To OTC Journal Members:
 

Some Eye Opening Market Info

Want to read something amazing about this current relentless move up in the large cap stocks? The S&P 500 has closed above its 21-day moving average for 69 consecutive sessions and above its 10-day moving average for 25 consecutive sessions.  Going back to 1962, the SPX has achieved this condition only twice (Feb. 1963 and March 1964). Going back to 1915, the Dow has achieved this same condition only once, in March 1964. These conditions were never achieved in the huge bull market of the 1990's.

In every case, the rallies were eventually followed by some sort either correction or extended period of sideways trading. After the corrective phase ran its course, in each case the market powered much higher.

We have arrived at a bit of a stalemate. Big hedge fund money is flowing into large caps as they have the momentum for the time being. Retail investors are coming back to the market in droves- after all energy and commodity stocks are now dead after a three year run and real estate flipping, the darling of individual investors over the last five years is dead now as well. The micros traded great in August and September (against the seasonal trends), and have since entered a corrective phase.

Once the large caps have become extended watch for money to flow down into the small and microcap sector. After five years of what has really been sideways trading, I expect 2007 to be a blockbuster year in the markets- the stock market is due to become the investment vehicle of choice once again. Hold the good ones into 2007 and sell the losers now.
 

PhotoChannel (OTC BB: PHCHF) Announces Predicted Reverse Split

As I predicted several times during the course of coverage, Photochannel will effect a 10 for 1 reverse split. The stock will begin trading post reverse split tomorrow at the open.

Here's what it means to you. If you currently own 10,000 shares, at the open tomorrow you will only own 1,000 shares, and the stock will be trading at about 10 times today's closing price.

The company is doing this for several reasons. In short- it is time. The capital structure over 10 years of struggle had ended with 300 million shares I&O. That is a good place to be for a development stage company where individual investors are prepared to take a risk on a low priced stock. However, the company is rapidly moving into commercial success and a high growth phase, and it is time for the stock to be looked at my another level of investors. Many fund managers are excluded from trading in $.20 stocks, but can participate in $2 stocks. Don't forget- this company has both a US and Canadian audience. The stock will trade in Canada under a new symbol: PN on the TSX.

I tend to view many reverse splits as negatives for the stock price. When small companies come up against many years of failure, they often continue issuing shares ad nauseum to fund their failure. A reverse split can reset the bar so they can do it all over again.

Then there's the occasional company that is done polluting its capital structure and starts making money. PhotoChannel is one. They are done raising money and are turning cash flow positive. The deal with CVS over this past summer was the catalytic event that got this stock moving up the charts and generating positive cash flow for the first time in its history.

And, speaking of CVS (NYSE: CVS), did you see today's news? CVS is planning to enter into a share exchange to acquire Caremark (NYSE: CMX). It is being described as a "merger of equals". The CVS management team will run the combined companies. 

Caremark is in the prescription business, but does sell medications through a network of third-party retail pharmacies.  This could be another avenue of expansion for Photochannel as the company is already managing the photo finishing online ordering for over 5,000 CVS pharmacies.

My original forecast remains intact. Just move the decimal to the left one space. Look for this $2 plus stock to trade into the $4 to $6 range over the coming months.

Potential catalytic events: revelations of substantial growth in both the top line and bottom line, and new relationships with other large retail chains looking to implement an "internet to retail" strategy for digital photo finishing.

Subscribe

Information is power and timely information is profitable. Become informed and profit from OTC Journal Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the OTC Journal Email Newsletter on a regular basis.

To ensure newsletter delivery, you can add any additional email addresses you may have to the OTC Journal Member List. Receiving the OTC Journal Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the OTC Journal recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery.

Note: Your email address will be kept strictly confidential, and will not be shared with any other entity for any purpose at any time. If you no longer wish to receive the OTC Journal, simply follow the instructions located at the bottom of every OTC Journal Newsletter Edition.

Go Here to view our compensation on every company we have ever covered, or visit the following web address:  http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts. MarketByte LLC has been paid a fee of $50,000 cash by Titan General for coverage of the company. In addition, MarketByte LLC has been pledged a fee of 90,000 warrants convertible at $1 and 90,000 warrants convertible at $1.50 into restricted shares by Trilogy Capital for coverage of the company. MarketByte LLC has been paid a fee of $30,000 by PhotoChannel for coverage of the company. In addition, MarketByte has purchased 500,000 free trading shares at a cost of $.1332 per share. This should be viewed as a potential conflict of interest. The management of MarketByte reserves the right to buy and sell shares of PhotoChannel at its discretion.

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.

From time to time MarketByte LLC sells shares in the open market it receives as compensation for coverage of client companies. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, the editors do not view the sale of the shares as contradictory to any advice delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies.

The editor, members of the editor's family, and/or entities with which they are affiliated aside from MarketBtye LLC itself, 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 unless specifically disclosed in the newsletter. Some of the companies featured in the OTC Journal pay a cash ESP fee to an affiliated technology company ranging from $2,000 to $5,000 per month for internet related technology services.

The Trustee of the MarketByte LLC Defined Benefit and Trust (“the MarketByte Pension Plan”) has invested approximately $140,0000 in Dutchess Private Equities II LP (“the Dutchess Limited Partnership”), a limited partnership in which the MarketByte Pension Plan is a limited partner. The Trustee of the MarketByte LLC Defined Benefit and Trust (“the MarketByte Pension Plan”) has invested approximately $190,0000 in the Longview Fund (“the Longview Limited Partnership”), both limited partnerships in which the MarketByte Pension Plan is a limited partner. No one associated with the MarketByte Pension Plan has any knowledge, information, or control as to any past, present, or future investment activities of the Dutchess Limited Partnership or the Longview Fund.  The Dutchess Limited Partnership is one of two hedge funds managed by Dutchess Advisors.  Dutchess Advisors and Longview periodically refers companies to MarketByte LLC for possible coverage by one of the MarketByte LLC publications, which publications include The OTCJournal.com Newsletter.  Dutchess Advisors or Longview may or may not own shares in the companies that it so refers to MarketByte. MarketByte has no information (outside of information readily accessible to the general public such as SEC filings) as to whether Dutchess Advisors or Longview owns any shares in the companies that it refers to MarketByte LLC.  The above relationships should be viewed as a potential and/or actual conflict of interest by shareholders and prospective shareholders of MarketByte LLC client companies. 

The profiles, critiques, and other editorial content of the OTCjournal.com may contain statements that appear foward 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. Disclaimer ID:$subst('Recip.userid') 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.  MarketByte LLC's mailing address is 4653 Carmel Mtn Rd Suite 308 #402, San Diego, CA 92130.