Dow Jones 11971.19 -128.11 1:18 pm PST, January 22, 2008 NASDAQ 2292.27 -47.75 For info, visit access.smallcapnetwork.com S & P 500 1310.50 -14.69 Change your subscription status here Russell 2000 671.75 -1.43 VOLUME 08 : ISSUE 7 Fed's Impact on Stocks, APDN Protects Profits  What a week. Just when it looks like things can't get any worse, they get worse. The good news is the Fed may have finally stopped the bleeding....at least for a while. Even better, I think Tuesday's terrible open (just a few moments after the Fed finally took some action) may have been the one last flushout we needed to get to a bottom. We'll be looking at this possibility - in detail - in a moment.  In the meantime, I've got some big news from a company who saw their stock shoot up by about 30% in the last few days. Applied DNA announced a key patent application had been filed. I don't think the patent alone was the cause for the rally though - I think a recent string of good news led to the move. Moreover, I sense more is on the way.  By the way, I've got two new articles up on the home page. The latest 'Technology Trends' columns takes a look at my tech predictions for 2008. Our 'Market Wise' column suggests some great new year's resolutions every trader may want to consider.    Applied DNA Protecting Profits We've seen Applied DNA (OTCBB: APDN) take several strides towards revenues over the last several days. Today they took a stride towards protecting their revenues from competitors, by protecting their proprietary technology.  The company announced they've filed several patents on a handful of 'markers' that can be used with their Signature(tm) DNA. As before, the botanical DNA is virtually impossible to replicate, making Applied DNA's application of their technology a perfect fit in the fight against counterfeiting. Now, the markers will allow a 'rapid (real time) test' to be done on marked tags using a simple hand-held scanner. In other words, rather than needing to chemically test a tag supposed to be market with Signature (tm) DNA, users can just hold the tag under the portable scanner to determine if there's DNA on the tag or not. Zap - done! The speed and functionality is clear. As a bonus, the markers and scanners can also use 2-dimenetional bar codes. Though both the markers and the scanners were already in use, apparently one of the market's concerns with the company's technology is/was the lack of patent protection. Well, problem solved. And, based on the market's preemptive response, it really does look like that's what some investors were waiting for. Check out the nearby chart. We saw a nice move on Friday, on decent volume. We saw hints of follow-through today, again on decent volume. As important as that is though, it doesn't hold a candle to one possibly overlooked reality...the bulls have been testing the water here for about a month. APDN did not participate in the last round of market weakness either. Coincidence, or hint? I lean towards the latter - albeit cautiously - based on some other recent news from Applied DNA. As a reminder.... Applied DNA collected their fourth and fifth milestone payment (of six) from Supima back on January 10th.  The company joined the Brand Protection Alliance (or BPA) on January 14th. On January 16th, Applied DNA's numbers from Q4 of last year showed the company's first-ever revenue from product sales.  And now the company's stock is moving again on and before the heels of patent news? I just get a feeling we may finally start to see the potential become reality. Stay tuned.   What's Up With This Market? Never let it be said watching the stock market isn't interesting. Ben Bernanke and Co. had been content to stand by and watch equity values decline by nearly 20% since late October, the whole time telling us not to worry. Finally they got spooked enough not by what was happening here, but by what was going on overseas. (I'm sure they're thanking their lucky stars U.S. markets were closed on Monday, to prevent any further pain before they could do something.) Stocks still opened lower, but also spent the better part of the day climbing higher. I think the real question to be asking here is not whether or not a major correction (or perhaps even a bear market) has been staved off....we already saw the correction, and the Fed is - quite frankly - powerless to prevent a cyclical bear market. No, I think the real question here is whether or not the economy can avoid a recession. In my top ten market predictions for 2008 I guessed a recession would indeed be avoided. However, that was based on the ridiculous assumption that the Fed would actually recognize what needed to be done, and then do it in a timely manner. How silly of me...one of these days I'll learn. At this point, I'd say the Fed is three to six months behind - too far behind to undo any economic damage that could have been (should have been?) prevented. Thus, I can't help but think there will be a small price to pay - though 'small' is the key word. Now, I'm not throwing the 'R' word around to scare you, and I'm certainly not saying it to get you out of the stock market. Why? Because plenty of stocks can and do thrive in a recession. So, the 'R' word isn't a reason to panic - just a reason to change strategies. In fact, later in the week we've got an edition planned to specifically look at sectors that tend to do well if we're in a recession...or even when there's just the threat of recession. That said, I think any cyclical contraction will be short-lived. While a recession theoretically can't be avoided, I think it can be controlled. Yeah, the Fed waited a little too long to move (in my opinion), but they did act boldly, and may act just as boldly at next week's meeting. Now that they're on their horse, I think they'll keep the soft patch to a minimum.  