Based on yesterday's head fake where the market gapped higher on the open and sold off all the way into the close, it appears the major indexes are working their way back toward testing their June 4th lows. I will point out though that it's no guarantee. We mentioned yesterday after the NDX hit it's resistance of 2577, there was a good possibility it would pull back before gunning for the 2613 level, which we view as a major line in the sand where traders are likely going to step back in force and really test the bulls' conviction. Advertisement Outlawed by Uncle Sam This alternative investment was so exceptional at creating wealth, the U.S. government shut it down. But thanks to a legal loophole, you can tap into this opportunity once again for big cash payouts...Find out how, NOW. Click here to find out how. Advertisement We provided a trading range on Friday pointing out that 2613 could be an opportunity to pick up some QQQ put options and conversely the June 4th low of roughly 2444 would be a good risk/reward level to pick up some call options. Right now, if you're going to attempt to do anything between that range, it might be prudent to play contrarian if you're going to do anything at all. In other words, buy calls on the pullbacks and puts on the short-term pops. I for one would exercise some patience as I learned long ago there's no reason to be overly hyperactive. All that does is reduce your ability to generate consistent profits. By exercising patience with your trading prowess, you're likely going to make less trades but when you do, they'll likely be much more profitable and consistent because the single most important aspect to any trading or investing is you must have what I refer to as a "context for your decision". In other words, having a clearly defined reason for what you're about to do. Context for a trade could include a technical signal, fundamental value, news, unexplained volume interest, or any number of a variety of reasons but the bottom line is you have a clearly defined reason for what you're about to do. Outside of protective stops, context in my opinion is as important as anything toward being successful in the market. Too many traders and investors make trades or investment decisions without any context for their decision whatsoever. Don't be that guy. With that being said, we're simply going to see if this market wants to move higher and test a logical critical resistance level or if we're going to test the June 4th bottom, anything in between there is anyone's guess. Yesterday, we provided updates on our three most recent Featured Stocks, today we'll cover the last three and stay tuned, we'll be adding more ideas very soon. For those of you who are new to our site and newsletter, more often than not, our Featured Stocks have offered our Members higher prices at some point after coverage initiation. If you're willing to accept realistic gains of 15% to even 100% without being too greedy, our Featured Stock list is something worth paying attention to but you've got to be quick about it. Our Featured Stock list is displayed in the top right of our homepage at: www.smallcapnetwork.com. Yelping for a Bottom We brought you YELP after the online urban city guide became a bit of a victim to Facebook's IPO debacle. With FB's IPO pricing disaster, just about every social media stock out there found itself fighting to buck the social media selloff. However, that's a perfect example of what opportunities in the market are made of. When you can identify a company where nothing has materially changed other than some short-term sentiment, it can often open up the door for favorable entries as long as you've got the conviction to act. When we initiated coverage on YELP back on May 22nd, the stock was trading around $18.60. Today, the stock is pretty much right around there, but not before some decent volatility. I've included a daily chart showing you that shares of YELP are doing what they can to form some sort of bottom it can work with. After trading to a low of $14 and change, the stock staged a pretty impressive snapback rally that sent shares above $20 before stalling. The stock has backed off since and I suspect, if it can get back to the 3X3 DMA pegged at $16.40 right now, that may prove an excellent entry. Since nothing in the market is for certain, my stop at this point would be a convincing break of that $14 low put in back when the major indexes found a short-term bottom. It's important to note that when Apple speaks, just about everyone in the tech world listens. Apple's two-hour keynote at the 2012 Worldwide Developers Conference yesterday mentioned YELP several time in the course of the morning. Search for restaurants on Siri has been spurring more YELP reviews to appear and YELP information is also is being integrated into Apple's new mobile Maps application and IOS. That is very good news for YELP. I've said it before and I'll say it again, when we look back ten years from now, I believe YELP (if managed properly) will be one of the biggest winners for investors. ORYN - A Lesson in Volatile Penny Stocks The development stage maker and marketer of flexible electroluminescent lamps and drive electronics has been Mr. Toad's Wild Ride for many penny stock players. We added ORYN to our Featured Stock list back in the middle of May at $1.05 per share on the context that the stock was going to start getting a lot of attention and sure enough it did. Shares of ORYN ran to $1.33 yielding SCN Members roughly a 25% return before reversing course. With shares of ORYN now searching for a base, it's important to remember to never ever let a penny stock gain turn into a loss. Greed seems to be one of the biggest culprits for penny stock losses than anything else. You get all of these penny stock sites out there preaching and pitching 500% returns etc... and the reality is that rarely happens. If you don't like 25%, then I don't know what to tell you. More importantly though, regardless of what kind of gains you want to see from a penny stock, you must use protective stops. Case in point, if you jumped in on ORYN and started seeing positive momentum to the upside, what's wrong with making that $1.05 or even $1.20 a stop loss you could work with in case things turned, because inevitably when it comes to penny stocks that's often going to be the case. Lastly, if you are the type of investor who gets married to a penny stock, make sure you only invest what you are absolutely willing to lose. It's that simple. Penny stocks can often provide ridiculous returns in a very short amount of time. The right penny stock can yield returns you'll likely never see anywhere else but you've got to remember, a penny stock is a penny stock for a reason. VRML Goes Up VRML Goes Down Our last Featured Stock update, VRML, has been another interesting case of volatility and again provided SCN Members who were willing to accept good returns with as much as 33% in roughly a month. We initiated coverage of VRML back in late April at $2.08 per share when the Company started going through what we believed to be some positive developments for the future of this developer of diagnostic tests in the fields of oncology, hematology, cardiology, and women's' health in general. The stock finally went parabolic on May 24th running as high as $2.78 in a single day on excellent volume. However, as noted in our May 25th edition, stocks usually tend to have their own personality and behavior in terms of how they trade. We pointed out that there was a very good possibility that the stock would repeat its same price action as it did back on March 6th, which basically amounted to a full 100% retracement of its one day move, and sure enough it did. Shares of VRML came right back down to earth and is again back trading around that $2.08 level. No harm no foul. Will shares of VRML do it again? Likely. If you get the opportunity to pick up some shares in VRML below $1.90, that may prove another savvy entry based on the context that it will repeat its behavior that has been so evident with the stock ever since the beginning of March. I'll add that VRML likes to pull back before making a nice move... like the one's we've seen on more than a few occasions now. Fundamentally, VRML does appear to offer value currently trading at much less than two times cash meaning even if you took most all of the value of the Company's assets away and simply left it with its cash on hand, it would still be of reasonable value. It's not often you'll find stocks like that, so we'll just have to see if we can catch some serious lightning in a bottle with VRML going forward because any positive corporate developments could quickly unleash some excellent returns.