To OTC Journal Members: 
 

Taking the Elevator Down

It has been said the stock market takes the "Stairs Up, and the Elevator Down". We've certainly seen it this week.

Greek Bonds were the excuse, and possibly more instability and defaults in Europe. Then, there was the "fat finger" technology glitch which roiled the markets as well. Don't kid yourself- these were just the excuses. Here's the real reason the market is selling off- it's because the market needed to sell off. Every hedge fund manager, black box programmer, and market disciple has been waiting for some sort of a correction. It was so long overdue that they all tried to pile in at once, and down goes the market in a total vacuum.

Completely overlooked were the Friday jobs numbers. Our economy created 290,000 new jobs last week, up from 180,000 the week before. 500,000 new jobs have been created in the last two months, which is a good step in the right direction for the US econonmy.

The market had been making the slow but consistent climb up the stairs for about 14 months. Do you remember the DOW was at 6500 in March of '09, and Thursday the financial community was horrified when it dropped through 10,000 last week? This is not some $2 stock we're talking about- this is the Clydsedale like Dow Jones Industrial Average. That 14 month climb was the most prolific move in the history of the DOW.

In fact, the markets gave up 38.2% of the entire move from last July in two trading days. That's a slow climb up the stairs, but a very fast ride down the elevator.

This is not your Grandfather's stock market. This is the 21st Century market driven by Hedge Fund Managers who live and die by their monthly performance, and simply can't afford to take a long term view on anything. Black boxes with very complicated algorithm programs start banging any bids that can be found. There's a good argument for more human involvement on crazy days.

Setting the insanity in the markets aside, one investing prinicples remains tried and true: Investing in quality, profitable growth companies pays off handsomely over the longer term. You just need a strong stomach for the dicey times.

And, speaking of quality, profitable growth companies- here's some content I prepared on Biostar Pharmaceuticals (NASDAQ: BSPM) on Thursday before the Dow dropped 1,000 points in a day.

Last month those who chose to act my trading idea on Biostar locked down a 40% proft. However, I don't believe that's the really big money to be made in this idea. I believe the stock could double off current levels before the end of the year. Here's why:
 

Biostar Video Chart

I recorded this video on Thursday before the market really fell apart. The observations might not hold water with this massive decline. Technically, the stock might want to work lower. I'm presenting this because there's valuable information if the stock gravitates back to $4 next week. Then, the premise holds up.

If the stock can't find any legs, the $3.30 level would be a bargain basement attention KMart shoppers irresistable buy. 

The Chinese word for Crisis also translates to "Opportunity" and "Chaos". Seems like there's plenty of both going around right now. Before clicking on the following link, turn up your speakers. The video chart only takes a few minutes, and should simply start playing in your browser. I'm working on getting a little better color resolution on the chart.

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