Lennar Corp. (NYSE: LEN) opened at $48.25. So far today the stock has hit a low of $46.64 and a high of $48.25. As of 12:30 this afternoon, LEN is trading at $46.32, down $1.93 (-4.0%).

After hitting a one year high of $62.38 in April, the swiftly retreated down below $40. LEN has been fairly flat for most of the last 10 months, with support around $45. LEN could test that support after another warning from New Century Financial Corp. NYSE: NEW) about its financial woes early this morning is sending home-builders down today. CEO Donald Tomnitz of competitor DR Horton (NYSE: DHI) summed up the housing situation quite eloquently last week when he said, "I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year." He went on to say that home-builders aren't going to get any pricing leverage until buyers pick up the houses that are already crowding the market this year, something that will hopefully happen by 2008. These sentiments are obviously not helping the stocks in this struggling industry. The technical indicators for LEN have been bearish and steady while S&P gives the stock a worrisome 2 STARS (out of 5) sell rating.

For a bearish hedged play on this stock, I would consider a May bull-put credit spread above the $55 range. LEN hasn't been above $55 since last April except for a few days in January and has shown resistance around $49. This trade could be risky if the home-builders somehow manage a quick turnaround, but all indications are that the "bottom" of the housing market we saw over the winter was merely false hope.

Brent Archer is an options analyst and writer at Investors Observer (Free Subscription). DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Were you watching CNBC after the market close today? If so, you may be cancelling your plans to sink all your home's equity into a big remodel. In an unusually frank and sober prediction, D.R. Horton, Inc. (NYSE:DHI) CEO Donald Tomnitz told the audience of millions of market watchers that "2007 is going to suck, all 12 months."

David Gaffen from the Wall Street Journal's MarketBeat blog was watching, and he wonders if it's not just a reaction to D.R. Horton's not-exactly-stellar stock performance. Though only down a penny today to $24.55, the stock is off 20% since its February 2, 2007 high near $31 -- a rough month, indeed.

The good news (sort of)? Tomnitz thinks 2008 will be better. Not good. Better than the suck-icious 2007, at least. Is this a case of let's-give- the-worst-case-projection-and-hope-no-one-blames-me-when-it- happens? Or is it really true? Either way, the homebuilder's stock isn't doing any better since his words; it's down over a percent in after-hours trading.

I, for one, won't bail out of the market but I think I'll wait to refinance... with this kind of talk, the only thing I see on the horizon is cheaper interest rates. And I'm certainly not going to hire Donald to run pep rallies anytime soon.