The market continued lower yesterday as resistance levels across the board held. Volume was once again lower as market participates try to decide which direction the indices want to push. Curiously

The market blasted higher out of the gate yesterday. Although it moved (painfully) sideways with almost no activity for the rest of the session. The rally was mainly bolstered by energy and industrial

Today is the day Fed Chief Ben Bernanke heads into the House of Representatives for what’s certain to be a very contentious Q&A session with Republican leaders.

Republicans took a majority in the House on promises to deal with the Federal deficit. And they also capitalized on populist resentment about “too big to fail” bailouts during the financial crisis. Bernanke is the bailout poster-child, and today’s session will be the first real opportunity for the House Republicans to show voters just how serious and mad they are.

The main bone of contention will be the Fed’s QE2 stimulus. Those opposed say the $600 billion bond-buying program is spending we can’t afford and will lead to inflation.  

I've found and interesting small cap company operating in the mobile technology industry - one that stood out from the pack because it has morphed two trends into one business model for those on the go.

But there's a catch: This microcap company is looking to make money by giving away their products.

In the usually quiet week between Christmas and New Year's China shook up the investing world by saying that it will further limit exports of rare earth elements. By now you've likely heard of rare earth elements, either in this letter or from other media outlets.

Last year General Motors Company filed for bankruptcy and collapsed into the government’s arms. With around $170 billion in debt in 2009 and only $82 billion in assets, the bankruptcy filing kicked off a major restructuring effort.

On November 17^th this restructuring will culminate with an initial public offering (IPO).

At the time bankruptcy was announced, Chief Executive Frederick Henderson said the move would “...give us another chance”. President Barack Obama also supported the move, saying GM would emerge a “...stronger and more competitive company”.

Now, almost a year and a half later, General Motors appears to be getting its second chance.

Our discussion of the GM IPO has been timely: the company filed with the SEC for its IPO yesterday. Now, we can answer some of the looming questions.

First of all, it sounds as though GM will not issue new shares, but rather simply sell more of the existing ones. That means the current common shareholders will not be wiped out. It also means that individual investors will be able to buy GM shares on the first day they are available.

We might quietly scoff at the Toyota (NYSE: TM) Prius drivers - after all, the car only gets slightly better mileage than the average car in its class, so it's not all that special as far as environmentalism goes.

But don't scoff too hard, because it just might be that we'll all be driving hybrid cars in the not-so distant future.

You might be thinking that we simply don't have a model of fuel-source change for automobiles - so we really don't know what the future will hold - and whether our cars will be powered by natural gas, lithium-ion, or even solar power - or perhaps some combination.

And you're right - there's basically no model for automobile fuel conversion.

But there is a very robust model for home heating conversion.

Today there are at least as many heating technologies as there are fuel types, but 100 years ago, most people used coal and wood.

Nanotechnology is still a business of the future. Although great strides have been made in creating the technology of the ultra small, very few commercial products have yet made any money for their developers. Altair Nanotechnologies, Inc. (Nasdaq: ALTI) is a case in point. The Reno, Nev.-based company has so far delivered just 61 products — lithium ion batteries for electric cars — and those cars have yet to hit the market.

But the company has several development contracts and joint ventures with big corporations in the works, including paint maker Sherwin-Williams Company (NYSE: SHW) and drug makers Eli Lilly & Co. (NYSE: LLY) and Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI). If those ventures play out successfully, its tiny particles could prove to have a very big future.

Altair was founded in 1973 under the name Diversified Mines Limited, acquiring and exploring mineral properties. For three decades it was a lackluster business. So in late 2003 it restructured with an eye on the future of Nanoparticles. CTO Bruce Sabacky, who has been with Altair since 1999, the year the company went public, began developing products based on nanomaterials.

In 2004 the company brought in a new CEO, Alan Gotcher, from Avery Dennison Corporation (NYSE: AVY), where he had led the development and commercialization of the “Duracell On-Cell” tester for the popular batteries. He has been moving the company’s new technology into commercial products.

From a peak of nearly $8 per share in 2000, the stock dropped to penny stock territory by mid-2003. It has steadily recovered since then, closing at $4.43 on Monday, with a market cap of $312 million, and is now flirting with the low end of analysts' targets. Three brokers polled by Thomson/First Call have price targets ranging from $5 to $6. Its 52-week high is $5.45, reached in October, and the low was $2.48, reached in January.

