EB Watch List Update Report

Dear Members, I hope everyone is enjoying the holidays. It's been very quiet on the earnings front, but that will change very soon. The market is very overbought and negative divergences are flashing on the 60 minute charts. This is a good time to begin removing stocks from our Watch Lists that have performed exceptionally well the past several weeks. So here are the stocks we are removing, with their current price: LARGE CAP WATCH LIST: SCHW 25.77 FRX 59.38 GOOG 1114.10 HAS 54.48 ILMN 109.28 M 52.84 NSC 92.20 NUS 137.46 MID CAP WATCH LIST: AYI 110.29 AZPN 41.90 DWRE 63.94 ECPG 49.69 FDML 19.47 FOE 12.77 GNRC 55.94 GNTX 32.80 GPN 63.97 NTCT 29.52 SMALL CAP WATCH LIST: LIOX 5.97 This will significantly reduce the number of stocks on our Watch Lists as the next earnings season approaches. You certainly can continue to trade the above stocks, but just keep in mind how overbought the market and many of these stocks are. If we go through a period of unwinding for a week or two, you may end up exiting these stocks lower. In the upcoming quarter, we will add one more Watch List - the Short Watch List. While I'm still not an advocate of shorting during a bull market, I know many of you would like shorting candidates to at least consider so we'll make that change. On Monday, we'll return to our normal format of commenting on several stocks, but I think it would be unwise to ignore taking profits on so many EB stocks that have performed so strongly this past quarter, especially with the overall market so stretched from the recent gains. Happy trading! Tom Bowley Chief Equity Strategist EarningsBeats.com