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U.S. Futures Flag Ahead Of Tomorrow's Employment Report; Asia Mixed After Chinese "Stimulus" Fails To Impress; Europe Gains Following Dovish Draghi News Conference

This morning. Today, U.S. equity futures are modestly lower after fair value adjustment. In Asia, equity markets closed higher, with better strength in Japan. In Europe, indexes are modestly higher, with the Euro Stoxx 50 (SX5E) above its April 1st post-2008 high. The dollar is mixed. Commodities are mostly higher. Thursday's Nikkei 225 June 2014 (NKM4) equity futures are up +0.200%.

U.S. economic reporting focuses on February U.S. trade balance (larger than expected), and the latest weeks' initial and continuing jobless claims (slight disappointment). In Europe, the ECB maintained interest rates. In his news conference, ECB president Draghi suggested that monetary ease will continue and "unconventional measure" and quantitative easing may well continue. European equity indexes are modestly higher, but at session lows. Other commentary focuses on interest rate, currency, and commodity price developments.

Tuesday, after a brief "in correction" that began on March 26th, the U.S. equity market outlook resumed its "confirmed uptrend" on April 1st. Yesterday, both the SPX and NYSE composite closed at 2nd consecutive records, as did the DJ Transports (TRAN), though the DJ Industrials (Private:DJI) failed to confirm with a record close of its own. The DJI closed -0.02% below its December 31st record.

U.S. equity markets opened modestly lower, then rallied to mid-morning highs, eased in mid-afternoon, and rallied again in the final two hours to end near intraday highs. The SPX, DJI, Nasdaq, and NYSE composite closed up +0.29%, +0.24%, +0.20%, and +0.31%, respectively. The TRAN rose +0.66%. NYSE volume fell -9.74% to 0.88x its 20-day moving average. The SPX, Nasdaq, and NYSE composite are higher on the year.

Other indexes such as the Russell 2000 (RTY) improved, and the Nasdaq Internet (QNET) and the Nasdaq Biotech (NBI) were mixed, with the NBI in correction.

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, though only 18 of 500 SPX companies have now reported.

Trading desks reported "underwhelmment" following announcement of China's stimulus package, which amounted to minor tweaks. In Europe, focus is on Draghi's news conference, with the usual accompanying volatility. Regarding yesterday's session, traders described a quiet and boring session, though above the recent 1840-1880 SPX trading range. Traders kept a close eye on groups that recently struggled (QNET and NBI). Whispers for tomorrow's March employment report have crept higher. Emerging markets had a good day, with Brazil particularly strong.

Price earnings multiples are elevated. With SPX equities trading at a 17.2x 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.2x times survey $117.27 2014 SPX operating earnings suggests a 2,013.18 SPX level next year, a +6.47% rise).

Technicals were little changed. All major indexes closed above their respective 5-, 10-, 20-, 50-, 100-, and 200-day moving averages. Most SPX market segments closed higher. Market breadth was modestly positive, and up volume led down volume. Volatility fell. Treasury bond markets weakened. The U.S. Treasury 10-year bond yield rose +5.20 bps to 2.8045%, compared to 2.7525% at the prior close.

This morning, 10-year U.S. Treasury yields are down -0.91 bps at 2.7954%, compared to the prior close. Spanish and Italian 10-year debt yields are near their lowest levels since 2005, at 3.29% and 3.32%, respectively, compared to 3.27% and 3.31% the prior day. The U.S. dollar is modestly stronger compared to the euro and Japanese yen.

U.S. options markets improved to neutral to bullish, compared to bearish to neutral the prior day. The CBOE SKEW fell -0.61% to 127.30, compared to 128.08 the prior day, above a neutral range (115-120), but below 130, a level that correlates well with short-term market tops.

In pre-market futures trading, June SPX equity futures (SPM4) price near the bottom of a narrow 1881-1886 trading range. After a fair value adjustment of +0.65 points, the SPM4 future prices at 1883.50, down -0.40 points. The SPX opens +1.34%, +2.96%, +3.74%, and +7.88% above its respective 20-, 50-, 100-, and 200-day moving averages. Initial resistance is 1889.59. Initial support is 1877.71, then 1869.89.

In Asia, equity markets closed mixed, with better strength again in Japan. Economic reporting focused on U.S. economic reports and regional PMIs, but commentary focused on the China "stimulus" reveal. On the day, the Nikkei 225 (NYSEARCA:NKY) rose +0.84%, the Hang Sang index (HSI) rose +0.18%, and the Shanghai SE composite (SHCOMP) index fell -0.74%. Today's volumes are unavailable.

