Macro Outlook

Slowest growth in 3 years: That “soft landing” is starting to look harder and harder. Kind of like dropping three stories to concrete sidewalk.

Suddenly folks are starting to look for a Christmas surprise from the Fed. Will they risk runaway inflation, and lower rates at the December meeting?

Or will they sit on the sidelines sulking for the rest of 2006?

More tonight…

Market Trends

Consumers don't seem to be buying up Christmas presents yet. Overall expectations for October retail sales are 3.4%, down substantially from the 4.3% a year ago.

Wal-Mart Stores Inc. (WMT:NYSE) reported a same-store sales increase of only 0.5%, much lower than the anticipated 2-4%. Even Target Corp. (TGT:NYSE) at 3.9% came in lower than the expected 4.2% increase.

According to CNN, of the 57 retailers reporting monthly sales today, 57% missed estimates and 35% beat estimates.

The Retail HOLDRs Trust (RTH:AMEX) was down substantially yesterday, and seems to want to continue its cyclical correction today, down to at least the 50-day Moving Average.

Material Profits

I've just returned from the Platts Cellulosic Ethanol conference held in Chicago. I'll have a brief report this evening.

Also, Material Profits and MP Wildcatter subscribers, I'll have updates for you today.

Trading Tactics

Although a lot of hoopla was made about the Dow breaking the 12,000 level, you sure didn't hear a thing when the Dow traded down and gave up the 12,000 marker, dipping to 11,997.25 just six minutes after the market opened.

If this weakness looks sustainable, we'll look to enter into a new round of puts. Stay tuned.

******************************************************************************************

Copyright 2006 by The Taipan Group,LLC. All rights are reserved. Printed in USA. Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies - let the buyer beware! WaveStrength Market Report does not provide individual investment advice, or act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company.

WaveStrength Market Report reserves the right to use email endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber's initials will be used unless express written permission has been granted to the contrary.

The Taipan Group, LLC.expressly forbids its writers from having a financial interest in any security that they recommend to their readers. Furthermore, all employees and agents of The Taipan Group, LLC and its affiliate companies must wait 24 hours before following an initial recommendation published on the Internet, or 72 hours after a printed publication is mailed.