Economies go in cycles. They push to their breaking points, then move in the opposite direction. We saw it clearly in the '90s when there was no end to up (except there was and we abruptly hit it in 2000). In 2008, it felt like there was no end to down. But we now know there is. Things are picking up, and there are numbers to prove it.

Don't be the last to figure out we're in an economic recovery. Sitting on the sidelines, waiting for one more chance to buy a stock at the bargain price you saw in March of 2009 isn't going to happen. Times have changed. The U.S. economy is on the mend.

Bilbao (BBVA) January 11 calls are active on total call volume of 11K contracts, compared to 1K puts. December and January put option implied volatility of 55 is near its 26-week average, according to Track Data. Large call option volume suggests traders positioning for price movement.

Tata Motors (TTM) rallied 10% to close near record high. Overall option implied volatility of 43 is above its 26-week average of 38, according to Track Data, suggesting larger price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Barclays upgraded Western Digital (WDC) to overweight from equal weight.
• LDK Solar (LDK) was upgraded to buy from hold at Needham.
• Legg Mason (LM) was upgraded to outperform from neutral at Macquarie.
• Agilent (A) was upgraded to buy from hold at Stifel Nicolaus.
• Wells Fargo upgraded Dean Foods (DF) to outperform from market perform and Developers Diversified (DDR) to market perform from underperform.
• Deutsche Bank also upgraded Developers Diversified, to buy from hold.
• Northrop Grumman (NOC) was upgraded to sell from conviction sell at Goldman.
• MYR Group (MYRG) was upgraded to buy from hold at BB&T.

"In the emerging markets arena, India frequently plays second-fiddle to China; but investors should not be deceived: India offers plenty of opportunities, such as Tata Motors (TTM)," says Brandon Clay.

The editor of Invest with an Edge explains "Tata is India's top automaker and the owner of the Jaguar and Land Rover luxury brands.

"India is the second-largest country in the world by population. It's also growing fast, but not as fast as China. The government wants to see annual economic growth top 10%. That's good stuff.

Tata Motors (TTM - option chain) shares are rising today after the company reported earnings this morning, posting a first-quarter profit of 19.89 billion rupees ($431.6 million) on revenue of 268.76 billion rupees. If you think that 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 TTM.

TTM opened this morning at $20.36. So far today the stock has hit a low of $20.36 and a high of $20.73. As of 12:10, TTM is trading at $20.60 up 0.54 (2.7%). The chart for TTM looks bullish and S&P gives TTM a positive 4 STARS (out of 5) buy ranking.

Analyst Upgrades

• Leerink upgraded Genzyme (GENZ) to outperform from market perform due to valuation as it believes the sell-off on news of the consent decree is overdone.
• FBR Capital upgraded Progressive (PGR) to outperform from market perform to reflect an improving outlook. The firm raised its target price for shares to $23 from $18.
• Janney Montgomery upgraded Cheesecake Factory (CAKE) two notches to buy from sell, citing improving casual-dining sales trends. The firm has a $30 price target for shares.
• Research in Motion (RIMM) was raised to overweight from neutral at JPMorgan.
• Tata Motors (TTM) was upgraded to buy from hold at Deutsche Bank.
• Palm (PALM) was upgraded to market perform from underperform at BMO Capital.

"The Cabot China-Timer has flashed a new buy signal, telling us the trend of Chinese and emerging market stocks has turned back up. No one knows how long this signal will persist, and you shouldn't try to guess. Instead, your best move is to go with the evidence, which is now bullish," observes Paul Goodwin.

The editor of The Cabot China & Emerging Markets Report explains, "India's Tata Motors (TTM), the largest truck and auto maker in the subcontinent, has been a little of both over the years, but it looks like the time is right for a new advance.

Back in the 1950s, Daimler AG (DAI) saw the big opportunities in India and formed a strategic relationship with Tata Motors (TTM), which included an investment. Over the years, the relationship did not get much traction. For example, the technology arrangement ended in the late 1960s and a distribution agreement stopped in the late 1990s.

So, now Daimler has unloaded its 5.34% position, which comes to roughly $428 million. In today's trading, the shares of Tata are down 4%.

Analyst upgrades:

• Deutsche Bank upgraded Clorox (NYSE: CLX) to Buy from Hold on valuation and believes upside to earnings forecasts is likely. The firm raised its target on shares to $66 from $65.
• Kaufman Bros. upgraded eBay (NASDAQ: EBAY) to Buy from Hold on expectations improved Marketplace fundamentals will serve as a positive catalyst for shares. The firm raised its price target on the stock to $29 from $22.
• Roth Capital believes Zumiez (NASDAQ: ZUMZ) is well positioned for improved results and margins. The firm, which upgraded shares to Buy from Hold and raised its target to $22 from $16, said September back-to-school results bode well for the holiday season and demonstrate that Zumiez can drive conversion during peak shopping periods.
• Northrop Grumman (NYSE: NOC) was upgraded to Sell from Conviction Sell at Goldman.
• Adobe (NASDAQ: ADBE) was upgraded to Outperform from Neutral at Baird.
• Monster Worldwide (NYSE: MWW) was upgraded to Overweight from Neutral at JPMorgan.