This week, the NKY, HSI, and SHCOMP are up +2.56%, +2.26%, and +0.10%, respectively. Last week, the NKY and HSI closed up +3.32% and +2.93%, respectively, while the SHCOMP closed off -0.29%. In April, the NKY, HSI, and SHCOMP are up +1.65%, +1.87%, and +0.51%, respectively, compared to March, when the NKY, HSI, and SHCOMP lost -0.09%, -3.00%, and -1.12%, respectively.

In 2014, the NKY, HSI, and SHCOMP are down -7.49%, -3.18%, and -3.42%, respectively. In 2013, the NKY rose +56.7%. The HSI closed up +2.87%. The SHCOMP closed down -6.75%.

In China, short-term interbank lending rates are steady, with 7-day Shibo rate at 4.11%, down from 4.21% 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 neutral ranges. The NKY RSI rose to 58.53, compared to 55.83 the prior day, up from an oversold 27.92 on February 4th. The HSI RSI rose to 6.53, compared to 59.82 the prior day. The SHCOMP's RSI fell to 49.21, compared to 53.19 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.

In Japan, the NKY closed at 15,071.88, compared to 14,946.32 the prior day, -7.49% below its recent year-end 16,291.31 high and -61.3% below its late-1989 38,915.87 high close. The index gapped higher to open at 15,000, then rallied to an early afternoon 15,164.39 intraday high. The NKY weakened through the final two hours. The index closed +2.44%, +1.92%, and +3.55% above its respective 20-, 50-, and 200-day moving averages, but -0.13% below its 100-day moving averages. All market segments closed at least +0.06% higher. Leaders were consumer services, telecommunication, and oil and gas, which rose +1.09%. Financials rose +0.95%. Laggards were basic materials, technology, and utilities.

In China, the HSI closed at 22,565.08, compared to 22,523.94 at the prior close. The index gapped higher to open above 22,650, set an early 22,523.94 intraday high, then eased through the session, with a mid-afternoon 22,531.24 intraday low. Most market segments closed higher. Leaders were basic materials, utilities, and consumer goods, which rose at least +0.69%. Laggards were financials and industrials, which rose at least +0.27%, and technology, which fell -2.28%. The index closed -5.63% below its recent December 3rd 23,910.47 high, but +24.1% above its 18,185.59 June 4, 2012 low.

In Shanghai, the SHCOMP closed at 2,043.70, compared to 2,058.99 at the prior close, +4.80% above the 1,950.01 June 27th close, last year's low. The index traded narrowly around 2,054 through the session, with a 2,046.74 mid-morning intraday low and 2,060.57 late morning intraday high. Most market segments closed lower. Leaders were technology, which rose +0.12%, and telecommunications and oil and gas, which fell at least -0.17%. Laggards were basic materials, industrials, and financials, which fell at least -0.90%.

In Europe, major equity indexes are modestly mixed. The Euro Stoxx50 opened at a post-2008 intraday high. The CAC 40 also opened at record high. The Euro Stoxx50, CAC 40, and DAX are up +0.26%, +0.07%, and +0.02%, respectively, while the FTSE 100 fell -0.03%. The Spanish IBEX 35 is up +0.86%, and the Italian FTSE MIB is up +0.72%. Economic reporting focuses on March PMIs. Commentary focuses on the latest ECB actions, and ECB president Draghi's post-decision news conference, which was accompanied by the usual volatility.

European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 64.55, compared to 63.15 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 3,199.71, +0.35% above its 3,187.45 April 2nd post-2008 high close, and -39.2% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day close, the index traded near 3,195 through the morning session, and briefly reversed lower during the Draghi news conference. The index rallied and set a mid-afternoon 3,205.48 intraday high before easing back below 3,200. Most market segments are higher. Leaders are consumer services, financials, and health care, which are up at least +0.49%. Laggards are consumer goods and utilities, which are up at least +0.02%, and technology, which is down at least -0.05%.

This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.65%, +0.69%, +0.40%, and +0.35%, respectively. Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +2.45%, +0.89%, +1.75%, and +2.61%, respectively. In April, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.99%, +0.95%, +0.85%, and +0.68%, respectively. In March, Euro Stoxx50 closed up +0.39%, while the FTSE 100, CAC 40, and DAX closed down -3.10%, -0.38%, and -1.40%, respectively.

