To OTC Journal Members: 

What a week- what a day. The Good, the Bad, and the Hideously Ugly. The market is getting murdered again- The 30 year Treasury rocketed again as financials and energy stocks were crushed. Another three days of irrational fear. The November lows look like they could be tested, which is what a lot of people have been looking for. I think that would be too easy for shorts. It will probably bounce before we retest the lows of 7500 on the DOW and 750 on the S&P 500. 

However, in microcap land, there are a couple positive developments coming out of today's session, and it's certainly worth reviewing if you're looking for a little sunshine in this equities nuclear winter.
 

China Energy (OTC BB: CGYV): Breakthrough Volume Day

CGYV had an absolute rocker of a volume day, trading 444,761 shares at closing at $2.12. The stock is now back above the $2 level, and traded the second highest volume day in its history. The catalyst was a research report placing a $4 price target on the stock. I haven't seen the final version yet, but will have it for you in short order.

Another interesting factoid for those who like obscure stats- CGYV traded the third highest dollar volume of any stock that traded on the bulletin board today. The only two with higher dollar volumes were Ricoh (as in the copiers)- a $67 stock, and Carolina Light and Power- also in the $67 range. Aside from those two, CGYV led the day- and led the day for microcap stocks.

In a day or two I'll have a copy of the research report for all to read on CGYV. In the meantime, against the backdrop of a mega ugly day on Wall Street, I'll be happy to take a new multi month high on huge volume. There might be a little pullback from here, but the chart suggests the uptrend continues in spite of the background macro bloodbath.
 
 
 
 

eFoodSafety (OTC BB: CGYV) One UPs Obama

In six days the United States will inaugurate a new President, and it will be a historic moment. Love him, hate him, or indifferent- the Bush Administration is departing from the White House in a sea of turmoil- it's just an abominable mess out there. 

Not wanting to be outdone by President Elect Obama, eFoodSafety (OTC BB: EFSF) is "one upping" the inauguration ceremony by ejecting its old and failed administration and bringing in a proverbial Obama of its own.

Today, about mid morning, EFSF announced that Pat Gruden has apparently been a lame duck President for some time. I had a feeling a major change would be coming. 

The incoming President is Martin Schmieg, current CEO of Freedom2. According to the press release, EFSF will issue 20% of its shares in return of 100% of the outstanding shares of Freedom2. Pat Gruden, who is described as the "retiring" CEO, will no longer be with the company.

I must say, this is welcome news. I don't know Pat and have only spoken with her a couple of times. I'm sure she's a nice person. However, based on the factual performance, one could only describe her tenure as captain of the EFSF ship akin to the helmsman of the Titanic. While the company has a nice portfolio of products, this ship was headed straight for an iceberg that would inevitably sink it, taking all hands and passengers to Davy Jone's locker.

Apparently, Freedom2 has a Tatoo Removal product. At this point, I don't know much about it aside from making the logical assumption that if it works, it will become a very big seller as all the 22 year old rockers become 40 year old moms and don't want to look like Bangkok bill boards any longer.

I don't have a lot of information about the new management, Freedom2, or the new CEO. I have been invited to have a conference call with Mr. Schmieg, and will do so as soon as feasible. I can only comment that, like the US, at this point any change is good change. The alternative is simply unacceptable.

Now, let's see if Mr. Schmieg can recognize there's an iceberg in the ship's path, and circumnavigate the darn thing. 

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