Technicals and an "after hours","jello jiggler" laugh.

"Are we there yet?" You haven't lived until you've heard that phrase more than a few times from the back seat. Well, since today the SkunK is setting with you in the back seat - we might want to answer that question ourselves. OR at least figure out how we will be able to tell when "we are there?!?"

The SkunK is a high risk value investor and does not believe in strict technical analysis. I can name a few Billionaire "Value Investors" - Not a single Billionaire Technical Analysis Investor comes to mind. I suspect there is a very good reason for that.

A chart is something like a map - The Skunk does not use a chart/map to tell him where we are going to end up - he knows that before he picks up the chart/map. The value of a stock will ultimately determine where we end up. However, I do find a chart helpful in determining where we have been, and the route we are likely to take to that value determined destination.

MOVING AVERAGES (MA)

A technical analysis term meaning the average price of a security over a specified time period (the most common being 20, 30, 50, 100 and 200 days), used in order to spot pricing trends by flattening out large fluctuations.

The 200 day Moving Average is a powerful indicator of where we have been, and good arguments can be made (if you believe in the big MO - momentum) that it can also shine a dim flash light in the direction we are headed. The 50 day average is a mid term MA that responds quicker to change.

If you click on the chart above - you should get it to expand enough to read it. Around 1 September 2006 we had the 50 day MA plow through the 200 day MA. Now this event did not make the stock go down over the last two years. It was an objective weather vane that told us the direction of the wind. It said we had been going down at an accelerated rate. It was a very powerful indicator that momentum and investor confidence had turned south. If you look at the chart following that cross of the 50 day MA and the 200 MA we can see the momentum has not yet changed. During the latter part of 2007 we see we built a ledge of support, which allowed the gap to significantly close between the MAs. At the culmination of the reverse split and corporate consolidation we saw the Gap nearly close - and the SkunK's blog to appear - only to have the 50 day MA head off to where we find ourselves today - bumping our collective heads on a glass ceiling called a "nickel".

Now if the SkunK thought the best way to drive a boat was by looking at the wake and the prop wash, we could say that looking backwards tells us where we were going - rather than simply were we had been. Just as investor sentiment had reversed momentum in September, 2006, I see another investor driven, momentum reversal within sight. I had given previous indicators of when we would know we are past the bottom. Here is one more. When we see the 50 day MA move above the 200 day MA - when this happens - it will be the coup de grâce to all skeptics. This is not an indicator of what might happen - it will be objective proof of what already has happened - a positive change of momentum. When we see all the MAs on a chart - with the lowest numbered on the top (20, 30, 50, 100, 200), and the highest numbered on the bottom, we can expect us high risk speculator positions to be quickly "discovered" by regular investors. That will help cause the sustained share price increase we are all looking for.

{To show a tiny indicator of momentum change - our 5 day moving average (.044) is already higher than our 20 day MA (.0393)}

If you double click on the chart above, you should be able to see a more recent chart that attempts to take us out past the present - into the SkunK-o-shere! That's right! Of all the zillion possibilities looking into the future - the SkunK picks one! (I hope that doesn't make the odds a zillion to one?)

In any case, the SkunK believes that a 50% increase of the 50 day MA will certainly cause it to plow through the 200 day MA over the next 2-4 months. As the 200 day MA continues to lose daily prices above 20 cents - it will pick up present levels below 5 cents - causing it to drop rapidly. It stands today at 12.8, two days ago it was at 13.1. On 22 August it was 15.7. The Skunk believes it will be below a dime by the end of October. The cross can be expected to take place between 5 and 10 cents. The rate of increase in the more volatile 50 day MA is harder to predict. It stands today at .048, as it was two days ago. On 22 August it was .0638. If we have seen the bottom, and we get to the .24 cents at years end as the SkunK has forecast - then we might see that 50/200 day MA positive cross by Thanksgiving.

