The market attracted some pretty good overall interest since the gap down early yesterday morning. We provided a range for the NDX yesterday between 2590 and 2550 suggesting that's where this market was going to find a short-term base, and sure enough once the NDX broke through 2590, a significant amount of interest came plowing into the major indexes. I've included an hourly bar chart here of the NDX showing you what I refer to as a wash and rinse. The extreme move down followed by a strong move up and a repeat of that action is a classic wash and rinse, which usually suggests a short-term bottom at the very least. The only thing you should keep a watchful eye for is a break below that support level that the NDX has tried to put in since early yesterday. It's possible the NDX could catch traders by surprise with a sharp move down again but I suspect if the NDX attempts to make that move, it will likely be met with a fairly strong snapback.   Advertisement 3 Profitable Dividend Plays to Buy Now Chief Investment Strategist Alexander Green reveals why dividends are still your best friend. Discover the three most profitable high-dividend stocks to buy right now. Claim your free report here. Advertisement Bottom line is we believe there's not a whole lot more downside left here (if any) before we see this market provide us with a very tradable and potentially profitable rally. If you've got the savvy, now isn't a bad time to be picking up some call options on the QQQ's, SPY's or DIA's to play a nice bounce. We'll reiterate here, as far as we're concerned this market has been cooperating about as perfectly to our predictive analysis as it could be, so we're not among the investors right now who are screaming run for the hills. As you know, the pullback so far has been very logical up to this point and as long as we're not surprised, we're just going to take it in stride and maximize the opportunities to profit from it. As a matter of fact, the recent selloff may actually prove helpful for the summer months... but it's still too soon to tell. We're starting to see some activity once again in smaller stocks so we've got a few new featured stocks coming over the next week or two that we think may start getting a lot of attention and of course, you'll be among the first to know. We'd love to catch lighting in a bottle again for our Members like we did with LUXR, so be on the lookout. I've got a strong suspicion things are going to start heating up. We've got a few updates from two of our most recent featured stocks, so here you have it... One Up One Down Since we're generally never too shy about tooting our own horn, it's only fair we start today's updates with the one down update... being DSCO. The Company came out on the open this morning providing investors with data from a preclinical study of their SURFAXIN LS™ (lyophilized KL4 surfactant) which was recently published in the May issue of Pediatric Research. The results of the study demonstrated that improvements in lung function following administration of SURFAXIN LS compares favorably to improvements in lung function following administration with Curosurf®. In addition, physiologic findings suggest that SURFAXIN LS may have a more favorable safety profile at the time of surfactant administration. The study was conducted in the preterm lamb model of surfactant deficiency, a preclinical model recognized by the neonatal academic community as a well-established surrogate for human respiratory distress syndrome (RDS). Although the news definitely didn't hurt DSCO's investors, it definitely didn't provide cause for jubilation either. We brought you DSCO a few weeks ago based on the fact the Company appears to have a promising pipeline, is very well capitalized and technically was looking good from a charting perspective. That usually is a combination that bodes well for a stock. None of those things have changed except the technical picture and it's important to remember that even though a Company may be in great shape from a fundamental perspective, it doesn't necessarily mean the stock is going to benefit from it right away if ever. There's so many forces at work that go beyond what the Company is doing when it comes to stocks. Look at the overall market over the last month or so, not so conducive for just any stock to move higher. You also have financings that create sellers, you have large insider and outsider holdings that often sell for reasons other than their like or dislike of a Company. My point is... it's important to understand this because if you don't, you'll often be left scratching your head. I've included a daily chart here of DSCO for your review. What you'll see here is I've included both the 3X3 DMA and the 25X5 DMA. You'll see the stock is literally riding that 25X5 right now day after day. It hasn't yet broken below that all-important moving average. If DSCO can maintain its strength above that level, we could see the stock pop hard in the blink of any eye. If it breaks that level convincingly to the downside, we'll likely pull the plug. Right now, we're down a little over 8% since our coverage initiation price of $2.94 but if you remember, we were up about the same within a few days of initiating coverage of DSCO as well. Basically, no harm no foul at this point. Not all entries are perfect so for now, we've just got to hang in there and hope the idea plays out like we anticipate it will. Let's look for DSCO to get back above the 3X3 level for a few days. I suspect if it does, we could be off to the races. If you'd like to learn more about DSCO and follow what SCN Contributors and Members are saying about the stock, go here: http://www.smallcapnetwork.com/Discovery-Laboratories-Inc/s/quote/p/s/DSCO/. Feel free to chime in and provide your own research or opinion on DSCO for others to benefit from as well. Our other most recent idea, VRML appears to be making an attempt to rally over the last few days, which would bode well for the stock's momentum. The Company has been fairly quiet on the PR front other than their April 30th announcement of a resolved non-contingent contract claims with Bio-Rad Laboratories, Inc. arising from the sale to Bio-Rad of Vermillion's protein research tools and collaborative services business in November 2006. So, not much on the corporate development front. However, from a technical perspective the stock is up a hair from our coverage initiation and more importantly is currently making an attempt to stage another nice rally. The stock experienced higher than average volume yesterday and has been met with a little follow through today, so let's see if there is some news on the horizon. If shares of VRML can break above that April high of $2.35 you see here, VRML could get very interesting very soon. If you'd like to learn more about VRML and follow what SCN Contributors and Members are saying about the stock, go here: http://www.smallcapnetwork.com/Vermillion-Inc/s/quote/p/s/VRML/. Again, feel free to chime in and provide your own research or opinion on VRML.   Advertisement The ONE Event in 2012 that Could Derail Obama A prominent financial journalist says that a single event -- which is likely to take place in the next year -- could soon transform America, overnight. He says this event could also destroy Obama's hopes of getting re-elected. And he says this controversial event will be the most important financial story of 2012 -- yet almost no one is paying attention to it right now. Get the important facts here... Advertisement The most important thing to keep an eye on here is if the major indexes follow through with the recent strength like we think they will, let's see if DSCO and VRML follow suit. That would be a vote of confidence for both stocks. I know we all love massive returns in as short a time period as possible but the reality in most cases is Rome wasn't built in a day. I think it took two. Looking forward to the coming weeks ahead. I think there's are going to start getting real interesting. Have an excellent day...