EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Friday: DRI, KMX Monday: MU MARKET NOTE: Options-related activity has had little bearing on market direction - at least thus far. This is a characteristic of a bull market, charging ahead despite a multitude of potential red flags and warning signs. Just please keep in mind that many warning signs began flashing in 2006 and into 2007, MONTHS before the actual top in October 2007. Unless intermarket relationships change, I do believe we're likely heading for at least an intermediate-term top somewhere in our not-so-distant future, but timing it is nearly impossible. And the Fed intervention makes it extremely tough because technical analysis tells us little about what to expect after such intervention because it's unprecedented. We can only take this one day at a time and remain vigilant in taking profits and keeping stops in play. ADDITIONS TO WATCH LISTS: There are no additions today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: ARG - 108 and 109 have been a brick wall for the bulls, but we'll respect a close above 109.75 and move on if it occurs. LL - Breaking to fresh new lows despite the long-term positive divergence. PRGO - Remains in the upper end of our resistance zone - near 143. We'll honor our Closing Stop of 145.00 to be safe. SBH - Ditto LL. Large Cap Watch List: CNP - Hit our short-term resistance level of 25.00 and is threatening to print a reversing candle. It is quite a bit off its earlier intraday low, however, so a strong finish could lead to a breakout and further gains. The close today will be important near-term. HSP - Has broken out and while the volume on Thursday was concerning, it's picked up today. If I owned HSP, I'd hold it, but raise my Closing Stop to 52.00 given the long-term negative divergence. Mid Cap Watch List: WTW - I'm surprised it failed to hold 20 day EMA support as volume was moderate at best. It's now down testing its rising 50 day SMA - I'd like to see this level hold. Small Cap Watch List: There are no Small Cap Watch List stocks at this time. DELETIONS FROM OUR WATCH LISTS: There are no deletions today unless closing stops are violated. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com