This morning. Today, U.S. equity futures are modestly higher after fair value adjustment and are near their morning highs. In Asia, despite another weak monthly PMI report, Chinese equity markets rallied on hopes of greater PBOC stimulus. In Europe, indexes are modestly lower and improved from their worst mid-morning levels. President Obama is in Europe for consultations with European leaders on Crimean/Ukrainian and NATO related issues. The dollar is mixed. Commodities are mixed, with aluminum and copper showing particular weakness. Tuesday's Nikkei 225 June 2014 (NKM4) equity futures are quiet, up +0.139%.
Economic reporting focuses on February PMI reports. Commentary focuses on macro concerns as well, particularly the likely effect of leaders' statements during the session.
Friday, U.S. equity markets opened with strength, as the S&P 500 (SPX) traded to new intraday highs, but despite strong options expiration spurred volume, indexes weakened by mid-session and reversed lower into the afternoon, with distributions on both the SPX and Nasdaq on the day. The SPX, DJ Industrials (Private:DJI), Nasdaq, and NYSE composite closed down -0.29%, -0.17%, -0.98%, and -0.08%, respectively. The DJ Transports (TRAN) fell -0.36. On quadruple options expiration, NYSE volume rose +216.5% to 2.64x its 20-day moving average.
The SPX and Nasdaq remain higher on the year.
Wednesday, March 26th, Fed approval/disapproval of requested bank capital plans is expected. Only modest surprises are expected.
On March 13th, the U.S. equity market outlook worsened to "uptrend under pressure". Starting February 7th, the prior U.S. equity market outlook was "confirmed uptrend", following a brief, but sharp "in correction" episode that commenced on January 23rd. The S&P 500 Index (SPX) rose a net +3.87% subsequently. The 4Q2013 quarter's earnings reports are complete, with U.S. materials reports particularly strong, followed by financials. The 1Q2014 earnings reports began on March 15th.
Trading desks note rotation toward banks, which are among the year's market leaders on expectations that higher short-term rates will benefit their earnings. Overnight trading was strong in Asia, while Europe is down modestly as the president meets with his European counterparts. In Japan, focus is on the increased consumption tax that starts on April 1st. With regard to Friday's afternoon negative reversal, traders suggest that pre-weekend macro concerns, but also a Congressional product pricing inquiry to one biotech manufacturer helped to spur the afternoon's weakness. Traders expect continued resistance to higher equity prices.
Indexes remain near recent record levels and P/E multiples remain elevated. With SPX equities trading at a 16.9x 2013 earnings multiple, attention focuses on 2014 earnings and valuations (16.9x times survey $117.43 2014 SPX operating earnings suggests a 1989.90 SPX level next year, a +6.61% rise).
Technicals worsened slightly, as the Nasdaq surrendered its 5-, 10-, and 20-day moving averages, and the NYSE composite surrendered its 5-day moving average. All are above their respective 50-, 100-, and 200-day moving averages. Led by utilities, SPX market segments closed mixed. Despite the lower indexes, market breadth was modestly positive, and up volume led down volume. Volatility rose. Treasury bond markets strengthened. The U.S. Treasury 10-year bond yield fell -2.80 bps to 2.7426%, compared to 2.7716% at the prior close.
This morning, 10-year U.S. Treasury yields are up +2.40 bps at 2.7762%, compared to the prior close. Spanish and Italian 10-year debt yields are 3.37% and 3.43%, respectively, compared to 3.36% and 3.41% the prior day. The U.S. dollar is mixed.
U.S. options markets are unchanged at neutral to bullish, compared to neutral to bullish the prior day. The CBOE SKEW fell -0.90% to 132.82, compared to 134.02 the prior day, above a neutral range (115-120) and again above 130, a level that correlates well with short-term market tops.
In pre-market futures trading, June SPX equity futures (SPM4) price near the top of a 1856-1865 trading range. After a fair value adjustment of +1.84 points, the SPM4 future prices at 1861.70, up +1.79 points. The SPX opens +0.27%, +1.88%, +2.86%, and +7.07% above its respective 20-, 50-, 100-, and 200-day moving averages. Initial resistance is 1879.17. Initial support is 1858.66, then 1850.81.
