One of our SmallCap Network picks made the top ten biggest NASDAQ gainers list yesterday, Reed's Inc. (REED), which popped for another 7.2% gain bringing our total gain to 46% since we suggested the idea back on August 15th. Not bad. Based on the last few weeks of major index activity, I'd say that's pretty darn good. We mentioned three weeks ago if shares of REED could break above a resistance level of $7.16, we could be off to the races again. Yesterday, the stock broke above the $7.16 level in the face of a horrible market and today it's being nicely rewarded with more follow through. What's interesting is the move came on no news, which is far more compelling to me than an obvious move on favorable news. Why? In small cap cases such as REED, it often means you've got some large shareholders, whether it's funds or insiders who aren't willing to part with shares. Based on recent data, the stock has an insider holdings percentage of over 40%, which when compared to most small caps is extremely high. That tells us management is confident about what they're doing. When you've got large players in a stock not willing to part with much of their position, it often creates a perfect supply and demand storm for the stock. The Company is set to report third quarter numbers on November 13th, so there's plenty of room for the stock to move up from here going into their earning's numbers. From a technical perspective, what happened yesterday could be a nice prelude of things to come. If you have a look at the monthly chart, the stock spent August and September testing a complete 5/8 retracement from its all-time high to its all-time low. Twice it tested the $7.16 level and failed. Yesterday, three times a charm. Shares of REED broke above that $7.16 level and is being well rewarded this morning currently trading at $7.71 as I type. I suspect if large holders continue to be patient, the stock could test its all-time high of just under $11 before it's all said and done. That would represent over 100% gains from our initial entry. I've included a daily chart here for your review. There's a few things I really like when looking at the daily chart. First, the volatile sideways consolidation the stock experienced throughout August and September turned out to be a real positive since REED broke out yesterday. Often when a stock consolidates like that and finally breaks out, the new leg up can often be parabolic, sort of like a pressure cooker. Once the lid blows, look out. The second thing I like is yesterday's volume was very convincing. It was the biggest volume day the stock has had in over two years. I don't care what stock it is, when that happens and the move to the upside is very noticeable, that's a good thing. Would I enter at current levels? Probably not. It's highly unlikely the stock goes to $11 in a straight line, so be prudent and pick your spots on logical pullbacks if you haven't participated in the idea yet. For those of you who are still in, congrats! You're loving today's move, as it appears shares of REED most definitely have the wind at their back. Let's hope this is only the beginning for those of you who acted on the idea. Believe me, when you can catch small cap lighting in a bottle, the returns can be ridiculous, and so far REED has been no exception. The major indexes, on the other hand, sure aren't cooperating with the idea of rallying off yesterday's break of 2744 on the ^NDX to the downside. However, we all know that can change pretty quickly. The NASDAQ Comp. appears to be gravitating toward a late September support level of roughly 3039, which is a number we pointed out as a downside target a while back. The S&P is doing much of the same as it approaches its 50 day simple moving average, while the DOW Jones Industrials are sitting right on their 25X5 DMA as I type. I suspect at the very least, we're going to find a short-term bottom very soon. What happens on the heels of that will tell us quite a bit. I'll say this, if this market doesn't find some semblance of a short-term bottom pretty soon, that's not going to bode well for the markets in the mid-term. However, just like nothing typically goes up in a straight line, nothing typically goes down in a straight line either, so if by chance the market implodes and suggests its better days are over for a while, long-term investors will probably have an opportunity to exit stocks on the next major bounce. If you're playing short-term options, keep your stops pretty tight. If you're a long-term investor, it's no time to freak out. At least not yet because again, believe it or not, the weekly charts are still bullishly intact... even though it doesn't feel like it right now.