EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Monday: BWLD, GLW, SOHU, SU Tuesday: ADM, AFL, AUY, BMY, BP, CIT, CMI, CNQR, CRAY, DB, EBAY, ESRX, GT, HRS, MAR, MGM, MRK, NOK, PNRA, S, SNY, STX, TRLA, TWTR, VLO, VRSK, X MARKET NOTE: The warning signs continue to mount in the stock market. While the Dow Jones and S&P 500 both trade mostly sideways the past couple months, significant technical damage has been done to both the NASDAQ and Russell 2000. Further technical damage will take place on drops below 3996 and 1090, respectively, so watch those levels carefully. We are down to just five Watch List stocks because of all the uncertainty in the market right now and our strategy to be more conservative until the market determines which way it will transition. In other words, will the bull market resume or are we going to have to deal with a significant correction, or worse yet, a bear market? Trading strategies vary greatly depending on the answer to that question. We are planning to add stocks to our Watch Lists this week, but don't expect large Watch Lists until we see further signs from the market as to which strategy is appropriate. I understand that the risk of trading such a small list of stocks is boring, but I also want to make sure that we don't overtrade in a poor environment. ADDITIONS TO WATCH LISTS: There are no additions to our Watch Lists today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: SJM - Bouncing today because the consumer staples sector is strong. The trading range hasn't changed. Large Cap Watch List: VIPS - The recent selling may be providing another re-entry opportunity close to 130. Consider keeping a closing stop in play near 125. Mid Cap Watch List: KFY - Failed recent at price resistance and now is close to initial support at 28.00. That level, along with 27.25, could represent re-entry areas. Small Cap Watch List: PLOW - On a relative basis, performing quite well given the weakness in small cap shares overall. 16.50-17.80 is the current trading range and we're currently situated right in the middle of it. DELETIONS FROM OUR WATCH LISTS: There are no deletions today unless stop losses are violated. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com