In Asia, equity markets rallied despite a weak Chinese PMI report, apparently on hopes that the PBOC will respond with greater stimulus. Japanese equity markets reopened following Friday's holiday, with a NKY rally of 1.77%. The Hang Sang index (HSI) rose +1.91%. The SHCOMP rose +0.91%. Only the NKY is presently in a bear market, down -11.2% from its recent year-end high. Today's volumes are unavailable.
Economic news focused on disappointing HSBC preliminary March Chinese PMI, which showed a contraction in manufacturing. In China, short-term interbank lending rates remain volatile, with 7-day Shibo rates at 3.58%, compared to 3.60% the prior day, up from a 2.26% low on March 11th, but down from the February 7th 5.41% recent high.
Regional relative strength indexes (RSI) show Tokyo, Hong Kong, and Shanghai, in the middle of a neutral range. Friday, the NKY RSI rose to 44.70, compared to 38.75 the prior day, up from an oversold 27.92 on February 4th. Friday, the HSI RSI rebounded to 46.33, from 36.93 the prior day and from an oversold 29.85 the prior day. The SHCOMP's RSI closed at 54.62, compared to 51.03 the prior session. On June 27, 2013, the index's RSI fell to a low of 15.27, which was also last year's low index close.
Last week, the NKY closed down -0.72%, the HSI lost -0.48%, and the SHCOMP gained +2.16%. The prior week, the NKY, HSI, and SHCOMP closed down -6.20%, -4.95%, and -2.60%, respectively. In March, the NKY and HSI are down -2.46% and -4.34%, respectively, while the SHCOMP is up +0.49%. In February, the NKY closed down -0.49%, while the HSI and the SHCOMP gained +3.64% and +1.14%, respectively.
In 2014, the NKY, HSI, and SHCOMP are down -12.7%, -8.02%, and -3.23%, respectively. In 2013, the NKY rose +56.7%. The HSI closed up +2.87%. The SHCOMP closed down -6.75%.
In Japan, the NKY closed at 14,475.30, compared to 14,224.23 the prior day, -11.2% below its recent year-end 16,291.31 high and -62.8% below its late-1989 38,915.87 high close. The index opened above 14,300 and rallied to the 14,514.28 intraday high by late morning, then found resistance at 14,500 through the afternoon. The index closed -2.15%, -3.29%, -3.95%, and -0.20% below its respective 20-, 50-, 100-, and 200-day moving averages. Most market segments closed higher. Leaders were consumer services, technology, and industrials, which rose at least +1.97%. Laggards were financials and consumer goods, which rose at least +1.12%, and oil and gas, which fell -1.02%.
In China, the HSI closed at 21,846.45, compared to 21,436.70 at the prior close. The index opened at 21,650 and traded narrowly at that level through the morning session, then trended higher through the afternoon session to a late 21,866.97 intraday high. Most market segments closed higher. Leaders were telecommunications, oil and gas, and basic materials, which rose at least +2.40%. Financials rose +2.06%. Laggards were utilities, which rose +1.11%, and consumer goods and industrials, which fell at least -0.29%. The index closed -8.63% below its recent December 3rd 23,910.47 high, but +20.1% above its 18,185.59 June 4, 2012 low.
In Shanghai, the SHCOMP closed at 2,066.28, compared to 2,047.62 at the prior close, +5.96% above the 1,950.01 June 27th close, last year's low. The index traded narrowly higher through the morning session, and after a late morning 2,043.43 intraday low, the index rallied to a mid-afternoon 2,074.06 intraday high. Most market segments closed higher. Leaders were industrials, basic materials, and financials, up at least +1.08%. Laggards were oil and gas, which rose +0.25%, and health care and technology, which fell at least -0.14%.
In Europe, major equity indexes are moderately lower. Indexes moved lower to mid-morning intraday lows, and then improved modestly by mid-session. The Euro Stoxx50, FTSE 100 CAC 40, and DAX are down -0.55%, -0.29%, -0.57%, and -0.53%, respectively. The Spanish IBEX 35 is down -0.72%, and the Italian FTSE MIB is down -0.35%. Economic reporting focuses on preliminary February PMIs. Commentary focuses on the President Obama's consultations with European leaders, largely with a focus on the Ukraine and Russian sanctions strategy.
