Hello all. How as your Tuesday? As long as you didn't have any of your bitcoin money held with Mt. Gox, I suppose it wasn't too bad, huh? $367 million in virtual currency just gone missing. Geez, what a mess. I can't say I'm surprised though. When all is said and done, bitcoins aren't actually a "thing". They're a premise. That's how they escape regulation, and that's how all that value (and I use the term loosely) got wiped away without any way of tracking down where it went and who got it.... if that value was actually stolen. How do you "steal" something that doesn't truly exist? Let's call a spade a spade... what was stolen is the real money that was represented by the virtual currency, and if those bitcoins were held as hard currency or real money, we wouldn't be having this discussion now. I could rant some more about the bitcoin thing, but we don't have time. We've got a lot to work though today, including a new stock pick. Ho-Hum Economic Data Last week when we showed you updated charts of how the housing and construction markets were slowing down, there was a missing piece of information - home price data. Since we opened the can of worms then, we figured we owed it to you to follow up on that analysis by updating those charts with today's most recent round of housing price information.... the Case-Shiller Index, and the FHFA Home Price Index. These two data sets are still on an upward trajectory, but the incline isn't as steep. Given the recent downward slope from other related data, it might be smart to get worried. Just bear in mind that the Case-Shiller Index and the FHFA Home Price Index numbers are as of the end of December, while all of our other data (except January's new home sales number, which is due tomorrow) is as of January. Regardless, the message remains the same... we're slowing down on the real estate front, even if still technically in a longer-term uptrend. The only other economic data that came out today was February's consumer confidence number. It fell a bit, from 80.7 to 78.1. No biggie, though we're seeing a general malaise set in here, and that could become a problem eventually. We don't have the final Michigan Sentiment Index score for February yet - it comes out at the end of the week. The preliminary reading for February was 81.2 though, in line with January's score. The Michigan Sentiment trend says consumers are feeling reasonably good about, well, everything. .... Sigh While it would overly pessimistic to call today's action "bearish", it sure wasn't bullish. That bugs me, because if the bulls really wanted to make a statement and get the ball rolling again, today was the day to make it happen. No dice. Traders were content to just let stocks drift lower. It's not exactly discouraging, but it sure isn't encouraging. And let me be clear about that point - Tuesday's modest pullback doesn't make things more bearish than they were on Monday. It just makes it clear that the market is going to have to do some work here to stay in bullish mode. The odds of a breakout are still about 70/30 (30% being the odds of a breakdown, with a 70% chance of a breakout), from where I sit. That being said... There's no denying the S&P 500 has a major hurdle to deal with around 1848. We had a pretty good idea of that late last week, and we had a really good idea of it after hitting high of 1858.71 on Monday only to close close at 1847.61. Then today we could only muster a high of 1858.91 before slumping back to a close of 1845.12. Like I said, there's a big problem around 1848. Take a look. Don't freak out yet. I'm not worried anyway. I'm prepared for a pullback if that's what's in the cards. I'm not worried though. In fact, the pause here at 1848 may actually play into our hand, as it gives the bulls some time to brew up a head of steam. Once that pressure is unleashed with a decent push above 1848, it could be an explosive move. Like we told you yesterday though, we really need to see a close above 1848 before making a commitment. And just for the record, even if the market pulls back a little this week, that won't wipe away the odds of a breakout move from here. Heck, bleeding off some of this overbought pressure may actually be a good thing, clearing the decks for the bulls. We're only going to join the 'worried' crowd if the S&P 500 breaks under the 50-day moving average line at 1816.5. In the meantime (if this tells you anything), we're going to keep adding new long positions to the portfolio.... today. New Pick Remember the eight trading possibilities we told you about on Friday? Yeah, well, we're going to go ahead and pull the trigger on one of them and add it to our completely hypothetical portfolio here in the SmallCap Network newsletter. No fanfare needed - it's Astec Industries (ASTE). You may already be aware that the construction machinery company beat earnings estimates today, posting a bottom line of $0.36 per shares versus estimates of 0.31. Revenue fell 1.6%, but the backlog grew by 10%. Not bad. The market responded very favorably to the news too, sending ASTE all the way up to a high of $40.27 (about a 9% gain at one point) before the stock fell back to about half of that gain. Yet, even at the pullback price of around $38.00, Astec Industries shares have done all I wanted them to do, which is break back above the upper edge of the wedge pattern that's been forming since mid-2008. This second wind should get traction, and I can see this chart rolling for several weeks now that traders can see the budding momentum is for real. Truth be told, I don't really like jumping into a stock that just jumped on earnings. The mid-day pullback burned off a lot of the froth though, and I just get the feeling the buyers have been waiting in the wings for the right time and reason to get in. Today's knee-jerk response in the shadow of an equally strong pop in mid-January should confirm to most anyone that there's potential here. In other words, I see ASTE as being worth the risk. I've also got a feeling ASTE could end up surprising a lot of people - on the earnings front - in 2014, and that's on top of the currently-expected 17% increase in income for this year. As for my timeframe, we're willing to hold it as long as it's making forward progress, but this is a situation that might best serve long-term investors (as opposed to short-term traders). Astec Industries is in the midst of a turnaround effort, and it's seeing signs of expansion from the effort. It may take a year's worth of economic growth to really fan the flames of that turnaround initiative, however. That said, if we get a big pop, I'll lock in a sizable gain while we can. We can always buy it back later, once the stock pulls back and begins to rally again. No matter what your timeframe is though, I'd put a safety net in somewhere around $34.95. Just because we think a stock is interesting doesn't mean it's right for you and your situation, however. As always, consult your qualified financial advisor who is familiar with your particular situation before acting on any of our ideas. By the way, yes, we still have Silicon Image (SIMG), Northwest Pipe (NWPX), CubeSmart (CUBE), and PICO Holdings (PICO). We'll try and get you an update on those ideas sometime later this week (not that there's much going on with them). There's also a pretty good chance we'll be adding another pick to the portfolio this week, so stick around for that as well.