Good Thursday afternoon, friends and fellow traders. Well, it's going to be tough to make a particularly strong near-term bullish case at this point. We just logged another lower low, turning a little volatility into an official downtrend. Some indices broke under key support levels, while others did not, but by and large I think we have to call it like we see it and say it's time to start playing more serious defense. It's hardly an ironclad expectation for a bigger pullback, mind you. The volume behind the weakness thus far has been tepid, and today's wasn't exactly raging either. As they say though, the trend is your friend (right up until the point when it isn't). An actual look at the indices will make everything pretty clear. Let's just start with an examination of the S&P 500's chart. As you can see, in one fell swoop the index broke back under its 20-day moving average (blue) line as well as its 200-day moving average line (green). Like we said, the volume behind the move wasn't crazy, or even above average. And, even if it was above average, knowing the market's recent penchant for making reversals seemingly out of nowhere, I'm still not sure we could wholeheartedly count on this brewing downtrend to follow-through. Here's the NASDAQ Composite. It too broke under its 20-day moving average line, but that's the extent of its technical damage. Its big make-or-break floor is still 4945, give or take. What's interesting about both charts is how each one's volatility index - the VIX for the S&P 500 and the VXN for the NASDAQ - are starting to edge higher with a little conviction. This is the first time we've seen this in a while, and I think it's a subtle sign something semi-significant could be brewing. Neither the VIX nor the VXN have hurdled their key ceilings yet, but both are dancing with them now. I've got a feeling we can trust the VIX and VXN to warn us of an impending breakdown more than we can trust the actual indices to do so. And just for kicks, here's an updated look at our breadth and depth chart, which we haven't shown you in a while. I know above we mentioned there wasn't a lot of volume behind the recent weakness, but as we can see here, what little volume we have seen of late has been more bearish than bullish.... and increasingly so. Of course, the notion that a pullback is brewing leads into a discussion of downside targets. As you probably already know though, that's not really a topic we can adequately broach here in the end-of-day newsletter. John Monroe over at the Elite Opportunity had a great discussion about near-term downside targets (and what it would take to really get that bearish ball rolling) today. If you want to add that framework to your trading strategy, the Elite Opportunity is the best way to go - John handles targets as well as he spots reversals. Here's how to add that weapon to your arsenal. OK, movin' on. Do You Know the Difference? I don't know if you saw this or not, but this morning New Global Energy (NGEY) put out a press release explaining that it was an OTCQB stock and not what was formerly known as a pink sheet stock (which now use just the prefix OTC, or in some cases with a 'PK' added). It's actually not a brand new development - we saw the changeover happen earlier this month. But, seeing as how (1) the company made a point of pointing it out, and (2) it actually matters quite a bit, we figured we'd let you know as well and explain exactly why it mattered. For some of you old-schoolers out there, you'll remember a time not too long ago when bulletin board stocks used a prefix of OTCBB, which generally indicated they were a fully reporting company, while pink sheet stocks used a prefix like OTC or PINK and/or a suffix like 'PK'. Usage of the right exchange or prefix seemed to be hit and miss though, so to really do investors a favor, the OTC Markets organization stepped up to the plate and got serious about making it clear where companies stood. Now there are three such categorizations. Pink Sheet stocks are still Pink Sheet stocks, and may or may not use a prefix like OTC or OTCPK. In some cases the ticker prefix is still OTCBB, which doesn't actually mean a whole lot anymore. Regardless of how they're identified, pink sheet stocks are still companies that are not fully-reporting, and as such should be looked at with a little extra scrutiny. There are now two upper-tier OTC designations.... OTCQX and OTCQB. These two designations are fundamentally the same, but oficially, the OTCQB "Venture Marketplace is for entrepreneurial and development stage U.S. and international companies that are unable to qualify for OTCQX. To be eligible, companies must be current in their reporting and undergo an annual verification and management certification process. These standards provide a strong baseline of transparency, as well as the technology and regulation to improve the information and trading experience for investors. Companies must meet a minimum $0.01 bid price test and may not be in bankruptcy." That the long way of saying [and you have to sour the OTC Markets website to find this] OTCQX companies have some reported earnings history or $6 million in annual revenue without a long-term history, while OTCQB stocks don't have that audited history. Other than that and the OTCQX's minimum bid price of $5 per share, the two statuses are pretty comparable. Philosophically speaking, New Global Energy has that history by virtue of its August acquisition of Aqua Farming Tech. Technically speaking though - like we told you from the onset of our coverage of NGEY - the company as we know it today has yet to report its first quarterly results. It's coming though, and soon. That may well plant the seeds for an OTCQX listing, but I honestly don't think that really matters. The important thing is, the OTCQB listing means the OTC Markets organization officially recognizes New Global Energy is a fully-reporting company (which it has been for a while). The new official status just makes it more attractive and credible to investors... especially institutional level investors. We just wanted to make sure you knew that about NGEY, and why it was important.