Analyst upgrades:

• Baird upgraded WinTrust (NASDAQ: WTFC) to Neutral from Underperform and raised its target to $20 from $13 citing the accretive purchase of AIG (NYSE: AIG) loans and reduced risk of a capital raise.
• Piper Jaffray upgraded Coach (NYSE: COH) to Overweight from Neutral on expectations product sell-throughs and margin trends will improve in the coming quarters. The firm has a $32 target on the stock.
• RBC Capital upgraded Campbell Soup (NYSE: CPB) to Sector Perform from Underperform and raised its target to $33 from $29. The firm cites Campbell's recent innovation, easy volume comps, and "reasonable" consensus estimates for its upgrade.
• Tata Motors (NYSE: TTM) was upgraded to Equal Weight from Underweight at Morgan Stanley.
• Rockwell Automation (NYSE: ROK) was upgraded to Buy from Neutral at BofA/Merrill.
• Fifth Third Bancorp (NASDAQ: FITB) was upgraded to Conviction Buy from Buy at Goldman.

Analyst upgrades:

• Citigroup upgraded Adtran (NASDAQ: ADTN) to Buy from Hold on expectations the company will benefit from the broadband Stimulus funds.
• Morgan Stanley upgraded Continental Airlines (NYSE: CAL) to Overweight from Equal Weight based on relative valuation and views the company as a "survivor." Additionally, the analyst lowered 2009 industry estimates but believes it is the last cut for the year and is incrementally more positive on the sector.
• Morgan Stanley also upgraded EXFO Electro-Optical (NASDAQ: EXFO) to Overweight from Market Weight based on valuation.
• Tata Motors (NYSE: TTM) was upgraded to Buy from Hold at Deutsche Bank.
• Ascent Solar (NASDAQ: ASTI) was upgraded to Neutral from Underweight at JP Morgan.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Underperform at Credit Suisse.

Tata Motors (NYSE: TTM - option chain) shares are headed higher today as the company officially begins booking sales of its Nano today. The car has been called the world's cheapest automobile, and analysts are eagerly waiting to see how well the car sells in rapidly-growing India. If you think that 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 TTM.

TTM opened this morning at $6.96. So far today the stock has hit a low of $6.95 and a high of $8.30. As of 11:45, TTM is trading at $7.65, up 1.01 (15.2%). The chart for TTM looks neutral and S&P gives TTM a 3 STARS (out of 5) hold ranking.

With the Big Three auto companies in dire need of cash, they've all considered the possibility of selling some of their brands. General Motors' (NYSE: GM) Hummer, Saab and Saturn, along with Chrysler's Jeep and Viper and Ford's (NYSE: F) Volvo are all reportedly on the block.

"Trouble is, nobody seems to have the interest - or the equity - to make a deal," Fortune reports.

Honda (NYSE: HMC) closed at $22.40 Thursday. HMC overall option implied volatility of 92 is above its 26-week average of 42 according to Track Data, suggesting larger price movement.

Toyota Motor (NYSE: TM) closed at 67.09 Thursday. TM overall option implied volatility of 70 is above its 26-week average of 39 according to Track Data, suggesting larger price movement.

Tata Motors (NYSE: TTM), an Indian car manufacturer, closed at $4.50 Thursday. TTM overall option implied volatility of 84 is above its 26-week average of 61 according to Track Data, suggesting larger price movement.

Nissan (NSADQ: NSANY) closed at $8.57 Thursday. NSANY overall option implied volatility of 76 is above its 26-week average of 49 according to Track Data, suggesting larger price movement.

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

MAJOR PAPERS:

• The banking unit of National City Corporation (NYSE: NCC) recently entered into a "memorandum of understanding" with federal regulators, the Wall Street Journal reported. The banking unit has bad loans, and the agreement basically means that the bank is on probation, as the government pressures financial institutions.
• The Wall Street Journal also reported that Justice Department criminal prosecutors and its U.S. attorney's office in Brooklyn, NY are investigating American International Group Inc (NYSE: AIG) to see if they overstated the value of contracts tied to subprime mortgages.

OTHER PAPERS:

• Lehman Brothers Holdings Inc (NYSE: LEH) is thinking of releasing its Q2 results a week earlier than planned, and announcing a capital raising plan at the same time, according to the New York Post, in order to reduce negative speculation about its future.
• The Economic Times reported that Indian auto companies Tata Motors Limited (NYSE: TTM) and Mahindra and Mahindra may be interested in acquiring Hummer from General Motors Corporation (NYSE: GM).