EB Watch List Update Report

Dear Members: MARKET NOTE: The feel good market of yesterday has turned into a return to the "old ways" of late of selling with all of the major indexes lower. This is what happens when the bears have control; the benefit of the doubt goes to them. In today's case the headlines are blaming oil and gas inventories which continue to show a bloated picture. But I have to tell you that I don't think today's selling has anything to do with oil, China or any of the popular topics that have been stealing the headlines lately. Instead, I think it has much more to do with options expiration which will take place on Friday. I say this because in looking at the totality of all options calls and puts that will expire on Friday it is clear that the bulk of them will expire worthless, especially if the market stays in a narrow range the next few days. Let me give you a few examples. Today AAPL is trading right near $100 a share. In the options chain the vast majority of outstanding puts and calls are right at 100; almost 82,000 calls and 72,000 puts. So, if AAPL were to close right now, there would be virtually no payment due to options holders. If you look at a broader picture, the S&P, you will see the underlying ETF, the SPY is trading right near $193. Not surprisingly the largest number of open puts and calls are right at $193; 45,000 puts and 33,000 calls, all that would expire close to worthless at today's prices. This is consistent throughout the options chain on all of the major indexes and the most visible stocks. And there's nothing else going on at the moment except to blame oil and China for all of the market woes. But the headlines of late will take on secondary status when earnings start coming out in droves beginning next week because when everything is said and done the bottom line is all that matters to investors. Right now the market is pricing in disappointing numbers. If this proves to be the case, don't expect the market to make much progress to the upside. On the other hand, should we start seeing a string of positive numbers, that could prove to be the catalyst the market needs to move higher. In the meantime, we could simply consolidate here into Friday's expiration with an occasional rally or pullback in between. 1900 remains a key support level on the S&P with 1990 likely being a brick wall should it get there. KEY EARNINGS REPORTS Companies reporting earnings today (January 13) include: There are no key earnings reports due out today Companies reporting earnings tomorrow (January 14) include: INTC, JPM ADDITIONS TO WATCH LISTS: Will continue to hold off on adding any new stocks to the Watch List. Over the next few weeks thousands of companies will be reporting their numbers which will allow us to load up our Candidate Tracker and look for fresh trading candidates that have strong earnings and strong charts and have held up the best during the recent market turmoil. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Only two stocks remain on the Watch List. Large Cap Watch List BSX - Stock is up over 2.5% today and a close above $18.29 would be bullish. Mid Cap Watch List SBGI - Stock is up slightly. A close back above $31.41 would be bullish. Small Cap Watch List There are no Small Cap stocks on the Watch List at this time. 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