EB Watch List Update Report

Dear Members: MARKET NOTE The Fed has come and gone and actually surprised the market some by declaring 4 rate increases are kaput and that 2 are more likely this year. That is quite a shift from what they said back in December when they raise the Fed Funds rate for the first time in many years. Since then they have seen something that has shifted their more hawkish stance and so far the market has seen their new thinking as something positive for stocks. We have seen a reaction in the bond market as well with the yield on the ten year treasury note falling from just over 2% down to 1.89%, one reflection that the Fed just conceded two rate hikes. In addition, oil prices continue rising which has more traders believing the lows in oil are well behind us. That's not so insignificant since stocks had been held hostage to falling oil prices for quite some time so now those shackles are off. We've also got the VIX at its lowest level since November of last year as traders get more comfortable with the notion of being long stocks. The S&P has worked its way back above its 200 day moving average giving the bulls the technical advantage. Now the next key level of resistance is at 2038, only 6 points higher. At the same time the fairly non-stop move to the upside since the February 11 bottom has resulted in the Dow being technically overbought with the S&P not far behind. The NASDAQ still lags some. We've also got options expiration tomorrow with a very large imbalance in calls on the SPY - in other words, a disproportionately large number of bets that the S&P will close higher by tomorrow, and quite often, the options masses are wrong. So the combination of an important level of resistance along with the market at or close to being technically overbought could make it difficult over the next few days for the market to move a whole lot higher. BUT...if the bulls manage to clear that 2038 level with some gusto the momentum could carry the S&P up near 2060. To the downside the bulls will be fighting to hold the 200 day moving average, now at 2018. Bottom line: The Fed is out of the way which is now favoring stocks. At the same time the overall market is starting to look stretched. Getting too aggressively long here could be a bit risky. But shorting the market is risky as well, considering the bullish momentum. Maybe not a bad time to take some profits off the table and look to redeploy to the long side if we get some type of pullback or to the short side should we get close to that 2060 level. KEY EARNINGS REPORTS Companies reporting earnings today (March 17) include: ADBE Companies reporting earnings tomorrow (March 18) include: TIF ADDITIONS TO WATCH LISTS: The market is looking a bit toppy here but momentum is positive so tricky to short. Also nearing resistance on the S&P at 2038. Want to see if that clears or stalls before doing anything else. If anything, would be leaning more towards the short side but we need to respect that the S&P is back above all key technical levels. Might look at a short candidate or two for members if the S&P closes back below the 200 day which could indicate the buying is over. Will keep you posted. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: Large Cap Watch List SHORTS: MDLZ - Stock pulled back nicely earlier in the session and has regained some of the earlier losses. A close below $40.70 would put the stock back below all key technical levels which could take it even lower. ROP - Stock closed over our stop of $177 yesterday so is no longer on the Watch List. Mid Cap Watch List There are no Mid Cap stocks on the Watch List at this time. Small Cap Watch List There are no Small Cap stocks on the Watch List at this time. DELETIONS FROM OUR WATCH LISTS: We have removed ROP from the Watch List as it close above our stop loss yesterday. At your service, John Hopkins, EarningsBeats