I have discussed many of my "penny stock" investments on this site and the successes I have had with them. One of my favorites, Carbon Sciences, got a nice boost today in stock price (up over 30%), due to a rather significant announcement regarding their development of capturing carbon emissions and converting it to usable fuel. Considering there has been a lot of interest in this company, I felt it was appropriate to post the press release:

SANTA BARBARA, CA--(Marketwire - January 25, 2010) - Carbon Sciences Inc. (OTCBB: CABN) (CABN), the developer of a breakthrough technology to recycle carbon dioxide (CO2) emissions into gasoline and other portable fuels, today announced the development of certain process technologies that will allow for the production of gasoline, shorten the time to commercialization and reduce the system and operating costs of its CO2-to-Fuel technology.

The company's current approach is an enzyme-based process used to transform CO2 into low-level fuels, such as methanol. Dr. Naveed Aslam, chief technology officer of Carbon Sciences, has now discovered a new and more cost efficient process to produce gasoline, a high-level fuel, from CO2. The key features of this breakthrough includes (1) the of use flue emissions directly from coal-fired power plants or industrial factories, eliminating the need for "clean" CO2, (2) the use of brackish water, eliminating the need for distilled freshwater as the source of hydrogen and reaction medium, (3) mild operating conditions, eliminating the need for capital intensive stainless steel equipment, and (4) a highly scalable system to transform large quantities of CO2 into gasoline for use in the existing transportation infrastructure.

Elaborating on the business implications of this new breakthrough, Byron Elton, CEO of Carbon Sciences, said, "We always wanted to produce high-level fuels, such as gasoline, but knew that additional steps would be required to reach this goal. Now, we have the way to go directly to gasoline." Mr. Elton commented further, "The United Nations' IPCC estimates that the cost of simply capturing CO2 for applications, such as underground sequestration or transformation into products, can range from $45 to $73 per ton of CO2. This cost is perhaps the single biggest economic barrier to any large-scale CO2 applications, such as carbon sequestration. However, by being able to use a raw CO2 flue gas stream in our CO2-to-Fuel technology, we are no longer dependent on the success or commercial availability of carbon capture systems. In addition, unlike biofuels based on growing plants to absorb CO2 from the air, our CO2-to-Fuel process is an industrial process that can produce fuel in minutes to hours, not months to years, to meet the demands of the world. These breakthroughs demonstrate why we continue to believe that Carbon Sciences is developing the most powerful and sustainable fuel technology in the world."

Commenting on the development roadmap, Dr. Aslam stated, "We are very excited about these new processes. Our end-to-end CO2 to fuel system will have several modules. We have determined that one of these modules can function as a standalone system for use by a sizable part of the energy industry for the production of gasoline. Inquiries from potential strategic partners have further validated our decision to focus on this module. We are anticipating a shorter than normal development cycle for this module and are hoping to achieve commercialization in less than one year."

Every day that goes by the market is becoming stranger and stranger. Today was no exception. We're beginning to see more of a separation of sectors in trading. For the last few months, it has seemed that most all stocks were trading in the same direction. If financials were down, so would tech, energy, and pharmaceuticals. However, lately, we are beginning to see these sectors begin to develop their own investment outlook as more variability is coming into the market. Much of this is due to the rather stagnant trading we've had the past few weeks, but it is something worth noting.

There was a lot of anticipation going into trading this morning as many were waiting for more hopeful words from our Fed Chairman Ben Bernanke. Lately, any government official or staff member at the podium has seemed to stimulate investors to want to go long. However, today was not the case with Big Ben. Due to much boredom and the large quantity of rambling which took place, I did not catch the whole hearing of Bernanke with Congress, however, I heard enough to make me even more nervous for our economic future here in the short term.

I especially enjoyed Ron Paul's tough questions for Bernanke, asking him about upcoming massive inflation worries and the possibility of making The Fed more transparent. As a response, Bernanke seemed not as worried about inflation (I don't know how) and felt that The Fed could become "more transparent" in some areas, but that other functions of the Fed would best to be left not public. Of course, why should the public be informed about all of the corporate and bank manipulation that is going on, as well as the foreign policy manipulation. Slowly The Fed is becoming more and more like The Men in Black. If the public knew of the beasts The Fed had to combat, we would most likely all go insane.

