TheStreet.com's Jim Cramer says a data point out of Germany gives him cause for hope.

I have seen the future, and it is German manufacturing orders! We are always looking for totems when we are teetering on the second dip, and a number that came out today from Germany showing a 4.4% increase in May manufacturing orders -- the best in two years -- ignited the European markets and should do the same for ours.

It's been no secret that our economy's doing nothing while the Chinese economy does all the heavy lifting. But what happens if Europe, which is supposed to be so, so sick, gets better? I don't know a soul who believes that Europe isn't worse than the U.S., with their banks being in far worse shape and their governments showing no signs of being worried about anything but Weimar.

Analyst upgrades:

• Goldman upgraded SanDisk (NASDAQ: SNDK) to Buy from Neutral and raised their target to $22 from $16 citing the renegotiated royalty agreement with Samsung.
• Goldman also upgraded Starwood Hotels (NYSE: HOT) to Buy from Sell and raised their target to $27 from $11 citing strong operating leverage as RevPAR recovers.
• KeyBanc upgraded Werner Enterprises (NASDAQ: WERN) to Hold from Underweight citing a recent improvement in freight demand.
• J.C. Penney (NYSE: JCP) was upgraded to buy from Underperform at Banc of America/Merrill.
• Savvis (NASDAQ: SVVS) was raised to Outperform from Perform at Oppenheimer.
• Sanofi-Aventis (NYSE: SNY) was upgraded at Citigroup to Buy from Hold.

Analyst upgrades:

• Jefferies upgraded shares of SourceFire (NASDAQ:FIRE) to Buy from Hold as they believe the company is benefiting from recent spending by the U.S. Federal government and private enterprises to improve cybersecurity. The firm raised their price target on the stock to $11 from $7.
  
• Piper Jaffray upgraded Brocade (NASADAQ:BRCD) to Buy from Neutral as they believe an expanded OEM announcement with IBM (NYSE:IBM) could be announced as early as the end of April, creating a positive catalyst. The firm raised their price target on the stock to $6 from $4.
  
• UBS upgraded Salesforce.com (NYSE:CRM) to Buy from Sell but lowered their target to $4 from $21 citing reduced churn and cashflow concerns, expectations for FY10 to be a trough year, and a potential reacceleration in deferred growth.
• AK Steel (NYSE:AKS) was raised to Buy from Neutral at Goldman.
  
• Strattec (NASDAQ:STRT) was raised to Neutral from Underperform at Baird.
  
• Lululemon (NASDAQ:LULU) was upgraded at William Blair to Outperform from Market Perform.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Express Co. (NYSE: AXP) earnings tumbled in Q4 but came in just short of expectations.
• Best Buy Inc. (NYSE: BBY) earnings prospects and cash flow led to an analyst's upgrade.
• Bristol-Myers Squibb Co. (NYSE: BMY) topped analysts Q4 expectations, sending shares higher.
• Colgate-Palmolive Co. (NYSE: CL) posted a better-than-expected Q4 profit despite the weak economy.
• Delta Air Lines Inc. (NYSE: DAL) reported a big quarterly loss due to merger costs and bad fuel hedges.
• Eaton Corp. (NYSE: ETN) Q4 earnings fell on lower exchange rates and charges related to an acquisition.
• E*Trade Financial Corp. (NASDAQ: ETFC) narrowed its Q4 net loss but fell short of expectations.

Here's a quick look at some of Monday's earnings results:

Netflix Inc.'s (NASDAQ: NFLX) fourth-quarter earnings jumped 45% percent to nearly $23 million, or 38 cents per share, which surpassed analysts' estimates. Revenue in the period rose 19% to $360 million. The company ended 2008 with 9.4 million subscribers, a gain of 718,000 customers from the end of September. Shares fell $0.29, less than 1% Monday.

Amgen Inc.'s (NASDAQ: AMGN) fourth-quarter profit grew 15% percent to $961 million, or 91 cents per share, mostly due to lower expenses. Revenue was $3.75 billion about the same as last year. Results included $60 million in restructuring costs a year ago. Shares rose $1.22, or 2.3%, but fell in after-hours trading.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

"The injections of huge amounts of liquidity into the markets worldwide will leave us all with huge inflationary pressures in the years to come," notes Steve Rawls.

