally kicked in and we're seeing a 50 day SMA test, where aggressive traders could consider an initial position. A second entry would be closer to 103.00. ROC - Approaching our final entry at 74.00, which represents not only price support, but also the rising 50 day SMA. Mid Cap Watch List: GMT - Keeps going higher, but that is one UGLY candle (shooting star) today if it holds into the close with that nasty long-term negative divergence in play. KFY - A little weak today, but the MACD is excellent. I'd consider weakness here to be a buying opportunity, especially on any upcoming 20 day EMA test. MELI - Will be removed if it closes below our Closing Stop of 94.00. The bulls have some work to do here. TTEK - If in this one, consider raising your Closing Stop to 29.00. Small Cap Watch List: There are no Small Cap Watch List stocks at this time. DELETIONS FROM OUR WATCH LISTS: There are no additional deletions today unless Closing Stops are violated. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com