EB Watch List Update Report

Dear Members: First, here is a link to yesterday's webinar for those of you who were unable to attend: http://investedcentral.adobeconnect.com/p8hlm3aselh/ Next, please note that I have added a Behavior Modification Case Study to my blog on the site. MARKET NOTE: The S&P move higher this morning as it touched its 50 day moving average before pulling back some. That's what we would expect after the strong move off of the recent bottom. Now the question everyone will ask is have we topped in the near term or can the market go higher? Let's remember that the S&P has now risen 7% off of last week's low of 1871 so seeing some profit taking at the 50 day moving average makes a lot of sense. At the same time, the Dow remains the strongest of the major indexes while the NASDAQ lags. In fact the NASDAQ is nowhere near its 50 day as tech stocks remain out of favor. The VIX is fairly flat for the day and is below both its 50 and 20 day moving averages but is still high enough to indicate traders are keeping at least one finger on the sell button. To me there are two levels for us to watch closely at this point; 1996 to the upside and 1955 to the downside. If we close above that 1996 level that would give the bulls some additional technical advantage. On the other hand, if traders decide to take some additional profits here, 1955 should serve as a key level of support, and a possible place to start getting more aggressive to the long side. And all of this is happening just before earnings season kicks off tomorrow when Alcoa reports after the bell. KEY EARNINGS REPORTS We are nearing a point where thousands of companies will report earnings over the next 3-4 weeks. It's also a time to remember how risky it can be to hold stocks into earnings reports because you never know how the market will react to the numbers. If you want a great example just look at YUM who reported after the bell last night. It's down 18% this morning, leaving many unhappy traders who decided to hold the stock into the report. This is why we always remove stocks from our Watch List if we know they are getting ready to report earnings. Companies reporting earnings today (October 7) include: AVI and MON Companies reporting earnings Thursday (October 8) include: AA, DPZ and HELE ADDITIONS TO WATCH LISTS: We are in the process of updating our Candidate Tracker on the site and will be taking off a lot of stocks that are currently on the list and are scheduled to report earnings over the next few weeks. At the same time, as more companies report over the next few weeks, we will be adding stocks that beat earnings expectations and have solid charts. We are going to remain disciplined here as we get ready to move into earnings season and as the market continues to try to find a tradeable bottom. If we identify a stock we are adding to our Watch List at any point during the day we will let you know. What we do know is there will be companies that beat earnings expectations and have strong charts and those that are the highest reward to risk trading candidates will be added to our Watch List as appropriate. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Large Cap Watch List There are no large cap stocks on the Watch List at this time Mid Cap Watch List There are no mid cap stocks on the Watch List at this time Small Cap Watch List VRA - Stock is up slightly for the day and currently remains above all key moving averages 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