To OTC Journal Members:
 

Market Comment

This past week saw a major rotation of capital out of defensive cyclicals and back into the high-flying, high growth, high tech NASDAQ stocks. The month of June was all about the economy as far as the market was concerned. It was characterized by sideways, choppy trading. This was the consolidation phase in the market cycle.

Early July's news was all about companies with earnings warnings which kept the market in check. However, during this past week, companies that did not warn about earnings disappointments began releasing financial results. Most of them were coming in considerably higher than analysts' expectations led by Internet Bellwether Yahoo! (NASDAQ: YHOO). The stock came off a low of $105 during the week to end at $128.

It seems that investors and traders are now rotating back into high growth on the NASDAQ, and the index rebounded sharply this week. The best technicians we know believe that the NASDAQ will continue higher to about 4400 which only gives us upside potential of 150 points above today's 4246 close.

Now we need to see some follow through in the small and
microcap arena. Most surges in volume and price we have followed have been met with selling pressure at this end of the market. Small and Microcap stocks are having a hard time getting any momentum. This condition is typical during the recovery phase after a bear market. As stocks begin to rebound some investors that wish they would have sold before the crash liquidate their shares as the stocks begin to climb. Small stocks tend to hit resistance prices, and it may take several attempts with volume to break through the resistance.

Once earnings season passes the market will turn its focus back to economic numbers. Hopefully, after a pullback from the 4400 level, a longer term rally can be sustained which should take the market back to new highs. Time will tell. We are very optimistic that a full blown bull market will be back in place by the fourth quarter, if not sooner.
 

StockTalkLive.com- Our New Partner

In last weekend's edition we announced the beta launch of the new StockTalkLive Real Time Quote service. Please do not send us anymore questions about getting it working!! The beta launch was overwhelmed with bugs, and it will take several more weeks to get it working smoothly.

Once it is fully functional you will be able to use this free application to set up your own real time dynamic stock monitoring screen. You will be able to set up a real time dynamic stock monitor which will show you update prices as they change. It also has free dynamic Level II quotes, and many other features that you can design to fit your own needs. This is the type of software you see advertised everywhere, but you cannot get this service for free anywhere else we know of. Certain brokerage firms offer it to their clients, but no one offers it for free with no strings attached.

We had it working on one of our computers during the week. However, we had to go through two login pages to get in. All of these bugs will eventually be eliminated, and it will be a simple process to use the application. It might be complicated to set up the page the way you want to see it, and it will take you some time to familiarize yourself with the software. The program is driven by a menu bar with pops up on the top of your screen. You build your quote system off this menu bar, which has numerous features for you to choose from.

You can try to log in over the coming weeks to see if it is functioning. We will let everybody know how the development is progressing as time goes by. In the meantime, don't send us anymore questions about error messages or glitches.
 
 

PawnBroker.com (OTC BB: PBRR)- A Correction from our Tuesday Morning Release

On Tuesday morning we reported on the news release issued by PawnBroker.com prior to actually reading the final version. The news release concerned the signing of an Agreement for a $24 million equity line of credit. There was also a server problem which explains why many of you got the edition late.

We reported that the company's investment banking relationship with Ladenberg Thalman would be mentioned in the press release. It was not mentioned. However, if you review the company's year end SEC 10-K filing you will find disclosure on their Investment Banking relationship with Ladenberg Thalman. We believe that this is more important than the money, as it demonstrates the first real evidence of major Wall Street interest in this company.

We were disappointed to see the stock climb back to about $3.50, only to drift back down under $3 on lighter volume before the end of the week. We were hoping to see the stock back to the $4 level plus. It may take two or three more high volume charges to get it back to the $4 plus level.

In order for the company to use the equity line of credit it must complete a registration statement with the SEC, which should take about 90 days. The market may not be willing to accept this company until they have the proper financing in place to allow them to execute their business plan.

Stayed tuned for more news on this stock. The company is working on several alliances and relationship which may put it back in the limelight long before the big Holiday Season push.
 

A Glimpse Into the Future- What We See Coming This Summer For Our Favorites

he values of the microcap stocks we follow tend to be affected greatly by news of fundamental progress by the companies. The Summer season is slower in the way of news and contracts, followed by a surge in the Fall before the Holiday Season down time.

The following is a list of our current favorite companies followed by a brief comment on our expectations for the next two months. Remember, this information only represents our opinion based on conversations with management. There are no guarantees that we will be right. There are also no guarantees that if we are right that this progress will be reflected in the price of their shares.

The list is compiled in the order that we see the most impact in the next two months. If you own positions in any of these companies you might choose to add to them when the stocks are trading quietly on pull backs. To read our disclaimer page on every company we have ever followed, Click Here, or go to this web address: http://www.otcjournal.com/disclaimer.html

Please take  the time to read our new Home Page. We have rewritten it to better describe our mission. Also- our July MVP award will be a free subscription to the Wall Street Journal, which we will bring you during the week of July 24th.

Here is our current favorites list in our favorite order:

• Blue Zone (NASDAQ: BLZN)- New contract signings for their software should propel this stock to higher levels. There are more people watching this company that any we follow. Making the jump from the Bulletin Board to the NASDAQ National Market was an impressive feat for a company still operating at a loss. We are hoping for and anticipating blockbuster news over the next month or two.
• iQrom (OTC BB: IQCO)- This company has been very quiet since the release of the original profile, but we expect to see a change in the short term. We anticipate that this company will sign numerous high profile contracts in the coming months. Once the floodgates open, the momentum should continue. We have a whole program planned to help you understand why their technology is so unique, but the proof will be in the contracts they obtain.
• Envoy Communications (NASDAQ: ECGI)- The company is now annualizing at about $.59 per share EBITDA, and the stock is trading at $5.50. More strategic acquisitions are in the pipeline, and the company is actively seeking Wall Street support. The current price is a joke, and it is just a matter of time before someone catches on to this one.
• PhotoChannel Networks (OTC BB: PHCHF)- This stock doesn't have much of a following in the US, but the Canadian microcap investors have been all over this stock. The stock trades 2 to 5 times as much volume on the Montreal Exchange as it does in the US. Announcements of marketing alliances prior to rolling out their service should get this one going.
• Pawnbroker.com (OTC BB: PBRR)- We love their business model. They need $5 million for infrastructure and general corporate purposes. One major institution is stepping up to the plate, and others may follow. Their B to B software is a sleeper in their business model. This stock should perform well in the 4th quarter in conjunction with the Holiday Season especially if they do a major, nationwide multi-media campaign.

We are working on a new section for the site which will be entitled "Trading Strategies For Micro Cap Stocks". When it is live we will let everyone know. In the meantime please read our section on Trading The Gaps found at the OTC BB Info and Stats button on our home page. In our new section we will discuss the importance of being willing to invest in micro cap companies when the stocks are trading quietly and nobody wants them. Hopefully, as advised in last weekend's newsletter most of our members read our section on Trading the Gaps and nobody bought Blue Zone this past Monday when it opened above $9. This was more of a sell than a buy. The question is: Now that the stock has traded back to the low $7 range on light volume how many are accumulating now? These are the types of strategies that pay off for micro cap investors.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with  which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication.
The profiles, critiques, and other editorial content of the OTCjournal.com may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN  SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN  CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

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