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AFTERHOURS TRADING

After a solid week of trading significantly off our recent all time lows - with 4 closes at 4.5 cents and a Friday close at 4 - we are faced with an "After hours Trade" that seems to make no sense. Up on the board springs a sale of 200,000 shares for .02 cents a share. Not only is it half of what we closed at, not only is it 25% below our all time low, it happened without filling many orders setting significantly above .02 cents!! So what happened???

Well the SkunK thinks one of three things happened.

1. The most likely is we had a trader with lots of shares and little experience. They gained access to after market trading and came in with a sell of 200,000 shares at market price. They may not have realized after hours trading is completely different from the day market. They may have seen the trading going on at .04 and assumed they would all sell for that or at least the .03 cent bid price. However, the only competition for those shares is other "after market" traders on the same Electronic Communications Networks, or ECNs. A seasoned trader may have left a sizable buy limit order at .02 on his after market ECN and waited for just such a "deal". In any case, by using the "after hours" sales, the investor went around the SkunK's and others higher priced bid orders and settled for the .02 cents he got on the "after hours" sales. If this is as the SKunK believes - it has nothing to do with the value of this stock - only the seller's real cost of knowledge gained in the school of hard knocks.

Since this happened at 16:03 - only three minutes after the close - the SkunK is confident the trade had nothing to do with news about the company. Here are a couple of various other scenarios I consider - "possible" - but improbable.

2. Market Makers having to settle up accounts for a week that showed a positive change in momentum. Market Makers risk their own capital by "making a market" for trades less than 10,000 shares. Most times they guess right and make money. Sometimes they guess wrong and eventually have to right the books. Not sure, but it being after a momentum changing week and being on a Friday - this might be a possibility here.

3. I "Trust" the SkunK's favorite improbable scenario is this: It could be a way for a short- who made a short sale at .02 (thinking by now GERS PPS would be driven subpenny) - being forced by his broker to deliver on his promise - by selling 200,000 shares back to his broker (or whoever is covering the short)- for delivery at the stated price - "after hours" - for .02 - after having to buy the shares at more than twice that price during the previous week? AND having to pay the commissions at both ends?? A scenario "Worthy" of any short who plays a stock in which the SkunK is long! LOLOL HEhehehe. I guess a better SkunK wouldn't find this one so dang funny - hehehehe. Somebody help me off the floor! -he he he.

SkunK's Cliff Notes: After Hours Trading
http://www.sec.gov/investor/pubs/afterhours.htm

http://www.investingonline.org/aio/facts_after_hours.html
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1 October 2008

Does GERS have about $2.25M due at the begining of October?

YAGI
"Effective July 1, 2008, the Credit Agreement was amended to extend the commencement of payments to YAGI to October 1, 2008 and to extend all performance timelines to December 31, 2008." 2Q

"Commencing on October 1, 2008, GS COES must pay to YAGI on account of the principal amount of the Loans an amount equal to the greater of (a) $100,000 and (b) 30% of its EBITDA for the month." 2Q

Bollheimer & Associates
As a result of its acquisition of 100% of the stock of Bollheimer & Associates, Inc., the Company entered into a purchase obligation of $320,000. This amount does not bear interest and is payable in the amount of $80,000 on or before July 1, October, 2008 and January 1, 2009 with the remaining $80,000 due on or before January 1, 2011 subject to certain sales based hurdles. 2Q

Stillwater
According to the amended terms, all amounts of principal and interest not previously satisfied will be due on September 30, 2008. Annual '07

The balance due to Stillwater at June 30, 2008 was 2,071,886. 2Q p23

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EOY FORECAST**24cents per share (18-30 cent trading range)
Long Range Forecast Feb 2010: **$3.72.

**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. SkunK for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions – (and your own life in general) good or bad. I have been rightfully accused of being a rather cheery, positive individual who laughs at every opportunity. These tendencies may cause me to overlook deficiencies in this stock that are painfully obvious to others. Celebrate today - and some good garage logic luck to ya.
SkunK - (Blogger formerly know as Skunk)