Editor's Note:

The U.S. market continues to look vulnerable here with a -3% pull back this past week. The indices have been unable to break the bearish trend of lower highs. Now this might turn out to be a normal correction after the sharp November-early December rally. Bull markets tend to climb the wall of worry.

My concern tonight is identifying what the catalyst might be to pull investors off the sidelines, especially as we head into the low-volume holiday season. We're choosing to not add any new active trades tonight but we are adding four new candidates to the watch list (LDK, LLY, TEVA, and VZ). In addition to those four stocks, I would keep my eye on KO and SBUX. A close over $68.00 for KO might be a bullish entry point as it breaks the bearish trend of lower highs. On SBUX I would watch for a close over resistance at $45.00 as a possible entry point.

-James