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

Paper bought 10,000 FSL March 16 Calls for $.05 (8.5 times usual volume) when stock was trading $15.67
Paper bought 500 PMCS Aug 8 Calls for $.25 (31.7 times usual volume) when stock was trading $6.81
Paper bought 14,000 RAD April 2 Calls for $.15 (34 times usual volume) when stock was trading $1.81
Paper sold 18,435 ETFC Jan 2015 10-17 Call Spread for $1.93 when stock was trading $11.01
Paper bought 4721 RWT Oct 25 Calls for $.95 (11.9 times usual volume) when stock was trading $23.37

Paper sold 2500 CERS Aug 5 Puts for $1 (59.2 times usual volume) when stock was trading $4.30
Paper bought 7000 STX April 39 Calls for $.59 when stock was trading $35.44
Paper sold 18,435 ETFC Jan 2015 10-17 Call Spread for $1.93 when stock was trading $11.01
Paper bought 2000 ERIC July 13 Calls for $.875 (3.7 times usual volume) when stock was trading $13.20
Paper sold 7250 AUY July 15-17 Call Spread for $.44 (3.9 times usual volume) when stock was trading $.44

Homes in backlog at December 31, 2012 increased 62% from the prior year, with significant increases in most regions due to increases in net sales orders as compared with the same period of the prior year. A further breakdown of this number shows that the Western region of the USA is home to the largest average closing price, $319,300, up 4% YoY (year over year). In addition to positive price trends, this region is also home to the largest number of closings. Full year YoY closing in the region were up over 60% for DHI, according to their last quarterly release.

From a macroeconomic prospective, YoY, housing permits are up 29% for one-unit structures. In the category of housing starts, the same figure is up 20%. It is important to define these data points too. Permits are privately owned building authorizations, while starts are the number of residential construction projects that have begun. These are also the type of homes that DHI tends to construct.

DHI shares are a near a 52 week high and the analyst community is enjoying the move for the most part. 9 of the 22 analysts that cover the stock have a buy on it, 11 holds, and 1 sell. The 36 day options imply about a 8% up or down range by expiration at a one sigma confidence level

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salerno.mark.a@gmail.com