If Europe Goes, We All Go: Forget Bonds, Buy Gold

Many investors continue to overlook the profound ramifications of having the largest economy on the planet fall into a steep recession. A sharp decline in the European economy means slower growth in emerging markets, which has implications for U.S. corporate earnings and bond prices.

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The EU 27, comprised of 27 countries in the European Union, has a GDP north of $16 trillion. The EU is the largest export destination of some of the world's fastest-growing economies. However, Bloomberg reported last week that Chinese exports rose at the slowest pace in almost two years in the month of October, as the deepening debt crisis crimped demand. Remember how the fall of 2008 so very clearly illustrated the interconnectivity of the global economy? Can there really be any safe-haven country when the GDP of the developed world is on the precipice of a sharp decline? The truth is that Europe, and quite possibly Japan and the U.S., face a recession in 2012 due to a full-blown bond-market crisis. But the mechanics behind what is occurring is actually very simple to understand. And once you grasp the fundamental dynamics behind what causes a sovereign default, investors can reach a very clear conclusion as to what action they need to take. History is replete with examples that indicate once a nation reaches a debt-to-GDP ratio of between 90%-100%, two pernicious conditions begin to appear. First, International bond investors start to become concerned that the tax base cannot support the amount of debt outstanding. This concern is precisely because economic growth rates screech to a halt, as most of the available capital is diverted from the private sector to the government. And secondly, it is at this point that interest rates begin to climb inexorably. Two recent examples of this can be found in Greece and Italy: Neither country is growing; their debt-to-GDP ratios have soared well above 100%; and their bond markets are now in full revolt. The sad fact is that their debt levels have become so intractable that both bond markets have now been placed on the life support of the European Central Bank.

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However, regardless of central bank intervention, interest rates eventually rise to a level in which most of the country's tax revenue must be used to service the interest payments on the debt. It is at this point where investors' fears become a mathematical reality and the country finds paying down the principal of the debt an impossibility.

Sadly, at this juncture only two default options exist. The country can admit its insolvency and default on the debt outright -- which is the smartest route to take. The other option -- and the one that all fiat currencies take -- is to monetize the debt. However, this default by means of inflation doesn't solve the problem, it only extends and exacerbates the default process.

It is very likely that an inflation-led default will be deployed first in Europe and then later in this decade in the U.S. Therefore, it makes sense to avail yourself of the best protection against the ravages of a crumbling currency. That is why gold and gold equities are a buy, especially when you are fortunate enough to get a pullback.

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3 Tips For Timing When To Buy Or Sell

It doesn't matter if your investing approach is fundamental or technical, timing trumps both when it comes to making or losing money.

Tip One: Don't fight the tape. Fight your emotions instead.

Since 1999, only 11 of the 525 biggest companies have negative correlations to the S&P 500 (SPY). More than a third have positive correlations greater than 50%.

Top 10 Large Caps w/High Positive Correlations to the SPY

Company	Symbol	Correlation
Prudential Fin'l	PRU	93%
CBS Corp.	CBS	91%
Lear Corp.	LEA	91%
Clear Channel	CCO	90%
Scripps	SNI	90%
Las Vegas Sands	LVS	90%
News Corp.	NWS	89%
C B R E Group	CBG	87%
Calpine	CPN	87%
Ameriprise	AMP	86%

This means it's easier to make money buying a horrible company in a rising market than a great company in a declining market.

It also means there is no single piece of information more relevant to making or losing money than determining whether the market is in an up or down trend.

But while positive correlations mean you can be more aggressive in an uptrend, it also means you're more susceptible to falling victim to your success.

Last month, Bloomberg published an article questioning the conventional theory of playing the hot hand. The article discussed the work of former derivatives trader John Coates, who makes his living studying trader biochemistry.

Mr. Coates' studies led him to conclude traders increase risk as they win, which inevitably causes big losses when hot streaks end.

As an investor, recognizing a market uptrend will help you make bigger profits. But, it also poses the secondary problem of making you too willing to take risk. To keep this in check, make sure you stick to your stock picking rules and if you find yourself reaching - or running too many victory laps - take a breather.

Tip Two: Volatile markets allow you to be more selective.

If markets are range bound or in a downtrend, you need to use volatility to your advantage.

The standard deviation of the markets has consistently increased since the 1960s, which means markets volatility is more likely to give you opportunities to enter and exit positions at the prices you want.

If markets are range bound or in a downtrend, it pays to be selective. If the stock you're interested in buying is bucking the trend and hitting new highs, avoid the temptation to chase it higher.

For example, simply look at a three year chart for Apple Computer (AAPL). During the market pullbacks in 2010 and 2011, investors got rewarded for patience with lower entry prices.

Instead of rushing in, wait for the inevitable pullback and dollar cost average into the position. After all, it's better to miss an opportunity than to go all-in ahead of a drop.

Tip Three: Improve Your Odds.

Professional gamblers understand more money is made when odds favor winning. Successful investors similarly look to improve odds by tracking the seasonal tendencies of markets, sectors and industries.

Throughout the year, particular baskets or individual stocks typically rise or fall. In many cases, whether stocks rise or fall depends on industry spending cycles. Knowing when these cycles are likely to positively or negatively impact your positions can help you capture more of your gain or avoid a likely loss.

Consider the performance history of the consumer discretionary ETF (XLY). Clearly, knowing its seasonal patterns provides an opportunity for bigger profits.

There are a number of resources you can use to learn about seasonality. You can visit free online sites like Yahoo (YHOO) Finance or Google (GOOG) Finance to download historical prices. And, of course you can keep an eye out here on Seeking Alpha.

Or, you can visit The Seasonal Investor site, offering pre-made seasonality databases across widely traded ETFs and over 1500 of the most heavily traded equities (I also write a quarterly ebook on the subject).

Either way, since there is no ringing bell telling you its time to buy or sell, arming yourself with information and thinking strategically about when you buy will help you keep more money in the win column.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

AT&T ditches the Yellow Pages

NEW YORK (CNNMoney) -- Here's another casualty of our increasingly digital era: The Yellow Pages.

AT&T on Monday announced plans to sell its Yellow Pages business unit to private equity firm Cerberus Capital Management.

As part of the deal, AT&T will receive $750 million in cash, a $200 million note and a 47% equity interest in the new entity, called YP Holdings LLC.

The arrangement frees AT&T from an albatross it's been struggling with for years. The Yellow Pages are iconic, but in a time when up-to-date listings are just a click away, those massive print directors are more of a nuisance than an aid.

AT&T's Yellow Pages directories go out to about 150 million homes and businesses in 22 states. How many of those recipients actually use them? Here's a sign: San Francisco banned their unsolicited delivery last year.

AT&T (T, Fortune 500) has tried to reposition the Yellow Pages for the digital world, turning YP.com into a city guide and local advertising portal, but with limited success. It took a $2.9 billion write-down on the business in late 2011, reflecting the unit's declining value.

Cerberus will take a fresh run at making the Yellow Pages a modern digital business. If it succeeds, AT&T will share in the upside, thanks to the significant stake it retains in the new venture.

Telecom analyst Frank Louthan, with Raymond James, praised that maneuver.

"The equity stake could give AT&T some option value if the new owners execute on improving the businesses' growth and profitability as a standalone entity," he wrote in a note to clients.

Pending regulatory approvals, the deal is expected to be finalized in mid-2012.  

