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Depending on your personality (are you an opportunity optimist or a panicky pessimist?) these are either the best of times or the worst of times.

As I've reported recently, the drama and trauma leading up to the big November 4 make-or-break G-20 meeting is already heating up this week. One headline today from media drama queen CNBC, which shows the level of dramatic scare tactics being employed, states "Greece Faces 'Hellish Week' as Debt Crisis Tests Nation."

There's no doubt Europe has a big and bloody financial mess to clean up, and the center of the contamination seems to be in the credibility of its banking system. The latest plan to preserve the European Union and save the global banking sector is to force European banks to increase their equity capital.

The goal involves an emergency response to restore confidence and stability. But if that's the case, then why are so many analysts and savvy investors still very nervous? Candidly speaking, the answer appears to be that most don't believe that the European Central Bank and the big dogs of the EU will be able to successfully pull off this rescue plan.

As it stands, the capital shortage in the EU banking system is about 200 billion euros ($277 billion) according to the International Monetary Fund. Some observers think it's more like 1 trillion euros ($1.4 trillion) by the time you factor in all the debts, derivatives and intra-dependencies of Europe's major banking houses and government Treasuries.

Keith Fitz-Gerald wrote recently at Money Morning:

As I have noted repeatedly since this crisis began, regulators are fighting the wrong battle, and have been since 2008. They are worried about liquidity when they should be worried about solvency.

Sure, a bank recapitalization can repair the banking system when it comes to keeping money moving in terms of short-term credit - but no amount of money can prepare European banks for a sovereign default or credit freeze because there literally isn't enough money on the planet to recapitalize the banking system unless you remove the risks that plague it.

The "system" is still at incredible risk as Keith points out in a few bone-chilling observations.

The total worldwide notional derivatives exposure is more than $600 trillion dollars according to the Bank for International Settlements. And that's against a gross market value of merely $21.1 trillion.

In other words, banks have invested in instruments valued at $21 trillion but with a total exposure that's 28.4-times that -- or $600 trillion dollars.

This is why rogue traders are such a problem; they can take disproportionately large risks with not a lot of capital, which often leads to catastrophe.

More recently, Kweku Adoboli, who served as director of exchange traded funds (ETFs) at UBS AG (NYSE:UBS), blew a $2 billion hole in UBS' balance sheet.

Part of the problem is that nobody knows exactly how much cash banks spend to amass such investments because derivatives and sovereign debt trading instruments are still largely unregulated and "self policed" within the industry.

Do you smell the buying opportunity?

So what's this have to do with our investments and our money? It creates the conditions for some wonderful buying opportunities and a great deal of market volatility.

You don't have to be a rocket scientist to see what the market mavens have been doing. With perfect hindsight you can see the short-term volatility cycles they've been creating--selling high, buying back, driving stocks up 10% or more and then selling out again.

Take a look below at the 6-month chart of the S&P 500 for ongoing evidence:

Chart forS&P 500 INDEX,RTH (^GSPC)

Beginning in late July, the big market movers have driven the major averages down and up like a bouncing ball. Today we started another downward motion, and it will again create the circumstances that allows us to buy great companies on sale.

Four Examples of Outstanding Stocks to Consider

Petroleo Brasileiro S.A. (NYSE:PBR), the big Brazilian energy company that primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses, is on sale. Trading at 5 times earnings, this powerhouse is one that's poised for growth and profits in the months ahead.

18% profit margins, 21% operating margins, and selling below book value, PBR should be carefully considered and could break the the upside after we learn that the world and Europe will be saved by massive infusions of capital. PBR is gearing up to restart its Pasadena, Texas, refinery at the beginning of November. That would coincide nicely with good news from the Nov. 4 G-20 meeting about the financial crisis in the eurozone.

Peruse and analyze PBR's website and judge for yourself. If we're lucky, we may be able to buy it below $23.

Devon Energy (NYSE:DVN) is a company I've written about before. I liked DVN back then, and I like it even more at current prices. If the price over the next couple of weeks gets down near the Oct. 4 low of $50.74, back up the truck and get ready to see the stock soar before the end of 2011.

Freeport-McMoRan (NYSE:FCX) is one of those companies that knows how to turn a profit and has many ways to continue to make that happen, through mining copper, gold, silver and other important mineral resources. Just look at its key financial statistics and you'll see why its year-over-year quarterly earnings have doubled, and why FCX selling at only 6 times this year's earnings and 5 times next year's.

Check out the latest financial numbers and its web site -- that of the world's largest publicly traded copper company. Analyst Jim Cramer believes that copper is ready to roll again, and recommends buying FCX -- and he's not alone. It's not clear if the Oct. 4 low of $28.85 will be retested, but I'm going to buy more if it gets close to $31.50. Even at $35, its current dividend yield is 2.86%, and it should have the cash to continue or even increase the payout in the year ahead.

