Talk about piping hot, how about Diedrich Coffee (DDRX)? The company's shares have been steaming higher for quite awhile now, racing up a stunning 17,000% in the last year from about 20 cents per share at this time in 2009 to around $35 today.

Last summer, the roaster and wholesaler of fine coffees was added to the small-cap Russell 2000 Index. Making it into the Russell 2000 means many indexed ETFs and mutual funds had to put DDRX shares in their portfolio. But it's not just the inclusion of DDRX into the Russell 2000 that makes it worth pouring into your portfolio. The company then saw shares explode after a buyout battle ensued between rival coffee companies.

"Gloom is thick enough to cut with a knife," says market historian and seasonal timing expert Sy Harding, whose timing system has just triggered a new intermediate-term buy signal on stocks. Here, in his Street Smart Report, the contrarian explains why he believes we are now near a market low.

He also looks at four new ETF index positions he has established in his portfolio. "The slowdown continues. Foreclosures soar. Debt problems are spreading to corporate and credit card loans. The housing collapse continues. The problems are affecting employment.

"And of course the credit crunch continues. Gasoline hit a record high $3.26 a gallon last week. Consumer confidence, and corporate CEO confidence is at multi-year lows regarding the economy.

"The gloom and doom has spread from financial publications to local newspapers and magazines, now featuring stories of layoffs and local plant closings, local small businesses suffering, comparisons to previous bad times, even occasionally to the Great Depression.

"Is the gloom thick enough? Are other conditions in place indicating we are near a market low? Here's why we think so:

The next two-and-a-half months have historically been one of the most difficult periods of the year for U.S. small cap stocks.

Over the past two decades, the Russell 2000 index has underperformed the S&P 500 index by more than 3%, on average, from early June through the end of August.

It it is hard to say for sure why this has been the case. Perhaps it reflects the reality that those who tend to favor the sector -- small investors -- lie low during the summer months.

Alternatively, the fact that these shares are less liquid than their blue chip counterparts means they bear the brunt of the seasonal pressures associated with the well-known adage: "Sell in May and go away."

Either way, it's a tendency -- which may or may not prove true this time around -- worth bearing in mind.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.