EB Watch List Update Report

Dear Members: MARKET NOTE: Traders are back on the scene after taking time off to celebrate the holidays with all of the major indexes higher as we begin a new trading day, week and year. Though the market is higher this morning we've already seen some early profit taking with all of the major indexes off of their session highs. In fact in looking at the charts I'm seeing black candles forming on all of the major indexes as traders aren't quite ready to commit the capital necessary to take the market back to all time highs. The VIX is lower by over 4%, showing some investor confidence but it remains above its 20 day moving average and touched its 50 day earlier in the session. So already we're seeing a tug of war, just a few hours into the new trading year. Now that the new year has begun we're just a week away from the "official" start of earnings season when Alcoa reports its numbers on January 9. So in addition to everything else traders must take into consideration add earnings reports which are really the most important metric of the health of corporate America. It's way too early to try and predict how the market will react to overall earnings but the continuing strength of the US dollar is likely to eat into the profits of those companies with extensive foreign exposure. This will be a busy week for economic reports including FOMC minutes from the last Fed meeting tomorrow and then on Friday monthly non-farm payroll numbers. Already this morning we saw a stronger than expected ISM manufacturing report leading analysts to predict the Fed will continue to look at raising rates even further. So far the S&P remains well below the most recent and all time high of 2277 which continues to be near term resistance. To the downside we saw the S&P close below its 20 day moving average on Friday with a low of 2233 which is now near term support. That 2233 level is important as there really isn't support after that until 2208, the December 7 low. Bottom line at the moment: the market is no longer technically overbought which could take some pressure off on the sell side. However the huge momentum the bulls enjoyed since the election has now subsided. So the market is currently more vulnerable to selling than it was even just a week ago which argues for remaining cautious in case traders decide to get even more defensive. KEY EARNINGS REPORTS Companies reporting earnings today (January 3) include: There are no key earnings reports due out today Companies reporting earnings tomorrow (January 4) include: UNF ADDITIONS TO WATCH LISTS: We are going to hold off adding any new stocks to the Watch List unless there is a good reason to get more aggressive. 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 DELETIONS FROM OUR WATCH LISTS: None at this time At your service, John Hopkins EarningsBeats