Is the Time for Contrarian Bullishness Near? Isn't it amazing how the market can stop and turn on a dime? Even more amazing is that we've seen five (count 'em, five) sizeable abrupt reversals in just the last couple of weeks. It underscores the importance of really being able to take a step back and spot the true undertow. It also highlights the importance of being able to be true to your convictions by doing what seems like the opposite of what everyone else is doing.... which may be the tougher of the two. So, here we are, watching the market wallow in a 1.5% loss and wondering just how much worse it could get. Nearly all (not every one, but most) of the headlines and stories the media is dishing out today are bearish/pessimistic ones, only fanning the flames of worry [check out marketwatch.com's home page today.... terrifying]. All joking aside, that may be the contrarian/bullish clue we've been waiting for. We've talked about it before, but it bears repeating now.... by the time the vast majority of the market and its pundits/commentators are publicly bearish, the bulk of any selling is done. Folks don't get bearish or pessimistic until it serves their purposes to do so (i.e. nobody's going to say they're currently bearish and then continue to step into long or bullish trades). Now that you can't throw a rock and not hit a bearish investor, and now that you can't turn on news television and not see a thing besides gloom and doom, any selling that was going to be done has likely already been done. Of course, that leaves nobody behind but the buyers, which is bullish. So are we bullish too? Ya' know, it's an interesting question considering we just poked fun of how the media's hysterics tend to be wrong at the absolute worst time. As pessimistic as everyone else currently is, no, we're not yet on the bullish side of the fence, but we're certainly not on the bearish side of the fence either. To give credit where it's due, Guy Adami may have said it best on 'Fast Money' last night.... "the next two days (today and tomorrow) are critical, that they will tell a long tale as to where the market is headed for the next couple months." He went on to add there's a ceiling at 1300 and a floor at 1270 for the S&P 500. If the numbers ring a bell, it's because they're close to the numbers we've been using as a cap and floor for the S&P 500 Index; the 20-day moving average line at 1291 (blue) is our ceiling, while the 200-day moving average line at 1262 (green) is our floor. Above 1291 is bullish, and below 1262 is bearish. We do agree with Adami's sentiment though..... today and tomorrow will make or break this market for the next two months if the index breaks out of this technical confinement. Traders will either be spooked, or elated. It's also worth noting we're ONLY talking about the market, and not the economy. The economy ain't great right now, but it's not in the dire straits folks seem to want it to be in. The market doesn't necessarily reflect that reality all the time though. That's how and why stocks could go either higher or lower from here - it's really not about valuation in the short-term. Our guess and inclination is a bullish one, but let's give the market the time it needs to make that decision - there will be plenty of trend to trade afterwards. We'll publish a quick edition this weekend if we get that decision before the end of the week. In the meantime, an update on some of our open trades...   Open Trade Update Despite a horrible market environment, Alphatec Holdings (ATEC) continues to roll. ATEC is higher for the last couple of weeks, making good on a reversal effort from last week. We're now up 16% for this trade. Nothing news-wise from the company though. For Avanir (AVNR), Biodel (BIOD), GigaMedia (GIGM), and AEterna Zentaris (AEZS), it's pretty much been market-perform. Though a couple of them are in the red, we've opted to hang in there based on the strength of their stories, and the fact that the market can't hold them back forever. Indeed, if the market bounces as discussed above, these names should be the first and best to benefit. No news here either. For our two newest trades, Easylink Solutions (ESYL) and Tii Network Technologies (TIII), we've also heard no news, and not even seen any real movement from either stock. Looks like traders are content just to stay on the sidelines for the time being while the broad market sorts things out. Timing is obviously still everything, but a little news from the companies would help. That said, when it rains it pours...once we do start to get news, look for it in waves.   The Community's Best Can this many people really be watching the YRC Worldwide (YRCW) chart - and even trading the stock - without realizing what the underlying numbers look like? It's no wonder this name has such an easy time attracting followers. Yet, all the numbers in the world don't mean a thing if it can't get to the important one. James Brumley has the scoop. Chinese stocks on sale. 'Nuff said. If you happened to own PRKR, AXK, AAST, or VRNM yesterday or today, and are feeling a little seasick, don't worry..... you're not alone. Here's some perspective that will put your feet back on firm ground, and put a plan in place. It was only a few months ago lithium-ion batteries were going to save the world. Now they can't even save themselves. There's a lot of similarity between the pharmaceutical industry in the United States and the pharmaceutical industry in China. There's a lot of difference too, as traditional (non-manufactured, organic) medicines are still quite mainstream. John Udovich names three ways to play this still-strong segment of China's healthcare market. Getting a bead on LCI, IMGG, and DDSS (you have to look at the bigger picture).   We Value Your Feedback Got comments, questions or suggestions? We want to hear from you. Send us your feedback. If you wish to send a written request or inquiry, please send it to our physical address: SmallCap Network 4364 Bonita Rd. #451 Bonita, CA 91902   Share the SCN Newsletter If you find the Small Cap Network Newsletter informative and profitable, please forward our newsletter alert service to like-minded friends and associates who share similar market interests.   Ensure Newsletter Delivery To ensure newsletter delivery, you can add any additional email addresses you may have to the Small Cap Network Member List. Receiving the Small Cap Network Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the Small Cap Network recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery.   Change Your Subscription Settings