Here we go again. Stocks are in the red today, as they have been for the better part of the last two weeks. When will the bleeding stop? Great question. Though there's a strong case for the answer being 'soon', the possibility of it not being soon sets up a downside possibility that makes the last two weeks look like child's play.  We'll dissect the if/then scenario below. After that, we'll review highlights from this week's community commentary and stock picks. In focus this time are Hansen Natural (HANS), Vermillion (VRML), Cirrus Logic (CRUS), and RINO International (RINO), just to name a few.    Here's the Game Plan Seasick yet? It's been that kind of month and a half for stocks, starting out with a bullish swing that re-ignited chatter of true recovery, only to transition back into a bearish mode that rekindled fears of a double-dip recession (which would eventually turn into a depression).  Of course, that's been the MO for the whole year.... up then down, good then bad, hot then cold - you get the idea. You know it's a mess when the folks who've made a career out of making predictions on TV (not necessarily by being right, but just by being interesting to watch) are now even refusing to make a near-term outlook.  Well, good news... I'm going to be a little bolder, and a little more optimistic than the majority right now.  On the other hand, I'm going to make all these outlooks conditional, as I'll be the first to admit now that hysteria has hijacked the market, 'rational' and 'predictable' have gone right out the window.  Oh, and I've also got a universal solution to the current and possibly-growing problem with U.S. stocks.  All Hope Isn't Lost ...Yet  I know it's been a nasty two weeks for the market. The S&P 500 is down more than 4% for the period, and halfway back to the lows (from the recent peak) hit at what most of us were hoping was 'the' bottom at 1010.  Just as a reminder though, we've actually experienced far worse in recent weeks, and loved to tell about it.  That's my indirect way of saying there's still a chance the bleeding could stop and stocks could resume their rally. Unfortunately, the market may have to give up a little more ground before hitting that short-term bottom.  That make-or-break level for the S&P 500 is 1042 (orange on the nearby chart), where the index has made major lows and subsequent rebounds a few times over the last few months. No, it's not the ultimate low of 1010, but that potential floor at 1042 has something of a cavalry on the way... a Bollinger band (blue, on the chart).  Not that Bollinger bands are the end-all be-all - not to me anyway - but it would be nuts to deny how well they've marked most of the major reversals over the last year and a half.  More importantly, they've generally stepped in as reversal catalysts right as investors right as investors were absolutely certain a new major trend was underway.  Any parallels to that idea now? I see plenty. Though the bearish crowd hasn't turned into a screaming mob yet, it's getting there. If the S&P 500 does indeed manage to slip even lower than today's multi-week low and reach the 1042-ish area [where the lower Bollinger band will also be by that time], I think that will pretty much convince the majority that stocks are once again, and inevitably, going to hell in a hand-basket. Of course, that is also apt to be the mini-capitulation we need to re-ignite the uptrend... just when nobody expects it.  As such, our marching orders are simple - we're not going to freak out until it's clear that the floor is going to be snapped. And if by some chance the bulls take over again between here and there, we won't get fully bullish until the 100-day and 200-day moving averages at 1116 are re-crossed.  If Support Is Broken  Alright, if the floor at 1042 breaks down, the outlook then becomes more time-based than distance-based.  I've never been a huge fan of calendar-based market timing (a la Hirsch's Almanac), but the averages are the averages for a reason. So, if we're going to see weakness, then this is the time to expect it. This year's potential fall weakness is being further prodded by mid-term elections - investors are largely adopting a 'wait and see' mentality, unsure about what the House and Senate will look like come November. [Investors can't stand uncertainty.]  Funny thing though... stocks will likely rebound whether the Democrats keep control, or whether the GOP takes over as the majority party. Why? At least the market will know where it stands.  As far as when that might be, again, the 'normal' calendar for the market is fairly well-aligned with the political one. By mid-October we should have a pretty clear idea of who's coming back from and going to Washington D.C. as your new congressmen. And, as it just so happens, mid-October is generally about the time stocks end their seasonal slump.  