European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 49.09, compared to 51.76 at the prior close, in a neutral (30-70) range, but better than its recent February 5th 33.57 low, which coincided with its 2014 low. The indexes lowest recent RSI level was 25.77 on June 24th, which marked the 2013 2,494.54 closing low.
Today, the Euro Stoxx50 trades at 3,014.00, -2.99% below its 3,168.76 January 15th post-2008 high close, and -41.4% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,096.49 close, the index fell to a mid-morning 3,068.01 intraday low, but then subsequently improved to 3,083.16 by early afternoon. Most market segments are lower. Leaders are consumer services and industrials, which are up at least +0.06%, and telecommunications, which are down -0.01%. Laggards are financials, oil and gas, and basic materials, which are down -0.57%.
Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +3.06%, +0.45%, +2.82%, and +3.16%, respectively. The prior week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed down -2.93%, -2.75%, -3.44%, and -3.15%, respectively. In March, Euro Stoxx50, FTSE 100, CAC 40, and DAX are down -2.39%, -4.14%, -2.36%, and -4.24%, respectively. In February, the indexes closed at least +4.14% higher.
In 2014, the indexes are mostly lower. The CAC 40 is up +0.19%. The Euro Stoxx50, FTSE 100, and DAX are down -1.13%, -3.28%, and -2.83%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.
1Q2014 SPX Earnings. Of 11 (of 498) reporting companies, 5 or 45.5% surprised positively on earnings, with an average -2.16% surprise average. Of reporting companies, 3 or 27.3% reported sales or revenues above estimates. The average sales/revenue surprise is -0.41%. Consumer discretionary leads with respective +6.92% and +2.45% earnings and revenue surprises. Industrials lag with respective -13.4% and -1.08% revenues surprises.
Valuation. The SPX trades at 16.9x estimated 2013 earnings ($110.15), 15.9x estimated 2014 earnings ($117.43), 14.3x estimated 2015 earnings ($130.74), and 12.8x estimated 2016 earnings ($145.27). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2013, 2014, 2015, and 2016 earnings to grow +6.52%, +6.61%, +11.3%, and 11.1%, respectively.
The BKX trades at 14.1x 2013 adjusted EPS ($5.16), 13.2x estimated 2014 earnings ($5.55), 11.8x estimated 2015 earnings ($6.14), and 10.6x 2016 earnings ($6.89). Analysts expect 2013, 2014, 2015, 2016 EPS will grow +19.4%, +7.47%, +10.7%, and +12.3%, respectively.
Composite, index, and equity options. Options markets are unchanged at neutral to bullish, compared to neutral to bullish the prior session. Composite options are bullish, index options are neutral, and equity options are neutral. The composite put/call ratio is 0.89, compared to 0.75 the prior day, and worse than 5- and 10-period moving averages of 0.80 and 0.84, respectively. The index put/call ratio is 1.17 compared to 1.15 the prior day, and worse than its 5- and 10-period moving averages of 0.93 and 1.01, respectively. The equity put/call ratio closed the day at 0.83, compared to 0.63 the prior day, and worse than its 5- and 10-period moving averages of 0.81 and 0.86, respectively.
NYSE Volume, Breadth Indicators. On quadruple options expiration, volume rose +216.7%% to 2.003 billion, compared to 632.86 million shares the prior day, 2.64x the 758.79 million share 20-day moving average. Market breadth was modestly positive, and up volume modestly led down volume. Advancing stocks led by +511 (compared to -71 the prior day), or 1.40:1. Up volume was 1.10:1 down volume.
Distribution day count and market outlook. Since March 13, the market outlook is "uptrend under pressure". On February 7th, with the SPX at 1797.02, the market outlook improved to "confirmed uptrend" after a brief corrective episode that began on January 23rd. The subsequent distribution day count is 5 for the SPX and 8 for the Nasdaq. The SPX's subsequent rise is +3.87%. Today, the SPX opens -0.32% below its March 7th 1878.04 record closing high.
