In This Edition...  Samson Oil & Gas Limited (SSN), Novatel Wireless (NVTL), Cord Blood America (CBAI), VIVUS (VVUS), China Green Agritech (CGA), and Telestone Technologies (TSTC) are put under an analytical microscope today. After that, we take a look at the market's overall earnings trend... and it's not terribly encouraging as of right now.    Stocks in Focus  Break-Out Performers: RELL, NVTL, GILT  If you like stocks on the verge of a major turnaround, Dennis Askew thinks you need to keep a close eye on Novatel Wireless Inc. (NASDAQ:NVTL). His digging has uncovered that there's been more that a little short selling for the stock, which not only explains the recent weakness, but also sets up a huge short-covering rally that could put the company back into its bigger-picture uptrend. Novatel Wireless' MiFi - the company's WiFi technology - takes mobile web to the proverbial next level.  Charting Analysis of PWRM, SSN, and ACTC Yesterday's upward thrust from Samson Oil & Gas Limited (ADR) (AMEX:SSN) not only carried it to new multi-week highs, it pulled it out of a trading range (rut) that had been plaguing it for quite some time. The move may well be what shakes things up enough to finally let Samson Oil & Gas Limited reach its potential.... which James Brumley believes could be something near $0.70 - nearly a triple in the current price. Take a look.  Bears Try to Shake Loose Shares of Cord Blood America (OTC:CBAI) Brian DePalma lays it all out in a list of four clear reasons why he and his team like Cord Blood America Inc. (OTC:CBAI). Above all else, they see the stock being worth something between $0.03 and $0.05 - close to a double of the current value, at least. Recently reduced debt, stronger margins, and a new business model are among the reasons why CBAI is worth consideration. Be sure to read the Cord Blood America commentary to get the full details of what the rest of the market may be missing.  Technical Reviews of SNSS, SOMX, and VVUS It's been a slow and rocky start, but VIVUS, Inc. (NASDAQ:VVUS) is indeed making good progress on the wedge breakout James Brumley first pointed out back on December 15th. So far the gains are minimal, but the technical victory is the important part of the puzzle. He feels VIVUS, Inc. have a legitimate shot at reaching $12.50, for starters. Check it out, if for no other reason than the chart.  Up-Trend Outlook: TSTC, ACTU, FLWS If you're in Telestone Technologies Corporation (NASDAQ:TSTC), get out. If you're looking for a good short (bearish) trade, then Telestone Technologies should be at the top of your list. That's the opinion of Dennis Askew anyway, who pointed out how short interest has nearly doubled between November and December as the stock continued to climb (though there's room for more). Why the drift higher? Lingering euphoria from Q3's results... but it can't last forever.  CGA, CAGC: These Fertilizer Names Are Not Enriching Ken Tudor tells it like it is with China Green Agritech (NASDAQ:CGA).... and it ain't pretty. Though it and its agricultural peers have recently rallied based on expectations for renewed middle class consumerism in China, a look under the hood of the fertilizer industry reveals some stunning factoids about China Green Agritech... like how overestimated the stock is given the actual growth opportunities.    Feature: Market Earnings Reality They say a picture is worth a thousand words. If that's the case, I'm going to save you a lot of time and reading by showing you a picture of the S&P 500's aggregate past and future earnings. Of course, I'll still chime in with my two cents.  The nearby chart is a snapshot of the S&P 500's earnings - if it were a stock - and the S&P 500's P/E ratio over the last several years. To the extent the data was available, we've added the forecasted numbers as well.  A couple of explanations are in order. For starters, the reason you see two lines for each data set is to differentiate between operating earnings (thin, red), and reported [or GAAP] earnings (thick, blue). The horizontal dashed line plotted on top of the operating P/E ratio data is a long-term average of the same data.... a calculation that's meant slightly less in recent quarters, as the difference between GAAP and operating income has widened thanks to some stunning (and repeated) 'one time' losses. Nevertheless, it's a good frame of reference. The vertical line just marks today, so you can see where the actual data stops and the forecasted data starts.  It is what it is, for better or worse.  A handful of things stick out right away, with last quarter's drop in GAAP earnings being one of them. They were down (again), yet operating earnings were a hair higher. Are we already starting to take massive extraordinary markdowns again? Geez.  The expectation on the earnings front is bullish on both an operating as well as a GAAP basis, but note we actually haven't seen evidence that we'll be able to grow either set of numbers... and 87% of Q3's numbers are now in. Hopefully Q4 results will tick higher, though I'm not holding my breath.  And even if earnings do meet expectations, so what? As of the end of last quarter, the reported P/E ratio of 82.47 is abnormally high. The estimated Q4 GAAP P/E ratio of 23.5 - which is very optimistic to begin with - would only represent a move the higher end of the market's normal P/E range.  Something else worth noting is the way both P/E ratios fell under the long-term average in 2005 and 2006. So, the fact that the forecasted P/E ratios are currently set up under the long-term norm of 20.0 doesn't actually mean the market's underestimated. Instead, it just means stocks are fairly valued at their current levels. Translation: It'll be hard to justify any real growth if the earnings estimates are on target.  Nothing is set in stone, of course, and we can only work with the data we have right now. But, this is something of a discouraging picture. It's NOT a reason to avoid the market altogether.... the data simply suggests paying careful attention to the stocks you pick, since there is no rising tide to lift all the market's boats.  As the data and estimates change, we'll post any updates here. Have a great weekend.