EB Watch List Update Report

Dear Members: MARKET NOTE: The market continues along its merry way with all of the major indexes higher. A few things caught my attention yesterday worth mentioning. First, even though the market was up sharply yesterday, the VIX ended the day higher. And even though the market is higher today the VIX is flat. Next, the equity only put/call ratio closed at .46 yesterday. That is only the second time it has been that low in two years; it means there is a disproportionate number of outstanding calls to puts with options traders betting heavily on the long side. In addition, the Dow remains extremely overbought. It's up almost 10% in one month. The Russell 2000 - small cap stocks - is almost up 20% during the same period of time. Also the S&P is now technically overbought as well. Only the NASDAQ has some catching up to do as it makes an all time high today. Clearly traders are smitten with stocks; there is no denying that. We've gone from bad news or good news getting positive or negative reactions to any news being seen as positive for stocks. And this is all coming less than a week from the Fed rate announcement where they are almost certain to raise rates for the first time in a year. All of this makes me a bit nervous; not bearish, just nervous. Just way too rosy when there are too many "what ifs" that are not being taken into consideration. I do want to point out that we're moving into a time of the year that is bullish for stocks. Also, given the likelihood for lower tax brackets for 2017, we could see a reluctance to take substantial profits prior to year end. These argue for a buoyant market. But the last thing I want to do is load up on long alerts to suddenly see a sharp pullback out of nowhere; it could happen even though it doesn't feel like it right now. I'm reminded of the many seminars and webinars I've conducted over the years, teaching technical analysis 101, when we would pull up charts of stocks and major indexes. When stochastics cleared 90 with RSI's at 30 we would point those out as warning signs; too extended. The Dow has been at those levels almost a month now which shows overbought can remain overbought for an extended period of time. But sooner or later something has to give and it often comes when it is least expected. Let's at least be careful to not get caught off guard here. Being patient could provide much better reward to risk opportunties than are present now. KEY EARNINGS REPORTS Companies reporting earnings today (December 8) include: AVGO, CIEN, COO, DVMT, RH, SAIC, SHLD and TTC Companies reporting earnings tomorrow (December 9) include: MTN ADDITIONS TO WATCH LISTS: I'm very reluctant to add more alerts at this time. At a minimum going to be very selective. 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 ERJ - I'm not pleased that this stock has retreated back below both its 20 and 50 day moving averages just a day after showing some progress. At a minimum I would like to see it close back above its 50 day moving average, now at 1973. I may be raising the stop on this one and if so will let you know via email. VEEV - This stock remains above all key technical levels which is bullish. I would like to see it remain above its 20 day moving average, currently at $42.94, by day's end. Small Cap Watch List CBI - Stock is higher today but I have noticed that so far it has printed a black candle which can sometimes mean a reversal is at hand. Remember that this one hit our initial price target yesterday so don't hesitate to lock in some profits just in case it stalls here. DELETIONS FROM OUR WATCH LISTS: None at this time At your service, John Hopkins EarningsBeats