Libor, LOIS, Currencies, Treasuries, Commodities:
· USD LIBOR is 0.09050%, compared to 0.08850% the prior day. USD 3-month LIBOR is 0.23285%, down from 0.23360% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.
· The US Libor-OIS (LOIS) spread is 14.185 bps, compared to 14.448 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 12.500 bps, down from 12.800 bps the prior day, and down from the December 27, 2011, high of 98.800 bps. Moves in the LOIS indicate changes in intra-bank lending risk premiums.
· The 3-month Euro basis swap is -2.638 bps, compared to -2.453 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, but far better than a normal -10 bps and -40 bps range.
· German 10-year debt yields are 1.64%, compared to 1.63% the prior day. Japanese 10-year debt yields are 0.62%, compared to 0.60% the prior day. Spanish 10-year debt yields are 3.37%, compared to 3.36% the prior day. Italian 10-year debt yields are at 3.43%, compared to 3.41% the prior day.
· U.S. Treasury yields are slightly higher, with 2- and 10-year maturities yielding 0.453% and 2.772%, respectively, compared to 0.425% and 2.318% Friday. The yield curve widened to +0.20 bps, with the 2- to 10-year spread at +2.318%, compared to 2.318% the prior day. In the past year, the 2- and 10-year spread varied from a low of +1.429% on May 1, 2013, to a high of +2.648% on December 31, 2013.
· The U.S. dollar is mixed, stronger compared to the euro and Japanese yen, but weaker compared to the British pound. The dollar trades at US$80.244, compared to a US$80.290 intraday high and US$80.244 the prior day, and worse compared to its $80.364 50-day, US$80.477 100-day, and US$80.945 200-day averages. The euro trades at US$1.3775, compared to a US$1.3764 intraday low and US$1.3794 the prior day. The euro trades better compared to its US$1.3707 50-day and US$1.3660 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥102.42, compared to ¥102.25 the prior day. The yen trades better than its 50-day moving average ¥102.56, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.
· Citigroup Economic Surprise Index were unchanged at -32.60, compared to -32.60 the prior day, its 22nd consecutive negative reading. The index is better compared to its respective -33.86 5-day and -33.14 10-day moving averages. Last June 10th, the index fell to a then 52-week low of -33.26. The index improved and turned positive on July 30th and rose to 53.30 on October 1st, but subsequently fell on dollar weakness to -2.10 on October 31st. It subsequently strengthened to a +72.70 high on January 15th, but then subsequently trended lower and turned negative on February 19th and fell to a -34.80 52-week low on March 19th. After a lag, the CESIUSD correlates with EPS revisions.
· Commodities prices are mixed, with higher energy, lower precious metals, higher aluminum and copper, and mixed agriculture prices.
· The CBOE SPX Volatility Index (VIX) rose +3.31% to 15.00, compared to 14.52 at the prior close. The VIX is up +1.73% above below the 14.75 20-day moving average. Its 30-day high is 18.22. Its 30-day low is 13.44. The index's all-time closing low is 9.31 on December 22, 1993. The long-term average is 20.14.
· The Euro Stoxx 50 volatility index (V2X) is 18.84, down -1.36% compared to 18.86 at the prior day's close. The V2X index trades -1.36% below its 19.10 20-day moving average, -22.6% below the 24.35 30-day high, and +17.8% above the 15.99 30-day low.
· The Hang Seng volatility index (VHSI) closed at 17.22, down -1.32% compared to 17.45 at the prior close. The VHSI index trades -3.88% below its 17.92 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.
· CBOE SKEW (SKEW) fell -0.90%, compared to 134.02 the prior session, above a neutral (115-120) range for the first time since last September, and again above 130, a level that correlates well with short-term market tops. The recent record high was 143.20 on December 20th. Its recent low was 112.47 on May 25, 2013. Spikes in excess of 130 correlate well with short-term market tops, though not in October or November. The index rarely falls below 110, last on July 31, 2009. The index correlates with market tail risks, the cost of buying out-of-the-money, long-dated options, i.e., options not affected by expirations. A rise suggests that investors are buying more puts than calls, a bearish signal.