Daily ETF Roundup: XLU Pops, VXX Drops

Stocks got off to a fairly uneventful start on Monday as investors decided to “play it safe” ahead of tomorrows key FOMC decision. Interest rates aren’t expected to go anywhere this time around, although investors will play close attention to the economic commentary issued after the rate announcement itself. Mixed trading on Wall Street kicked-off the week; the Dow Jones Industrial Average tacked on a solid 0.29% gain on the day, while the Nasdaq slipped in red territory, shedding 0.16% for the day [see ETF Insider: Was The Greek�Bailout�Priced In?].�

Mixed economic news from overseas coupled with a lackluster U.S. budget deficit paved the way for mixed trading across equity markets. The U.S. government reported a $231.7 billion budget deficit for February, which is higher than the previous reading of $222.5 billion in the same month of last year. In Japan, machine orders data came in better-than-expected, although consumer confidence slipped down to 39.5 from the previous reading of 40. Gold futures drifted lower with a downward bias, settling near the $1,700 an ounce level as the trading session drew to a close [see also 3 ETF Trades For The Next Euro Zone Debt Crisis].�

The State Street Utilities Select Sector SPDR (XLU) was one of the strongest performers, gaining 1.14% on the day, bolstered by defensively-bullish buying pressures. Euphoria from last week’s Greek bailout deal has spilled over, although investors expressed their caution by opting for�relatively�”safe” utilities exposure instead of jumping into “riskier” sectors like technology or financials. XLU is down about 1% from a year-to-date perspective thus far [see Simple (But Effective) Safe Haven ETFdb Portfolio].�

�The S&P 500 VIX Short-Term Futures ETN (VXX) was one of the weakest performers, shedding 4.58% on the day, as uncertainty seemingly evaporated from the markets after the positive conclusion to last week’s Greek debt deal swap. The Volatility Index, commonly�referred�to as “the VIX”, sank below the 16 level on Monday, hitting a multi-month low at the 15.23 mark [see Low Volatility ETFdb Portfolio]. �

[For more ETF analysis, make sure to sign up for our�free ETF newsletter�or try a�free seven day trial to ETFdb Pro]

Two Swiss ETFs for Quality and Value

According to Citi Chief Economist Willem Butler,

“More than 40 per cent of global GDP now resides in jurisdictions (overwhelmingly in the advanced economies) running fiscal deficits of 10 per cent of GDP or more. For much of the past 30 years, this fluctuated in the 0-5 percent range and was dominated by emerging economies.”

Switzerland is an exception. The Swiss franc is one of the most stable currencies in the world and performs well in times of financial turmoil. Investors will be moving to quality companies, countries and currencies.

Currency traders have been building up bets on a rise in the Swiss franc (FXF) in anticipation that the Swiss National Bank will soften its stance on currency intervention at its widely anticipated policy meeting on Thursday. Chances are that the central bank, which has been fighting pressures on the Swiss franc to appreciate, will begin to scale back interventions to stem the rise of the Swiss franc.

The FT reports that Paul Meggyesi, FX strategist at JPMorgan, says that “Switzerland had a relatively mild recession and is enjoying a fast recovery compared with its peers.” In addition, Switzerland’s current account surplus, high private savings and low sovereign risk is in sharp contrast to eurozone instability.

While only 137 miles by 216 miles in size, and with a population of 7.2 million, Switzerland packs a punch and is a multinational powerhouse. Let’s take a quick look at the asset side of Switzerland’s balance sheet. It has a strong currency backed by ample gold reserves, fiscal discipline, trade surplus and very little foreign debt. Outward looking, Switzerland has 40% of its gross domestic product attributed to exports. Switzerland represents the third-largest financial center in the world after New York and London. It is also home to world-beating pharmaceutical, engineering and food companies.

Switzerland enjoys a stable government, vibrant democracy and a reputation as an asset haven in times of stress. The Swiss have had a functioning democracy for 500 years and actually has a fairly weak central government, with a legislature that meets for only two weeks, four times a year.

About 45% of the Switzerland ETF’s (EWL) holdings are concentrated in three great companies: Nestle (NSRGY.PK), Roche Holdings AG (RHHBY.PK) and Novartis (NVS) all of which are pretty good defensive plays. The p/e ratio for the Swiss market is in line with the S&P 500 and lower than almost all other major European markets. I also like this ETFs sector breakdown, led by Health Care 32%, Financials 22%, Consumer Staples 19%, Industrials 11%, Materials 8%, Consumer Discretionary 6%, and Telecom 2%.

You will sleep better with Swiss quality in your portfolio.

Disclosure: None

Two Top Utility Stocks for Income Seekers

If you’re skeptical of the market’s good intentions, insulate yourself from the volatility by picking companies in steady, recession-proof industries. You can further reduce your risk by focusing on equities that throw off generous dividend yields � the “bird in hand” strategy.

Utilities fit the bill perfectly. Some with very safe dividends are paying as much as 5%�6% up front. What’s more, while traders (since the March 9 bottom) have rushed back into financials, retailers and other beaten-down stocks, they’ve overlooked utilities.

Most utility shares, electric and gas names, in particular, are only starting to make their move. So you can still buy real value, instead of playing the “greater fool” game of chasing prices higher and higher.

The Golden Rule of Growth

In the utility sector, there’s a broad rule that higher-yielding stocks harbor lower potential for capital appreciation, and vice versa.

Thus, in building a collection of utes, you want to think about your goals and needs. If you’re already retired, for example, and you’re trying to maximize your monthly income, it makes sense to tilt your purchases toward companies with higher dividend yields.

On the other hand, if you don’t expect to retire for several years (or you’re retired and your portfolio already generates more than enough income for you to live on), I advise you to lean toward lower yielding stocks.

Over the long run, five to 10 years, say, the faster growth rates of the lower-yielding companies are likely to produce a higher total return (income plus capital gains).

Let’s begin with two picks for income seekers�

Two Top Utility Stocks for Income Seekers

I project that these companies will be able to boost their dividends more or less in line with the cost of living for many years to come:

Utility Stock #1: AGL Resources (AGL)

Parent of Atlanta Gas Light, AGL Resources (AGL) distributes natural gas in Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia � states with generally faster population growth than the nation as a whole.

Over the past five years, AGL has raised its dividend a handsome 53%, including the latest hike, announced in February.
However, I expect the pace to slow in 2010�2012 as the company’s ambitious construction program drains off cash.

Current yield: 6.0%.

Utility Stock #2: Dominion Resources (D)

A diversified giant with $16 billion of annual sales, Virginia-based Dominion Resources (D) generates electricity and sends it out to
both wholesale and retail customers. In addition, the company operates an extensive natural gas pipeline network, as well as gas-gathering and storage facilities.

I like D’s well-rounded profile: regulated businesses that provide stability and unregulated businesses that deliver growth. Dividends have increased 31% over the past five years.

Current yield: 5.6%.

Tesla Model S review: A good first impression

NEW YORK (CNNMoney) -- I was never that impressed with the Tesla Roadster, the $100,000 two-seat sports car that so many people saw as the beginning of an electric car revolution.

The Roadster was a deft parlor trick, I figured. It's easy to make an exciting long-range electric car if you don't bother to making it affordable or practical.

Now comes Tesla's next trick. The Model S sedan, available with seating for up to seven, is now on sale. Once it's in full production, prices will range from $50,000 to roughly $100,000.

I have driven the $100,000 version of the car, albeit it briefly, and I'm amazed. The car would seem worth the price, or maybe more, if it were powered by a gasoline engine. (Cheaper versions will be largely the same but with shorter driving ranges.) If there's sleight of hand here, I haven't been able to find it yet.

I'd been in the Model S before -- Tesla (TSLA) chief executive Elon Musk took me on a test ride through lower Manhattan back in November -- but, even so, the view from the driver's seat was striking. Wherever possible, knobs and physical gauges have been replaced by computer screens.

There isn't even a "Start" button. If you have the Tesla's car-shaped key fob in your pocket and your butt is in the driver's seat the car -- quite reasonably -- assumes you want it to turn on. So it does.

It runs in "Accessory" mode, allowing you to use the computer screens and listen to the stereo, until you push down the brake pedal. Then the speedometer and other driving gauges appear and the car is ready to roll.

Move the gear selector stalk to Drive and off you go in near silence. (If the gear selector stalk seems familiar, that's because Tesla got it straight from Mercedes-Benz.)

At slow speeds the Model S feels disappointingly like a hefty, battery-laden electric car. With a light foot on the accelerator, it shuffles from stop sign to stop sign with all the eagerness of a fat man asked to change seats on an airliner. You can almost hear it sigh.

Then you get out on the open road and really step on the "gas" and.... Yowzah! It turns out that, when asked to, this car can move with astonishing speed. Fortunately, for me, the brake pedal works just as well as the accelerator nicely preventing me from rear-ending cars ahead after each startling burst of speed.

The Model S's steering feel and response are adjustable using touch screen "buttons." The steering can be changed from heavy and quick, like a sports car, to easy and slow, like an old Cadillac. The car's ride height can likewise be changed up and down to the wonderment of bystanders.

Inside the Tesla Model S

One thing our test drive route -- which included Manhattan back streets and a long stretch of the West Side Highway -- didn't include was any high speed curves, which was a shame.

The Model S's heavy battery packs are in the form of a flat sheet that takes up most of the underfloor of the car. That gives the car a very roomy interior as well as a very low center of gravity. Turns are accomplished (or so I'm told) with hardly any body lean and with alacrity that puts other performance sedans to shame. We'll have to see but, for now, it seems believable.

