Dow Jones 12276.32 +15.62 1:00 pm PST, March 10, 2007 NASDAQ 2387.55 -0.18 For info, visit access.smallcapnetwork.com S & P 500 1402.85 +0.96 Change your subscription status here Russell 2000 785.12 +3.98 VOLUME 07: ISSUE 28 Hot Pockets & Cold Corners - There's Opportunity in the Obscure  Everyone had a chance to catch your breath? I, for one, am glad the weekend is here. The past couple of weeks have been a frenzy, so I'm happy to take a couple of days just to regroup without feeling I have to keep my eyes glued to the market.  One of the reasons I'm grateful.....the Small Cap Network Newsletter has been in high gear recently, delivering wave after wave of some pretty hard-hitting news regarding our companies. Today's topic should be a nice, macro look at a bigger picture.  The other reason, though, is the market's up-ending a couple of weeks ago, and then this past week's bounce. To be blunt, I'm already kinda' tired of the "is the market at a bottom yet?" discussion. We've added our two cents on the matter, and will surely have more to say as things develop. But, nobody really knows the answer, and probably won't until after the fact. So there - enough already. In the interest of your sanity (and mine), let's instead spend a little time looking at something deliberately different this weekend - sectors and industries. Or to be more specific, let's see if any of the market's obscure pockets managed to circumvent the plunge or rebound by doing their own thing instead.  Why bother? Because statistically, a stock is just as likely to trade in tandem with its peers as it is to be priced based on its individual fundamentals. So, maybe there's an opportunistic sector or industry trend in place that's been otherwise obscured.    Some Good, Some Not So Good...  This isn't necessarily a comprehensive list of worthy sector trends (and certainly our opinions of them aren't guaranteed to be of any help). However, in my experience, there's often a valid reason when things are gaining or losing value while the market is headed in the opposite direction.  By the way, there aren't major indices for these groupings - they're based on the standard industry classification (or SIC) system. All the exchange-traded stocks lumped into a particular SIC group essentially 'made' the aggregate index we're looking at. We've also added a few stock tickers to the discussion, just to provide some context.  And just so you know, the comparison we're using is the 'market' bullishness between February 1st and February 26th, the bearishness between February 27th and March 5th, and the bullishness (again) between March 6th and March 9th. If a group of stocks wasn't swayed for better or for worse during the entire time, I'd like to know about it.  Crops - Never in a million years would I have guessed we'd be having a serious discussion about the 'crops' industry within the Small Cap Network Newsletter, but here it is....these names have been on a tear since January, and didn't even flinch two weeks ago. I have no idea why, and maybe there's no reason it all. All I can see - and all I really need to see - is how these stocks are going higher. You can thank Fresh Del Monte Produce (NYSE: FDP) for the lion's share of the strength, but Landec Corp. (NASDAQ: LNDC) played a role too. The Del Monte chart looks especially interesting, as the last few weeks were phenomenally strong. At first glance I wondered if it was just setting up for a big downside correction. Then, I took at a weekly chart, and recognized how FDP might actually be starting a recovery effort after getting cut in half in 2005 and 2006.  Software - Don't be fooled....we'd say the software stocks were in big trouble well before the market turned sour, and based on the sustained selling here last week, we'd guess these names are still in no better position to stage a recovery. And, despite the launch of Windows Vista leaving computer owners longing for the days of DOS (10 points awarded for anybody who understands what that means), we can't blame Microsoft (NASDAQ: MSFT) alone for the struggle.  Lumber - Until last week, these stocks pretty much reflected the market's movement....rising through late February, then moving down two weeks ago. Then last week, we saw a divergence - these names just kept on falling even though the market inched higher. I think the key factor in their continued demise is just how they were so overbought. They had easily outpaced the S&P 500's 18% gain between mid-July and Late February by putting up a 35% gain of their own during that time. But, the higher ya' fly, the harder ya' fall....at least it seems to me so far. Now that the damage has been done, I have to think the hefty profits are going to be locked in, which may well drive these stocks even lower. Weyerhaeuser (NYSE: WY), Plum Creek (NYSE: PCL), Louisiana-Pacific (NYSE: LPX)....take your pick - they all look pretty troubled to me.  Computer Storage - These names mirrored the market before February 27th, but kept sinking despite last week's slight rebound. We considered chalking it up to just the bad luck of being in the wrong sector, but technology, and specifically hardware, did indeed manage to move upward last week. All the big company's stocks look as if they're struggling to us, like EMC Corp. (NYSE: EMC), Western Digital (NYSE: WDC) and Seagate (NYSE: STX). Though SanDisk (NASDAQ: SNDK) looks like it could be an interesting rebound play, the group as a whole seems to be in dire straits.  