At any rate, if anything, Bernanke's words were a let down. I could definitely sense doubt in his voice as he attempted to remain as optimistic as possible and you can't blame him, that's his job. Unfortunately, when he makes comments like commercial real estate is fine, and you are professional in that industry, it is easy to see just how little information they are giving to the public.

MGM and LVS soared today due to another case of "better than expected earnings." Even though MGM suffered a 20% loss in revenues, this amount was small enough to send the stock up over 40% at one point during trading. Of course, no one failed to mention that the big Vegas company did sell one of their prized assets (Treasure Island) this past quarter for over $700 million, which I'm sure helped quite a bit. I said in the chat a month ago, that LVS was one of my favorite long gambles, as either it was going BK or it was going to soar, due to a confidence brought back to financials. For those that bought in, I applaud you.

However, with such big increases like we saw today, I can't help but think of the big shorting opportunity there is for me with LVS now. LVS, owner of the Venetian hotel in Las Vegas, is going through some serious debt problems. I understand they are considered similar to MGM, however, they are in much different boats. I actually wanted to maybe pick some puts up today, but missed my opportunity. I'm sure an opportunity will present itself either tomorrow or Thursday.

Friday we will be receiving unemployment data, which always sparks a reaction in trading. Just a warning for bears, there could definitely be some buying momentum building into the end of the week. Thursday we have the results for the bank stress tests, which I still believe will be nothing but praises to the banks, noting that all or most are well capitalized, at least when placed in front of the measly stress tests. If we see such a move, the bulls could find more support when a "better than expected" unemployment number is released. Market is expecting a horrible -643,000 jobless report, which for April, would be a very devastating number. I would expect the number to most likely not be this bad, which once again should cause for this sense of cheering from investors. If unemployment numbers end up being this bad, I would be running for the hills, however, I am sure bulls have a good rebuttal prepared in case of the bad news. I believe these are just a few reasons why much of the bear volume is sitting on the sidelines at this point.

So even though it is boring, I will still patiently wait through some of these uncertainties so that I can start to see more clarity in the market. I may look to double up on some options, by buying and selling calls and puts of the same stock at different strike prices in order to pocket the premium difference. As expiration nears, these plays become more appealing to me.

Tomorrow could be another green day due to some "better than expected" Disney earnings which were released after hours. However, GM's desire to have a 100 to 1 reverse stock split is not sitting very well with investors after hours, which it shouldn't. That is usually done as a last attempt to salvage value. So who knows. As I've said before, I believe these over-corrected market expectations which are manipulating investor's reaction will eventually come back to bite these company's stock price. The same goes with the economic data like Friday's unemployment rate. So we'll see how these companies can sustain, when enduring 30-60% drops in revenue. MorningStar is a good place to keep track of company's earnings, check out the free trial: Morningstar - Valuable insights and innovative portfolio tools. Get the Morningstar advantage with a FREE 14-day trial membership! Times are becoming more and more interesting and I believe some big opportunities are around the corner for me. Have a great night and Happy Trading.

Remember to sign up free for the Crash Market Stocks Forum for a more detailed dialogue with the CMS community. Click here.

Today’s jump of more than 2.5% may invite some side liners to join the game, but the shorts are still the largest player, this type of move is too strong for the economy’s current condition. Don’t be surprised by this move, short interest saw this coming.

Short interest results for the first half of April showed a decline for both the Exchange and NASDAQ. Though it was the first time since mid December that short interest fell, trust me the bulls are not coming to town just yet.

The 4.8% and 2.9% drop for the NASDAQ and NYSE respectively, is largely due to the shorts covering. The run beginning last month and continuing today has left many bears scrambling, while many bulls have come out of the shadows and are testing the waters. It’s a typical scenario for this type of market. All the ultra-conservatives may feel inclined to slowly invest again, but nothing to stir the market in their favor. Plus there are still too many signs the economy is struggling. One strong day or even month is not enough to counteract the past two years.

The awful GDP rating is a clear indicator of how the economy has been performing, yet the past two months have been full of misguided rays of hope. Don’t be fooled. With the market standing on superficial optimism, the bears may be in for a killing.

A sector to put on your radar is consumer spending, especially retail clothing stores. Recently Quicksilver’s founding partner came in and cleaned house, firing many of the top executives. The company has more than a 20% drop compared to their competitors in 2008.

