How's it goin', folks? We hope you all had a good weekend, but with just two weeks before the end one fiscal year and the beginning of another, we can't waste any time. We're going to hit the ground running this week, starting with a new trade. We're also going to take a quick look at one of our two open picks, which decided to get going today ... finally. As for the new trade, we're naming Silicon Image (SIMG) as an official holding in the totally-unofficial SCN portfolio. Yes, this is the same stock we were talking about getting into a few days ago. I didn't like it then, saying we wanted to wait for a few more things to fall into place before jumping in. So what's changed in the meantime? To tell the truth, not a lot that's blatant. There were a couple of subtle things that ended up materializing, however. The biggest change was the way Silicon Image shares solidified the recent cross above a huge resistance level. Thursday's pullback to - and then Friday's pushoff of - the converged 100-day and 200-day moving average lines pretty much seals the deal for me. The bears had plenty of opportunity to trip the stock up. They just didn't. None of this is to say a few days' worth of encouraging technical action is the only reason I'm willing to dive into SIMG now As we pointed out to you guys a few days ago, this stock is in the midst of a major turnaround (since late 2012), and the pullback over the past few months is just a great window of opportunity to get into this long-term uptrend. No joke here - I think a target of $7.00 could be within reach, but if it's trading well when and if we get to that level, a move well above $7.00 wouldn't be a surprise. Also like every other trading we've passed along to our readers this year, this budding uptrend also happens to coincide with a measurable improvement in earnings. The EPS chart from cnbc.com tells the story as well as it needs to be told. Earnings are projected to grow from 22 cents per share last year to 28 cents this year to 35 cents next year. Now, that 25% growth rate for 2014 is impressive enough on its own. Here's the thing - Silicon Image has a great history of beating earnings estimates. It's not fallen short once in the past fifteen quarters, and has actually topped estimates in fourteen of those fifteen quarters. Point being, if there's any stock you can have faith in, SIMG is going to be at the top of that list. That's it. Do what you want to with it. Oh, and just for the record, we're wading into the mental Silicon Image trade as a long-term holding, but like any trade we'd ever get into, we're more than willing to cut loose of it early if the right profit-taking opportunity pops up. Speaking of the portfolio, did you see Fred's (FRED) today? Honestly, I was getting a little frustrated with this stock. Today I became glad we were patient with it. Now, don't get the wrong idea - it's not like the stock flew through the roof. It posted a second day of forward progress though, pushing off the 20-day moving average line, and even toying with new multi-month highs. That's an encouraging, sustainable effort. As for the prod, well, that's a great question. There was no real news... just a lot of buying. That's ok though. In fact, that organic buying interest is a great sign. With all of that being said, I want to zoom out to a weekly chart of Fred's to really show you what's about to get my blood pumping here. Ever heard of a stock going parabolic? It's just a fancy word for a stock that seems to be defying gravity and going straight up. These rallies can last anywhere from a couple of days to a couple of years, and though they all end abruptly (and usually with no warning), they're all a lot of fun while they're soaring. Yeah, well, FRED may be close to going parabolic. I'll warn you now that most potential moonshot-stocks don't live up to their alleged potential. They're still worth a swing though, especially if you've already got a little bit of a profit cushion with the stock... like we do with Fred's. The reason we suspect FRED may be about to be catapulted is the fact that shares are once again pressing into a major horizontal ceiling at $17.60. This was the peak level in August, and in November. Now it's under attack again. Between the bullish persistence and the way Fred's shares have already fought their way back above a long-term (rising) resistance line, we just think there's more of a bullish undertow here than anybody really recognizes. Anyway, a thought occurred to me as I was writing today's edition of the newsletter ... Even if you're not actually acting on our stock suggestions, there's still a lot to be learned just by reading about and following our trades, from start to finish. Hopefully you get something out of everything we write, as we intend it not just to be actionable, but instructive. I'll be honest though - the analysis you're getting here in the SmallCap Network newsletter isn't the best stuff we're sending out. John Monroe's dedicated team over at the SmallCap Network Elite Opportunity does nothing but look at, think about, and write about the market and their stock picks, while a bunch of my time is spent writing commentary for the website. If you really want some trading lessons that'll blow your hair back, you should check out what they're saying. The SCN EO has been particularly impressive with their recent analysis of gold. So, if any of you are looking to get a firm grip on what gold's got in store heading into 2014, now's the perfect time to use your free two-week trial to the SmallCap Network Elite Opportunity service. Here's how. 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/ As for the market after today's rally, we really don't know anything more than we did at the end of last week. The pop wasn't a real surprise, as stocks were oversold at the end last week. But, all it took was the mere threat of a brush with the 20-day moving average line at 1795 today for the bulls to hesitate. The market peeled back more than a little bit once the bulls were forced to actually stick their neck out. What's interesting - and perhaps that's code for "concerning" - is the way the VIX edged higher even though the market didn't lose ground. This is a hint that even though traders were net-buyers of stocks today, they're also thinking and posturing defensively using options [the VIX represents the value of a basket of index options, in case you didn't know]. Why are people buying stocks at the same time they're getting increasingly bearish via the VIX? That's the million dollar question. The most likely answers is, traders have little real confidence this rally will last. Maybe they're right. We'll have to wait and see how it all plays out, but it's more bearish than bullish until we get some sort of agreement between the two charts. In the meantime, the market is simply stuck between a rock and a hard place and there's not a lot you need to do as long as this is the case. Don't worry - we'll see a break out of this confinement (1773 to 1795, for the S&P 500) soon enough. Stick around, and we'll let you know exactly when it happens.