U.S. Economic Reporting and News:
- At 8:30, the February Chicago Fed national activity index was 0.14, compared to 0.10 survey and -0.39 revised prior.
- At 9:45, March preliminary Markit U.S. manufacturing, with 56.5 survey and 57.1 prior.
Overseas Economic Reporting and News:
- China - March preliminary HSBC China manufacturing PMI was 48.1, compared to 48.7 survey and 48.5 prior.
- Japan - February YoY supermarket sales rose +1.5%, compared to -0.2% prior.
- Eurozone - March preliminary Markit composite PMI was 53.2, compared to 53.2 survey and 53.3 prior.
- France - March preliminary Markit composite PMI was 51.6, compared to 47.9 prior.
- Germany - March preliminary Markit/BME composite PMI was 55.0, compared to 56.4 prior.
Friday's Trade. On options expirations spurred and above average NYSE volume, U.S. equity indexes ended lower, with distributions on the SPX and Nasdaq. Indexes initially rallied, but weakened through the afternoon on a combination of pre-weekend macro concerns and biotech weakness, the result of a Congressional inquiry into new product pricing. The SPX, DJI, Nasdaq, and NYSE composite lost -0.29%, -0.17%, -0.98%, and -0.08%, respectively. The SPX and Nasdaq indexes remain higher this year.
Since March 13th, the U.S. equity market outlook is "uptrend under pressure". On February 7th, the U.S. equity market outlook improved to "confirmed uptrend". The subsequent distribution count is 5 on the SPX and 8 on the Nasdaq. The SPX closed +3.87% above the February 7th 1797.02 close and -0.61% below the recent March 7, 2014 record close.
Market breadth was positive, with gainers 1.40x losing stocks. Most SPX market segments closed lower. Leaders were utilities, basic materials, and oil and gas, which rose at least +0.26%. Financials fell -0.05%. Laggards were technology, consumer services, and health care, which fell at least -0.47%.
On quadruple options expiration, NYSE volume rose +216.5% to 2.003 billion shares, compared to 632.86 million shares the prior day, 2.64x the758.79 million share 20-day moving average volume. On the day, bond markets strengthened. The U.S. 10-year yield opened at 2.7698%, rose to a mid-session 2.7825%, then reversed lower to a late 2.7389% intraday low. The index ended at 2.7426%, down -2.90 bps compared to the 2.7716% prior close.
From its prior day 1872.01 close, SPX futures suggested a moderately higher open. The index opened above 1875 and set an early 1883.97 and traded narrowly around 1880 until early afternoon, when weekend macro uncertainties and biotech weakness sent equities lower. The SPX set a late 1863.46 intraday low, then ended at 1866.40, -0.61% below its March 7th record close. The index closed +73.7% above the 1074.77 October 4, 2011, intraday low.
The DJ Transportation index (TRAN) fell -0.36%, compared to DJI's -0.17% loss. From its prior 7,542.29, the TRAN rose to its 7,588.57 mid-morning intraday high, then eased and reversed lower in early afternoon, with a mid-afternoon 7,507.35 intraday low. The index closed at 7,515.18, -1.02% below its recent 7,592.36 March 7 record close. Volume rose +363.8% to 2.98 million shares, compared to 8.777 million shares the prior session, and 2.98x the 15-day moving average volume. The TRAN closed +0.61% and +1.98% above its respective 20- and 50-day moving averages, and +3.34% and +9.34% above its respective 100- and 200-day moving averages.
Market volatility rose +3.31%, as the CBOE SPX volatility index (VIX) closed at 15.00, compared to 14.52 at the prior close. The VIX opened lower, set a mid-morning 13.77 intraday low, then rose and reversed higher by mid-afternoon as equity markets weakened. The index set a late 15.17 intraday high. The VIX's all-time closing low was 9.31, on December 22, 1993. Its lifetime average is 20.09.
