Here is there latest comment on the Venture Exchange and what they see as an upcoming rally. Included KXL in their top 10 list:

www.solomonsmallcaps.com

RALLY TIME:
VENTURE EXCHANGE SELL-OFF IS OVER

PLUS…GREENCASTLE NEWS IMMINENT

August 26, 2008

We have never felt more certain of a call than the one we are now making: The TSX Venture Exchange, which plummeted 29% from July 2 thru August 19 (34 trading sessions), is actually now in the very beginning stages of a significant rally that should intensify next week when volumes pick up following the Labour Day long weekend. We presented our case for this in our Sunday, August 25 article, and today we examine in further detail just how far this market could go.

The upcoming rally is likely to have a duration of six weeks (from August 19) to three months and should take the Index up anywhere between 10% and 20% from today’s close of 1,943. In this bullish environment, some of the best stocks could increase in value by 50% or even 100% or better. Given that this would be a “bull run” within the context of what is currently still an overall bear market, it will be a selective market. Investors and speculators, then, are encouraged to stick with quality in terms of company management, balance sheets, and exploration prospects. At the end of this article we lay out 10 situations that we view extremely favorably and all 10 of those stocks will be included in our 30-stock model portfolio that we will be releasing in full Sunday evening, August 31. We strongly suggest, as usual, that investors perform their own due diligence with each of the companies we highlight.

Last month, we warned of the possibility the Venture Exchange could fall to as low as 1,950 over the short term, an area of previous strong support. This market appeared to be in a free-fall when it plunged below 1,900 last Tuesday, August 19, but it quickly reversed course during the day. The 1,881 low reached that morning marked the bottom, we believe, of the massive sell-off that began July 2 and erased 769 points from the Index. This is not to say that we’ve necessarily seen the low for the year, although that is certainly possible. But what we are saying is that given all the technical and fundamental factors we have closely examined, this market is poised for a substantial short-term rally to at least help alleviate the current extreme historical oversold conditions. The sell-off in the Venture Exchange coincided with a general commodity sell-off that we believe has also run its course.

For some reason, the Venture Exchange seems to enjoy a near 30% hair cut every now and then. Let’s now take a look at what transpired following each of the three most recent “crashes” for some insight into what may develop now:

1. May-June, 2006

With a major drop in gold, the Venture Exchange plunged 29% over just 22 trading sessions. After the bottom was reached in mid-June, the Index climbed 14% in 14 trading days and exactly 20% over 57 sessions before reaching 2,800 in early September (another plunge followed that).

2. Late July-August, 2007

This 29% drop of course was fueled by the emergence of the “credit crisis” and also a sharp fall in gold. After bottoming out at 2,350 August 16, the market went on a tear and 56 sessions later reached a high of 3,200, an increase of 850 points or 36%.

3. October-January, 2008

After bottoming out in mid-January at 2,350, the Venture Exchange immediately took off and rose 19% to 2,800 over the next 27 trading sessions.

So, as you can see, we’ve had short-term rallies of 20% (57 sessions), 36% (56 sessions) and 19% (27 trading sessions) following the three most recent major sell-offs in the Venture Exchange (the average percentage increase being 25% over an average period of 47 trading sessions).

With the above in mind, it’s not hard to conclude that we could quite possibly see a rally that takes the Venture Exchange all the way back up to 2,350, a 25% move from 1,881, over the next couple of months. Resistance at 2,350 would certainly make sense as this was a strong support area for a considerable length of time.

We expect a deluge of exploration results in September and October, beginning next week. Keep a close eye on news - historically with the type of market situation we have now, major discoveries and “area plays” have a tendency to suddenly emerge.

We expect a reversal in the Venture Exchange’s 10-day moving average this week which means a strong close for the week to set the stage for the start of some fireworks right after Labour Day.

10 Stocks For Upcoming Market Rally:

1. Greencastle Resources (VGN, TSX-V)

One of our favorites which we first uncovered and recommended at 15 cents May 31. Sound management, very strong financials, and solid portfolio of diversified projects (oil and gas royalties from Primate Oil Field, coal, shale gas in Quebec, gold and uranium). More “high-impact” projects under review. Closed August 26 at 35 cents.

2. Eldorado Gold (ELD, TSX)

Low-cost producer with a history of strong Septembers. We were very impressed with management’s takeover of Frontier Pacific Mining, a steal for Eldorado shareholders. Closed August 26 at $8.26.

3. BacTech Mining (BM, TSX-V)

Little-known company trading at just eights cents with Yamana as its largest shareholder. BacTech owns commercially-proven, bacterial oxidation and bioleaching technology that liberates precious and base metals from difficult-to-treat sulphide ores and concentrates. This company has been around for a while but now is finally starting to make significant strides. We’re looking forward to big things out of BacTech in the weeks and months to come.

4. Sherwood Copper Corporation (SWC, TSX-V)

Producing company with excellent management that consistently meets its goals and timelines. Stock has formed a nice base around $4.50 and appears ready for lift-off. Closed August 26 at $4.66.

5. Columbia Yukon Explorations (CYU, TSX-V)

Columbia Yukon is developing a world class molybdenum deposit near Cassiar, BC, and current drilling outside of the known resource (an updated 43-101 was released earlier this month) is delivering high-grade visuals. The first drill results from this summer’s 30,000 metre program should be coming out beginning next week, we suspect, and at just 35 cents ($15 million market cap) this stock is quite simply very undervalued.

6. Hathor Exploration (HAT, TSX-V)

Uranium, we believe, will be a big story in the year ahead, and Hathor has made a significant discovery at its Midwest NE Property in the Athabasca Basin. Lots of blue-sky potential here. Closed August 26 at $3.58.

7. Kodiak Exploration (KXL)

Kodiak was hit hard by the recent market sell-off but has bounced off strong support at $1.20. Kodiak’s Hercules Property in Ontario’s Beardmore-Geraldton area is going to be a huge winner, we believe, and the current $1.55 share price will look very cheap six months from now.

8. MacDonald Mines (BMK, TSX-V)

One cannot overlook the continuing excellent exploration potential of the James Bay Lowlands where BMK is a huge landholder. Everyone, though, has fallen out of love with BMK, which is why we believe it’s time to be a buyer. The stock has steadily drifted all the way down from a 52-week high of $1.32 to below 20 cents where it just has to be a buy in our view. Closed August 26 at 19 cents.

9. Nortec Ventures (NVT, TSX-V)

The same group that ran Frontier Pacific Mining is in charge of Nortec which is getting very interesting results from its Kaukua platinum-palladium-gold-nickel-copper project in northeastern Finland. They also have high-quality nickel-copper-cobalt targets in Labrador, one of which is currently being drilled. The individuals behind Nortec are company builders and mine finders - they will make Nortec a success story. Closed August 26 at 28 cents.

10. Junex Inc. (JNX, TSX-V)

We’re very big on the shale gas play in Quebec, and Junex is very much at the centre of the action there. Closed August 26 at $2.47.