In 2014, the indexes are mixed. The Euro Stoxx50, CAC 40, and DAX are up +2.70%, +3.10%, and +0.71%, respectively. The FTSE 100 is down -1.31%. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

1Q2014 SPX Earnings. Of 18 (of 500) reporting companies, 10 or 55.6% surprised positively on earnings, with an average -0.29% surprise average. Of reporting companies, 9 or 50.0% reported sales or revenues above estimates. The average sales/revenue surprise is -0.26%. Consumer discretionary leads with respective +15.9% and +1.98% earnings and revenue surprises. Industrials lag with respective -13.4% and -1.08% revenues surprises.

Valuation. The SPX trades at 17.2x estimated 2013 earnings ($110.15), 16.1x estimated 2014 earnings ($117.27), 14.5x estimated 2015 earnings ($130.62), and 13.0x estimated 2016 earnings ($145.02). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2013, 2014, 2015, and 2016 earnings to grow +6.52%, +6.47%, +11.4%, and 11.0%, respectively.

The BKX trades at 14.1x 2013 adjusted EPS ($5.16), 13.2x estimated 2014 earnings ($5.51), 11.9x estimated 2015 earnings ($6.11), and 10.6x 2016 earnings ($6.86). Analysts expect 2013, 2014, 2015, 2016 EPS will grow +19.4%, +6.71%, +11.0%, and +12.3%, respectively.

Composite, index, and equity options. Options markets improved to neutral to bullish, compared to bearish to neutral the prior session. Composite options are bullish, index options are bullish, and equity options are neutral. The composite put/call ratio is 0.65, compared to 1.00 the prior day, and better than 5- and 10-period moving averages of 0.88 and 0.88, respectively. The index put/call ratio is 0.62 compared to 1.61 the prior day, and better than its 5- and 10-period moving averages of 1.07 and 1.11, respectively. The equity put/call ratio closed the day at 0.68, compared to 0.73 the prior day, and better than its 5- and 10-period moving averages of 0.81 and 0.81, respectively.

NYSE Volume, Breadth Indicators. Volume fell -9.74% to 653.10 million shares, compared to 723.56 million shares the prior day, 0.88x the 745.97 million share 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +447 (compared to +1,347 the prior day), or 1.35:1. Up volume was 2.18:1 down volume.

Market Outlook and Distribution Day Count. After a brief "in correction" that began on March 26th, the U.S. equity market outlook resumed its "confirmed uptrend" on April 1st, when the SPX closed at a record high 1885.52 on higher volume.

Libor, LOIS, Currencies, Treasuries, Commodities:

· USD LIBOR is 0.08810%, compared to 0.08740% the prior day. USD 3-month LIBOR is 0.23035%, up from 0.23010% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

· The US Libor-OIS (LOIS) spread is 14.835 bps, compared to 14.760 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 14.600 bps, down from 13.700 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 -2.821 bps, compared to 3.498 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 1.62%, compared to 1.62% the prior day. Japanese 10-year debt yields are 0.65%, compared to 0.63% the prior day.

· Spanish and Italian 10-year debt yields are near their best levels since 2005. Spanish 10-year debt yields are 3.29%, compared to 3.27% the prior day. Italian 10-year debt yields are at 3.32%, compared to 3.31% the prior day.

· U.S. Treasury yields are slightly lower, with 2- and 10-year maturities yielding 0.446% and 2.794%, respectively, compared to 0.454% and 2.805% Wednesday. The yield curve narrowed -0.320 bps, with the 2- to 10-year spread at +2.347%, compared to 2.351% 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 stronger compared to the euro, Japanese yen, and British pound. The dollar trades at US$80.294, compared to a US$80.327 intraday high and US$80.215 the prior day, and mixed compared to its $80.222 50-day, US$80.408 100-day, and US$80.862 200-day averages. The euro trades at US$1.3759, compared to a US$1.3750 intraday low and US$1.3767 the prior day. The euro trades better compared to its US$1.3736 50-day and US$1.3687 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥103.93, compared to ¥103.88 the prior day. The yen trades worse than its 50-day moving average ¥102.36, but better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

· Citigroup Economic Surprise Index improved to -32.80, compared to -34.1 the prior day, continuing its string of consecutive negative readings since February 18th. The index is worse compared to its respective -31.70 5-day and -32.40 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 lower energy, lower precious metals, higher aluminum and copper, and higher agriculture prices.

Volatility, Skew:

· The CBOE SPX Volatility Index (VIX) fell -0.08% to 13.09, compared to 13.10 at the prior close. The VIX is -10.9% below the 14.69 20-day moving average. Its 30-day high is 18.22. Its 30-day low is 12.92. 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 16.97, down -0.80% compared to 17.11 at the prior day's close. The V2X index trades -11.0% below its 19.08 20-day moving average, -30.3% below the 24.35 30-day high, and +6.14% above the 15.99 30-day low.

