Dow Jones 13974.31 +6.26 5:35 am PDT, October 5, 2007 NASDAQ 2733.57 +0.00 For info, visit access.smallcapnetwork.com S & P 500 1542.84 +0.00 Change your subscription status here Russell 2000 829.15 +0.00 VOLUME 07 : ISSUE 93 Your Small Cap Network Newsletter - Small Stocks. Big Returns.  In this edition...  1. Why The VIX Concerns Me, In The Short Run 2. Chart Check-in: Titan Global 3. One Hot Commodity - Gold's Still Shining Before we get to the goods today, I want to give you an advance notice of a new trading idea we're going to issue sometime Saturday morning. I can't say too much about it right now, but I can tell you this industry's stocks are red hot right now. In some cases we're talking triple-digit returns in just the last few months. And, I think this group could stay just as strong way for a while.  This particular company has a novel way of solving a major technological problem about 7 out of 10 people have, but can't fix themselves. How's that for a big pool of customers?   Why The VIX Concerns Me, In The Short Run If you're a regular reader of the Small Cap Network newsletter, I think it's also safe to say you're regularly involved in stock trading, and therefore make an effort to do more than just 'buy and hold'. If so, then you'll probably also understand what the CBOE Volatility Index, or VIX, is, and why it's causing me a little short-term concern.  Though instinctually a momentum trader simply looks at which direction a chart is pointed to make a buy/sell decision, sometimes the market can be deceptive. Why? It may look like it's trying to do one thing, but it's actually doing another under the surface. (You may have your parents to thanks for your first experience with this philosophy....it's the old 'Do as I say and not as I do' argument.)  While things may still look generally bullish based on the market's recent rally, the VIX may be saying investors are becoming progressively unconfident following the October 1st market peak.  Why do I say this? Because the VIX has been rising since September 28th...even before the market hit a top. The VIX's overall uptrend is odd, since the VIX is supposed to be falling while stocks are rising, and rising while stocks are falling. No, it's not a perfectly-inversed correlation, but it's close. In fact, the nearby chart shows that relationship fairly well. Though the VIX didn't make a higher close or even a higher high on Thursday, it's still kind of odd...I saw no real hint that it was trying to go lower even though stocks were going higher.  The point - when I see a good reversal indicator pushing off of its lower Bollinger band and a short-term support line at about the same time the market starts to falter at new highs, I just have to wonder why. That's frequently when trouble starts.  DON'T PANIC. This is not a omen of a bear market...not even close. This kind of ebb and flow is natural. We could see a pullback as great as 3%-4%, and it still wouldn't worry me in the grand scheme of things. The only reason I even want to mention it is in case you were thinking about getting in or out off a position. Based on the VIX chart, I think (and this is strictly my opinion) we may be due for a soft patch, or small dip. No biggie - just be aware of the possibility. In fact, I'll be using any dip as an entry point for my longer-term stuff.  And yes, there will be plenty of stocks completely unfazed by any pullback.    Chart Check-in: TTGL  It seems like only last week I was singing Titan Global's (OTCBB: TTGL) praises. Though I still don't see any blaring problems now, I have to say I'm a little disappointed we didn't break past resistance at $2.20. We reached highs there a couple of times over the last month or so, and I thought for sure the third time would be the charm. Instead, I've watched TTGL slide lower over last couple of days. No big deal, but it's the first time since July we've been under the 20 day moving average line.  In retrospect, I guess it's a well-deserved pullback. This stock has been going like gangbusters for weeks now, and even with the two-day dip it hasn't retested the first 38.2% Fibonacci retracement level. In fact, we could see TTGL slip all the way back to $1.73 before that happened.  And what if it did? I'm not a big fan of trying to catch a falling knife, but if support is seen around there, I think I'd be an aggressive buyer. However, I feel the same aggressive buying is in order if we get a break above $2.20 even without a full 38.2% retracement occurring first. This company is firing on all cylinders, and making a legitimate attempt to get a NASDAQ listing. I think that'll garner some serious buying attention.  Also, we didn't have room for it here, but be sure to check the blog for updates on two other charts...StockGroup (OTCBB: SWEB), and MIV Therapeutics (OTCBB: MIVT). They both seem to be at an inflection point, and may require a decision on your part.    One Hot Commodity I've mentioned gold's strength a couple of times in the blog recently, but I figure its persistence now deserves a full-blown mention in the newsletter. Why? Because the more it gains, the better I like it. And, taking advantage of any more upside for gold isn't strictly reserved for futures traders anymore. The StreetTracks Gold Trust ETF (NYSE: GLD) is the first alternative that comes to mind for stock traders.  Just for the record, gold trading is pure insanity. I don't mean doing it is crazy...I mean the way and the reason the chart moves is crazy. The more gold rises, the more hysteria that's created, making it rise even further. It's great, unless you just happen to be the guy left holding the bag once all those traders have had enough and the cycle is reversed into a selling mode. So, there's really no way to measure the true value of gold - it's largely just a function of the herd of traders all trying to outguess one another.  The reason I say that is just to make sure you know when it comes to gold, the only thing I'm worried about is the chart and properly applied technical analysis.  With that, what I see on the current chart of gold futures can be whittled down to one word - momentum. Back in a September 17th blog entry, I highlighted the fact that gold had broken to new 52-week highs when it got past 716. At the time it was trading at 721, and I set a checkpoint target (not an ultimate target) at 750. It looks like I wasn't the only one thinking that way. Gold futures got as high as 755 on October 1st, only to gap back down to 737 the next day - proof that a bird in the hand...  So, is the party over? I don't think so. In the same September 17th blog entry, I said my final target for gold was 810. Though things looked iffy there for a couple of days, I think the bigger trend has been restarted. Gold futures were up big-time on Thursday, closing at 743.80. As for a stop level, I initially said 702. However, given the distance already traveled, I'm going to raise my hypothetical stop to 716.  And just to reiterate, this isn't an official trade...I'm just having a little fun (but if you can make a buck or two from it, so much the better). Also, there's not enough room here to get into all the technical analysis I want to, so be sure to check the blog every now and then for the charts' critical updates.  Don't forget Saturday's newsletter...it's a new trading idea you won't want to miss.      We Value Your Feedback   Got comments, questions or suggestions? 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All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCN. To the degrees enumerated herein, SCN should not be regarded as an independent publication.  Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://access.smallcapnetwork.com/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts.  On January 19th, 2007 TGR Group LLC entered into an agreement with Stock Group Media, Inc. 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