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Bad investments such as Rossignol (which they purchased for 560 million in 2005 and sold for 50 million just last year) and the 900 million of debt which 50% comes due this year, has put the surfing giant on thin ice. Quicksilver is actively selling DC for about 500 million in hopes of eliminating their debt obligations. This year, Moody’s included Quicksilver on its Bottom Rung list of companies most likely to default on its debt. With luxury spending down considerably, Quicksilver may have seen its days, look for shorting opportunities.

Another major US company is on the chopping block as Chevron Texaco fights a 12 billion dollar lawsuit from the indigenous people of Ecuador. The Ecuadorians are claiming Texaco, which Chevron purchased in 2001, released 18.5 billion gallons of petroleum waste and waste water into the environment in the 1970s and 1980s.

Though Texaco was in partnership with PetroEcuador, the state oil company, the lawsuit blames Texaco for not fulfilling their clean-up obligations once the company left Ecuador. The court appointed scientific experts claim Chevron could pay as much as 27 billion in damages. The case is being tried in Ecuador and is expecting a decision during this year. A 27 billion dollar check would put considerable strain on Chevron sending their stock to all time lows.

Both Quicksilver and Chevron have major battles on the horizon; look to capitalize as times continue to heat up.

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-Chad Carlson

Watching the end of trading today, I almost believed that once again we were going to see a close in the red. I am amazed at the power of the selling that is now going on right before close. Lucky for the bulls, the selling did not prevail this time as the market finally closed in the green today up 2.23% (6,875), however far below the intraday highs. The S&P also did rebound back from its recent below 700 level, which is a good technical sign that indeed a bear market rally could be brewing. However, many obstacles remain for the bulls in pushing this market up, so it is still looking like we are in a very unpredictable market. A big one is the scary unemployment number heading our way Friday.

First, let me point out the very large volume of trading today, 464M (compared to an average of 354M). My level two trading platform was going off the entire day. The increase in volume is definitely something to look out for, especially if markets begin to creep up again this next month. A mixture of the two could be a very critical factor influencing an upcoming crash for the market. So my eyes are watching.

It was liberating for me to see the market finally trade up. Not for any reason specifically dealing with my current holdings, but because it will most likely create some opportunities for me to make some good profits in the near future. I do have some long plays in case of anything severely violent, but nothing very significant. Although the green closing was positive and shows some signs of the possibility of a rebound here in the short term, the critical thing to watch is whether the buying can continue, even amidst negative news. We were very overdue for a technical rally, and are still, in my mind, a bit oversold in the market. So yes, a rally was a good sign for markets today, but it is so so critical to see if that buying continues into tomorrow. I worry if it doesn't it may not make it the rest of the week.


China helped jump start trading today, along with Obama presenting the new plans for loan modification, and the process by which the plan is to unfold. I am very curious to see how successful this plan is, as it seems too specific in some points and far too vague in other points. I would just let nature take its place in the market and have prices correct themselves. If we don't we risk facing more problems in the future. It was also very strange to see that China had a strong up tick in their PMI, but at the same time needed to pass a huge stimulus for the country. Ha, that doesn't smell like number forging. The combination of the two sent China stocks flying and FXP crashing. However, as for me, I am staying out of China!

Other stocks that came crashing today were MGM Mirage, as they have put a hold on their new Civic center on the strip due to a lack of funds available. They are looking for financial partners to help finish the deal. Picked a great time to try and do that. Ford and GM came crashing down during after hours as their plan to "reorganize" debt was announced, which sounded a lot like bankruptcy. Citi took another 7% off today as more concerns keep growing whether or not they're going to make it alive. My guess is no.

Oil finally got the love I've been waiting for today as oil was up nearly 10%. I was a couple days early on buying my options, but it was nice to finally see some reward with oil. This may spark a rally for oil depending on how the rest of the market trades. Gold is creeping down back to the 900 range, which makes it very tempting for me to pick up some more rounds of options. Gold performed very well for me last time, and although I still believe we're a while away from inflation risk, at 900 it's looking very appealing to me. GDX and DGP are back on the radar. UUP and TBT continue to make me glad that I bought them. UUP has a Market Club report of +90, which is also very good for technicals (get your own symbol analyzed for free, all you need is a name and email, Click Here).

