It was inevitable that the market would have a good day. Earnings season begins tomorrow, and the market might stop obsessing about oil and recession, and turn its attention to numbers. At any rate, some sort of rebound was inevitable. The market has now spent 20 days in a row below the 10 day moving average- it’s only happened twice in the last 20 years.

My call in yesterday’s edition for a short term, oversold bounce in RIMM was very good- the stock was up $6.38 today and closed at $122.04- Up substantially from the early AM going of $115 where I suggested pouncing.

In fact, I decided to sell my 10 August 110 calls- I netted about $2200 on a $12k investment in two days. I’ll take that anytime. I decided to hold the 500 shares I picked up at $116.85- looking for higher levels there.

In fact, let’s look at an LPO (Logical profit objective) for RIMM. Here’s the chart:

On the left you see the perfect 61.8% retracement I covered in Monday’s edition. On the right you see the LPOs. Your first stop would be about $124, which the stock will probably hit in the AM if the market’s move today carries over to tomorrow.

If $124 gives way, I’ll be looking for $131.50 as the next target price. I’ll probably hang in there and hope for that level.

If you sold the QID and jumped into this trade, you should be very pleased. These trades can be profitable when the micros are simply stalled, which is the case in the current market malaise.

Aside from an update on SPKL today via the BLOG, there’s not much for report on the microcap front. Hoping for some news out of one or two of these puppies in the next week or so.

Comments and questions are welcome.

The home page at the OTC Journal lists my SSL (suggested stop loss) for Spicy Pickle at $.90. For those of you who understand the concept of an SSL, you know that you have now become a long term shareholder if you have continued to hold the stock.

As a very early stage investor, I was happy to notch a big profit at the end of 2007 when the stock was trading with liquidity above $1.50. Since then I have done very little trading in this issue- some buying and selling, but I don’t think I’ve done a trade in the stock in quite some time.

I knew things could get rough coming into the summer months. For starters, the summer can be rough on microcaps- summers are generally characterized by low volume pullbacks.

This summer has been particularly rough with the backdrop of a US recession. In short, any company who sells anything to US consumers is getting pretty rough treatment by the US markets right now. A couple of exceptions would be WalMart and Costco- the big discounters.

Fundamentally, there’s not much reason for the shoddy treatment. It’s more market and recession related. The company’s 41 stores are doing very well for the most part, and the expansion will continue.

I was able to get an update on current events this past weekend. Two new stores are slated to open in July in two new states- the first Michigan and Brooklyn stores are scheduled for opening.

There are more under construction. More leases are close to being signed. New franchisees are close to coming on board. The money that was going out for the 7 corporate stores is over, and they are now contributing gross profits regularly.

No franchise commitments are being shelved in this tough market. Real estate continues to be the expansion Achilles Heel- finding the right locations cannot be rushed, and finding the good locations is still difficult. A good recession might actually a positive on the expansion side- the real estate might become more readily available.

So- here’s the slap of reality- we’re in a recession, we’re in a Bear Market, and we’re in the middle of the summer doldrums. My accounts are awash in red ink, but I made the decision to tough it out.

SPKL has a very loyal shareholder base, but has still come down into the mid $.70’s on a little selling pressure without the accompanying buy side pressure.

The company will continue opening new stores for the forseeable future, albeit not as fast as I would like to see. Each new store opening contributes a little more cash flow on an ongoing basis forever.

I can’t call where the bottom might be or when the stock will start a reasonable and sustainable rebound phase. I suspect the stock will be a lot higher by year’s end, but there’s no telling for sure. Here’s one certainty- the market will start pricing stock’s out of this recession long before economists give the all clear signal.

If I have to hang in there for two months or two years to catch the next Bull Market surge for consumer related US stocks, then so be it. That’s what I’m going to do.

Comments and questions are welcome.