So now Tesla faces the mundane challenges of producing the car profitably in relatively high volumes while preventing quality problems that could damage the brand name. At the same time, Tesla is already preparing to sell its next vehicle, the Model X crossover SUV.

There's still a lot of work for Tesla ahead but, so far, the car itself looks good. 

First Post-Crisis Bank IPO Offers Play on Failure

As the list of America’s problem banks balloons, healthy institutions are gearing up to capitalize on others’ misfortune. Such may be the case of First Interstate BancSystem (FIBK), the first bank to launch an initial public offering since before the financial crisis. It may use the proceeds of its offering to pick off failed brethren.

The Montana-based bank raised about $130 million of capital after fees. While not a big offering, it was the first debut of a U.S. bank since 2007 — demonstrating that distress in the sector may be creating opportunities for the healthy. With the Federal Deposit Insurance Corp (FDIC) expecting the number of bank seizures in 2010 to surpass the 140 seized last year, the supply of bank carcasses seems endless for canny vultures.

First Interstate boss Lyle Knight salivated over that prospect during a recent investor presentation, noting that he’s “particularly excited” about FDIC-assisted transactions. And after the IPO raised tangible common equity 30 percent to 6.4 percent of tangible assets, the 42 year-old family-owned bank has fresh capital to pounce.

That may not seem like a lot of firepower, but First Interstate’s low risk, low-cost funding model, combined with its conservative lending, means it probably has plenty of room to keep regulators comfortable. The IRA Bank Monitor, which rates all FDIC-insured institutions, grades the bank “A plus” based on low loan default rates and high risk-adjusted returns on capital, among other metrics.

True, at $14.50, the offering priced near the low end of the range and below pre-offering book value per share of $16.73. The discount could reflect the bank’s relatively high level of goodwill and the fact that the bank’s family owners retain control via super-voting Class B shares. But with the shares up 8 percent to $15.60 in early trading, investors clearly see opportunity.

Indeed, for investors hoping to play the bank failure trade, First Interstate may appeal. Other publicly-listed institutions that bought failed banks from the FDIC have seen their shares jump. For instance, shares of Georgia’s Ameris Bancorp (ABCB) have surged 86 percent since it announced a second acquisition of a banking carcass in November. To the victors go the spoils.

Yingli Green Energy Shines Amid the Gloom

Finally, one solar company has come up with something bright in the third quarter. Although Yingli Green Energy (NYSE: YGE  ) swung to a loss for the first time in a tumultuous year, its outlook was enough to send the stock northward by around 12%.

Let's take a look at how Yingli fared and what boosted its shares in such difficult times for the industry.

A look at the quarter
Revenues jumped to $667 million, a significant rise of 36% from the year-ago period, as Yingli saw record shipments in the just-concluded quarter. The entire industry has been struggling due to rapidly falling prices of solar products, and the same goes for Yingli as it swung to a loss of $28 million. Same time last year, it had reported a profit of $68 million.

Yingli did manage to keep a tab on its inventories, which crawled up about 23% from last year, a figure which is impressive compared to other illustrious competitors like First Solar (Nasdaq: FSLR  ) and SunPower (Nasdaq: SPWR  ) , who saw their warehouses piling up crazily. However, it is the future prospects that made Yingli's stock surge.

The ace up its sleeve
China is one of the fastest-growing markets for solar products, and Yingli is in position to tap the maximum out of it. The Chinese solar market will grow to about 3,000 megawatts next year, and Yingli looks to grab 30% of the pie. Although the company has cut its shipment forecast for 2011, the potential jump in shipments in 2012 could bring the shine back to its margins.

Moreover, management believes that the stock is cheaply valued, and they plan to push it up by buying back around $100 million worth of shares over the next 12 months.

Beating the industry blues
The entire industry has been in distress all year, and all players, including Yingli, have seen their margins shrink. But still, I somehow feel confident of Yingli's prospects, as the company has managed to attain the prime position in the key Chinese market. This is a strategic advantage for Yingli, as the majority of solar players depend greatly on the European market, which has been the source of depression this year.

The Foolish takeaway
Yingli's outlook comes as a breath of fresh air in an otherwise gloomy industry. The coming year may turn out to be a good one, but the company's margins can only improve if prices of solar products stabilize. The buyback plan adds further impetus if you're looking to move into the stock, but in my opinion, you should wait till the industry stabilizes and solar unlocks its true potential.

Till then, you can stay on top of the latest developments at Yingli Green Energy by adding it to My Watchlist.

Almost Half of Gen X Retirements ‘At Risk’

The number of years of defined contribution plan eligibility has a significant impact on Gen X workers’ risk of running out of income in retirement, a report from the Employee Benefits Research Institute found.

EBRI simulated outcomes in its Retirement Security Projection Model to determine how many investors were at risk of running out of retirement income, as well as how severe their shortfall could be. The model considers three different levels of “adequate income,” or the accumulated value of deficits generated after all members of the household have died, divided by the accumulated value of the total retirement expenditures for the household.

Almost 44% of Gen X households are at risk of running out of income in retirement, the report, released in June, found.

That figure is based on the assumption that individuals retire at age 65 and that they’ll fail to accumulate 100% of adequate income. A little over one-third of households are at risk of having less than 90% of the resources they need, and 19% are at risk of having less than 80%.

When taking Gen X households’ future earning and saving years into consideration, the report found more than 60% of households without future 401(k) eligibility were at risk of running out of retirement income. For those with another 20 years of eligibility, just 18% were at risk.

The report found 10% of Gen X families will have a shortfall of between $50,000 and $100,000, with 9.8% having a shortfall of less than $50,000. Single Gen Xers were not so lucky. More than 11% of single men and 20.6% of single women will have a shortfall of between $101,000 and $200,000. Fully 13% of single women could have a shortfall of more than $200,000.

These shortfalls can be dramatically reduced by participating in a defined contribution plan, the report noted. For individuals with no future years in a 401(k) plan, their retirement deficit was estimated to be $78,000. For those with between one and nine years left in a plan, the deficit fell to $55,000. Those with at least 20 years left in a plan could reduce their deficit to $23,000.

EBRI also considered the impact health care and nursing home costs could have on retirement. For example, 90% of single Gen X men were simulated to have no shortfall in retirement if health care and nursing home costs were ignored. By including those costs in the model, the percentage of single men with no shortfalls fell to 68%. EBRI found similar results among single women and married Gen Xers. “Ignoring the impact of nursing home and home health care costs in retirement significantly exaggerates the likelihood of achieving retirement income adequacy,” the report noted.

The percentage of households with adequate retirement income has increased by between five and eight percentage points since 2003, EBRI found. Still, despite the small improvement, there are a “significant percentage of households that are simulated to be at risk of not being able to cover retirement expenses and uninsured medical costs” throughout their retirements.  

Mueller Industries Whiffs on Revenues

Mueller Industries (NYSE: MLI  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Mueller Industries whiffed on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped, and GAAP earnings per share shrank significantly.

Margins contracted across the board.

Revenue details
Mueller Industries reported revenue of $491.4 million. The one analyst polled by S&P Capital IQ predicted sales of $588.3 million. Sales were 6.7% lower than the prior-year quarter's $526.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.34. The two earnings estimates compiled by S&P Capital IQ averaged $0.34 per share. GAAP EPS of $0.34 for Q4 were 28% lower than the prior-year quarter's $0.47 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 12.9%, 30 basis points worse than the prior-year quarter. Operating margin was 4.3%, 100 basis points worse than the prior-year quarter. Net margin was 2.6%, 80 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $780.4 million. On the bottom line, the average EPS estimate is $0.34.

Next year's average estimate for revenue is $2.60 billion. The average EPS estimate is $1.83.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 155 members rating the stock outperform and 10 members rating it underperform. Among 61 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give Mueller Industries a green thumbs-up, and one give it a red thumbs-down.

Over the decades, small-cap stocks like Mueller Industries have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

• Add Mueller Industries to My Watchlist.

Q1 Trends Still Up in the Air

I track the key levels for the US Capital Markets, and discuss three of my ten predictions for 2010 – The drag of Fannie (FNM) and Freddie (FRE), Mortgage Delinquencies and Emerging Markets.

The US Capital Markets continue to trade within their staging ranges.

