Amazingly enough, I don't have a lot to say here in the shadow of yesterday's break to new all-time highs. The market was up today mostly thanks to the momentum of yesterday's euphoria, though a good-sized dip in the number of new unemployment claims provided a boost for stocks too. For the time being we just have to wait for that momentum to run its course. What I'm really interested in seeing is how these same buyers react when the bears really put them to the test. I'll gladly tell you how I think this is all going to shake-out though. First and foremost, I still suspect we're approaching an intermediate-term top, as April frequently gives us. But, today's admittedly-modest gain suggests the bears weren't waiting to ambush the bulls the very moment the market brushed multi-year or all-time highs. The volume behind today's buying was even stronger than Wednesday's. In other words, yesterday wasn't a blowoff top. I still see a small pullback coming to burn off the current overbought condition, however. The question is, where will that pullback stop? If the S&P 500 doesn't fall below that pivotal 1570 ceiling but instead starts to rebound before sinking that low, I suspect the market will make even higher highs than it did today later in the month. If instead the S&P 500 makes a move back under the 1570 mark that it fought so hard to hurdle this week, I'd say that sharp dip would be enough to spook the recent buyers into a bigger corrective move. Now we just have to wait to see how it all unfurls. Again though, I think we're close to a major pullback either way, as I described back in the April 1st newsletter. We just may need to reach a little higher to kick-start that correction. Now, I'd like to tell you my take on the market right now is the best one out there, but I know for a fact it isn't. The guys over at the SmallCap Network Elite Opportunity made a point today that's so much more poignant than mine. They've got more time and room to do that kind of stuff. My advice is this... take them up on the offer of a free two-week trial, just to see how they're seeing the market's current tug-of-war between bullish momentum and the bearishness inherent with big gains. If you like the way they think, you can continue being a subscriber. If you don't, then just tell 'em bye. Either way, the charts and logical approach they're taking now is well worth exploring. Learn more about it here. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/ The Case Against Afrezza, and Mannkind Is everybody familiar with Mannkind (MNKD)? I'm going to guess most of you are, but in case you're not, I can give you the short version of the back-story. (It's a story with a real twist, and almost sounds like a John Grisham novel.) Mannkind is the developer of an insulin/delivery system call Afrezza. What makes this insulin so unique is the way it's delivered - it's inhaled. A couple of other major biopharma firms tinkered with the idea at one point, as the potential of an easy-delivery insulin [the alternative is an injection] is huge. Pfizer (PFE) was one of those drug developers that gave up on the idea; Eli-Lilly (LLY) also abandoned its inhaled insulin work. Both companies just felt like it was never going to work well enough to win the FDA's approval. Mannkind's Afrezza, however, was different from the beginning... it worked fairly well. It had even made it through Phase 3 trials. That's a big deal, since most drugs that make it that far usually win a final approval. In fact, after Afrezza was rejected in early 2011 it came out than an FDA insider/employee who had a history of front-running major drug approvals had even purchased shares of MNKD (most of those prior trades were very profitable), strongly suggesting that at one point even the FDA was planning on giving the drug the green light. At the 11th hour, however, things got strange. Just a few days before the drug's PDUFA date, a hedge fund manager who had a history of shorting biotech stocks in front of drug-approval or drug-denial announcements wrote a letter to several key FDA employees explaining why they had a legal and moral responsibility to reject the drug. Let me repeat that in slightly different words. A guy who (1) is not an expert on pharmaceuticals and (2) who likely has a vested interest in a drug's rejection is (3) telling executives of a government agency - officials who get paid to make impartial decisions - what they should and shouldn't do. If it seems a little fishy, that's because it's a little fishy. It gets even fishier when you read the detailed account we reported last year. Anyway, the agency did end up rejecting Afrezza, and Mannkind shares tanked. It's never been explained how or why the FDA employee who had a history of profiting from what was probably privileged information was somehow wrong about Afrezza; the only explanation is that somewhere along the way someone at the FDA changed their mind. The question then becomes, why the change of heart? Was it the hedge find manager's request? If so, that's wrong in several ways. (Yes, there's a point to all this.) While that kind of rejection can turn a company off to investors, it's not like the FDA told Mannkind to not bother ever trying again. The agency basically sent Mannkind back to the beginning of Phase 3 trials of Afrezza, asking the company to come back with more information the second time around. Well folks, it's getting close to that time. The drug's approval or denial will likely be announced sometime in late 2013. The stock, however, should start to reflect the market's expectations well before then.... like now. That's largely why MNKD has been so hot this year - traders are getting positioned for news later in 2013. Will we see an approval this time around? Some obviously seem to think so, and honestly, the efficacy data from the first Phase 3 trial looked good enough to merit approval then. But, the FDA still denied it, and one has to wonder if a tainted reputation will somehow plant a negatively-biased seed within the FDA's inner circle. Now, there's a reason I wrote all of this stuff about Mannkind. While we're leaning towards the drug's approval after the Phase 3 "do-over", the guys over at Bio-Wire are leaning the other direction. They're saying Afrezza will likely fail to meet the company's goal for the current trial. If it fails, you can pretty much kiss an FDA approval goodbye. Heck, if the drug fails, you may even kiss the company goodbye. Here's the entire rationale for Bio-Wire's doubts. No matter which side of the fence you're on, it's worth considering. Don't shoot the messenger though - we just wanted to give you the other side of the story.