To OTC Journal Members:

If the market's action over the last six days is testing your mettle, you are not alone. Ever since the last quarter point interest rate increase by the FED, the market has been tanking, taking all sectors down with it. It wasn't the 1/4 point hike. It was the statement eradicating the "one and done" belief priced into stocks. I haven't been a big seller. Most of the stocks I own are correcting on much lighter volume than when they were headed up. I generally look at low volume pullbacks as more of a buying opportunity.

The objective of a correction is to divorce investors from their hard-earned gains. Corrections create enough fear to force you out of stocks at the peak of maximum frustration -- the bottom (see BPTR in my case).

Some of the technical tea leaves I read suggest the market has only been this oversold two other times in the last 7 1/2 years. The last two times were September 21, 2001 (the first day the market opened after 911) and July 23, 2003 (the height of the Enron disaster).

This correction, as abrupt and painful as it has been, is actually quite healthy for the market. It resets the bar. Fear provides the fuel for higher levels. 

If you want to sell out in front of the low volume dog days of summer, don't do it now. Wait for the inevitable rebound. At the close today I jumped on a bunch of the July $39 QQQQ calls at about $1.45 (A bet on a bounce in the NASDAQ 110). I believe a tradeable bounce is inevitable.
 

US Energy (OTC BB: HYFS); Delivers Truck 1 to Ohio

If you've been following the BLOG, you should have made note of the fact that I am a huge believer in US Energy, the company formerly knows as Hybrid Fuel. For our purposes, HYFS is all you need to know because that's the symbol under which it trades.

Here is something to think about: Out of all the alternative fuel technology companies out there, why did CNBC choose HYFS to be featured in a segment on new fuel saving technologies? After all, there are dozens of companies with much higher market caps trading on NASDAQ and the AMEX. Why, out of all the companies, did CNBC choose this obscure little penny stock by Wall Street standards? You can Click Here to view the video clip if you missed it. If you want to review the story, now would be a good time.

The answer- I'm not sure, but I like to entertain the possibility that somehow CNBC knew there might be some huge developments reported by this company in the not too distant future.

I have been talking to management about their pipeline. They have a huge number of irons in the fire, any of which could be transformational. Are there any guarantees something big is going to fall their way? NO. However, I like our odds. There are so many opportunities in front of this company that the likelihood of one monster coming to fruition is very high.

When you consider the sweet spot of the market right now, HYFS is right there. One event, and this one will respond.

Today's news offers further evidence their technology is well on its way to being adopted. HYFS has completed and is delivering the first retrofitted 60 Series Detroit System for Solid Waste Authority of Central Ohio's 2005 Sterling truck. In plain English, HYFS is delivering a monster trash hauler, retrofitted with their technology, to a District in Ohio. 

Over the next 3 to 6 months the truck will be evaluated. If successful, the district has 25 an additional trucks to retrofit. Furthermore, there are 52 other districts in the State of Ohio with similar equipment that will be monitoring the test results. The delivery of this one truck could lead to substantial new business.

In the last month they have delivered prototypes to NY and Ohio. The stock has made a new all time high. It was chugging up the charts beautifully last week for no apparent reason until the selling started. The market tanked, and the stock has come down along with the overall market.

It has pulled back on very low volume from last week's high of $.42 to today's close of $.33. It was a nice little wash and rinse. This is the chart of a stock that wants a reason to take out a new high, and probably trade somewhere in the $.52 range.  What an opportunity. This one could be the idea of 2006, and you need to be in it. 

Here is the complete text of today's news for your review:
 

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