Furniture - There's actually a category for these stocks? Wow. On the other hand, maybe it's a good thing there is. Like most stocks, they got whacked a couple of Tuesday's ago. But, they were already in trouble before that, and they didn't participate in last week's rally. They actually peaked on February 2nd, and started to fall back well before the market did in late February. They closed in the red last week too. A look at the Masco Corp. (NYSE: MAS) chart will probably tell you everything you need to know, though Hon Indus. (NYSE: HON) doesn't necessarily inspire us either. Tires - Perhaps even more obscure than furniture, we have to confess we're highly impressed by this groups' strength. They took a hit like everything else two Tuesday's ago, but started to recover the very next day....and are still on the rise in our view. The reason is a complicated one, but in essence, the pricing dynamic here is a combination of basic materials prices, and industrial demand for tires (large truck tires in particular). Apparently the status quo is an advantageous one for the tire makers. Think Goodyear (NYSE: GT) or Cooper (NYSE: CTB).  In any case, those are just a handful of our observations - take 'em for what they're worth.  Though the market's picture may be a little fuzzy right now, we think these pockets of consistent strength or weakness may have opened up a few opportunities to capitalize upon while we're waiting for the overall market to pick a trend and stick with it. Though stocks, sectors, and even the market can (and have) turned on a dime, a trend is still your friend until proven otherwise, as far as we're concerned.  What do you think? Agree or disagree with any of these sector and industry ideas? Or, maybe you have some observations of your own. We'd love to hear them. Feel free to write in, or post a comment in the blog.      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 Attention Readers! Newsletter Delivery Change Notice and Instructions The clock is ticking for Small Cap Network members who have not yet made the necessary changes to ensure delivery of our Newsletter. We already mentioned the name of our publication would be changing from the SmallCap Digest to the Small Cap Network Newsletter, and you can now see the new logo is in place.  However, in order to ensure you continue to receive our e-newsletter, you may need to take action ASAP! To try and minimize any problems with receiving the newsletter, we highly recommend at least taking these two actions....  1) 'Whitelist' all email with 'smallcapnetwork.com' AND 'smallcapnetwork.com' in the 'From' (or Sender) header.  2) If modifying an existing whitelist entry for the newsletter, replace all occurrences of 'smallcapdigest' with 'smallcapnetwork'. Also, replace 'lyris.smallcanetwork.net' with 'lyris.smallcapnetwork.com'.  For additional help on whitelisting, please see our instructions located here.  For additional assistance getting the newsletter delivered, please write to our webmaster.    Stockgroup Stages Breakout If Stockgroup Information Systems (OTCBB: SWEB) isn't on your radar right now, maybe you should put it there....we think we may be seeing a breakout effort. And, considering the last one carried the stock from 43 cents to 74 cents just two days later - a mere 72% surge - we'd say the reason we're intrigued is obvious.  Since the initial run-up in January, shares have been range-bound between 64 cents and 75 cents. Friday's high of 81 cents was a new year high. Could this be the second stage of a long-term uptrend? Maybe. So if you're interested, we'd suggest not hesitating - in case this thins is growing legs and getting ready to run.  Our longer-term target is still $1.51, which suddenly seems even more plausible after seeing Thursday's and Friday's big volume gain.    Titan Toys With a Breakout Too Well, we mentioned several times we expected it, but now we've actually seen it happen. Shares of Titan Global (OTCBB: TTGL) broke past resistance at $1.40, reaching $1.49 on Thursday. Though it didn't stay there on Friday, we think it still suggests traders are thinking aggressively here. A study of this chart's history reveals this stop-and-go type of pattern, where it trades flat for a few weeks, then surges without warning.  The last few pops like this were good for about 20 cents each, so we may see a little more upside in the short run - perhaps as high as $1.60. As long as it continues to make short-term steps towards my long-term target of $3.00, it can do a two-step tango for all I care. The nice part about those flat periods is just how it allows others an opportunity to get in if they're not really fans of jumping into a sharp rally in mid-stream.    Challenger Featured In Business Publication Every bit of publicity helps, right? Well, Challenger Powerboats (OTCBB: CPWB) got a little help recently by being featured in a St. Louis (MO) area business publication. The St. Louis Business Journal took a nice, focused look at Challenger - based near St. Louis - in the March 2nd edition.  It's a little bit of a different venue than Hotboat Magazine, Powerboat Magazine, or the boat shows the company hast started to attend, but hey, getting the name out there for free doesn't cost a penny, and you never know who may be reading.  You can get a portion of the article by clicking here.  Subscribe Information is power and timely information is profitable. Become informed and profit from Small Cap Network Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the Small Cap Network Email Newsletter on a regular basis. To ensure newsletter delivery, you can add any additional email addresses you may have to the Small Cap Network Member List. 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All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, TGR accepts compensation from third party consultants and/or companies, which it features in the publication and circulation of SCN. To the degrees enumerated herein, SCN should not be regarded as an independent publication.  Click Here or go to http://access.smallcapnetwork.com/compensation_disclosure.html to view our compensation on every company we have ever covered, or visit the following web address: http://access.smallcapnetwork.com/profile_disclosure.html for our full profiles and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts.  On January 19th, 2007 TGR Group LLC entered into an agreement with Stock Group Media, Inc. 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