Prior to the disappointing data released last week, the British Pound suffered when Britain’s credit rating was downgraded by Moody’s last February. Another main concern is the expected quantitative easing from the Bank of England in response to their .3% drop in GDP in the final quarter of 2012. It is no longer a question of whether the Bank of England will ease its monetary policies, but how much. Unfortunately, Britain’s economic forecast is looking nearly as bad as the euro-zone.

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Edmund Gray
KOTM Contributor
edmund.gray@gmail.com

Paper bought 6760 NYX June 32 Puts for $.20 (12.8 time usual volume) when stock was trading $38.14
Paper bought 1100 USNA April 35 Puts for $.55 (3.2 times usual volume) when stock was trading $46
Paper bought 1000 NTES April 52.5 for $2.25 (2.6 times usual volume) when stock was trading $52.32
Paper bought 1030 ASML April 72.5 Puts for $3.20 (3.1 times usual volume) when stock was trading $71.55
Paper bought 200 MDC Sep 19 Puts for $.85 (2.2 times usual volume) when stock was trading $38.60

Paper bought 3000 BRE July 60 Calls for $.15 (3.7 times usual volume) when stock was trading $49.70
Paper bought 14,435 FSL March 16 Calls for $.05 (8.9 times usual volume) when stock was trading $15.72
Paper bought 5304 CIE April 27.5 Calls for $.98 (2.2 times usual volume) when stock was trading $26.70
Paper bought 400 CRR April 100 for $2.70 (3.1 times usual volume) when $2.50
Paper bought 600 AVNR March 3 Calls for $.05 (5.8 times usual volume) when stock was trading $3.06

Paper sold 24,910 $SKS April 12 Calls for $.25 (17.6 times usual volume) when stock was trading $11.78
Paper sold 8000 REN April 7.5-10 Call Spread for $2.35 (14.4 times usual volume) when stock was trading $11.46
Paper bought 4999 WPZ April-March 55 Put Spread for $.90 (5.5 times usual volume) when stock was trading $49.13
Paper sold 5000 PGNX May 4 Puts for $.35 (370 times usual volume) when stock was trading $4.16
Paper sold 9948 DNDN Aug 5 Puts for $.71 when stock was trading $5.43

Under Armour has made many inroads into different sectors of the retailing market. As mentioned before, these include the shoe, casual, and female market for example. A risk to these efforts is if these investments don’t pay off, or the consumer rejects their products. It is interesting to note too that the stock has over 17% short interest. This may indicate that some of Wall Street believes UA is overvalued and does not present great prospects as it once did before from a risk reward prospective.

The front month options imply a $4.4 range up or down by expiration in just over 30 days. This is about an 8% move up or down.

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salerno.mark.a@gmail.com

Well all of the banks rallied when the news came out of a successful stress test. But what is more important is what is the larger picture of these banks as a whole. When going through all of the banks hourly charts, 16 of 19 are currently in an uptrend. The three that are not are, FITB, STI and COF. Only three, this tells you that financials have been strong for quite some time and that we may be nearing a point of a reversal. News does not move the markets it only triggers certain rallies and reversals. I am seeing red flags on this move, and in the banks, let me explain by showing you the financial sector as a whole.

XLF is an ETF for the financial sector and is showing some extreme extensions on the daily chart. When you have five waves up, it means you can start to look for topping signs and a strong reversal because that rally is most likely over. Going back to the beginning of October I can see a clean five wave structure laid out. The price has hit the typical fib targets that you would want to see in a standard impulsive wave, and is now approaching the 200.0 fib, which is mostly likely the end of the 5^th wave. That 200.0 fib lies just up above at $18.74. All of this is bearish for the banks as a whole. Sure, there may be a couple bank charts that holdup, but I would be bearish on the sectors as a whole right now. It seems as though the ‘stress test’ is lining up to just be a false breakout, only to find price reversing quite significantly.

Author: Peter Nitso

Twitter: @PeterNitso

pnitso@yahoo.com