The 10-Year yield continues to trade between my monthly pivot at 3.868 and my semiannual pivot at 3.675, which is the balance between supply and inflation concerns and a return to risk aversion.

Comex gold is between my quarterly support at $1084.90 and my weekly, monthly and semiannual resistances at $1157.80, $1166.70 and $1186.90. Parabolic bubble is reluctant to re-inflate.

Nymex Crude oil is above my annual support at $77.05. Below is quarterly support at $67.22, and above is my annual resistance at $97.29, which would be a June or July pre-hurricane season high.

The dollar Index remains the wildcard needing a weekly close above my quarterly resistance at $80.23 to signal an end to the dollar carry trade.

Chart Courtesy of Thomson / Reuters

The weekly chart shows the Dow above the down trend that goes back to October 2007, with my annual pivot at 10,379 the key level to trigger significant downside risk towards quarterly support at 6,705, or a continued grind higher to weekly, monthly, annual and semiannual resistances at 10,746, 10,997, 11,235 and 11,422. We had the Breakout – We await the possible Fake-out.

Reviewing the Accounting behind the Conservatorship of Fannie Mae and Freddie Mac - Starting from the bottom up I dissect the latest chart of the bailouts for Fannie and Freddie from the FHFA.

Federal Reserve purchases of GSE Debt and MBS end on March 31 with only $15 billion in debt to buy and $237 billion in mortgage backed securities. Treasury purchases of MBS and the GSE Liquidity Facility have ended with Treasury and hence tax payers owning $221 billion in mortgage backed securities.

Under the Senior Preferred program the Treasury can now purchase more than $400 billion in Senior Preferred. The total through Q3 2009 has been $111 billion. All losses between now and the end of 2012 will be unlimited and will add to the $400 billion for a grand total through 2012.

Serious Delinquencies continue to rise rapidly in all Categories: Subprime ARMS 40.8%, Subprime Loans 28.7%, FHA Loans 8.7%, All Loans up to 8.9% up from 8% in November, and Prime Loans 8.7%. Obviously, as delinquencies continue to increase so will foreclosures. This will force Fannie and Freddie to tap their unlimited Senior Preferred heavy in each of the next thirteen quarters.

The Fannie Mae key metrics at the end of November – Their mortgage portfolio is $752 billion and can rise to $900 billion, but cannot exceed $810 billion at the end of 2010. Fannie outstanding debt is $782 billion. At the end of Q3 Fannie had an REO inventory of 72,275 single-family homes valued at $7.0 billion.

The Freddie Mac key metrics at the end of November – Their mortgage portfolio is $762 billion and can rise to $900 billion, but must be $810 billion at the end of 2010. Freddie outstanding debt is $809 billion. Their inventory of foreclosed single-family homes is valued at about $4.7 billion.

The Emerging Markets Index Fund (EEM) is up 3.7% in the first two days of 2010, which is not surprising given the Wall Street hype. I would use strength to my annual, monthly and semiannual resistances at $44.99, $46.12 and $48.09 to book profits. A weekly close below my annual pivot at $39.81 indicates risk to my quarterly supports at $25.01 and $22.83.

Chart Courtesy of Thomson / Reuters

The China 25 Fund (FXI) is up 4.2% in the first two days of 2010. I show annual pivots at $39.25 and $44.53 as a neutral zone with monthly resistance at $49.74. A weekly close below $39.25 indicates risk to quarterly support at $19.75.

Chart Courtesy of Thomson / Reuters

Disclosure: No Positions

How to Slash Risk and Avoid Losses With a "Stress Test" of Your Personal Investment Portfolio

Back when I was a portfolio manager, I was always looking at ways to "stress test" my portfolio. In other words, I was on the constant lookout for ways to hedge my holdings, guard against risk, and to anticipate anything the market could throw at the stocks, bonds, options and other investments contained in my portfolio.

Hedging involves much more than just anticipating the movements on individual stocks. The financial markets are so deeply interconnected that - to the distant observer - they might appear to be seamless.

To show you what I mean, let's look at oil: It's a great real-world example, ripped right from the daily headlines, and there's a strong emotional component to it, too, since the "black-gold" commodity touches the lives of investors and consumers alike. I'll demonstrate how even retail-level investors can apply this "portfolio-stress-test," risk-management technique to their own portfolios.

Let me give you an example of just how convoluted the markets appear to be. If you are exposed to U.S. crude prices - for example, you're holding a U.S.-based oil refiner like Valero Energy Corp. (NYSE: VLO) - you really need to get a quote for Brent crude and the Argus Sour Crude Index (ASCI).

Brent crude, which is traded in London, tells us what the world market is really paying for the same quantity of essentially equivalent oil. Argus is key because that tells us the price that the United States is paying for Saudi Arabian oil.

The U.S. markets have been - and continue to be - distorted by the capacity of storage available in Cushing, Okla. Cushing is where U.S.-traded commodity contracts are settled. Newcomers are often surprised to discover that one very small city of 8,000 people - which seems to be in the middle of nowhere - sets the price of oil for the U.S. futures market in New York City.

The pipelines into and out of Cushing's tank farms can be affected by a single major refinery being down for repairs -which is precisely what happened in 2008. That closure of a single user of West Texas Intermediate (WTI) - the U.S. benchmark - caused Cushing to fill up with oil, artificially depressing oil prices around the world.

After this event, Saudi Arabia announced that it would no longer trust the WTI price, and would use Argus for its base line going forward. Given that a single refinery distorted global oil prices for months, you can see the Saudis' point.

That's why I began using the "stress-test" technique. Sometimes, a single variable will alter a sector's entire outlook. For an institutional investor, that sort of unanticipated development can savage a portfolio. For a retail investor, such a turn of events can obliterate a nest egg.

Anatomy of a Stress TestThe financial use of the term "stress test" came into vogue after the global financial crisis eviscerated the U.S. banking sector. I'm sure you've heard the term. These high-level "what if" scenarios were designed to provide a much greater degree of banking-system transparency following the near collapse of the financial system. The banks needed to show that they could handle a drop in home prices, or they had to raise capital.

The stress-test result: Of the 19 major U.S banks that were tested, 11 had to raise capital.

Since those public tests in spring of 2009, Europe has stress-tested its banks, and now China is doing the same. In fact, in order to get a true assessment of its national banking system, Beijing reportedly ordered its banks to assume a 60% drop in the real-estate market.

In a nutshell, a stress test is a means of scrutinizing your portfolio holdings, and candidly assessing whether that portfolio could ride out a rough stretch - including a "margin call" that's triggered by a steep drop in value of the assets. While simple to say, it is always different in each case.

For example, if I had a large oil exposure in my stock holdings - but felt that near-term oil prices could or would drop - I would hedge, or offset, the risk by buying a "put" on oil prices, while still permitting my equity positions to react to market conditions.

How do I know this strategy would work? Very simple: I deployed it myself under circumstances very similar to the ones I described here.

And it worked great - just as I anticipated.

The non-margin put position essentially served as "insurance." It helped to hedge my long equity exposure to a drop in its primary component: crude-related investments.

Specifically, in a situation such as this one, I would buy a "short-equivalent" position - out of the money - with a minimum of six to nine months of coverage. As my equity positions moved up in price and value, I continued to buy these types of puts at regular, pre-determined points.

While this "beta future insurance" does represent an expense, meaning that I would be eating into the (alpha) returns of my stock-holdings a bit, these puts positions were never significant from an actual dollar-outlay standpoint.

The only risk was the cost of creating the put position. And if there happened to be another Cushing-like incident, my oil exposure would be nicely hedged.

Adding this put position to my portfolio meant several things to me, all of them important. The put position:

• Helped to limit my overall portfolio risk, meaning that I still had direct exposure to the crude futures market, but without the potentially unlimited risk that a true futures position would represent.
• Enabled me to remain invested in the oil market and to pursue the potential that I see there in the long run - and to benefit from the potentially unlimited volatility based gains that are available during a crash.

One final benefit - and possibly the biggest one of all: Knowing what my portfolio was going to do in most of the key conceivable situations helped me to sleep better at night.

So, how do you apply this technique to your own holdings? Let's take a look.

Stress Testing Your Own PortfolioLet's begin by posing a short list of questions about your portfolio that you need to answer. Generating those answers will take some time and effort, but the energy that you expend here could save you a small fortune in unnecessary losses down the road.

