EB Watch List Update Report

Dear Members, KEY EARNINGS REPORTS: Tuesday: AZO, CONN, KFY Wednesday: COST, HOV, TOL, VRA MARKET NOTE: The selling really began to accelerate just about this time on Monday. After a very rough start to the morning (on the heels of significant selling overseas - especially in China), the bulls have managed to pare the losses. Let's see how the market finishes today, though. Until we can print a higher high and higher low on a daily basis, this downtrend remains in play. Given the long-term negative divergences that have appeared in many corners of the market, we may see more selling before things stabilize. ADDITIONS TO WATCH LISTS: There are no additions to our Watch lists today. If the weakness in the market persists, we'll be looking to add a few names as the end of the week nears. 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 - Part of the pharmaceutical space that is being hit rather hard today. Still, other than the long-term negative divergence in play warning us of potential short-term negative action, we've seen no meaningful breakdown. COST - REMOVING FROM OUR WATCH LIST AS COST REPORTS QUARTERLY RESULTS ON WEDNESDAY. HSIC - Seeing more meaningful selling, but still no 20 day EMA test. ILMN - At one point this morning was down over 6 bucks, but has recovered nicely. Mid Cap Watch List: CRS - Continues consolidating, which is fine, but I'd be careful if support at 47.50 is lost, especially if volume begins to accelerate on that decline. INFN - Both the 20 day EMA and price support at 13.50 were touched today, providing entry or re-entry opportunities. Nice action. IRBT - After losing its 20 day EMA, IRBT quickly fell today to test key price support at 34.00. This level has held for weeks and thus far today, the bulls are stepping up again at that level. ODP - Bouncing from 6.25 once again. 5.95 still remains the critical support, however. SNCR - Stopped out on Monday's close. The longer-term weekly chart looks much better than the daily chart. For those wishing to hold longer, the 37-38 area is long-term support from the breakout that occurred in July. TASR - Test of 20 day EMA today was perfect opportunity for entry or re-entry. 20.50-21.00 should also provide additional support if we see further selling. VDSI - Weakening and is now below its 20 day EMA. This is significant because of the long-term negative divergence in play. The rising 50 day SMA would provide a solid entry point on further weakness. Small Cap Watch List: QLGC - Down fractionally, but sideways consolidating. Not bad action. DELETIONS FROM OUR WATCH LISTS: COST is being removed as earnings will be out tomorrow. SNCR was removed at Monday's close as it violated our closing stop. There are no other deletions today unless closing stops are violated. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com