EB Watch List Update Report

Dear Members: MARKET NOTE: We've got a brand new trading day and week and so far all of the major indexes are lower. What's not lower is the VIX which is now back above all key technical levels. In other words, fear in the market has escalated over the past few sessions. The problem the bulls have is they've gone from having the total technical advantage to struggling from beneath the 20 and 50 day moving averages on all of the major indexes. We've gone from buying on the dips to selling on any bounces. This is not a recipe for regaining the momentum. Bank of America reported its earnings this morning while beating expectations. Yet it is lower as are most major banks even though we saw some decent earnings from the sector on Friday. So it's going to be tough to mount a rally if the financials are lagging. We also need to remember this is options expiration week. In looking at option activity on the SPY I see that at this moment there is a disproportionate number of puts to calls - many more options traders betting against the S&P than those who are betting on a rise - which if used as a contrarian indicator would mean the worst of the selling in the very near term could be over. But options are only one indicator so we need to stay focused on the charts which continue to show 2114 on the S&P as support with 2149 as resistance. In the meantime it remains tricky to get aggressive either on the long or short side, especially with a ton of earnings reports coming out this week which could turn the tide either way. And remember, cash IS a position. KEY EARNINGS REPORTS Companies reporting earnings today (October 17) include: BAC, HAS, NFLX, UAL and VRX.TO Companies reporting earnings Monday(October 18) include: BLK, CMA, CREE, DPZ, GS. HOG, INTC, ISRG, JNJ, KSU, NAVI, NVR, PM, RF, UNH, GWW and YHOO ADDITIONS TO WATCH LISTS: Over the next 2-3 weeks thousands of companies will report their earnings. We'll be scouring the market to see which companies beat expectations and have good looking charts. These will be added to our Candidate Tracker as appropriate. Will let you know if there are any additions to the Watch List. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: There are no shorts on the Watch List at this time LONGS: 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 DV - Stock is down over 1% so far for the session. As a reminder we have a stop of a close below $22.20 so if it closes below that level it will be removed from the Watch List. Needs to close back above $22.95 at a minimum to remain technically healthy. EAT - Stock attempted to clear its 20 day earlier in the session before pulling back a bit. At a minimum would like to see it close back above $50.90 to get back on track. DELETIONS FROM OUR WATCH LISTS: None at this time At your service, John Hopkins EarningsBeats