Here are the questions:

• Is my portfolio diversified in terms of exposure?
• Is my portfolio hedged to cover losses - or even to make money - if the market moves against my key holdings?
• If I'm not hedged, and I opt to "stand pat" (make no changes), what is the absolute worst thing that could happen to my portfolio?
• What can I do to protect my portfolio, or even to make money, if I address the deficiencies discovered by answering question No. 3?

Let's answer each of these questions, to illustrate the thinking that's involved in mentally "stress-testing" your own portfolio. Take a look:

• Is my portfolio diversified? In simple terms, what percentage of your holdings is in cash, stocks, bonds and physical assets? Ratios such as 10%, 50%, 30% and 10% are used to evaluate your total holdings - and your exposure. These can change - and they will - as you seek to maximize growth, or income at different times in your life. When you define your "portfolio," make sure that you include all your holdings. Investors will too often exclude their IRA accounts or 401(k) accounts from this exercise - and don't see the big exposure risk they have as a result.
• Is my portfolio hedged to cover losses - or even to make money - if the market moves against my key holdings? Addressing this question can be as simple as buying puts in your personal account on the Standard & Poor's 500 Index, should you discover that you have a large S&P 500 exposure in your 401(k). If you own a lot of Valero, and believe that a run-up in oil prices would hurt the refiner's results, you could buy "calls" on the United States Oil Fund LP (NYSE: USO) exchange-traded fund (ETF). If you are experiencing near-term weakness in some of your core holdings, you could write some very-near-term "covered calls" against those holdings to fund put purchases. This way your investment is hedging itself in the near term.
• If I'm not hedged, and I opt to "stand pat" (make no changes), what is the absolute worst thing that could happen to my portfolio? Sometimes, investors are afflicted with "deer-in-the-headlights" syndrome. This is when the market goes against you, and you know it, but you freeze - and get run over. And be honest when you answer this question.
• What can I do to protect my portfolio, or even to make money, if I address the deficiencies discovered by answering question No. 3? Can you buy a small position opposite to how your portfolio is leaning, to hedge that risk? Can you employ some of the investments that we detailed in answering question No. 2 to actually generate some income or capital gains for the portfolio?

Actions to Take: In the turbulent market conditions of today - with "flash crashes" a newfound reality - take the time to administer a "stress test" to your personal investment portfolio. Your objective is to see how your portfolio will handle a major change in market conditions.

For example, if you are heavily exposed to a specific commodity, what would happen if the price of that basic commodity dropped by 50% in a period of weeks? If you are short a commodity, what would happen if it went up 50% or 100% in a month?

Are you are a bond investor? What would happen if interest rates started to rise significantly, as the world tires of buying U.S. Treasury bonds?

If you are heavily invested in S&P 500 stocks, what would happen if that key U.S. index re-tested the painful lows of March 2009 once again?

My suggestion is to conduct the investment self-review that we've outlined for you in the preceding essay. Once you've done that portfolio assessment, I suggest that you may want to consider pairing some shorter-term ETF options to hedge your long-term exposure to the markets.

S&P 500 Breaks Below 1,120: Technical Gurus Grit Their Teeth

People who divine the future from technical fluctuations in the stock market have been looking at the number 1,120 for the S&P 500 for weeks now. If the index breaks below that number, they argue, stocks could be in for a serious down-leg. Well, we’re there now, with the S&P 500 trading at about 1,115 in midday trading. In many recent sessions, the index has touched 1,120 before miraculously bouncing back up. But a gradual broad-based slide among equities today, interrupted briefly by strong ISM numbers, just took an ugly turn.

In short, the evil eye is upon us. Be vigilant.

Exelixis Falls on FDA Prostate Cancer Trial Design Setback

Exelixis(EXEL) faces the possibility of a lengthy delay in the approval process for its experimental prostate cancer drug cabozantinib because U.S. regulators are refusing to sign off on the design of a pivotal clinical trial.

See if (EXEL) is in our portfolio

The setback introduces new risk into the development of the promising prostate cancer drug, which caused investors to flee Exelixis. Shares are down $2.97, or 38%, to $4.75 in Tuesday trading following Monday night's announcement.Exelixis had been hoping to reach agreement with the U.S. Food and Drug Administration that a relatively small and quick phase III study of cabozantinib demonstrating pain reduction in very late-stage prostate cancer patients would be sufficient to get the drug approved.But FDA balked at endorsing this strategy and refused to grant Exelixis a so-called Special Protocol Assessment for the cabozantinib pain study, Exelixis disclosed Monday night."This was surprising and unexpected," said Exelixis CEO Michael Morrissey, referring to the FDA's decision, on a conference call.Exelixis has decided to push ahead and conduct the cabozantinib study with a pain reduction endpoint without an FDA endorsement. The company will hope that overwhelmingly positive data will convince FDA to approve cabozantinib early. If FDA balks at this "go fast" approach to cabozantinib approval -- and Monday's announcement certainly suggests FDA opposition to this plan -- Exelixis will have to wait for results from a larger, follow-on phase III study in prostate cancer that will seek to prove cabozantinib can prolong survival. Exelixis suggested Monday night that cabozantinib could still be approved in 2014 even if two studies are required. Analysts like Canaccord Genuity's George Farmer are skeptical about that timeline, predicting cabozantinib's approval could be pushed back to 2015 or 2016.Exelixis decision to rely on pain relief as a primary endpoint for a pivotal study of cabozantinib has been controversial. All recently approved prostate cancer drugs -- Johnson & Johnson's(JNJ) Zytiga, Sanofi's(SNY) Jevtana and Dendreon's(DNDN) Provenge -- used a survival benefit as the basis for approval. Still experimental prostate cancer drugs from Medivation(MDVN) and Algeta both employed overall survival in their respective phase III studies. Exelixis believes demonstrating cabozantinib's ability to shrink or eliminate the spread of prostate cancer to bone, which causes patients a lot of pain, is a clinically significant benefit and enough to convince FDA to approve the drug. To support their position, Exelixis points to the FDA's own guidance stating prostate cancer drugs can be approved on the basis of pain resolution. Mitoxantrone was approved for prostate cancer using a pain reduction endpoint in 1996.

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On Monday's conference call, Exelixis CEO Morrissey said initial feedback received from FDA in August suggested the agency was willing to grant an SPA for the pain relief trial. However, the FDA changed its tune in follow-up comments sent to the company in October.

Patients enrolled in the cabozantinib studies will have advanced, metastatic prostate cancer that no longer responds to the standard chemo regimen of Taxotere and J&J's Zytiga. These are very sick prostate cancer patients with significant prostate cancer-related pain who have few or no treatment options left.The first study with a pain relief endpoint will begin before the end of the year. The second study, with an overall survival endpoint, will begin in the first half of next year. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.>To submit a news tip, send an email to: tips@thestreet.com.Follow TheStreet on Twitter and become a fan on Facebook.

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Clayton Williams Energy Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: As oil prices took off earlier today, shares of Clayton Williams Energy (Nasdaq: CWEI  ) surged more than 10% in early trading on above average volume. The stock closed up 9% as crude prices ended above $100 per barrel for the first time in two weeks, The Associated Press reported.

So what: Oil rose $0.57 on the day to close at $100.36 on the New York Mercantile Exchange. In London, Brent crude rose $0.12 to $109.98 a barrel. The higher prices could mean more profits for Gulf-area explorers such as Clayton Williams. Related winners included Chesapeake Energy (NYSE: CHK  ) and Sand Ridge Energy (NYSE: SD  ) . Both stocks closed up more than 6% on the day.

Now what: Analysts have been predicting higher crude prices heading into 2012. Goldman Sachs (NYSE: GS  ) , meanwhile, is advising clients to bet on July 2012 Brent crude futures on the theory that a "tight physical market" resembling that of late 2007 could set the stage for a surge in oil prices. Do you agree? Would you buy shares of Clayton Williams Energy at current prices? Please weigh in using the comments box below.

Worried about U.S. politics? How to protect your portfolio

(MONEY Magazine) -- I'm worried that our incompetent politicians will screw up the current bull market and cause even worse economic damage than we've seen in Europe. So I'm thinking of getting out of U.S. stocks and going 100% into international shares. Is this a good idea? -- M.B., San Antonio, Texas

Let me get this straight.

To protect yourself from the chance that American politicians might make a hash of things, you plan to put all your money into international stocks, even though foreign politicians have already shown they're more than capable of wreaking the very kind of havoc you fear?

