EB Watch List Update Report

Dear Members: MARKET NOTE: This has certainly been one of the more challenging times in the market for quite some time. To see the Dow lose 1000 points at the open on Monday then a failed recovery after yesterday's early move higher has understandably made traders nervous. Now today we're off to another strong start with everyone wondering; will it hold? There's no certain answer to this question which is one of the reasons the VIX remains on the higher end, though well below the level it hit when panic set in on Monday. But it still must be respected. Also to be respected; how much ground all of the major indexes have lost and how much they have to recover to get back to key technical levels. For example, for the S&P to just get back to its 20 day moving average, it would have to gain over 6.5%. That's quite a different picture compared to even a week ago when the S&P was above all of its key moving averages. So the question becomes, when are we out of the woods? That might take some time but it will start with a slowing in the selling and continuing to hold the October 2014 lows. Would also be good to see the market start putting in a series of higher lows. And perhaps another step towards a recovery would be the S&P at least closing above 1900. In fact, after the S&P closed back above 1900 after the correction in October, 2014, it never looked back. Not to say that will happen again; we remain in an historically bearish time of the year. Even before then; can any early session gains hold into the close? So we'll want to be watching this again today since we've seen an unwillingness so far for traders to remain aggressively long deep into the day. The good news in all of this; stocks have certainly gotten cheaper! And we have a lot of stocks that reported strong earnings and are now on our Candidate Tracker list that are even more attractive then they were before the recent selling. So we'll want to be patient and let the current environment play out while keeping our eye on high reward to risk trading candidates that can stand up during this tricky time. KEY EARNINGS REPORTS Companies reporting earnings today (August 26) include: CHS, NA.TO, PLL, PSEC, PVH, RY.TO and WSM Companies reporting earnings tomorrow (August 27) include: ADSK, BURL, DG, GME, SJM, MIK, PDCO, SDRL, SIG, SPLK and TIF ADDITIONS TO WATCH LISTS: We are going to hold off adding any new stocks for the time being and until we see signs that the worst of the selling is over. If anything if we see some recovery in existing Watch List stocks we might use that as an opportunity to lighten up. What's going on now has less to do with earnings as it does with a technically broken market. So let's focus more on preservation of capital and get more aggressive at the appropriate time. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Large Cap Watch List AMZN - Gap resistance remains at $494 with the falling 20 day moving average, now at $506, a key level of resistance. LEN - We're going to keep our stop at a close below $47. We're going to watch to see if we can get a decent bounce here towards key moving averages. Mid Cap Watch List NUVA - Held its closing stop the other day. Now want to see if can move back towards its 20 day moving average, now at $52.28. Small Cap Watch List KFY - We raised our stop yesterday to a close below $32.50 RUBI - We will maintain our stop at a close below $13.86 DELETIONS FROM OUR WATCH LISTS: There are no deletions from the Watch List today unless a Watch List stock closes below the stop loss provided. At your service, John Hopkins, EarningsBeats