Baleco (Balancing the economy) is an addon that searches out low priced goods on the auction house and determines what can be bought for a profit. It isn't simply about flipping auctions, Baleco identifies what professions you have and looks at a number of factors to determine if the materials to create it are cheap enough to sell the item, or the enchanting by-products, on the auction house.
A simple, and popular item, example is selling bags. Cloth is a highly variable market and the bag prices reflect that; however, the two are not always in balance and large profits can be had at opportune times. To make an embersilk bag, the tailor will need 15 x Hyptonic Dust and 15 x Bolt of Embersilk Cloth. Assume there were 450 x Embersilk Cloth on the AH for 5g each and 90 x Hyptonic Dust for 15g each. That is enough material to make 6 bags total. Your total purchase would be 3600g for 6 bags thus you would need to be able to sell the bags for more than 600g to make a profit. If the bags are all listed below 600g, this pattern will be ignored and the next one will be analyzed; at the end of the scan, a printout of profitable options will be displayed and saved.