EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Friday: BIG, BNS Monday: HRB, MTN MARKET NOTE: The stock market is responding well to this morning's very strong nonfarm payrolls report (jobs totaled 321,000 vs. 230,000 consensus estimate) while the treasury market is doing the opposite and selling off - as should be expected. The problem with the equity market right now, however, is that we're again moving into overbought territory and many key sectors, industry groups and stocks are printing ugly long-term negative divergences. Given this development, I won't be too surprised by some profit taking next week as the second week of December historically can be problematic for the bulls. ADDITIONS TO WATCH LISTS: There are no additions to our Watch lists today. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Short Watch List: There are no Short Watch List stocks at this time. Large Cap Watch List: BMY - I was looking for a potential pullback here, but today's breakout is occurring on strong volume and that trumps negative divergences. ILMN - This one is highly volatile if nothing else. Failures are occurring at price resistance near 195.00, but to the downside, the rising 20 day EMA is providing support. Trade the range for now. Mid Cap Watch List: CUBE - Weakening further as traders are likely discouraged by failed breakout attempts and the long-term negative divergence in play. INFN - Resumption of uptrend likely underway. Look for price resistance at 14.96 to perhaps slow down the advance briefly. Ultimately I see INFN going much higher. MLNX - Consolidating above its 20 day EMA, bullish for now. TASR - Volume again strong to support fresh new highs - very solid action. CMPR - Another new high, but where's the volume? Given the long-term negative divergence in play, if I owned CMPR, I'd raise my stop every day to a price just beneath the low of the prior day. Small Cap Watch List: QLGC - A close above 11.75 would likely lead to a test of recent highs in the low 11.90s. DELETIONS FROM OUR WATCH LISTS: There are no deletions today unless closing stops are triggered. Continue to watch SNCR, our one problem child. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com