Bottom line? If the market implodes (decisively moves under 1042), then we may as well hang it up until October. Once October is here though, we can take the first bullish clues around the time at face value.  Like I said though, it's all moot if the S&P 500 holds the line at 1042.  No Matter What  Not even interested in doing the if/then dance with the market? I hear you. I'm kind of weary of U.S. stocks myself. It's not a question of value, as the value is there. It's a question of fear taking over - value is irrelevant if investors can't see past their fear.  There's a great way around all of it though. Think foreign.  While it is true that the demise of the U.S. economy and market led the global economy and market lower, it's not true that the United States' problems continue to hold other countries back. Perhaps more importantly, foreign stocks are doing a much better job of reflecting their true undervaluing value than U.S. stocks are doing of reflecting their actual value.  Yes, Chinese stocks are one way to go, though it seems like China and the United States are so well-linked right now, economically and psychologically, that you can't really escape this ridiculous volatility by going that route.  I'd suggest looking at Malaysian, Brazilian, Australian, German, Argentinean, Korean, and Indonesian stocks or ETFs. I doubt any of those countries are a surprise to hear named as an opportunity; they've each gotten a little love recently from the media. Just consider this an affirmation of the opportunity, but also notification that their underlying stocks have indeed been (1) less volatile than U.S. stocks, and (2) better performers of late.  I'll be naming names and doing some international-based investing analysis in future editions.  Helping you get more out of the market, James Brumley Editor - Small Cap Network      From The Community  - Latest Commentary - Diamonds in the Rough - RINO, GAME, and CSIQ What do you get when a stock with consistent P/E ratios under 10, lots of earnings beats, and a ton of short interest starts to make higher highs? You raise the possibility of a short-covering rally.... that's what. That describes RINO International Corp. (NASDAQ:RINO) right now.  Forget the Doom and Gloom: MVIS, KTCC, TSYS Is it time to take advantage of the modest five-month slide Key Tronic Corporation (NASDAQ:KTCC) has handed us? Dennis Askew thinks so, deeming it a 'buy'. Find out what was in the last quarter's numbers to prompt that opinion.  Should These Be In Your Portfolio? RCRC, ANAD, CHDX The value is certainly there with RC2 Corporation (NASDAQ:RCRC). The trailing P/E of 13.5 is palatable as is, but the forward-looking earnings multiple of 9.4 is a downright bargain considering we've seen earnings beats for four straight quarters. Check it out.  VRML: heavily Shorted Low Float With FDA Approval, a Partner, and Money in the Bank  M.E. Garza lays it all out for us about Vermillion, Inc. (NASDAQ:VRML), looking at some of the stunning numbers behind the stock.... like almost half of the market cap total held as a cash balance (meaning the other half represents the enterprise's value). This turnaround story rocks, yet still under appreciates VRML.  The Clues Are There if You Choose to See 'Em - GNBT, CRUS, & ARNA in Focus Does Cirrus Logic, Inc. (NASDAQ:CRUS) really deserve to sink following such a strong runup? Great question, and one that lands smack dab in the middle of the technical-versus-fundamental argument. The winner of that debate varies with the volatility of the stock, which right now means the technically overbought status of CRUS is of greater influence than the underlying value.  - Newest Picks -  Sell Short Houston American Energy Corp. (Nasdaq:HUSA) - Scott Brown of Dark Horse Hedge is off to a great start with his bearish trade on this Texas-based utility name.  Sweet Like Kandi Technologies, Corp (Nasdaq:KNDI) - Henry Fisher has picked up some shares of the China-based electric vehicle manufacturer, taking advantage of the recent pullback. With All Natural Ingredients, And A Great Taste, Hansen Natural Corporation (Nasdaq:HANS) Is Always Good - Jeff Owen is now long this niche soft-drink maker.  Mastercard Incorporated (NYSE:MA) Has Been on Flat Land Lately, I Predict a Change - Max Rios is right about that..... MasterCard shares has been volatile of late, but not progressive. He's long the stock now, expecting this consolidation to bullishly slingshot MA out of the recent rut.    We Value Your Feedback Got comments, questions or suggestions? Send 'em on over: Email the Editor If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC  4653 Carmel Mtn Rd  Suite 308 #402  San Diego, CA 92130   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! 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