In his Tipping Point Stocks, the advisor suggests, "Historically, the best place for an investor in inflationary times is gold. And ProShares Ultra Gold (NYSE: UGL) is the best way to invest in gold in 2009."

The advisor explains, "Right now, the battle being fought is to stimulate economic growth to prevent a worsening recession; whether or not this will be successful remains to be seem.

"But one thing is certain, the injections of huge amounts of liquidity into the markets worldwide will leave us all with huge inflationary pressures in the years to come.

"The pressures related to government guarantees and bailouts (and the necessary borrowing to finance them) are hidden right now because of the slowing economy, but that doesn't make them any less real.

TheStreet.com's Jim Cramer says we have the right people in charge, so 2009 looks a lot brighter.

Send out the clowns. That's how I am looking at 2008.

The people who got us in this mess, whether it be Chris Cox -- last-minute stifling of any accounting hopes ... thanks, Chris! -- or the incredibly overrated and somehow revered Hank Paulson, and, most important, President Bush. Not for a minute did that man do anything to get us out of this jam. It is telling that when people speak of the outgoing administration on Wall Street, they never speak of Bush. It's all Paulson and some Bernanke, a Bush appointee. But in the biggest economic collapse statistically since the Great Depression, the president has played no role and clearly doesn't understand most if not all that is happening around him.

When we speak of the next administration and domestic policy, it is clear that we are going to speak about President Obama. He won't fob it off or deny what's happening. And remember, this crisis got very deep because the man at the top said the fundamentals were sound, and repeated that over and over and over, right up until the beginning of 2008, which is why things are as horrible as they are. And they are horrible. The president's advisers, no doubt cowed by a clueless chief, never wanted to differ, and Bernanke reminds me of one of those academics around presidents Kennedy and Johnson, a brilliant man who has gotten us into the equivalent of a domestic Vietnam. He's finally bombing the heck out of the economy, but it was too late, and now a new administration has to clean up his and Paulson's and Bush's mess for him.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Adobe Systems Inc. (NASDAQ: ADBE) posted strong Q4 and full-year results, but with flat Q4 revenues.
• Best Buy Inc. (NYSE: BBY) beat Q3 expectations though earnings tumbled, and shares rose about 18%.
• Carnival Corp. (NYSE: CCL) announced that it had lowered its full-year earnings and revenue guidance.
• Discover Financial Services (NYSE: DFS) net income from continuing operations more than doubled in Q4.
• Eaton Corp. (NYSE: ETN) cut its Q4 earnings guidance on weakness in the American auto market.
• FedEx Corp. (NYSE: FDX) Q2 earnings topped expectations and it reaffirmed its guidance.
• General Electric Co. (NYSE: GE) declined to provide quarterly earnings guidance in its annual outlook.
• General Mills (NYSE: GIS) posted a higher-than-expected profit on cost cutting and increased marketing.
• Gilead Sciences Inc. (NASDAQ: GILD) strong earnings growth are expected by one analyst to continue.
• Goldman Sachs Group (NYSE: GS) swung to an anticipated Q4 loss and reported negative revenues.
• Healthcare Realty Trust Inc. (NYSE: HR) was downgraded due to its near-term earnings prospects.
• Honeywell International Inc. (NYSE: HON) affirmed a lower 2009 outlook and said it expects profits to fall.

TheStreet.com's Jim Cramer says the economics are still dire, but stocks aren't even flinching on huge warnings.

Preannouncement after preannouncement after preannouncement. Yawn after yawn after yawn.

I've never seen anything like it. Worst ever. But, did anyone really think Ingersoll Rand (NYSE: IR) (Cramer's Take), cut in half here, would make the quarter? How about Nucor (NYSE: NUE) (Cramer's Take)? Stanley Works (NYSE: SWK) (Cramer's Take)? ITT (NYSE: ITT) (Cramer's Take)? Eaton (NYSE: ETN) (Cramer's Take)? Pentair (NYSE: PNR) (Cramer's Take)? I figured they would all miss. I bet the ones that preannounced last night hardly go down. Why should they? ITT's up nicely. Eaton's unchanged. Not even glancing blows. Nucor's up 10! Ten from a preannouncement.

Most glaring: the 10% miss by Joy Global (NASDAQ: JOYG) (Cramer's Take) with the almost 15% rally! Now that's gigantic.

