Dow Jones 11059.02 +141.51 1:29 pm PDT, September 16, 2008 NASDAQ 2207.90 +27.99 For info, visit access.smallcapnetwork.com S & P 500 1213.60 +20.90 Change your subscription status here Russell 2000 710.62 +20.86 VOLUME 08 : ISSUE 81 In This Edition... * Voyant Conference Call Reminder  * The Silver Lining of the Lehman, Goldman, Merrill Trifecta  * SpongeTech CEO Lays it All Out  Voyant Conference Call Reminder Just as a reminder, Voyant International's (OTCBB: VOYT) upcoming investor conference call is scheduled for Wednesday, September 17th, at 2:00 PM EST. To listen in, dial 877-741-4248 five to ten minutes prior to start time for registration if you're in the U.S. or Canada. International callers should dial 719-325-4763. Either way, the event passcode is 5794266.  There will be a replay available if you can't make the call. However, there's nothing better than a live event, right?    The Silver Lining of the Lehman, Goldman, Merrill Trifecta Well, I'm not surprised it happened. I'm just surprised it happened in the span of just a few days. Lehman filed Chapter 11, Merrill was 'sold' to Bank of America, and Goldman Sachs posted earnings that confirmed just how bad things are within the capital markets. AIG is on the chopping block too. You know what though? I'm thinking like a net buyer right now ...particularly for the financials, but also the overall market. I suspect many of you are as well, realizing if there was any bad news left to bake into stock prices as of last week, it's been taken care of since then. Or to say it another way, how much worse could it get? Lehman shares are trading at 20 cents. AIG is currently priced around $2.70. All the major financial stocks are near multi-year lows.  Don't get me wrong - technically things can always get worse. In this situation though, anything short of the bubonic plague isn't going to raise an eyebrow when it comes to Lehman or AIG. Merrill's been taken care of, and Goldman shares already paid the price for a weak quarter. What's left to factor in? Indeed, Lehman (or what's left of it) has drawn the attention of Barclay's, JP Morgan and Goldman are providing some much-needed cash for AIG, and the Merrill/BofA union should actually offer some synergies. Those are all good things....the silver lining behind the nail being driven into the proverbial coffin That's not my only hint though. It's not even my biggest hint. Most of you know by now I'm also a contrarian; I zig when everyone else zags. In market terms, I'm a buyer when everyone is a panicked seller. And, 'panicked' is the key word. One of my favorite gauges of market sentiment is the CBOE's Volatility Index (or VIX). It peaks when traders are fearful, and it hits lows when traders are optimistic. When the VIX hits the extreme ends of its range, I get to work. I haven't talked much about the VIX in a while, primarily because there's been nothing to talk about - it's just been in neutral territory. That all changed yesterday day though. The nearby chart tells the story ...investors are freaking out. The VIX hit highs we haven't seen since mid-March, so we know fear is high. The thing is, the VIX hit those highs in March and pulled back from them right about the time the market made a huge rebound move. In fact, each of the VIX's recent peaks has tagged a bottom (some more significant than others).  I don't know if this instance will be different than the previous five. It theoretically could be, but the odds are astronomically against it. For this VIX peak not to be ultimately bullish, the VIX would have to stay here above 30 - or even move higher - to keep stocks pointed lower. Clearly the VIX hasn't been keen on doing that recently. In fact, the VIX rallied briefly on Tuesday, and then ended up moving under Monday's close... a subtle hint of reversal pressure.  As always, stranger things can and do happen, so being vigilant is necessary. My chief worry is that a move under today's lows could spell trouble for the the market. From a risk/reward perspective though, I have to favor the market's upside potential right now.   SpongeTech CEO Lays it All Out I don't know how many of you caught the letter from SpongeTech (OTCBB: SPNG) CEO Michael Metter, but if you didn't, I recommend you check it out. I'll whet your appetite here, and add my own two cents. In a nutshell, I sensed a little attitude in the letter. I understand it though. The company is going like gangbusters ...sales growth and earnings growth have been phenomenal. Yet, the stock still isn't responding. Metter suggested the cause of the stock's struggle was naked short selling. Though we can not confirm his suspicion, we can't rule it out either. It would certainly make sense - the track record of results should have pushed the stock well past five cents by this point. At the same time though, we also have to wonder how dilution has played a role in the market's perception of SpongeTech.  