To OTC Journal Members:

Despite the fact that the market is continuing to behave poorly several of the companies that we follow had great press this past week.  There was a favorable article in the New York Times on PawnBroker.com (OTC BB: PBRR), and Blue Zone (OTC BB: BLZN) was featured in a major Canadian newspaper again.  Blue Zone's stock symbol has reverted back to BLZN from BLZNE as they were able to complete the Form 10 process with the SEC.  We will cover it all for you in the weekend edition.
 

Market Comment

The market has spent the last couple of days giving back the gains it tacked up the four trading days prior to the FOMC meeting and subsequent announcement last Tuesday, demonstrating that investors still buy on rumor and sell on news.  This same phenomenon is demonstrated over and over again when we see stocks sell off just after a great earnings release.  Generally, the stock appreciated substantially for the two weeks prior to the news, and short term traders take profits when the news comes out.

Everybody agrees that we are in a bear market.  There seem to be very few believers that the market has a lot more downside left.  We are in the confusing phase that market technicians call the base, where volume is light, and significant moves in either direction are met with support or resistance.  Extended tight trading ranges with low volume always end up with a high volume break out or break down depending on which way the market wants to go.  It is just a question of time.

Friday's action was very negative, but the market has dropped to the point of retesting some of the April lows, and it will probably find some support in this range.  If it doesn't, the technicians are saying that the NASDAQ might want to try for 2900, which would probably make stocks irresistible to the big money on the sidelines.  However, don't take Friday's action too seriously.  It was options expiration day which never tells us anything about market direction.

This sideways market could last anywhere from weeks to months.  However, there has been a lot of talk in the press this week about enormous amounts of cash sitting on the sidelines waiting for the ideal moment to re-enter the market.  Although many of the NASDAQ high flyers have been cut down to 1/3 of their March highs, the money taken off the table during the sell off has not disappeared.  It is out there waiting for the right time to go back to work.  That time will come when the market is convinced that the overheated economy is cooling off enough to take us back to 3% growth, thereby minimizing the threat of inflation.

Market gurus that we follow are beginning to look for the next bull market to begin in June or July.  We don't know.  We just know that the next bull market is coming, stocks are very cheap today, and investors at today's levels that can invest until the fall have a high probability of experiencing great returns on their investments.  
 

PhotoChannel (OTC BB: PHCHF)

Yesterday we conducted a 12 minute interview with Geoffrey Briant, the CEO of PhotoChannel.  We always try to ask the questions that investors would want the hear the answer to.  Send any suggestions you have for future questions to info@otcjournal.com. 

At the end of the interview there is a fascinating glimpse into the future of the digital photography world.  We strongly recommend that you listen to the entire interview.  Here is your link:

Pawnbroker.com (OTC BB: PBRR)

There was a favorable article published on PawnBroker.com in the New York Times this past week.  In any other market this is the kind of article that might have created a positive movement in the stock.  

Have patience.  In discussions with management we learned that the next several weeks may prove to be fruitful for the company.  We expect a lot more favorable press of this type on PawnBroker.com once they have their formal grand opening.

Blue Zone (OTC BB: BLZN)

Blue Zone also received some favorable press during the week, but we don't have the article for you. There was a feature article in a Canadian newspaper.  More importantly, Blue Zone was able to complete the dreaded Form 10 with the SEC prior to losing its listing from the Bulletin Board at the 11th hour.

The next step for Blue Zone is a NASDAQ listing, which has already been applied for.  We hope to see the NASDAQ listing granted soon.  It will allow for much greater exposure for the stock to institutional investors.

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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.gov and/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.