Sorry, but this is a terrible idea.

It's not that I doubt political decisions can affect financial markets. Clearly decisions about taxes, government spending and monetary policy can have a significant impact on economic growth and market performance.

And I certainly don't hold U.S. politicians in especially high regard when it comes to their handling of economic matters. At the same time, though, I don't see any reason to assume that home-grown politicos are more likely to exercise poor judgment in the economic sphere than their counterparts abroad."

So your plan to pull out of the world's single largest stock market because you think American pols will screw up more than foreign ones strikes me as a flimsy investing premise at best.

I have a better idea. Do what prudent investors usually do when facing uncertainty: Spread your money around, in this case by holding both U.S. and international shares.

Reasonable people can disagree about how much of each you should own, but advisors typically recommend devoting anywhere from 10% to 30% of your stock stash to foreign shares. You can do more if you like. But research shows that going beyond 30% doesn't appreciably improve performance.

Best money moves in your 40s and 50s

Whatever percentage you decide on, you can get all the foreign exposure you need by going to our MONEY 70 list of recommended funds. There, you can create a diversified portfolio of foreign shares by assembling different funds or ETFs that focus on particular market segments -- developed countries, emerging markets, large shares, small, etc.

Or, you can simply invest in a total international stock fund (VGTSX) or ETF (VXUS), which has large and small shares from virtually every country and region in one fund.

If you want to make things really easy on yourself, you could buy a world stock market index fund (VTWSX) or ETF (VT). This will give you the entire global stock market -- the U.S., Europe, Japan, China, emerging markets -- in a single portfolio.

One caveat: A world index fund divvies up its holdings based on the percentage of global stock market values each country represents. And since the U.S. accounts for about 45% of total stock values around the world, holding only a world stock market index fund would mean upwards of 55% of your money sits in foreign shares. I consider that rather high, although still preferable to going 100% international.

There is another option: Vary your exposure to specific foreign markets based on how you think each is likely to perform in the coming year or so. If you go this route, however, you can't expect to succeed just by making judgments about the quality of each country's politicians. You've got to do some real analysis, like digging into each nation's growth prospects, gauging the outlook for its currency, deciding whether its stock market is reasonably priced, etc.

Ask The Help Desk about investing abroad

Frankly, I doubt that most individual investors have the time, inclination or expertise to pull this off. If you want to try, though, there are more than enough single-country and regional funds and ETFs available to create an international portfolio that reflects your reading of the global markets.

But whatever you do, don't shift all your dough out of domestic shares and into foreign ones. That's the kind of move I'd expect from an incompetent politician, not an investor.

Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Send an email to nominate your Money Hero. 

7 Stocks Under $10 Moving Higher

At Stockpickr, we track daily portfolios of stocks that are the biggest % gainers and the biggest % losers.

Stocks that are making large percentage moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst like a recent earnings release. Sometimes stocks making big % moves have been hit with an analyst upgrade or an analyst upgrade.

See if (CAMP) is in our portfolio

>>5 Earnings Stocks Poised to PopAt Stockpickr, we track daily lists of fundamental and technical readings, including stocks rising on unusual volume and stocks with unusual option activity. Everything on our list can help you become a better trader or investor when you pick which equities you want to buy or sell. Regardless of what prompts it, when a stock makes a large percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits if you time the trade correctly and combine a number of technical indicators such as volume, price and momentum indicators such as relative strength. Combine all of those technical indicators with fundamental trends, discipline and sound money management, and you will be well on your way to investment success. Let's take a closer look at a number of stocks under $10 that are making large percentage moves to the upside today. These names warrant a close look since there's clearly investor interest. Some of these names could potentially be just starting an even larger trend higher.

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CalAmpContent on this page requires a newer version of Adobe Flash Player.

CalAmp(CAMP) develops and markets wireless communications solutions that deliver data, voice and video for critical networked communications and other applications. This stock is trading up 10% at $4.30 in recent trading.

Today's Range: $3.84-$4.4952-week Range: $2.46-$4.49Volume: 280,000Three-Month Average Volume: 82,762This company is soaring higher today after CalAmp announced it was awarded a $4.7 million extension of its development contract to help design and supply initial radios for the North American interoperable Positive Train Control system. From a technical standpoint, this stock has started to trigger a big breakouttoday now that it has begun a high-volume move above some past overhead resistance at $3.85 to $4 a share. If this stock can sustain a move and close above $4, then I would look for shares of CAMP to trend significantly higher in the coming days and weeks, as long as it stays above those breakout levels.

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Netlist(NLST) designs, manufactures and sells memory subsystems for the server, high performance computing and communications markets. This stock is trading up 7.3% at $3.06 in recent trading.

Today's Range: $2.65-$3.2952-week Range: $1.04-$3.29Volume: 2,360,000Three-Month Average Volume: 216,180This stock has been hot all week after the company showed in a regulatory filing on Monday that it had inked deals with IBM (IBM) and Hewlett-Packard (HPQ).From a technical standpoint, this stock is now approaching some massively overbought levels; its current relative strength index is showing a reading of 90.5. Any reading over 70 is usually considered overbought for any stock, so NLST is extremely overbought. If you're bullish on this name, I would let this pullback significantly from current levels. There are a number of gaps that could easily get filled on this stock below its current price. I would wait for these large recent gains to consolidate before I went long NLST.

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Vermillion(VRML) is engaged in the discovery, development and commercialization of diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. This stock is trading up 6% at $1.69 in recent trading.

Today's Range: $1.55-$1.8552-week Range: $1.17-$9.49Volume: 254,605Three-Month Average Volume: 148,789This stock is trending higher today after the company reported a $4.7 million net loss on $320,000 in revenue in the third quarter, vs. a $2.7 million loss on $413,000 in revenue during the same period last year. >>20 Highest-Yielding Drug StocksFrom a technical standpoint, this stock has been stuck in a nasty downtrend for the past six months, with shares making mostly lower highs and lower lows. The stock is also currently trading well below both its 50-day and 200-day moving averages, which is bearish. That said, traders can look to play the next major breakout that will trigger on ahigh-volume move above $2 and then $2.25. If we see that action soon, look for a run back towards $3.

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Pacific Ethanol(PEIX) is a marketer and producer of low-carbon renewable fuels in the Western U.S. It produces and sells ethanol and its co-products and provides transportation, storage and delivery of ethanol through third-party service providers. This stock is trading up 27% to $1.70 in recent trading.

Today's Range: $1.30-$1.8552-week Range: $0.25-$7.98Volume: 24,000,000Three-Month Average Volume: 5,578,690This is a stock I highlighted last week in "5 Stocks Under $10 With Big Upside Potential" when it was trading near $75 cents a share. Since that piece, this stock has soared to a weekly high of $1.85. Today the company announced it has retired in full its $35 million senior convertible notes with its final payment in shares of its common stock. From a technical standpoint, this stock is extremely overbought now since its relative strength index is showing a reading of 91. Any reading over 70 is considered overbought, so we are reaching some extreme overbought levels with PEIX here. The stock is also approaching some past overhead resistance at $1.88 and at $2.10 (its 200-day moving average). If you're bullish on this name, I would wait for some consolidation and a big pullback before thinking about buying.

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Pacira Pharmaceuticals(PCRX) is a specialty pharmaceutical company focused on the development, commercialization and manufacture of pharmaceutical products, based on its DepoFoam drug delivery technology, for use in hospitals and ambulatory surgery centers. This stock is trading up 12% to $7.72 in recent trading.

Today's Range: $7.08-$7.8252-week Range: $6.16-$15.34Volume: 2,043,000Three-Month Average Volume: 168,986This stock is spiking nicely today after the company announced the pricing of a public offering of 7 million shares of common stock at a price of $6.50 per share. >>10 Biotech Stocks Loved and Hated by the ProsFrom a technical standpoint, this stock is still trading well below its 50-day moving average of $9.23 despite the large move up today. Yes, volume is very strong, but that volume has much to do with the public offering. I would only consider getting interested in this stock from the long side if it can manage to move back above its 50-day moving average of $9.23 on high volume.

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Royale Energy(ROYL) is an independent oil and natural gas producer. This stock is trading up 14% to $3.54 in recent trading.

