If so, you’ll want to get your eyes and ears around this piece of news from the series creator Bryan Bottarelli (a regular Taipan editor and options play tactician at our WaveStrength Group).

Bryan writes: “Did you see that homebuilding giant Toll Brothers again reduced its forecast for home sales for the fiscal year ending in October? Management also announced that new orders for the quarter fell to 1,572 from 2,209 – an ugly decline of nearly 29%, with the contract values declining 21% to US$1.14 billion.

“Surprised? You shouldn’t be. Not if you’ve followed our prognosis for the US housing market, because we’ve been playing the downside of the US housing market for the last six months.

“And Toll’s bad news about declining business (insiders, by the way, started selling large chunks of shares in the second half of 2005) means it’s good news if you followed Taipan’s advice into a handsomely profitable hedge position.

“However, I need to give you some key information here…

“On February 1, the Philadelphia Housing Index (HGX) split 2 for 1. This often creates a lot of confusion, especially for options holders, so allow me to explain the situation…

“The original recommendation was to purchase the HGX March 540 Puts (HGX OH) on October 3 for US$34.40 as a downside defense against negative pressure on the US housing market. On October 11, we told you to sell half of this position for US$63.60 and lock in an 85% gain. As for the remaining half, the advice was to hold out for more gains.

“However, with the HGX stock split, your March 540 Puts, those have now changed to the March 270 Puts. The symbol is HGX ON. It also means instead of holding one HGX March 540 put contract, you now hold two March 270 put contracts. If you originally bought four contracts, you how own eight, etc.

“Right now, these new March 270 puts trade between US$15.50 and US$16.80. On the surface, it would appear that you’re showing a big loss. But don’t panic – that’s not the case.

“Remember, you now have twice the number you originally bought. That makes the total value of your puts US$34.40, which is your exact entry price from October.

“Look to sell your remaining half at or above US$20.00, good for the month of February. If these puts do not trade above US$20.00 by the end of the month, we’ll re-evaluate at that time.”

My thanks to Bryan for that important update. Hope that clears up any questions you may have.

* * * * * * * * * *

Google-Sized Gains at the Click of a Mouse!

If you missed the boat on the Google’s incredible US$350 run, don’t worry – there’s a “tag-along” stock within the search engine’s multibillion niche with just the same potential.

Potential that could net savvy investors 395% gains in less than six months!

This information is hot off the press, so you must act now.

Check out the full report here:

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* * * * * * * * * *

JOBS, INFLATION AND BAD NEWS BEARS

With the dust having now settled on the January job report, let’s talk a little bit about the inflation implications.

On the surface, the fact that the US economy generated 193,000 new jobs in January, with the unemployment rate declining 0.2% to a five-year low of 4.7%, looks like good news. But it isn’t. And I’ll tell you why.

With the jobless rate falling to a level where inflation might pick up, the numbers didn't produce much by way of cheer. Instead they sparked concerns over more interest rate hikes in the near future. When the Federal Reserve met for the last time under Alan Greenspan, it left the possibility open that it could raise rates further. January’s job numbers could make that more likely when the Fed reconvenes under Ben Bernanke.

But the notion that there’s a point where the unemployment rate becomes inflationary is misleading. Given what we know about the Fed’s philosophy these days, it’s not going to raise interest rates simply because the unemployment rate is below 5%. Anyone who thinks the stuffy old bankers will make knee-jerk decisions based on one month of job data needs his head examined.

In any event, it’s the surprising drop in US productivity that is more frown-inducing than the job numbers. Should it continue to fall, that could signal a larger problem.

Despite this, though, don’t be fooled by the mainstream financial media’s gloomy approach. Many headlines today would seem to suggest that the American economy is faring badly – particularly in light of that job report and the poor fourth-quarter GDP number (1.1%).

But take a look at corporate earnings. In the midst of another reporting season, the Financial Times expects fourth-quarter earnings per share on the S&P 500 to grow 13.4% on average. If this prediction is anywhere near accurate, it will mark ten consecutive quarters that the market has recorded double-digit earnings growth. Such a trend hasn’t occurred since the middle of the 1990’s, and only once before that, in the mid 1970’s.

FANCY SOMETHING FOREIGN

Americans seem to be ignoring their low savings rate and piling money into foreign assets with as much gusto as ever.

Whereas US stock funds enjoyed US$9.2 billion worth of inflows in November, the figure slumped to US$2.2 billion in December. Foreign funds reaped the benefit, hauling in US$11.8 billion in November and US$12.3 billion in December.

For all of 2005, foreign stock funds scooped up US$104.6 billion in capital - a 57% surge from 2004. By contrast, US stock funds endured a 72% slump in inflows last year.

And speaking of foreign investment assets, that’s Brit Ryle’s bag, baby! The man who beat Warren Buffett to investing in China by a full year is now set to do it again!

Brit has his finger well and truly on China’s pulse and informs me that while most folks haven’t realized it yet, preferring instead to focus on China’s headline GDP growth numbers, the economic tide is turning.

For you, it’s great to have a guy like Brit on your side, because while everyone else sits around waiting for it to happen, Brit has identified the companies you need to make 748% as the secret Chinese economic meltdown begins!

To access his FREE report, please click this link:

http://www.isecureonline.com/reports/TPT/ETPTG208/

Well, that’s all for this week. Enjoy the weekend and take care if you’re in the path of the big snowstorm headed for the mid-Atlantic and Northeast.

Martin Denholm

Executive Editor, Taipan

MMM

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