Well, as far as Presidential State of the Union addresses go, last night's was relatively uneventful. I didn't hear anything all that surprising anyway, though maybe you did. Either way, the market didn't seem to be too worried about it, or too excited about. Maybe traders were more interested in today's news from the Federal Reserve, which also wasn't much of a surprise. Pretty much as expected, the monthly bond-buying effort was trimmed by another $10 billion beginning in February, to $65 billion, down from the budget of $85 billion per month as recently as December. Of course, surprise or not, it's not what the market wanted to hear. Hooked on that stimulus, today's selloff suggests traders were somehow secretly hoping the Fed would see too many red flags to dial down its QE efforts. No such luck. The market sold off just enough to bring us to the brink of a big collapse, though interestingly, we still haven't moved past the point of no return. I'll show you what I mean below. Before that, while the dust from President Obama's speech and Ben Bernanke's last words as Fed Chairman is still settling, there was something else that popped up today I found worth a look, and I'm pretty sure you'll find it interesting too. Like always, I've got an opinion on the matter, and as seems to be the case too much of the time, mine is the minority opinion. Is Amazon's Idea Good, or Bad? So what's the news I have to discuss with you? The possibility that Amazon.com (AMZN) is working on a gaming console that will ultimately take dead aim at Netflix (NFLX), Apple (AAPL), Microsoft (MSFT), and devices like the Roku. Simply put, Amazon is rumored to be designing a gaming console based on the Android operating system that will play app-based games on a full-sized television rather than on a tablet-sized device. I say it's only a rumor, because the company won't confirm it. But, the company won't deny it either, and the rumor was spurred by a usually-reliable VG247.com, who accurately pointed out some things Amazon has done of late that could almost only mean they're diving into the gaming world. Though it hasn't even been unveiled yet, the sub-$300 console has already been met with a lot of criticism, the biggest of which is that anybody who was into full-screen gaming wouldn't care about such a device, opting for an Xbox or a PlayStation or even the disappointing Wii and Wii U consoles. Worse, most games that were designed for tablets are touch-screen based, which wouldn't be playable on a regular sized television set. I get all of that. Heck, I agree with it. Even after I point out how Amazon has been encouraging its developers to build future games with joysticks and controller-pads in mind, I'll agree there's going to be a limited number of games that players will be excited about on an Amazon console, and therefore a limited amount of interest in it. You know what though? I don't think this is entirely about games... not initially anyway. This is about Amazon.com establishing a physical presence in your living room that could serve as an accessible launching pad to the company's shopping site, and/or to the company's Prime service. See, the device will also play on-demand videos, access the web, and more. For those of you who don't know, Amazon Prime is an on-demand digital video service that looks a lot like Netflix. Its content library isn't anywhere near as deep or as wide as Netflix's.... at least not yet. But, the more people that participate in it, the more content that Amazon can add to the Prime service. Prime members also get free two-day shipping, to sweeten the pot. So, while Netflix is the king of online television right now, this gaming console is something Netflix should worry about. See, unlike Netflix, Amazon doesn't have to make money with everything it does. There are some rumors suggesting the company actually loses money on every Kindle Fire it sells, but it's willing to do so because it more than makes up for that loss on sales of digital content like e-books and on-demand video. Amazon may lose money by offering free shipping to Prime customers, but it more than makes up for it on its cut of what it sells at the site. Point being, even if Amazon only sells a few million gaming consoles, it's likely to gain a few million paying customers for its other profit centers. At that point, that's why margins on - and even total sales of - a game console aren't important. Heck, even if Amazon only sold 10 million of them, it could convert several million of those buyers into Prime subscribers, and it will always have that "Shop at Amazon.com" button or the "Watch Amazon Prime now" button just a few feet away from people's fingertips while they're lounging on their couch. Netflix, in contrast, only turns a profit in one way - it has to sell movies and TV shows at a price greater than what it pays for them. For those of you that follow the company closely, you'll know that's been increasingly tough to do. Bottom line? I like the idea of an Amazon gaming system (and this is coming from a guy who's pretty much hated most of what Amazon has done, and has despised the way the market has given the company a 10-year pass on profit expectations). Not that Amazon needed a lot of help, but I think it would be a step in a good direction, for the company and for shareholders. Advertisement Today's Top 10 Small Cap Stocks - Dynamically Updated List This list will continuously scan and rank small cap stocks throughout the trading day. Find realtime trading opportunities using our SmartScan and Trade Triangle technology to uncover the next big stock under $10 to make major moves. View the top 10 small cap stocks for today. Advertisement So what do you think? Am I nuts? Can Amazon afford to come up with a consumer technology that doesn't sell like crazy right out of the gate, particularly in an overcrowded market? If you've got some thoughts you want to post, just go to our AMZN research page and chime in. Now, about this market.... The Bulls Defend Their Border Despite today's 1.0% selloff, the 1773 mark is still a huge line in the sand for the S&P 500. In fact, I'd say it became even more important today, as it was tested and then confirmed as a floor. Oh, the actual low from the S&P 500 on Wednesday was 1770, but it's pretty clear from the close at 1774.2 that the bulls had every intention of propping the market up around 1773. While this support in no way is evidence that the uptrend has been renewed, it certainly puts the kibosh on any further bearish arguments. With that being said, you should know the deck is still stacked against the market here. Remember how yesterday's volume for the rally was tepid? Yeah, well, today's volume behind the selloff was strong again. In fact, of the four bearish days within the past five trading days, Wednesday's volume was the second-strongest. It all says there are still more sellers than buyers at this time. This is a situation, however, where the lower the market goes, the more motivated the sellers become, and the more hesitant the buyers get. Yes, this condition exacerbates the selling pressure, and yes, the 1773 is still the tipping point as far as I'm concerned. Although we've already lightened up on our total number of open trading ideas in the SmallCap Network portfolio ( we're down to three now) we're going to go ahead and pull the plug on one more. Let's go ahead and exit Fred's (FRED). We should be walking away with about a 3% gain, give or take. It's not a lot, but it's not a loss either, and I think if we keep this trade on the table much longer it could turn into a loss. We've still got Digital River (DRIV) and MicroSemi (MSCC), and for reasons I don't have time to get into today, I'm content to hold onto those. Let's just say I see a strong uptrend brewing for both. There's nothing new to add to our portfolio today, and unless the market improves soon, I doubt we'll add any new picks this week. I can tell you, however, these guys went bargain shopping today and found a long/bullish setup I love. If they hadn't pulled the trigger on this stock for their subscribers, I would have passed it along to you. It's just got reversal written all over it. That's it for now. We're past the halfway point for the week, and we're getting close to Super Bowl weekend. Time to get excited. It should be a good game, if only because of the commercials.