EB Watch List Update Report

Dear Members: MARKET NOTE: Fed Chairwoman Janet Yellen is on the hot seat today as she speaks before Congress. So far stocks are mixed with the Dow up slightly and the NASDAQ an S&P showing more strength. On the one hand I admire how the market has held up given everything that has taken place the past week or so. On the other hand you can see the S&P continues to struggle and make that next move to retest the all time high of 2193. We do need to remember that the S&P was on the verge of a potential technical breakdown less than two weeks ago when it touched its 200 day moving average on November 4. Since then it has bounced 100 points. So how much more should the bulls expect, especially with stochastics at 97 and a RSI in the mid 60's? Throw on top of that the uncertainty of what lies ahead and that might help to explain why the S&P hasn't made any progress for four months now. The NASDAQ continues to play catch up while the Dow takes a rest after the sharp move higher off the recent bottom. But it is now up over 300 points from its recent bottom and less than 20 points from its all time high. Then we've got the VIX which has moved from a very high level of fear to a historically low level of fear; all is well. It should also be pointed out that the Russell 2000, small cap stocks, has risen over 13% in just two weeks. Stochastics on the RUT are now 98 with a RSI of 73; too far too fast, even if expectations for a favorable environment turn out to be true; a lot has already been built in. So when I bundle everything together it points to a fairly low level of reward to risk here. Yes, the NASDAQ and S&P might test their all time highs but they just aren't far from here while we saw the NASDAQ 300 points lower 10 trading days ago. So it's not that I hate the market here; the bulls have been very resilient and we're in a very bullish time of the year. But any unexpected development could quickly derail the progress seen over the past week so my instinct is to let this play out, let the market get even more overbought if necessary and take advantage of pullbacks where it makes more sense to get aggressive on the long side. KEY EARNINGS REPORTS Companies reporting earnings today (November 17) include: AMAT, BBY, GPS, HAYN, HP, INTU, SJM, MRVL, ROST, CRM, SPLS, WMT and WSM Companies reporting earnings tomorrow (November 18) include: ANF and FL ADDITIONS TO WATCH LISTS: I took a close look at all of the new stocks we just added to the Candidate Tracker. What I found was many stocks have performed very well since they reported their earnings and are too stretched to consider taking on a position at this time. But they could become excellent trading candidates if we get a decent pullback. Just don't want to chase them at this time and I believe patience will be rewarded. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: There are no shorts on the Watch List at this time LONGS: Large Cap Watch List None at this time Mid Cap Watch List None at this time Small Cap Watch List None at this time DELETIONS FROM OUR WATCH LISTS: None at this time At your service, John Hopkins EarningsBeats