7:30 AM – MORNING MARKET UPDATE & WATCH LIST Yesterday, U.S. markets completed their first back-to-back declines of 2019. The Dow closed -0.4% lower while the S&P 500 shed -0.5% and the Nasdaq dropped -0.9%. Most European markets opened with gains following a positive trading session in Asia. QUOTE OF THE DAY: “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean It’s earnings season. Delta Air Lines (DAL) will release earnings before the open. Pinnacle Financial (PNFP) and United Continental (UAL) will follow after the close. Several more banks reporting today too. JPMorgan Chase (JPM) and scandal-ridden Wells Fargo (WFC) will report earnings before the open. Citi (C), the first US bank to report this earnings season, did so on Monday. Its revenues in the fourth quarter were lower than what Wall Street was expecting. This weekend I released the following… ____________________________________________________ Here is a quick update to the report above. LONGS FIVN – Lost -4% on Monday with a +25% increase in volume. Not good. CIEN – Quietly holding up. QNST – Pulled back slight yesterday after Friday’s negative reversal. Generally held up today in a tough day in the market. DORM – Sold off today with a sharp increase in volume, and closed at the session lows. Not good. SHORTS DECK – Remains at our 1st COVER-PROFIT area. ANTM – Like DECK, this stock is too – sitting right on support of its 200-day moving average. _________________________________________________ 12 Potential Stocks to Short Generally, all of these 12 stocks rallied from their December sell off lows with volume that was below average. Each is now at an area of resistance, and could be headed lower, especially if the broader market pulls back. SYMBOLPRICESECTORBJRI$54.20RETAILDG$113.10RETAILHZO$20.48RETAILJBGS$36.19REAL ESTVICI$20.45REAL ESTAIV$45.22REAL ESTDRE$27.52REAL ESTHASI$21.43REAL ESTABR$11.35REAL ESTHOLX$42.53MEDICALHZNP$21.94MEDICALDIS$112.42MEDIA ____________________________________________________ Regardless of market conditions, I am always preparing a watch list of high-ranked leaders which are building bullish technical bases. This morning, I ran my routine stock screens, and added 3 stocks to our TrendLine WatchList. I removed SPLK and CIEN as each did trade above their TRIGGER PRICE, yet the volume did not make the TRIGGER VOLUME. We now have a total of 9 stocks which we will be watching for a potential breakout. SEE ALL MY CURRENT WATCH LISTS HERE: James’ Stock WatchLists Now you can get access all watch lists with updated trading criteria including –TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here. Missed any of these morning reports? You can find all previous reports here. Standard rules apply – any gains above the stock’s TRIGGER PRICE while the day’s volume is at least on pace to make the TRIGGER VOLUME would have any of these set ups confirming a BUY signal up to their MAX BUY PRICE by default. Keep in mind that when a stock breaks out – becomes potentially buyable – there are other factors to consider. Volume on the breakout. A stock that is breaking out through resistance, with an increase in volume of +50% above the stock’s average volume (50 DAV), is showing more conviction and more demand. This is not saying – all lower volume breakouts will fail. Actually, we’ve seen many continue higher. If you have found that you did buy a stock that showed lower daily volume or volume under 50%, going forward – simply treat it a regular trade. Earnings BreakOuts. Many stocks from our watch list will break out during earnings season. Earnings breakouts can be more rewarding, however, these trades carry much more risk then traditional (non-news) breakouts. One needs to also consider – the strength/weakness of the fundamental news that was just released along with the forward-looking guidance the company gave, investors response to the conference call, etc. For anyone who is not familiar with – buying earnings breakouts – I suggest that they sit through a few seasons to study, paper trade, and show some profits, before applying actual capital. As always, if anyone has any questions – please feel free to email me at james@jamestaulman.com as I would be glad to assist you.