EB Watch List Update Report

MARKET NOTE: Dear Members: When the major indexes hit their respective all time highs on March 1 they were all in extreme overbought territory. This included the Dow which matched a record for consecutive days higher in a row, so rare that even the bulls had to acknowledge the market had gotten ahead of itself. Since that time it has become more difficult for the market to advance; it's been in churning mode for the past two weeks as traders try to figure out what might come next. We continue to see the VIX churning as well, stuck right near its 20 and 50 day moving averages as traders seem to be acknowledging the market could go either way here with the bulls continuing to maintain a slight edge here with all of the major indexes remaining above all key technical levels. The action we are seeing today comes just ahead of this week's FOMC meeting when the Fed will make its interest rate announcement at 2:00 pm on Wednesday. It's a forgone conclusion that they will be raising rates by 25 basis points. What's not known is what they will do after that with traders hoping to gain some fresh clues in the language following the rate increase. So far the market is handling the shift in Fed policy quite well. It's a departure from what they've been doing for many years now with some saying it's because the economic picture is improving while others will argue that there's still not enough evidence that growth will be picking up enough to justify an aggressive Fed rate raising campaign. But for now the market is building in another 1-2 rate raises by year end as it remains within easy striking distance of record highs should traders resume their buying ways. Maybe another way to look at the market at this moment in time is to look for reasons for it to go lower. The selling we've seen since the recent peak has helped relieve the overbought conditions so that's no longer the major concern it was going back to the beginning of the month. Earnings season is past and apparently the market was satisfied with the results. The transition to a new presidency, though not as smooth as some would have liked, is now almost two months in; at least some of the uncertainty is behind us. And some of the concerns around global issues like Brexit and other potential changes in the political landscape in other countries seem to have ebbed some. So now traders are focusing more on the potential of the future; what additional changes might be made that could have a positive impact going forward? It seems this "benefit of the doubt" mentality could keep the market from falling sharply unless it becomes apparent that some of the things the market is counting on simply don't take place. From our perspective we need to keep a close eye on the S&P which remains trapped in the narrow trading range of 2400 to the upside and now 2357 (the 20 day moving average) to the downside. While the S&P remains in this tight range we need to continue to be as selective as ever because the type of churning we are seeing can be painful to the pocketbook. Thus it's a good time to consider trading less, perhaps adjusting the trade size and keeping tight stops. Also a good time to take any decent profit that comes along, waiting for much better opportunities until we see how things shakes out in the near term, especially with the Fed rate decision now just two days away. KEY EARNINGS REPORTS Companies reporting earnings today (March 13) include: There are no key earnings reports due out today Companies reporting earnings tomorrow (March 14) include: DSW, TWNK and VOW3.DE ADDITIONS TO WATCH LISTS: Will continue to be very selective in the near term and notify members via email on any additions to the Watch List. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: None at this time LONGS: Large Cap Watch List ARNC - Stock continues to consolidate as it struggles to clear $27. It really needs to clear its 20 day moving average, currently at 27.56, to have any shot at moving towards our target of $53.50. Mid Cap Watch List DATA - This stock closed below our stop loss on Friday so is being removed from the Watch List. Small Cap Watch List None of this time DELETIONS FROM OUR WATCH LISTS: Data is being removed At your service, John Hopkins EarningsBeats