EB Watch List Update Report

MARKET NOTE: Dear Members: First, please note below that we will be removing NWL from our Watch List later today because it reports its earnings in the morning. Technical Analysis 101 tells us that when a stock or major index has stochastics near 100 and and a RSI near 70 its time to be extremely cautious, take profits, maybe even short. We saw both the Dow and S&P approach those levels a few days back and start to pull back and now the NASDAQ, which is hanging in stubbornly is at those levels as well. One can argue that when the market is in a bullish mood, as it has been, that stocks and indexes can remain overbought, and that is true. But sooner or later there is a price to pay; it's just the way it has been forever. The NASDAQ got as high as 5151 yesterday with a retest today as it touched 5152. But now it is struggling because its stretched and it takes more effort to advance higher. This is coming a day after the Fed stood pat and left interest rates alone. But they changed the tone of their language some, leaving open the possibility of a rate hike in September, one day ahead of Q2 preliminary GDP that will be released tomorrow at 8:30 am eastern. And the results could either embolden the bulls or put a lid on this recent rally. Remember as well that we're entering a period of the year that favors the bears. So as great as this most recent run to the upside has been, to me its starting to look tired. In looking at the NASDAQ I see it got as high as 5163 in November of last year. So the bulls got within 11 points earlier today. Maybe they'll want to take another crack at it. But it's still going to get tougher to advance the more overbought the market gets. Also, in looking at the Dow, its closing in on its 20 day moving average with blue chips suddenly more out of favor. The S&P is heading in a similar direction. I should point out that our tendency when the market gets overbought is to lay low rather than to get aggressively short, especially when the underlying tone is as positive as it has been of late. So for the moment there's really nothing to do but let some steam come out of the market. We may well see traders buy on dips but I would like to get stocks even cheaper. I think our patience will pay off as we look to preserve capital. In the meantime let's watch to see what happens if the S&P nears its 20 day, now at 2145, as that will be the first technical test. KEY EARNINGS REPORTS Companies reporting earnings today (July 28) include: AFL, ALXN, ALGN, GOOGL, AMZN, AMT, ANZ.L, BA.L, BIDU, BHI, BCC, BWA, BSX, BCO, BMY, BC, CELG, CCO, CME, CL, COLM, COP, CY, DECK, DBD, DOM.L, DOW, EXPE, STAY, FICO, FITB, F, HOG, HCA, HLS, HSY, IGT, IP, ISIL, ITC, KLAC, LLL, LEA, LYV, MPC, MA, N, NYT, OSK, PENN, PAG, PGC, PF, PJC, POT.TO, PFG, RTN, SBAC, SERV, TCO, TRI.TO, VRSN, VC and YRI.TO Companies reporting earnings tomorrow (July 29) include: AC.TO, AN, CPN, CBOE, CVX, CI, XOM, FOR, MRK, NWL, PSX, SAVE, TEN, TYC, UPS and XRX ADDITIONS TO WATCH LISTS: We're continuing to hold off at least until the Fed rate announcement is over BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: There are no shorts on the Watch List at this time LONGS: Large Cap Watch List NWL - PLEASE NOTE: NWL reports earnings BEFORE the market opens tomorrow so we are removing it from our Watch List as we have found it is too risky to hold stocks into earnings reports. So it will be removed from the list when the market closes today. 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: NWL will be removed from the Watch List at the market close today. There are no other deletions from the Watch list today unless a Watch List stock closes below or above the stop loss provided. At your service, John Hopkins, EarningsBeats