No matter - we're still mostly focused on revenue and EBITDA, both of which are expected to be even better for their fiscal Q1 (which ended Aug. 31st).  Per the letter, they're expecting about $5 million in sales. They didn't offer any EBITDA guidance for Q1. But, they had net income of $1.2 million on $4 million in sales during Q4. Assuming they net about 30% of revenue again, we're looking for a net income of around $1.5 million. The dilution debate not withstanding, the SpongeTech story all along has been about value, and this stock's never been short of it.  With a net of $1.5 million in Q1, that should lead to an EPS of about 0.28 cents for the quarter. Annualized, that makes the P/E ratio something around 2.0. Now the naked short selling possibility doesn't seem crazy at all ...I can't imagine the market overlooking something like that low P/E for this long. If it is indeed the short sellers keeping SPNG at bay, I think they're playing with fire. That's a lot of short trades to be covered, and it could lead to a complete upside explosion when and if it happens.     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 Spicy Pickle Grows More San Diego Roots If any of you are near 317 10th Avenue (near Petco Park) in San Diego, California, pretty soon you're going to have another cuisine choice. Spicy Pickle (OTCBB: SPKL) just signed a lease for the location. That should be the next one opening up in San Diego, though the same restaurateur has already signed a lease for a third San Diego store to be opened later in 2009.  As for the stock, SPKL put up a good fight, staving off market weakness for most of the last four weeks. The most recent outgoing tide created by Lehman and AIG, however, has just been too much to resist. Spicy Pickle shares have moved to 41 cents.  Normally I'd call that a bargain, but normally we're not in a recession either. Now it's like trying to catch a falling knife. I still have tremendous confidence in the company's plan. However, timing is everything. I'm going to table this one until it looks like it can draw a buying crowd.  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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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 described below, this publication accepts compensation from certain of the companies which it features. TGR Group, LLC which owns this electronic publication, also accepts compensation in connection with the dissemination of information regarding the companies featured. This publication should not, therefore, be regarded as an independent publication.  To view our compensation on every company we have ever covered, visit the following web address: http://access.smallcapnetwork.com/profile_disclosure/ for our full Profiles and http://access.smallcapnetwork.com/alert_disclosure/ for Trading Alerts.  TGR Group, LLC has been paid a fee of $30,000 cash and 1,000,000 shares of newly issued restricted stock by Voyant International Corp. for coverage of the Company. TGR Group, LLC has been paid a fee of $30,000 cash and 750,000 shares of newly issued restricted stock by Spongetech Delivery Systems Inc. for coverage of the Company. Additionally, one of the managing Members of TGR Group, LLC has purchased 150,000 shares of Spongetech Delivery Systems, Inc. in the open market with an average cost basis of $.035 cents per share. Larry Isen, the editor and publisher of the OTC Journal, through various entities he controls, has purchased 1,200,441 shares of Spicy Pickle at an average cost of $.2125 per share. These purchases were made in Spicy Pickle private offerings. The aforementioned purchases were made between August of 2005 and August of 2006. On 12/15/07, on entity controlled by Larry Isen participated in an additional financing wherein 12 shares of convertible preferred, converting at $.85 into 120,000 shares and 90,000 warrants with an exercise price of $1.60 were purchased. In addition, Larry Isen has received 785,000 shares of Spicy Pickle common stock for consulting services and has purchased 213,343 shares in the open market at an average cost of $.89 cents per share. In addition, MarketByte LLC, an entity controlled by Larry Isen, has received a fee of $30,000 cash, and 300,000 newly issued restricted shares for coverage of Spicy Pickle. TGR Group LLC, the publisher of the Small Cap Network, has received $30,000 and 300,000 newly issued restricted shares for coverage of Spicy Pickle. Mr. Isen is an affiliate of TGR Group. In addition, two other individuals affiliated with TGR Group have purchased a total of 300,000 shares at $.25 per share, 21,961 in the open market at $.76 per share and received an additional 70,000 for consulting services. Current positions of the aforementioned can be found at www.otcjournal.com and access.smallcapnetwork.com in the Spicy Pickle information section. 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