That's why people feel better about this tape. In the end of that big run up, stocks failed to react to even the biggest beats. Now they fail to react to the biggest misses.

Eaton (NYSE: ETN - option chain) stock is falling today after the company cut its fourth-quarter earnings guidance. ETN now expects adjusted EPS of $1 to $1.10, down from an earlier estimate of $1.70 to $1.80. Analysts are looking for EPS of $1.68. ETN cited weakness in the American auto market for the cuts. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on ETN.

This morning, ETN opened at $41.59. So far today the stock has hit a low of $40.61 and a high of $42.60. As of 11:50, ETN is trading at $42.31, down $1.60 (-3.6%). The chart for ETN looks neutral and S&P gives ETN a 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in one month as long as ETN is below $50 at January expiration. Eaton would have to rise by more than 18% before we would start to lose money.

ETN hasn't been above $50 since early November and shown resistance around $48 recently.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ETN.

Eaton (NYSE: ETN - option chain) shares have soared higher today after Berkshire Hathaway (NYSE: BRK.A) disclosed in an SEC filing Friday afternoon that it has bought 2.91 million shares of ETN over the past six months. Usuall,y when announcements like this are made, investors follow the Oracle of Omaha and send the stock higher. If you think the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ETN.

ETN opened this morning at $42.30. So far today the stock has hit a low of $41.48 and a high of $43.35. As of 12:25, ETN is trading at $43.49, up $2.34 (5.7%). The chart for ETN looks neutral and S&P gives ETN a neutral 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just five weeks as long as ETN is above $30 at December expiration. Eaton would have to fall by more than 30% before we would start to lose money.

ETN hasn't been below $37 at all in the past year and has shown support around $39 recently.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ETN or Berkshire.

ConocoPhillips (NYSE: COP) closed at $47.39 Friday. WTI crude oil futures are recently down 2.16% to $55.81 according to Bloomberg. Berkshire Hathaway reported an 84 million stake in COP. COP December option implied volatility is at 80, January is at 75; is above its 26-week average of 43 according to Track Data, suggesting larger price movement.

Eaton (NYSE: ETN) closed at $41.15 Friday. Deutsche Bank has a Hold rating on ETN. Berkshire Hathaway reported a 2.9 million stake in ETN. ETN December option implied volatility of 76 is above its 26-week average of 46 according to Track Data, suggesting larger price movement.

United Therapeutics (NYSE: UTHR) is recently down $25.90 to $64.62 in pre-open trading. UTHR ph.3 FREEDOM-C trial for oral treprostinil failed to its meet endpoint. UTHR November 90 straddle went out at $21.10, December 90 straddle is priced at $27.40 according to Track Data, suggesting large price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Analyst upgrades:

• JP Morgan lowered its 2009 North American light vehicle production estimate by 13% to 11.2M and Europe by 10% to 19M. The firm upgraded Borg-Warner (NYSE: BWA) to Overweight from Neutral citing balance sheet and revenue growth.
  
• Jefferies upgraded shares of Kroger (NYSE: KR) to Buy from Hold and raised its target to $32 from $28 as they expect the company's value image to benefit in the current environment.
  
• Leerink upgraded AMAG Pharma (NASDAQ: AMAG) to Outperform from Market Perform on valuation as they believe current data is sufficient for some form of first cycle approval of Ferumoxytol.
• Coca-Cola Enterprises (NYSE: CCE) was upgraded to Neutral from Underperform at Merrill Lynch.
  
• Watsco (NYSE: WSO) was raised to Perform from Underperform at Oppenheimer.
  
• UBS upgraded Invitrogen (NASDAQ: IVGN) to Buy from Neutral.

Analyst downgrades:

• Jefferies downgraded shares of Whole Foods (NASDAQ: WFMI) to Underperform from Buy and lowered its target to $9.50 from $23 on the worsening macro environment, which they believe is "overwhelming" the company's ability to drive even flat comps in Q4 and FY09.
  
• Deutsche Bank cut Texas Instruments (NYSE: TXN) to Hold from Buy and lowered its target to $19 from $28 following the company's worse-than-expected outlook, as they expect shares to be range bound.
  
