EB Daily Market Report

Dear Members.

An abbreviated report today as Tom Bowley prepares for tonight's Top 10 Stock Pick Draft that will begin at 5:30 pm eastern. You will be sent room instructions prior to the event and a recording will be sent out to all members as well.

A bit of a mixed picture with the Dow trading lower while the NASDAQ and S&P hug the flat line.

Even though the bulls are so far succeeding in holding on to most of the recent market gains, the S&P has been unable to make any progress since testing its 200 day moving average, currently at 4322, on Tuesday. So until that level is cleared we need to be more cautious here, especially with options expiring tomorrow and continuing to show a large imbalance between calls and puts - i.e., many more bets on the long side. Since this can be seen as a contrarian indicator, we'll want to see if selling picks up later today and into tomorrow.

One stock to keep an eye on, which might help determine the near term direction of the market, is Apple (AAPL) which remains stubbornly high, even after a non-stop run since its June 16 low. Technically the stock is overbought but unless traders decide enough is enough, the stock could continue to move higher and take the market along for the ride. On the flip side, if the stock were to move and close below $72.50, that might serve as a catalyst for the market to move lower.

Again, with options expiring tomorrow, we're leaning more cautious. That could change if the S&P clears its 200 day so let's keep an eye out for that as well.

At your service,

John Hopkins