For those of you who really dive into our Featured Stocks and dig into the names we like (which has to be everyone, right?), then you're already aware of how Sky Power Solutions Corp. (OTC:SPOW) hit a headwind on Monday. Your first thought - as was my first thought - was probably something along the lines of "here's another case of the market being flooded with supply". As it turns out, that's not the case at all. After a couple of day's worth of digging, this story has taken a quirky turn, though at least for the better in the grand scheme of things. I'm going to slice and dice the reality for you below. First I want to give you the latest update on where the market is, and where I think it's going next... though that won't take long. Indices Are Testing Technical Support I know this day-by-day look at the market is getting a little old. But, that's just the nature of the beast right now. Were it 2009 or 2010, I'd simply say my piece and update my bullish outlook a month later. In this environment, a month's worth of work can be wiped out on a day or two. So, we have to be hyper-attentive to everything, at least until we're through this mess. Anyway... I remain on the bearish side of the table, for the short run. To give credit where it's due though, the bears haven't actually tipped the market over to a point of no return. The bears are getting close though (despite today's bullish romp), and we now have a specific trigger point to use as a sell-prompt. In the case of the Dow, the NASDAQ, as well as the S&P 500, all three indices hurdled their 100-day moving average lines this week. Since then, all three indices have fallen back and been testing the #$@% out of the 100-day moving averages as support. So far the bulls have held the line, but defeat looks alarmingly close - traders are just looking for a good enough reason to send 'em lower, and even today's buying effort is half-hearted (low volume). The NASDAQ Composite is probably the best illustration of what's going on here. The 100-day line is at 2613. The all-important 200-day moving average line was brushed on Monday in front of the sharp pullback on Tuesday, and the index has been under the 100-day line temporarily today. The bulls understandably don't want to give up this ground, but the bears are mostly winning this battle. If the 2613 level does fail as a floor on a closing basis, I believe that'll ignite the pullback I've been talking about for a while. Anything else, and the bulls remain in the hunt for a breakout above 2691. That's it. This is just a waiting game in the meantime. Now, about this how Sky Power Solutions business... SPOW Selloff - Not All is as It Seems Nine times out of ten, when you get a 65% dip in one day, it's because somebody just introduced a @#$%load of shares into the open market, making the bid/ask depth so imbalanced that the stock just can't stay afloat. That's pretty much what I expected to see with Sky Power Solutions' day on Monday - a ton of shares being traded at the bid, sending the bid/ask range progressively lower as the day went on. That's not even close to how it happened though. To really do it justice, I had to dig deep into the details here. I think it was worth it though. The first detail you may want to know about is the fact that there actually weren't that many trades done at or under the bid on Monday. In fact, of the 978 transactions done on SPOW two days ago, only one was done at or below the bid price at the time. Twelve were actually done at or above the ask price at the time, while 965 were made between the bid and the ask at the time they were done (which is where almost all trades should be happening). This graphic tells the details; sorry if it's fuzzy. So what does this tell us? The one thing we can't glean from the data screen is WHEN the sub-bid and hyper-ask trades took place, which could be telling. Still, with only one transaction at or below the bid, the 'when' is also a little irrelevant just because there were so few of them. But, what this tells us is that there wasn't a great deal of supply beating the stock lower after all, nor was someone trying to manipulate the price to move lower (at least not manipulating it by playing games with the bid/ask spread). This data actually trumps a lot of the rumors and theories that were floating around about manipulation. The other interesting data nugget that I was surprised to find was how the supply that appeared to hit the market early on Monday was nowhere near commensurate with the sharp move lower. With 7.6 million shares trading hands on Monday [easily a record for SPOW] versus an average of about 50,000, Monday's session was a huge one. Seeing a 65% plunge on the same day, you'd think the bulk of that volume would be unleashed on the way down. It wasn't. The selling started right out of the gate, with the peak selloff trade occurring at 9:34 am EST, shedding 55,000 shares at $0.32 Volume was actually quite mediocre between then and about 10:15 am when we saw a slight pick-up in selling effort. We saw three more 50,000 share blocks transacted shortly after that; one was at $0.14, one was at $0.15, and one was at $0.11. By 10:45 am, all the ground this small cap stock was going to give up that day had already been given up... but only about 2.5 million shares had been dumped on the way down. The other 5.1 million shares that traded hands on Monday were actually net-buying. So what does this tell us? At the most there were only 200,000 shares 'for sale', and considering 150,000 of them were sold at a pretty lousy price, I'm not even sure there were that many intended to be sold - the only trader that made a decent exit was the 9:34 am exit at $0.32. Of course, it begs the question.... if the selling wasn't all that heavy, how did SPOW sink so much in the first place? The answer is, it was targeted, mostly at Yahoo's message boards. It was enough though. Most stock-bashing efforts fail. Even when a stock tumbles after a bashing effort though, I still have a hard time believing that was the reason - usually it's just an excuse the longs/bulls make for being on the wrong side of the trade. In the case of Sky Power Solutions Corp. though, for whatever reason, this one worked. It's a rarity, but it happens. The guy wasn't dumping at the bid though, which actually would have been is best bet if he really wanted to crush it. This tells me there was more bark behind the effort than actual bite. Looking ahead, though the stock's still at a depressed value, nothing's really changed about the company - the value of shares are just cheaper. I've got a feeling shell-shocked traders are simply hesitant to step back in just because they're not sure what to make of Monday. As you can glean from the details above though, there's actually not a lot to glean from Monday... things certainly aren't the way they seem to be on the surface. Though the price was beaten down, there really weren't a whole lot of sellers being forced out on the way down. It was just a lot of noise. And, if it was a short seller talking the stock down (we won't know until the end of the month), he's gotta' cover sometime, and his breakeven point isn't all that high... somewhere around $0.18 if all 200,000 shares of those large-block trades are his. he may have an itchy trigger finger, ready to cover at a moment's notice. You can do whatever you want with the data and SPOW. But, just FYI based on what I'm seeing, Monday's action was a strange one-off anomaly.