· The Hang Seng volatility index (VHSI) closed at 14.75, down -3.41% compared to 15.27 at the prior close. The VHSI index trades -14.9% below its 17.33 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

· CBOE SKEW (SKEW) fell -0.61% to 127.30, compared to 128.08 the prior session, above a neutral reading (115-120), but below 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:
 

  • March Challenger YoY job cuts fell -30.2%, compared to -24.4% prior.
  • April RBC consumer outlook was 50.0, compared to 51.8 prior.
  • February trade balance fell to -$42.3 billion, compared to -38.5 billion survey and -39.3 billion revised prior.
  • The latest weeks' initial and continuing jobless claims were 326K and 2836K, compared to 319K and 2843K survey and 310K and 2814K revised prior.
  • At 9:45, March final Markit U.S. services PMI, with 55.5 survey and 55.5 prior. Markit U.S. composite PMI, with 55.8 prior.
  • At 10:00, March ISM non-manufacturing composite, with 53.5 survey and 51.6 prior.


Overseas Economic Reporting and News:
 

  • Australia - March AiG performance of services index was 48.9, compared to 55.2 prior. February MoM retail sales rose +0.2%, compared to +0.3% survey and +1.2% prior.
  • China - March non-manufacturing PMI was 54.5, compared to 55.0 prior. HSBC Chines services PMI was 51.9, compared to 51.0 prior. HSBC composite PMI was 49.3, compared to 49.8 prior.
  • Hong Kong - HSBC PMI was 4.9, compared to 53.3 prior.
  • Japan - March Markit services PMI was 52.2, compared to 49.3 prior. Markit/JMMA composite PMI was 52.8, compared to 52.0 prior.
  • Eurozone - March composite PMI was 54.1, compared to 54.5 prior. February MoM retail sales rose +0.4%, compared to -0.5% survey and +1.0% revised prior.
  • ECB - April base 0.25% interest rate and marginal lending facility rate unchanged at +0.25% and +0.75%, respectively.
  • Germany - March final Markit/BME composite PMI was54.3, compared to 55.0 survey and prior.
  • Italy - March Markit/ADACI composite PMI was 51.1, compared to 53.4 prior; services PMI was 49.5, compared to 52.3 survey and 52.9 prior.
  • Spain - March Markit services PMI was 54.0, compared to 53.3 survey and 53.7 prior. Composite PMI was 54.2, compared to 53.7 survey and 53.8 prior.
  • United Kingdom - March Markit/CIPS composite PMI was 57.6, compared to 58.1 survey and 58.2 prior. Services PMI was 57.6, compared to 58.2 survey and 58.2 prior.


Company Ratings/News:
 

  • None.


Wednesday's Trade. On lower and below average NYSE volume, U.S. equity indexes managed modest gains, with 2nd consecutive record closes on the SPX and NYSE composite. Indexes opened modestly lower, then rallied in early trading, eased in early afternoon, then rallied again into the close to end near session highs. The SPX, DJI, Nasdaq, and NYSE composite gained +0.29%, +0.24%, +0.20%, and +0.31%, respectively. The SPX, Nasdaq, and NYSE composite are higher this year, while the DJI is -0.02% lower.

The session's rally was narrow. The Russell 2000 (RTY) rose +0.35% and is -1.31% below its March 4th record close. The Nasdaq Internet Index (QNET) fell -0.39%, -9.49% below its March 6th closing high. The Nasdaq Biotech Index rose +0.13%, in correction and down -11.5% from its recent February 25th record high.

After a brief "in correction" that began on March 26th, the U.S. equity market outlook resumed its "confirmed uptrend" on April 1st, when the SPX closed at a record high 1885.52 on higher volume.

Market breadth was positive, with gainers 1.35x losing stocks. Most SPX market segments closed higher. Leaders were basic materials, industrials, and consumer services, which rose at least +0.56%. Laggards were financials, which rose +0.11%, and technology and utilities, which fell at least -0.05%.

NYSE volume fell -9.74% to 653.10 million shares, compared to 723.56 million shares the prior day, 0.88x the 745.97 million share 20-day moving average volume. On the day, bond markets weakened. The U.S. 10-year yield opened at 2.7562%, and moved narrowly through early afternoon, when it rose quickly to 2.80%, with a late session 2.8081% intraday high. The yield closed at 2.8045%, up +5.20 bps compared to the 2.8045% prior close.