In the meantime, here's my short-term take on the stock market. I think we're apt to move higher from here, though not entirely due to the 3/4 point rate cut. I attribute a lot of bounce potential to the fact that stock prices were deflated by about 20% over the last three months, but they aren't actually worth a whole 20% less. In fact, by historical standards, stocks are downright cheap at this point. When comparing forecasted earnings to risk-free treasuries, valuations are at multi-year lows. And what about a bear market (which by the way isn't the same thing as a recession)?  I'm not going to try and blow smoke here and tell you it'll never happen, because it can and eventually will. When I see unemployment rising significantly, and earnings forecasts starting to be adjusted lower on a regular basis, I have to wonder. And, after a five-year bull run, we're certainly due in terms of the typical time cycle.  But no, I don't yet see the recent dip as evidence of a bigger valuation problem. On the other hand, if some of the major red flags start to wave persistently, I'll certainly revisit the idea. Namely, I'm watching for how stocks perform relative to the major news.  Bottom line - I'm a buyer here for the short run. I'm not getting married to any of my new stocks (i.e. I have ultra-tight stops), but I expect enough short-term strength to make it worth my while. I'll assume these names will stay strong indefinitely until it's crystal clear they won't. By the way, did you notice that Russell 2000 led the way today?  Be sure to check out the follow-up commentary later this week. Here's the news from Applied DNA.   Applied DNA Sciences Files Patents for Optical DNA SigNature Markers and Enters the Instant Detection Market  STONY BROOK, N.Y.--(BUSINESS WIRE)--Applied DNA Sciences, Inc. (OTC Bulletin Board: APDN) today announced that it has filed multiple patent applications to cover its latest developments in optical reporter markers. These reporters "announce" the presence of the DNA markers to which they are attached. The development of these reporter adducts enables instantaneous detection of Applied DNA's SigNature(tm) DNA markers by commercially available, hand-held devices. A blinking light, an audible beep or the reading of an invisible 2-D bard code signals detection. The company has begun to demonstrate its new platform to individual customers, and plans a formal unveiling for a later date.  "This is a significant accomplishment for Applied DNA Sciences," stated Dr. James Hayward, President and CEO. "The company has been working on the development of a system for remote instant detection for some time and we now have in place a number of proprietary optical markers which can be covalently linked to SigNature(tm) DNA to provide an instant means of detecting the presence of SigNature(tm) DNA by small, hand-held readers. DNA-reporter adducts offer a high-speed first defense that enable a rapid screening to identify the presence of a SigNature(tm) DNA marker. When complemented by our forensic methods, we provide an integrated solution for brand-owners and governments."  While intended as a rapid screen of our SigNature(tm) anti-counterfeit mark, SigNature(tm) Optical Reporters also enhance the logistical value of DNA marks by permitting the co-encryption of the content of a 2D barcode.  "With these discoveries," stated Dr. Benjamin Liang, Chief Science Officer, "the company now offers three levels of detection for its SigNature(tm) DNA, from a simple rapid screen which can be done instantaneously anywhere with a portable handheld device to more definitive forensic tests which can be tested either in the field or at our laboratories. This underscores the significant progress APDN has made in the past two years and it is what we believe many of our potential clients and investors have been waiting for. We now have a highly cost effective and easy to implement solution."  "Rapid Screens" utilizing optical reporters afford APDN and its customers the ability to quickly identify the presence or absence of SigNature(tm) DNA Markers using portable handheld detectors. For more definitive testing, clients can have their SigNature(tm) DNA marked items forensically authenticated with services and tools provided by APDN.  Dr. Hayward continued. "If you are serious about brand protection and care about the quality of the products that are being produced and ultimately consumed, we believe that DNA is the only true workable solution in that it provides a unique, unbreakable code, and has the staying power that no other security technology can offer. We believe we are well prepared to provide exactly what is needed in the field so that genuinely branded products can be easily differentiated from counterfeits."  About APDN  Applied DNA Sciences markets and sells DNA encrypted and embedded solutions that are forensically authenticated by machine readable devices. These solutions can be easily integrated with a range of inks, threads, varnishes, adhesives as well as thermal ribbon, inkjet and laser ink. Applied DNA Sciences' products can help protect the brands and intellectual property that can easily be eroded by counterfeiting, product diversion and fraud.  The statements made by APDN may be forward-looking in nature and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements describe APDN's future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of APDN. Actual results could differ materially from those projected due to our short operating history, limited financial resources, limited market acceptance, market competition and various other factors detailed from time to time in APDN's SEC reports and filings, including our Annual Report on Form 10-KSB, filed on January 15, 2008 and our subsequent quarterly reports on Form 10-QSB. APDN undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date hereof to reflect the occurrence of unanticipated events.  Contact:  Applied DNA Sciences, Inc.  Debbie Bailey, 631-444-8090  fax: 631-444-8848 FCMN Contact:  info@adnas.com  Web site: http://www.ADNAS.com Source: Applied DNA Sciences, Inc.    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 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. 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