Today's Range: $3.07-$3.5852-week Range: $1.73-$7.90Volume: 381,000Three-Month Average Volume: 250,517From a technical standpoint, this stock is just starting to challenge its 200-day moving average of $3.53 today on above average volume. Market players should now watch for a sustained move and close above $3.53. >>Top-Rated Oil & Gas StocksIf we see that action today, then look to play the next major breakout on ROYL, which will trigger on a high-volume move over some near-term overhead resistance at $3.64. A high-volume move over that level will set up this stock to potentially re-test more resistance at $4 to $4.16 a share. Any high-volume move over $4.16 in the near future should be considered very bullish for this stock.

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Syntroleum(SYNM), along with its subsidiaries, is engaged in the commercialization of its technology to produce synthetic liquid hydrocarbons that are substantially free of contaminants found in hydrocarbon products. This stock is trading up 7.9% at $1.15 in recent trading.

Today's Range: $1.06-$1.2952-week Range: $0.76-$2.45Volume: 1,634,000Three-Month Average Volume: 409,846From a technical standpoint, this stock is very close to triggering a big breakout if it can manage to sustain a move and close above $1.28 with high volume. The volume today is very bullish, so traders should now watch for a close over $1.28 in the coming days or weeks. I would consider it even more bullish if SYNM can trade back above its 200-day moving average of $1.50 with high volume soon. Any move over $1.50 could easily set this stock up to fill a massive gap down in price from $2 a share back in July. Follow Stockpickr on Twitter and become a fan on Facebook.

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World’s Economic Ills Weigh on America’s Fragile Recovery: News Analysis

Is the global economy just teetering or is it cratering? The U.S. economy has been making modest but steady gains, but hazards in Europe, China and emerging markets have the potential to put that progress in check.

U.S. consumer sentiment has been notably up, household debt ratios have fallen to 1994 levels, inflation is starting to recede and, while unemployment remains stubbornly high, the fear of further job losses seems to have dissipated.

While the status quo is far from ideal, the snail’s pace progress together with the molasses-like GDP growth rate of about 2% seems nearly acceptable in a global economy that seems to be unraveling. Most of the headlines have focused on European disunion, where the leaders never seem to be able to get ahead of a crisis that has spread from Greece to Ireland to Portugal and in 2011 to Spain, Italy and Belgium. What’s more, the vulnerability of French and German banks to toxic sovereign debt and the looming threat to France’s triple-A debt status has already shrunken Europe’s solid core to a Germany governed by a wobbly coalition.

While it is impossible to say what precisely will happen in Europe, it seems reasonable to suppose that Greece and Ireland, the first two economies to go down, point the way. Both are experiencing negative GDP growth. The European Central Bank (ECB) itself, which has every reason to downplay bad news, is forecasting a Eurozone contraction while imploring its member states to make long-delayed structural reforms. It is not inconceivable that the ECB, like Europe’s politicians, is just playing for time with mild statements aimed at maintaining the current level of foreign investment. The Eurozone does not have a good track record in accomplishing sustained structural reforms.

A European implosion in 2012 could damage the United States’ surging export market, one of the U.S. economy’s bright spots. A Milken Institute economist projects that a Eurozone recession triggering a 10% decline in U.S. exports to the region would result in a manageable 2% decline in U.S. exports and a 0.2% hit to U.S. GDP growth. But that projection is based on a mere recession. A cratering of the European economy following a full-fledged banking crisis would naturally have a correspondingly greater effect. Such a crisis seems within the realm of possibility in 2012.

Perhaps a bigger potential hazard for the still fragile U.S. economy involves China. Economists have long debated not so much whether its credit bubble will pop but how hard. Writing this week in the London’s Telegraph, Ambrose Evans-Pritchard, the journal’s international business editor, makes the case that China’s hard landing has already begun.  Despite all the double-digit dreams investors have had about China in recent years, its Shanghai stock market has already registered nightmarish returns since its 2008 peak, losing 60%. That matches Wall Street’s Great Depression crash from 1929 to 1933—in one fewer year. And half of that loss has occurred in the past half year.

Evans-Pritchard cites an IMF economist who says loans in China’s credit-bubble economy have grown to 200% of GDP. Compare that to the 50% of GDP level that occurred prior to the bursting of the U.S. housing bubble, or the 50% level that preceded Japan’s late ’80s Nikkei bubble, from which Japan has never fully recovered. That level of debt is starting to adversely affect the Chinese property market—with prices as much as 70% lower in outlying areas and 25% down, reportedly, in one Shanghai development. Chinese official figures report a mere 0.3% decline, but Evans-Pritchard calls this a lagging indicator.

As pain spreads throughout China and double-digit GDP growth begins to contract, China is likely to cease its recent role as the world’s shock absorber as it endeavors to contain its own shocks. The U.S. has been pressuring China for years to allow its currency to appreciate, which it has been doing very slowly. But it is entirely foreseeable that China will now work to devalue its currency, which will cut into U.S. exports and shave off some U.S. GDP growth. (China is now America’s third largest trading partner, after Canada and Mexico.)

Indeed, China’s announcement Wednesday that it would impose anti-dumping duties as high as 12.9% on GM, Chrysler and other U.S.-made autos, following the imposition in 2009 of U.S. duties of as much as 35% on Chinese car and light-truck tires, may signal a run-up of trade wars that will be destructive to each nation’s economy.

A Chinese hard  landing is also bound to adversely affect fast-growing emerging economies, many of whose economies have expanded through increased trade with China.

U.S. investors have cheered positive U.S. economic data with a post-Thanksgiving stock market rally. But already visible perils in two of the world’s major economic centers would seem to have more power to drag down the American economy than a still fragile U.S. has to lift an interdependent global economy.

Tips for Dealing With Neighbors

Your home may be your castle, or your refuge or your treasured investment, but those warm and fuzzy feelings can sometimes, unfortunately, be rudely intruded upon by your neighbors.

Rusted cars strewn about the property, right in your line of vision?

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Unkempt grounds, which make you consider volunteering for clean-up duty so you spruce up your view?A dog that barks incessantly at passers-by, gusts of wind or its own shadow?A fence or garden lawn sculpture that pushes the boundaries of good taste?Any of these nerve-wracking scenarios is enough to sour your domestic tranquillity and prompt unpleasant thoughts of revenge or moving far away, fast.While you can try and turn a blind eye to the things driving that you nuts, there are a few things you can do to mitigate frustrations born of a nuisance neighbor. The key goal is to not aggravate the problem or make a tricky situation any worse.1. Communicate firstHow well do you know your neighbor? Have you considered that they may have a good reason for not mowing their lawn or a broken-down vehicle in their driveway? It is easy to jump to conclusions or harbor feelings of anger. But sometimes it's impossible to know or anticipate what your neighbor's situation might be. Before you do anything, including call the police or municipal code enforcement agencies, it is wise to talk face-to-face with your neighbor. Approach your issue respectfully and see if any amends can be made. You may get an unfriendly response, but sometimes the mere act of your concerns may prompt a positive response you would have never anticipated.2. Talk to other neighbors or a homeowners associationIf you live in a neighborhood with a homeowners' association, it may be most appropriate to address your concerns in this group setting. You can vet the problem, including steps you've already taken to try to mitigate the situation. If you don't have an association, it can still be be helpful to seek the counsel of other neighbors. If you are renting, you may also take the issues to your landlord, who may have ties to the neighborhood that can achieve better results.

3. Research your rightsWhile you may hate the color your neighbors chose for their home, it probably isn't something you have any control over. There are other issues, however, that can be brought to your city or local government. Contact your code compliance departments to see what issues they have addressed in their jurisdiction. If there's a potential safety or health violation, local authorities will want to be involved, especially around these issues:

• dilapidated structures, fences
• abandoned vehicles, either in the street or on properties
• outdoor storage or junk
• yard maintenance
• trash disposal
• vegetation overgrowth
• vacant buildings
• parking or common area issues

Issues of noise and animals are usually delegated to the police and animal control, respectively.

Some cities will even offer a mediator to come to your neighborhood and work with the opposing parties to find a solution.4. File a complaintIf your own attempts to mitigate an issue have failed, you can take it a step further. In most instances, photos, notes and dates will be necessary to document your case. Each municipality will depend on the amount of time they'll take to deal with the complaint. Most cities will first send a formal warning and inspector to follow up with the neighbor. While some cities allow anonymous complaints, you may have to identify yourself in further proceedings.5. Municipal court and beyondIt's rare, but some neighborhood problems will be directed to the civil or criminal court system depending on the severity. Obviously any illegal activity will fall under the jurisdiction of the police and homes that are determined to be a health hazard can be torn down by the city.End problems before they startThe easiest way to avoid neighborhood issues is to build a good rapport with your neighbors. You don't need to be best friends with the people living on either side of you, but waving and making an effort at small talk can go a long way.>To submit a news tip, email: tips@thestreet.com.>To submit a news tip, email: tips@thestreet.com.Follow TheStreet.com on Twitter and become a fan on Facebook.