From its prior day 1885.52 SPX close, June 2014 SPX futures (SPM4) suggested a modestly lower open. The SPX index fell to an early 1883.79 intraday low, then rallied to 1890, which proved resistance through early afternoon. The index fell back to breakeven by mid-afternoon, but then rallied through the final hour to a late 18983.17 intraday high. The SPX ended at 1890.90, +0.29% above its April 1st record close. The index closed +75.9% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

The DJ Transportation index (TRAN) rose +0.66%, compared to DJI's +0.24% gain, and closed at its 2nd consecutive record high, though again without DJI confirmation. From its prior 7,645.11 close, the TRAN rallied to a mid-morning 7,714.77 intraday high, then traded narrowly higher through the close. The index closed at 7,695.51, +0.66% above its prior 7,645.11 April 1st record close. Volume fell -0.57% to 11.464 million shares, compared to 11.889 million shares the prior session, and 0.96x the 15-day moving average volume. The TRAN closed +2.04% and +4.22% above its respective 20- and 50-day moving averages, and +5.26% and +11.2% above its respective 100- and 200-day moving averages.

Market volatility fell -0.08%, as the CBOE SPX volatility index (VIX) closed at 13.09, compared to 13.10 at the prior close. The VIX opened traded narrowly around 13.10 through the session, with an early 13.35 intraday high and late 12.92 intraday low. The VIX's all-time closing low was 9.31, on December 22, 1993. Its record high was 89.53 in December 2008. Its lifetime average is 20.01.

The market's technical factors were little changed. All indexes closed above their 5-, 10-, 20-, 50-, 100-, and 200-day moving averages. SPX relative strength (RSI) improved to 62.79, compared to 61.22 the prior day, in a neutral range, and 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 -.61% to 127.30, compared to 128.08 the prior session, above a neutral 115-120 range, but below 130, a level that correlates well with short-term market tops.

This week, the SPX, DJI, Nasdaq, and NYSE composite are up +1.79%, +1.53%, +2.90%, and +1.74%, respectively. Last week, the DJI rose +0.12%, while the SPX, Nasdaq, and NYSE composite closed down -0.48%, -2.83%, and -1.73%, respectively. In April, the SPX, DJI, Nasdaq, and NYSE composite are up +0.99%, +0.77%, +1.84%, and +0.85%, respectively. In March, the DJI and NYSE composite are up +0.01% and +0.09%, respectively, while the SPX and Nasdaq are down -0.10% and -3.54%, respectively.

In 2014, the SPX, Nasdaq, and NYSE composite are up +2.30%, +2.39%, and +2.08%, respectively, while the DJI is down -0.02%. 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 lower and below average volume, the BKX rose +0.01% to 72.67, compared to 72.66 at the prior day's close, its 13th consecutive close above 70.00, but -0.33% below its 72.91 March 20th post-2008 closing high. The index traded narrowly through the session with a late morning 72.36 intraday low and late session 72.83 intraday high. Volume fell -1.85% to 42.952 million shares, compared to 43.763 million shares the prior day, and 0.76x the 56.261 million share 15-day moving average.

Monday, large cap banks outperformed the regional banks, as the KBW regional banking index (KRX) fell -0.28%.

This week, the BKX is up +1.72%, compared to a decline of -1.73% the prior week. In April, the BKX is up +0.53%, compared to March, when the BKX closed up +4.74%. In 2014, the BKX is up +4.91%, compared to the SPX's +2.01% gain. 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 +123.2% 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 +75.9% in the same period.

The BKX index closed -40.0% below its February 20, 2007, record 121.06 high. The BKX is up +290.3% from its 18.62 March 6, 2009, closing low.

Technical indicators were little changed. The index closed +1.67%, +4.50%, +5.65%, and +9.55% above its respective 20-, 50-, 100-, and 200-day moving averages. The 20-day moving average rose +13 bps to 71.48. The 69.54 50-day moving average rose +3 bps. Its 100-day moving average rose +8 bps to 68.78, and the 200-day moving average rose +6 bps to 66.33. The 20-day closed (by +1.93 points) above the 50-day, and the gap widened +8 bps. The 50-day moving average closed (by +3.21 points) above the 200-day moving average, and the gap narrowed -3 bps. The 100-day moving average closed (by +2.45 points) above the 200-day moving average, and the gap widened +2 bps.

The directional movement indicator narrowed to +12.794, compared to 12.795 the prior day, its 23rd consecutive positive reading. Relative strength rose to 62.60, compared to 62.55 the prior day, in 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 72.88; next support is 72.41.