Copper prices were actually boosted by the sad strike at the Grasberg mine. Monday FCX announced that it has been forced to shut down all operations at its Grasberg mining operation due to strike action, emphasizing the risks of deteriorating labor relations in the mining industry. This could temporarily hold down the share price as analysts assess how the strike will impact earnings, so we may have a chance to buy the shares 10% below current levels, or lower. Once the strike issue is resolved, this stock has a lot of upside potential, and management has dealt successfully with this kind of challenge in the past.

Last but not least, I want to point out a company that traders love to buy low and sell high. This little gem of a company explores for silver, lead, zinc, and gold ores, mainly in the Yukon Territory of Canada. It also provides consulting and project management services in respect of environmental permitting and compliance, and site remediation and reclamation in Canada and the United States.

I'm referring to Alexco Resource Corp (NYSEMKT:AXU) -- take a look at the price action of this stock just over the past year:

Chart forAlexco Resource Corporation (<a href='' title='Alexco Resource Corporation'>AXU</a>)

Speculators have been buying it between $6 and $7 a share and selling it below $9 several times since January of this year. It's getting close to $7 again, and below $7 is a good opportunity to buy in or accumulate more.

One of these days this stock will take off, and the possible reason may involve a buyout, merger or takeover.

According to Casey Research's International Speculator, this is a stock that everyone who believes in the ongoing bull market in gold and silver will want to own. It recently wrote:

Here are the reasons why I [Louis James of Casey Research] consider this a must-own stock:

  • Alexco is a Yukon play – still one of the hottest area plays today.
  • Alexco is an emerging silver producer with substantial growth ahead: currently 2.2 – 2.5 million ounces, with a goal of reaching 5.0 million ounces within three years, and a hopeful target of 7.0 to 10.0 million ounces of production within five years. As we’ve said, the shift from greed to fear in the market is favoring production stories.
  • Alexco is an exceptionally high-grade play, one of the highest-grade silver mines in the world (Bellekeno’s Indicated resources average 926 g/t silver – almost a kilo per tonne), able to remain profitable at much lower silver prices than those prevailing today (cash costs last quarter were $6.30/oz).
  • Alexco has a strong balance sheet, with $50 million in cash and no long-term debt. Alexco reported $14 million in cash flow from operations in H111, and 6 cents EPS for FY11.
  • Alexco has a nice, tight share structure for a producer (60M SO vs. 64.6M FD), enabling more volatility to the upside on good news. Best of all, growth can be funded out of operating cash flow, so significant future dilution is unlikely. By the way, Clynt Nauman, the CEO, is the company’s largest shareholder, and he doesn’t want to get diluted down any more than we do. I like that.

Alexco is almost certainly going to be adding more high-grade resources to its 43-101-compliant tally. If you look at the Bellekeno Long Section on page 10 of the company presentation, you’ll see a drill intersection grading 79.6 opt (about 2.7 kilos per tonne) silver over 0.4 meters. Even diluted out over mineable width, that’s still an exceptionally high-grade hit – and it’s outside the current resource area. This strongly suggests high-grade resource growth within a producing mine.

And that’s not to mention the company’s profitable environmental remediation subsidiary, which just completed a successful project for Pan American Silver in Peru, and which the Canadian government is paying to clean up the Keno Hill district.

In fact, if Alexco does not reprocess the old tailings, which are just sitting in the valley below the old mines, the government will have to pay to clean them up, so it seems likely that Alexco could get paid some amount by the government and also recover the silver in those tailings.

These are just some of the reasons why at the very least we should all familiarize ourselves with this company through its own reports and news releases.

These are the kind of companies that will be considered cheap, undervalued and most likely going much higher in the next 3 months -- and they are the kind that traders can buy low and sell high, which has worked well during the current volatile bear market.

When the surprising "good news" announcements about the not-for-certain rescuing of the troubled European banking system hits the headlines, these companies will be on their way toward 100% price moves in the months ahead. When it comes to AXU, it wouldn't surprise me to see the stock price triple from here in less than 18 months. Do your own careful research to see if you agree.

If you want to be very conservative, wait until the risk of Europe's banks going broke passes and the big bailout announcements are made, then buy them. There still will be plenty of upside left. Or, take a small position as the latest spate of bad news drives stocks like these lower, and then see if you can buy more if the worst-case scenario plays out in the eurozone.

Incidentally, I sold at least half my holdings of all the stocks mentioned in this article by Friday, Oct.14 (except PBR), and have entered buy orders to repurchase them. If we get a meaningful retracement towards the Oct. 4 lows as I anticipate, I'm going to double down.

Pick your targets, pick your price, be patient and save some cash to buy super low if all hell breaks loose. And hold on to your hats and fasten your seat belts -- the volatility is set to continue for the time being. I'm wishing you good fortune and great results.

Disclosure: I am long PBR, FCX, AXU, DVN.