• Banc of America downgraded the Dry Bulk Shipping sector to Equal Weight from Overweight to reflect the "depressed" charter rate environment, tighter credit markets and the weakening macroeconomic outlook. The firm downgraded Britannia Bulk (NYSE: DWT), Navios Maritime (NYSE: NM) and TBS International (NASDAQ: TBSI) to Neutral from Buy.
• Eaton (NYSE: ETN) was lowered to Underperform from Neutral at Merrill Lynch.
  
• AXA (NYSE: AXA) was downgraded at JP Morgan to Neutral from Overweight.
  
• Aracrus (NYSE: ARA) was downgraded to Underweight from Equal Weight at Morgan Stanley.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Altera Corp. (NASDAQ: ALTR) beat Q2 estimates, offered guidance, and announced a quarterly dividend.
• Capital One Financial Corp. (NYSE: COF) profit tumbled as consumers stopped paying off credit cards.
• Coca-Cola Co. (NYSE: KO) mixed Q2 results were boosted by international operations.
• Eaton Corp. (NYSE: ETN) reported strong Q2 numbers but shares still fell afterward.
• Genentech Inc. (NYSE: DNA) did not meet analysts' estimates but lifted its full-year outlook (see transcript).
• Google Inc. (NASDAQ: GOOG) posted strong results that fell short of Wall Street expectations.
• Intel Corp. (NASDAQ: INTC) better-than-expected Q2 results lifted other tech stocks as well (see transcript).
• JPMorgan Chase & Co. (NYSE: JPM) posted better-than-expected Q2 results (see transcript).
• Lawson Software Inc. (NASDAQ: LWSN) net income fell due to an auction-rate securities related charge.
• Mattel Inc. (NYSE: MAT) Q2 results topped expectations despite lower profits on weak demand for Barbie.
• Nokia Corp. (NYSE: NOK) posted better-than-estimated Q2 earnings on strong sales growth.
• Overstock.com Inc. (NASDAQ: OSTK) fell nearly 30% after reporting earnings for the second quarter.
• Rockwell Collins Inc. (NYSE: COL) posted strong Q3 results due to long-term government contracts.
• Sun Microsystems Inc. (NASDAQ: JAVA) preliminary Q1 results sparked an after-market rally.
• Wells Fargo & Co. (NYSE: WFC) beat low earnings expectations and also raised its quarterly dividend.
• Yum! Brands Inc. (NYSE: YUM) beat Q2 expectations due in part to strength overseas, but shares fell.

For more highlights from this week, see: Citigroup, eBay, IBM, Merrill Lynch, Microsoft and others

The earnings crunch continues next week. Among companies scheduled to report are Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Merck (NYSE: MRK), Texas Intruments (NYSE: TXN), Caterpillar (NYSE: CAT), Halliburton (NYSE: HAL), United Parcel Service (NYSE: UPS), Wachovia (NYSE: WB), Yahoo! (NASDAQ: YHOO), Amazon (NASDAQ: AMZN), Anheuser-Busch (NYSE: BUD), AT&T Inc. (NYSE: T), McDonald's (NYSE: MCD), PepsiCo (NYSE: PEP), Pfizer (NYSE: PFE), Boeing (NYSE: BA), Hershey (NYSE: HSY), and Southwest Airlines (NYSE: LUV).

Visit AOL Money & Finance for more earnings coverage.

Diversified industrial manufacturer Eaton Corporation (NYSE: ETN) posted some great numbers for 2Q 2008. Investors responded by pushing the stock down 8% as a result. Go figure. With the exception of its automotive segment, which saw a modest 2% decline in sales, all other divisions posted double digit sales increases with demand remaining strong going forward. 2Q sales increased 32%, net income increased 35%, while net income on a per share basis increased 24% The company posted these results despite the fact that oil prices increased 40% during the quarter.

The FAA recently awarded a $40 million contract for power quality equipment. The company's Hydraulic Launch Assist technology performed very well in tests on trash trucks. It reduced fuel costs by 25% and significantly reduced brake service costs. With diesel prices showing no signs of decline, demand for this technology will be very strong when it becomes commercially available in late 2008. CEO Alexander Cutter forecasts FY sales growth to be 3% in the U.S. and 5% internationally. FY operating EPS are forecast to grow 12-16%, resulting in EPS of $7.70-$8.00. At this rate of return, the stock is currently bargain-priced around $73.00