If indeed we do see this rally gain some ground, I think we could be in for quite the rebound for the March. Historically, March is usually a strong rally month, as it usually acts as the rebound for the beginning of the year blues. If this rally does indeed get some steam behind it, we could see a 15-20% rally for March. I'm not claiming that we've hit bottom, no way. In fact, I believe such a rally is what will ultimately set up for the market crash, probably sometime around the dreaded earnings season. By then I will want to have once again loaded up on a lot of the shorts to ride, what I believe, will be the worst down spiral we've seen this round. So I am remaining very careful not to get caught on the wrong side of one of these violent rallies for the time being.

So, tomorrow is a very critical today. If we do indeed see bears come back just as hard tomorrow, the green we saw today was in vain. If we see two days consecutive of buying, that's a very strong sign for a short term rebound. Congratulations to Nate Meyer for winning the Lending Club promotional contest. Nate also put money in it, and thus far, says he has nothing but good things to say about the company and his investment. Enjoy the $200 Nate. Have a good evening, Happy Trading and see you tomorrow.

It seems as if Geithner and his crew were unable to get a feasible "bad bank" plan together before tomorrow, as most recent news says that the plan will not be included in tomorrow's announcement, but that an alternative process of helping to buy up toxic debt would still be in place. This is not that all surprising, as I had expressed my doubts about their ability to execute such a plan without having to nationalize major banks when they first announced the possibility of the plan. It seems that they are going to take a more "private equity" approach to buying up the toxic debt and that anywhere from $50 to $100 billion of the remaining TARP funds are evidently being set aside for foreclosures. Surely, this is nowhere the number it needs to be, as I recently discussed the $650 billion deficit in loans due this year compared to what is available. And that is for just this year for commercial real estate! So, I would expect Geithner and company to be back at the drawing board very shortly. So, keep an eye out tomorrow at 11 AM, Eastern, for Mr. Geithner and his bag of tricks.

As I said on the chat earlier today, it was hard for me to make any moves today, as I can see the market reacting three ways to the announcements. First, such news could build on the excitement of what we have already seen the last two days and send the market up another 200 points. Or, we could see a negative reaction and profit taking from investors as the Geithner breaks down his plan. If indeed there are "questionable" policies, we could see some major bashing from analysts pushing markets down. Last, which I feel could easily happen, is a strong opening until Geithner, with a pretty strong sell off following the remarks. Geithner will be doing a interview with CNBC directly following the 11 AM conference, so be aware of that. Either way, I do feel there is going to be some exhaust selling and profit taking this week as the news is released and we all wake up in the same beds, driving the same cars, with the same credit card bills.

So, all I did today was sell my BAC (see the market trend analysis for BAC below, get your own symbol analyzed for free, all you need is a name and email, Click Here). Yes, it may go up tomorrow, especially in early trading, but come one, I made a 28% profit in 2 days off a bank I don't even know will exist in a year. I cannot be greedy. So, I did sell that and remain in cash from the proceeds. I now own a bulk of shares from my Thursday's FAS purchase and then my Friday's SKF purchase. My plan with them is to set a 5% stop loss on my FAS and a 10% stop loss on my SKF. Indeed, I feel that SKF could be down in the morning, but up by close. I personally feel that if FAS is down to begin the day, it has nowhere to go but more down before close. So, we'll see how it goes, but that's my plan. I just don't see a lot of hope for the banks here in the short term. America's debt accumulation is estimated to be at $294 trillion! Compare that to the $700 billion TARP money, and it's 420 times larger! Couple that with the wealth destruction we have experienced this past year and we have a very, very large hole to fill. So I remain pessimistic.


My QAADB, April expiring Apple call options have been very good the past week as tech has received a huge bounce. I don't know how long I can see this tech dream going, but I don't think I will roll the dice much longer. I plan on selling them before the end of the week. Who said Apple is nothing without Jobs?


So I plan to pick up the pace on my portfolio as soon as we see some direction with all these announcements. Remember, we may also have the final vote in for the stimulus as soon as tomorrow, which I think is sure to pass. I don't think Obama would have put it to vote unless he knew he had all the votes. That can also be an influential factor on the market.

Like I have said before, I am hesitant to go all the way short in the current state we're in. I do believe that our market is close, but some things need to be worked out. I feel that after people once again realize that all this spending is not creating the jobs promised, the market will react more violently in the opposite direction. So I will remain patient and wait for deflation and increasing debt show more of its ugly face.

Just a reminder of two more weeks for the $200 Lending Club promotion. You don't need to invest money in it, just sign up. Click here for more details. Have a good evening everyone, I'll jump on chat later tonight and tomorrow morning. Happy Trading.