Root canals, first dates, colonoscopies, images of James Carville—just a few of life’s unavoidable discomforts. Interaction with a car salesman is another. Only the loneliest among us enjoy whiling away an afternoon with someone who couples a gift for oleaginous banter with an overbearing manner.

Nevertheless, whiling away we must if the goal is to acquire a new ride. Today, more of us are whiling away at chain-owned dealerships, including those owned by Asbury Automotive Group (NYSE: ABG), one of the largest new and used auto retailers in the United States.

Asbury operates 88 dealerships that spread south from New York through the Carolinas and Texas, and west to California. The network encompasses a wide swath of American, European and Asian brands, concentrated in luxury and mid-line imports such as BMW, Acura, Lexus, Mercedes-Benz, Honda (NYSE: HMC), Toyota (NYSE: TM) and Nissan (Nasdaq: NSANY). The agglomeration accounts for 68% of new vehicle sales.

Asbury’s goal is for even more people to while away time at its dealerships and to that end, it’s adding more of them to the fold. In the first half of 2007, Asbury acquired three dealerships, increasing annual revenue by $140 million. The goal is to add a few more to rev the revenue number to $300 million by year’s end.

The strategy is sensible: retail auto sales are highly fragmented, with the 100 largest automotive retailers generating approximately 17% of industry revenue. What’s more, the large capital requirements necessary to operate and compete make it likely that consolidation will continue.

The downside is that chief competitors AutoNation Inc. (NYSE: AN) and Penske Automotive Group, Inc. (NYSE: PAG) are pursuing similar strategies, which is driving up import dealership prices (Asbury’s wheelhouse).

In today’s environment, acquisitions are the only reasonable avenue for driving top-line growth. Anyone following the travails of General Motors Corporation (NYSE: GM) and Ford Motor Company (NYSE: F) knows that new auto sales are anemic at best. A residential housing recession, higher gas prices and more stringent lending practices have all extracted a toll. New auto sales—topping 16.6 million in 2006—are expected to ease to 16.3 million in 2007.   

The Russell 2000 (NYSE: IWM) and the Dow posted solid gains following news of a milestone deal between General Motors and the United Auto Workers. The small-cap index added 6.12 points, or 0.76%, to 809.12. The Dow Jones Industrial Average (INDU) moved up 99.50 points, or 0.72%, to 13,878.15.

Stocks began the day on a bullish note and stayed in positive territory throughout the session following news that the United Auto Workers union and General Motors Corp. (NYSE: GM) reached an agreement for a new national contract.

This afternoon, about 73,000 factory workers ended their two-day strike and began returning to work after it was announced that the Detroit-based company has promised to invest in UAW factories in the United States and make improvements to its retirement benefits. In return, General Motors will shift to an independent trust over $50 billion in debt that it owes to the UAW for the health benefits of retired workers.

Some observers are referring to the deal as a huge step forward for the automaker, which should now be able to operate under a cost structure similar to that of Japanese rival Toyota Motor Corp. (NYSE: TM). General Motors, a Dow component, has posted losses in the past two years while Toyota has been chipping away at its market share.

News of the deal dominated headlines today as investors apparently disregarded negative economic reports.

The Russell 2000 (NYSE: IWM) and Dow (INDU) and the other major U.S. indices are posting solid gains with less than two hours left in the session. At 2:39 p.m. ET, the small-cap index had added 4.56 points, or 0.57%, to 807.56. The Dow Jones Industrial Average was up 62.35 points, or 0.45%, to 13,841.

Stocks have trimmed some of their early gains but are still riding a wave of positive momentum following the announcement of a deal between General Motors Corp. (NYSE: GM) and the United Auto Workers union.

The agreement, which should be ratified over the weekend after all the details are discussed, will allow the automaker to shift more than $50 billion of retiree health-care liabilities to an independent trust. The deal could allow the Detroit-based company to narrow the cost advantage enjoyed by rival Toyota Motor Corp. (NYSE: TM), which is not unionized.

In economic news, new orders for U.S. durable goods fell a greater-than-expected 4.9% in August to a seasonally adjusted $219.53 billion, the Census Bureau reported before the opening. That’s the sharpest drop in seven months and the latest sign of an economic slowdown.

Economists were expecting orders for durable goods, which are designed to last more than three years, to decline 3.1% following an upwardly revised increase of 6.1% in July.

