EB Watch List Update Report

Dear Members: MARKET NOTE: All of the major indexes are down slightly this morning as we move into the tail end of December. The quest for Dow 20k continues as it came within 13 points of that level at its high yesterday. The VIX touched a level this morning not seen since August of 2015. On the one hand, that could be seen as bullish; traders are feeling very confident these days. On the other hand, a reading in the 10's starts coming close to the lowest reading of all time. That's a bit concerning, especially if you consider the VIX can be a contrarian indicator; too much complacency can sometimes catch traders off guard. In fact, that low in the VIX reached in August of 2015 was followed by a sharp pullback a few weeks later. The bulls will argue that times are different. Maybe, but let's not forget the major run we've seen up to this point in time. I think it is quite possible the bulls will drive the Dow to that 20,000 level if for no other reason than to show that level can be reached. I also believe that many money managers are trying to defer gains into 2017 which is having the effect of keeping the market from falling. This could set up for an interesting January. However, the market has a way of fooling everyone just when they think they have things figured out. It's worth noting that the S&P, which I feel is much more representative of the overall market than the Dow, has stalled since it hit its all time high of 2277 last week. It's not as stretched as the Dow but is still close to being technically overbought. I'm still feeling there's no reason to get aggressive to the long side here and that being very selective still makes the most sense. The range on the S&P is 2277 to the upside and 2236 to the downside, so to me more downside than upside risk. KEY EARNINGS REPORTS Companies reporting earnings today (December 21) include: ACN, BBBY, MLHR, MU, PAYX, RHT and WGO Companies reporting earnings tomorrow (December 22) include: CAG and RAD ADDITIONS TO WATCH LISTS: We added SDRL to our Watch List this morning. More information can be found below. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: None at this time LONGS: Large Cap Watch List None at this time Mid Cap Watch List None at this time Small Cap Watch List HLX - Stock has given up yesterday's gains. PLEASE NOTE: We are changing the stop loss on HLX to any CLOSE below its 50 day moving average, now at $9.81. Just won't be as bullish on the stock if it closes below the 50 day and in this market want to keep losses to a minimum. SDRL - We added this stock to our Watch List this morning at an entry price of $3.73 with an initial price target of $4.09 and a stop loss of any Intra Day move below $3.53. This can be a highly volatile small stock so keep that in mind, especially if you are risk averse. DELETIONS FROM OUR WATCH LISTS: None at this time At your service, John Hopkins EarningsBeats