The market's technical factors worsened slightly as the Nasdaq surrendered its 5-, 10-, and 20-day moving averages, and the NYESE surrendered its 5-day moving averages. All exchanges closed above their 50-, 100-, and 200-day moving averages. The NYSE composite also closed below its 20-day moving average. SPX relative strength (RSI) eased to 55.92, compared to 58.31 the prior day, in a neutral range, and much better than an oversold 31.24 on February 3rd. The RSI is also down from an overbought 71.26 on December 31st, when the SPX closed an earlier record high, but above earlier oversold levels of 35.14 on August 27th and 39.19 on October 9th. The CBOE put/call SKEW fell -0.90%, compared to 134.02 the prior session, above a neutral 115-120 range, and above 130 for a 2nd consecutive session, a level that correlates well with short-term market tops.
Last week, the SPX, DJI, Nasdaq, and NYSE composite closed up +1.38%, +1.48%, +0.74%, and +1.04%, respectively. The prior week, the SPX, DJI, Nasdaq, NYSE composite closed down -1.97%, -2.35%, -2.09%, and -2.16%, respectively. In March, the SPX is up +0.38%, while the DJI, Nasdaq, and NYSE composite are up +0.38%, -0.12%, and -0.32%, respectively. In February, the SPX, DJI, Nasdaq, and NYSE composite closed up +4.31%, +3.97%, +4.98%, and +4.60%, respectively.
In 2014, the SPX and Nasdaq are up +0.98% and +2.40%, respectively, while the DJI is down -1.65%, and the NYSE composite is down -0.08%. In 2013, the SPX, DJI, Nasdaq, and NYSE composite closed up +29.6%, +26.5%, +38.2%, +23.2%, respectively. All closed at least +5.91% higher in 2012.
KBW Bank Index (BKX). On higher, option expiration driven, and above average volume, the BKX closed at 72.70, down -0.29% from 72.91 at the prior day's close, its 5th consecutive close above 70.00, but -0.29% below its 72.91 March 20th post-2008 closing high. The index rallied to a late morning 73.90 intraday high, then eased back to breakeven by late afternoon and reversed lower in the final hour to a late 72.63 intraday low. Volume rose +1.22% to 143.80 million shares, compared to 64.661 million shares the prior day, and 2.22x the 55.857 million share 15-day moving average.
Large cap banks equaled the performance of the regional banks, as the KBW regional banking index (KRX) rose +1.95%.
Last week, the BKX rose +4.94%, compared to a loss of -2.89% loss the prior week. In March, the BKX is up +5.33%. In February, the BKX closed up +2.41%, compared to January, when the BKX closed down -1.07%. In 2014, the BKX is up +4.97%. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.
The BKX is now +22.8% better than the June 24th 59.19 close, its worst since May 13, 2013. The index crossed above 50 on December 17, 2012, 60 on May 15, 2013, and 70 on January 8, 2014, but then dropped back below 70 on January 24th, which persisted until March 6th. The BKX closed +123.3% above the 32.56 intraday low on October 4, 2011, the bottom of that year's correction. Large-cap bank stocks have outperformed the broader market's rebound, with the SPX up +73.7% in the same period.
The BKX index closed -40.0% below its February 20, 2007, record 121.06 high. The BKX is up +290.4% from its 18.62 March 6, 2009, closing low.
Technical indicators were little changed. The index closed +3.61%, +4.92%, +6.64%, and +10.4% above its respective 20-, 50-, 100-, and 200-day moving averages. The 20-day moving average rose +24 bps to 70.17. The 69.29 50-day moving average rose +4 bps. Its 100-day moving average rose +8 bps to 68.17, and the 200-day moving average rose +6 bps to 65.88. The 20-day closed (by +0.87 points) above the 50-day, and the gap widened +19 bps. The 50-day moving average closed (by +3.41 points) above the 200-day moving average, and the gap narrowed -2 bps. The 100-day moving average closed (by +2.29 points) above the 200-day moving average, and the gap widened +2 bps.
The directional movement indicator widened to +28.729, compared to +26.069 the prior day, its 15th consecutive positive reading. Relative strength eased to 67.55, compared to 69.36 the prior day, in the upper end of a neutral range, up from the recent 32.95 low on February 3rd, but down from an overbought 75.56 and 71.88 on January 9th and 10th, respectively. The recent low RSI level 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 73.52; next support is 72.25.