EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Friday: AXL, CBOE, CLX, CVX, PG, RBS, WY Monday: AIG, CAH, CNQR, KORS, L, MRO, VNO MARKET NOTE: Selling and volatility have escalated as additional breakdowns technically discourage buyers. Heavy volume accompanied the S&P 500's break below its 50 day SMA and this follows a long-term negative divergence on its MACD. When we combine that with all the warning signals over the past several months, the market message is to BE EXTREMELY CAUTIOUS. July nonfarm payrolls disappointed today as did the ADP employment report on Wednesday. So traders are either not buying the stronger than expected GDP report earlier this week or they believe that the Federal Reserve's hand may be forced to raise rates earlier than previously thought. That development would make sense given the breakdown in housing-related stocks over the past couple weeks. ADDITIONS TO WATCH LISTS: There are no additions to our Watch Lists today. We want to see the current turmoil settle down before taking on any additional stock risk. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: There are no stocks on our Short Watch List at this time. Large Cap Watch List: CNP - Holding trendline support and actually going against the grain today and moving higher. I like the stock, but I'd raise my stop to a close beneath 24.00. FDX - Down fractionally today, but overall holding up well. I still like entry from 145.50-147.50. If you're nervous about the market (and I wouldn't blame you), consider a tight closing stop beneath 144.00-145.00. JWN - Remains in a very bullish pattern, but that sell signal at 70.21 should continue to be honored - at least until JWN can make the breakout with confirming volume. NVDA - Thus far holding 17.50 support. If the market can catch its breath, I see NVDA bouncing from here. But further downward pressure could result in a breakdown here so make sure your stop is in place. Mid Cap Watch List: PAY - I like this stock, but I don't like the market. Don't take any chances. If it closes beneath 33.50 today, we'll remove it from our Watch List without hesitation. Small Cap Watch List: There are no Small Cap Watch List stocks at this time. DELETIONS FROM OUR WATCH LISTS: There are no deletions unless closing stops are violated. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com