Economists consider orders for durable goods to be a measure of business capital spending.

In other economic news, the Mortgage Bankers Association reported that its weekly index of mortgage activity fell 2.8% for the week ended Sept. 21, reflecting the ongoing slump in the U.S. housing sector.

In commodities news, the price of oil has increased $0.95 to $80.48 a barrel.

On what has been a volatile morning for markets, the Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) reversed downward momentum to head higher, as investors sorted through multiple economic data releases, mostly positive.

At 12:47 p.m. ET the small-cap index had added 1.19 points, or 0.15%, to 791.65. The Dow had gained 58.69 points, or 0.44%, to 13,364.16.

Against a backdrop of looming concerns surrounding tighter credit, which had sent stocks spiraling down at mid-morning, investors turned their attention to the positive.

The Institute for Supply Management’s non-manufacturing index, which measures activity in the services sector, reported that service activity remained flat in August from July at 55.8%. The figure clocked in above the 54.5% from July economists had forecasted.

Investors warmed up to better-than-expected same store sales for the month of August, led by Wal-Mart Stores (NYSE: WMT), which saw a 3.1% increase in U.S. same-store sales. Analysts were anticipating an uptick of 1% to 2% last month.  The world’s largest retailer said it is projecting same-store sales to increase by 1% to 3% in September.

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are continuing to advance as hopes continue to mount for a Fed rate-cut following weaker than expected manufacturing activity for the month of August.

Indices tacked on to Friday’s gains. At 12:50 p.m. ET the small-cap index had added 5.73 points, or 0.72%, to 798.59. The Dow was up 38.28 points, or 0.29%, to 13,396.02.

The Institute for Supply Management’s manufacturing index fell to 52.9 from last month’s 53.8. Economists were forecasting the index would decline to 53. A reading over 50 indicates expansion. The index has remained above 50 since January.

Friday, stocks bolted higher after investors interpreted Fed Chairman Ben Bernanke’s statement, in which he said that that central bank would be ready to "act as needed" to thwart any eroding affects of the credit debacle on the economy, to indicate a probable rate cut.  President Bush also gave jittery investors hope by announcing a plan to for government agencies to offer greater support for any overload in mortgage defaults.

The Federal Reserve is expected to hold its Federal Open Market Committee monthly meeting on September 18.

It’s been a long and sometimes rocky road for Hayes Lemmerz International (Nasdaq: HAYZ) since its founding companies manufactured wood-spoke wheels for Henry Ford’s Model T. The Northville, Mich.-based maker of steel and aluminum wheels has survived the decline of the Big Three automakers in Detroit and a Chapter 11 reorganization earlier this decade, and now seems on track to reap the benefits from its concentrated effort to restructure operations and restore profitability.

The company earlier this month announced solid gains in sales and earnings for the first fiscal quarter ended April 30, and said it was on target to reach full-year goals of $2.2 billion in sales and $200 million to $210 million in EBITDA, compared with $2.06 billion and $188.6 million in the year ended January 31.

Hayes Lemmerz is the global leader in supplying steel and aluminum wheels to passenger cars and steel wheels to commercial vehicles. It has had a laser focus in the past couple of years in positioning itself in the global automotive market and now realizes three-quarters of its sales outside the United States (and four-fifths of its wheel sales). While it still depends heavily on the Big Three in the Unites States, it has won virtually all the major European and Asian carmakers as customers as it shifts production to low-cost sites in Czech Republic, Turkey, Thailand and India.

At the same time, it has shut down and sold off non-core operations in the Unites States  and in general downsized the company, going from 43 facilities and 11,000 employees when it emerged from Chapter 11 in 2003 to 30 facilities and 8,500 employees now. Of those 30 facilities, only seven, with 1,500 employees, are in the Unites States – the remaining 23 facilities and 7,000 employees are spread among 13 foreign countries. Wheels, which represented two-thirds of sales in 2003, are projected to account for 84% in 2007. Other products include components for brakes and powertrains.

The company followed up its operational efforts with a successful capital restructuring this spring, raising $180 million in a rights offering, plus a $13 million direct investment by manager Deutsche Bank, to retire senior debt. It consolidated the rest of its debt in a $495 million syndicated loan and a $175 million euro-denominated note offering in Europe, so that the end result is to slash $24 million annually from its interest expense ($76 million in the past fiscal year), extend maturities (the earliest now is 2013), and better match its income streams.