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Effective Wealth Principles

Understanding wealth principles is important if you want to build wealth. Different people opt for different strategies. Some prefer to invest in the stock market, some in real estate investments, etc. which helps in providing tax advantages and a steady stream of cash inflow. For different investors, wealth means different things. Some may prefer to accumulate material items such as own huge mansions, fancy cars and have the ability to relax throughout the day. But, for others the perspective differs!

Funds invested in the stock market grow significantly over a few years. Another section of people consider putting all their children through college, as wealth! A few strategies need to be followed to build wealth. Managing risks, starting early, spending less and making the most of the money you have are some of the strategies. Those understanding wealth principles know the meaning of compound interest. Start by saving early in life. At the end of the day, it’s all about how you keep.

Over the years if you save a significant amount, becoming a millionaire is not at all difficult. A steady job is sure to fetch you money on a regular basis. This is one of the first and most important methods of earning wealth. This will help in adding more to your already existing wealth.

There are also secondary supplementary income sources of earning money. You can even work part time and earn additional income in your spare time. A control on your spending ability helps in curtailing a lot of onetime or reoccurring expenses. Setting aside a formal budget that can be easily followed and adhered to makes this process doable, however if a budget is not followed you may find yourself in debt.

Unfortunate and uncontrollable events in your life could wipe away years of your savings. An individual, understanding wealth principles well, will obtain a life insurance or property insurance to protect their savings and these investments if a catastrophic event did occur. Talk to people who can share their wealth building experiences with you and gain from their expertise. People with similar goals as yours will surely inspire and encourage you in your odyssey towards wealth building as a guiding principle. For further coaching, there are a number of wealth building seminars which provide you knowledge on different techniques of saving and earning for your future.

David Afana is a Professional Marketer. He has dedicated himself to helping others’ achieve exponential recognition and rewards by applying the Art and Science of Internet Marketing to acquire Ultimate Success by way of incorporating Financial Independence and Time Freedom in their Lifestyle. To find out more about these valuable key strategies, see here.

Check Into a Hotel and Never Leave

Rich people from Andrew Carnegie to Al Capone once lived full time in residential hotels. And now you can too.

"I love hotel living. I would never live anywhere else," says Sotheby's International real estate broker Elizabeth Sample, who not only sells units in Manhattan's Mandarin Oriental Residences, but bought a $3 million place there in 2005. "I like the fact that you never have to leave the building if you don't want to."

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A popular housing option in the 19th and early-20th centuries for wealthy people, living full time in a hotel is making a big comeback.Many of New York's landmark hotels -- from the Plaza to the St. Regis -- have converted some floors to condos in recent years. The Mandarin Oriental, the Ritz-Carlton and other hospitality chains have also teamed up with developers around the world to build combined hotel/condo complexes from scratch.Developers will typically put condos on special floors or wings of five-star hotels that they're building, creating private residences with access to a facility's spa, health club and other amenities."The one thing that buyers all have in common is that they all want a hotel's amenities and services -- and they all gravitate toward brand names like the Ritz-Carlton," says real estate broker Michael Doherty, who lives Boston's Ritz-Carlton Residences and has sold several units there. "Most people who buy at the Ritz have stayed at a Ritz, and they expect the same services as residents that they got as hotel guests."Hotel-based condos generally start at a bit under $1 million in smaller cities like Boston, while top-of-line Manhattan units can approach $100 million.You're getting a lot more than just a glorified hotel room for your money.Hotel-based condos usually come with full-sized dining rooms, living rooms, kitchens and everything else you'd expect in a private residence.Throw in housekeeping, valet parking and other services and you get a lifestyle that's popular with CEOs, celebrities and others who have lots of cash but little free time.

New England Patriots star Tom Brady owned a $14.5 million Mandarin New York unit for several years, while hip-hop musician Jay-Z rented a four-bedroom condo there for a reported $40,000 a month.

In Boston, Johnny Damon, Manny Ramirez and other baseball players hung their caps at the Ritz Residences when they played for the Red Sox.

Doherty says pro athletes especially like the Boston Ritz's 114,000-square-foot gym, which boasts a junior Olympic-sized pool, a full basketball court and 120 fitness classes per week.The Boston Ritz also features a spa, a restaurant and a location that's just steps from famous Boston Common."You've got 50 acres of the Boston Common right on your doorstep -- and that's our version of Central Park," Doherty says.Of course, if you prefer to live near the real Central Park, the Mandarin Oriental is right across the street from that famed landmark."Our views of Central Park are incredible -- like living art," says Brenda Powers, a real estate agent who, like Sample, lives at the Mandarin New York and sells property there. "I don't need art for the walls, because I have it in front of me every day out the windows."And because the Mandarin is located in Manhattan's 80-story Time Warner Center, you can go to a four-story shopping mall, a two-story spa, numerous restaurants and a nightclub without ever stepping outside.In Los Angeles, the 3-year-old Montage Beverly Hills Residences take up the top 2-1/2 floors of a five-star hotel that's right off famous Rodeo Drive. The complex features a two-level spa and fitness center, a rooftop pool and top-quality 24-hour services."It's almost like having your own chef, your own housekeeper, your own butler -- your own everything," says Coldwell Banker Realtor Kathy Villa, who recently sold a unit there. "You get the same luxury living that you'd have in a big estate -- without having to buy the big estate."

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Bank of America: Financial Loser

Bank of America (BAC) was the loser among large U.S. financial names on Wednesday, with shares dropping 7.5% to close at $6.38.

The broad indexes sank after the Federal Reserve's Open Market Committee ended a two-day meeting, with the central bank announcing it would shift its investment strategy to further boost the economy, in a move known as "Operation Twist.. The Fed also said it would reinvest principal payments from agency debt ad agency mortgage-backed securities into more agency-backed MBS.

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The KBW Bank Index (I:BKX) was down 5.5% to close at 35.39, with all 24 index components showing significant declines for the session.Moody's Investor Service announced that had lowered its long-term debt ratings for Bank of America (BAC) and Wells Fargo (WFC), while lowering its short-term debt rating for Citigroup (C). The ratings agency said the cuts reflected the lower "probability that the US government would support" the banks, if needed.Shares of Wells Fargo were down 4% to close at $23.71, and Citigroup declined over 5% to close at $25.52.Shares of SunTrust (STI) declined over 7% to close at $17.60, after the U.S. Treasury announced that it was auctioning 17.9 million warrants to purchase SunTrust common stock, that the agency had received in 2008, when providing the Atlanta lender with $4.85 billion in federal bailout funds, through the Troubled Assets Relief Program, or TARP. SunTrust fully redeemed the preferred shares held by the government in March. Larges banks seeing shares decline over 7% included Comerica (CMA), which closed at $22.69, and Huntington Bancshares (HBAN), closing at $4.66.Big banks seeing 6% declines included JPMorgan Chase (JPM), closing at $30.26, and KeyCorp (KEY), which closed at $5.93.RELATED STORIES: 6 Bank Stock Plays for Operation Twist >Bank of America, Citigroup, Wells Fargo Cut by Moody's >Bank of America Lays Off Industrials Bankers >Tyco Split Could Find Bondholder Resistance >Foreclosure 'Injury' Hotline Being Readied >Banks Face Lost Decade of Revenue: Mayo >Treasury Looks to Unload SunTrust Warrants >Big Banks Ensnared in 'Poker Ponzi Scheme' >10 Banks on Solid Financial Footing >-- To contact the writer, click here: Philip van Doorn.To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

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Leaders and Laggards in U.S. Capital Markets

Treasury yields are range-bound, but with an upward bias. Comex gold and Nymex crude oil tested resistances, while the euro stabilizes. The Dow lags its January high, while the NASDAQ, Transports and Russell 2000 power to new cycle highs. The homebuilders rally in the face of weak housing data, while community and regional bank stocks lead the rally ignoring the increasing noncurrent loans in the banking system. Emerging markets are trying to catch up, but remain the laggards year to date. Bank Failure Friday!