EB Watch List Update Report

MARKET NOTE: Dear Members: Technical Analysis 101 teaches that when stochastics exceed 90 along with a RSI over 70 a stock/index is overbought. Today the NASDAQ printed stochastics of 99 with the RSI near 76. We also know that the all time low on the VIX was near 9.30 while the all time high was near 90. Today it got as low as 9.56. So the VIX got to within .26 of its lowest print ever while it is 80 points from its all time high. Today we also saw the S&P hit an all time high of 2403. This is something the bulls have been looking to do for a few months now, clear that all elusive 2400 level. In the meantime the Dow continues to lag; not much enthusiasm for blue chip stocks when traders can shoot for the moon on tech stocks. At the same time government bond yields are back on the rise with the ten year treasury note back above 2.4% as it moves back above all key technical levels. This is a move away from safety. When I bundle all of this together it sends up a big caution flag, especially the runaway NASDAQ where stochastics can't really go any higher and a VIX that is right near its all time low and miles away from its all time high. It's clear that traders are very hesitant to unload their long positions, especially on the tech side, and as long as this continues the market will remain elevated. But a great deal of the move higher in the NASDAQ can be attributed to a small handful of stocks, including Apple, Amazon, Google and Facebook that have left a lot of other stocks in the dust. Being cautious here could result in missing out on further gains but think about this; the highest stochastics can go is 100 while the lowest level is 0. Does it make sense to chase the market when stochastics on the NASDAQ are at 99 when we know they can go as low as 0? NO! I won't considerr shorting the market because the momentum is so strong - a market can remain overbought for a sustained period of time - but if I HAD to make a decision here, either go short or go long, I would go short only because the reward to risk, at current levels, disproportionately favors the downside. KEY EARNINGS REPORTS Companies reporting earnings today (May 9) include: AGN, CBOE, DF, DISCK, DIS, DUK, KODK, FTD, HSIC, IEP, NVDA, PCLN, SLW, STWD, TSRO, TRIP, VRX, W, YELP and ZBRA Companies reporting earnings tomorrow (May 10) include: MYL, NTES, NCLH, SNAP, BID, SYMC, TIME, TRCO, FOX, VMC, WEN, WFM and WWW. ADDITIONS TO WATCH LISTS: We added SCSS to the Watch List this morning with more details below. BRIEF COMMENTS ON SELECT WATCH LIST STOCKS: SHORTS: LONGS: Large Cap Watch List NVDA - PLEASE NOTE: this stock will be reporting after the bell toNIGHT so will be coming off the Watch List prior to the market close as we hesitate to hold stocks into earnings reports. Mid Cap Watch List None at this time Small Cap Watch List SCSS - We added this stock this morning at an initial entry price of $30.66 with a second entry (which hit) on a pullback to $30.35. Price target is $33.25 with a stop loss of any INTRA DAY move below $29.66. So far the trade has moved against us and if the market weakens could pullback further. PLEASE NOTE: We are changing the stop loss from any INTRA DAY move below $29.66 to any INTRA DAY move below the 20 day moving average, which is currently at $29.51. DELETIONS FROM THE WATCH LIST None at this time At your service, John Hopkins EarningsBeats