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Gary Townsend - Founding member and Chairman, GBT Capital Management, LLC, a macro long/short fund based in Chevy Chase, Maryland. Also, 2007-2013, a founding partner, CEO and Portfolio Manager of Hill-Townsend Capital LLC, a long/short equity financial sector fund. Mr. Townsend has 35 years... More
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  • U.S. Futures Flat Ahead Of Holiday; Asia Ends Largely Unchanged; Europe Rallies As Earnings Surprise 0 comments
    Apr 17, 2014 9:15 AM | about stocks: COF, BBT, GS, MS

    This morning. Today, U.S. equity futures are flat following yesterday impressive rally, the market's 3rd consecutive, though on lower volume. In Asia, equity markets closed largely unchanged. In Europe, indexes have reversed higher and stand near their intraday highs. The dollar is weaker. Commodities are mixed. Friday's Nikkei 225 June 2014 (NKM4) equity futures are up +0.278%. The U.S. trading week is shortened by this Friday's Good Friday holiday.

    U.S. economic reporting focuses on the latest week's jobless claims which showed modest improvement. Commentary focuses on financial earnings from CapitalOne (NYSE:COF), BB&T (NYSE:BBT), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS), among others.

    On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opens -1.51% below the April 2nd record 1890.90 close.

    Wednesday, on lower and below average volume, major equity indexes opened higher, eased to mid-session, then rallied through the afternoon to end near their intraday highs. The S&P 500 (SPX) rose +1.05%. The DJI, Nasdaq, and NYSE composite closed up +1.00%, +1.29%, and +1.00%, respectively. The DJ Transports (TRAN) rose +1.67%.

    NYSE volume fell -14.5% to 0.85x its 20-day moving average. The SPX and NYSE composite are now +0.75% and +1.01% higher in 2014, while the DJI and Nasdaq are down -0.92% and -2.16%, respectively.

    Other notable indexes also rallied. The Russell 2000 (RTY), Nasdaq Internet (QNET), Nasdaq Biotech (NBI) closed up +1.10%, +2.27%, and +23.41%, respectively. The QNET remains in correction, down -13.8%, while the NBI improved to correction from bear market territory, down -18.5%, from recent highs.

    The 1Q2014 earnings reports began on March 15th, with 75 of 500 SPX companies having now reported, with a +4.037% EPS surprise, and -0.13% revenue surprise.

    Trading desks reported mostly quiet markets overseas, though European bourses reversed higher following improving U.S. weekly unemployment claims reports at 8:30. Trading desks also note that U.S. equity markets are again in the middle of the recent 1840-1890 trading range, but sentiment remains neutral and fragile, especially as the U.S. 10-year Treasury yield moves toward 2.60%. Yesterday , flows were quiet through the day. Buyers remain hesitant, but the quiet rally pushed short covering, especially after mid-session. Market "resilience" seems the operating theory.

    Price earnings multiples remain elevated. With SPX equities trading at a 16.9 (compared to 16.7x the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (16.9x times survey $117.08 2014 SPX operating earnings suggests a 1,979.47 SPX level this year, a +6.29% rise).

    Technicals improved. Led by basic materials, all SPX market segments closed at least +0.53% higher. By large margins, market breadth was positive, and up volume led down volume. Volatility fell. Treasury bond markets were little changed. On the day, the U.S. Treasury 10-year bond yield fell -0.01 bps to 2.6282%, compared to 2.6283% at the prior close.

    This morning, 10-year U.S. Treasury yields are up +2.70 bps to 2.6552%, compared to the prior close. Spanish and Italian 10-year debt yields are near their lowest levels since 2005, at 3.09% and 3.12%, respectively, compared to 3.07% and 3.10% the prior day.

    U.S. options markets improved to neutral to bullish, compared to bearish to bullish the prior day. The CBOE SKEW is above a neutral range.

    In pre-market futures trading, June SPX equity futures (SPM4) price near the top of a 1846-1858 trading range. After a fair value adjustment of +3.06 points, the SPM4 future prices at 1855.25, down -0.56 points. The SPX opens +0.19% and +0.73% above its respective 20- and 50-day moving averages, and +1.77% and +5.52% above its 200-day moving averages. Initial resistance is 1867.74. Initial support is 1851.44, then 1840.58.

    In Asia, equity markets closed mixed. On the day, the Nikkei 225 (NYSEARCA:NKY) closed fractionally lower, but essentially unchanged. The NKY remains in correction. The Hang Sang index (HSI) rose +0.28%. The Shanghai SE composite (SHCOMP) index fell -0.30%. Today's volumes are unavailable.

    Commentary focused on earnings reports and Ukrainian developments. This week, the NKY is up +3.28%, while the HSI and SHCOMP are down -1.06% and -1.49%, respectively. Last week, the NKY closed down -7.33%%, while the HSI and SHCOMP closed up +2.19% and +3.48%, respectively. In April, the NKY is down -2.77%, while the HSI and SHCOMP are up +2.75% and +3.23%, respectively, compared to March, when the NKY, HSI, and SHCOMP lost -0.09%, -3.00%, and -1.12%, respectively.

    In 2014, the NKY and HSI are down -11.5% and -2.34%, respectively, while the SHCOMP is down -0.81%. 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 remain volatile but were unchanged today at 2.72%, compared to 2.71% Wednesday, 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 neutral ranges. The NKY RSI was 47.22, compared to 47.22 the prior day, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI rose to 56.95, compared to 55.71 the prior day. The SHCOMP's RSI fell to 55.98, compared to 57.78 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 14,417.53, compared to 14,417.68 the prior day, -11.5% below its recent year-end 16,291.31 high and -63.0% below its late-1989 38,915.87 high close. The index gapped traded narrowly through the session with an early 14,500.66 intraday high and late morning 14,351.85 intraday low. The index closed -0.70%, -1.41%, -4.46%, and -1.40% below its respective 20-, 50-, 100-, and 200-day moving averages. Market segments closed mixed. Leaders were utilities, oil and gas, and basic materials, which rose at least +0.67%. Laggards were financials, technology, and consumer services, which fell at least -0.18%.

    In China, the HSI closed at 22,760.24, compared to 22,696.01 at the prior close. The index gapped higher to open at the 22,858.79 intraday high, then eased to 22,750, where it traded narrowly through the close, though with a late afternoon dip to the 22,657.95 intraday low. Most market segments closed lower. Leaders were oil and gas, consumer services, and technology, which rose at least +0.63%. Laggards were telecommunications, utilities, and consumer goods, which fell at least -0.07%. The index closed -4.81% below its recent December 3rd 23,910.47 high, but +25.2% above its 18,185.59 June 4, 2012 low.

    In Shanghai, the SHCOMP closed at 2,098.89, compared to 2,105.12 at the prior close, +7.63% above the 1,950.01 June 27th close, last year's low. The index opened higher and set an early 2,110.53 intraday high, but reversed lower by mid-morning, when it fell to the 2,095.77 intraday low. The index rallied to breakeven by mid-session, then eased narrowly lower to the close. Most market segments closed lower. Leaders were technology and consumer goods, which rose at least +0.06%, and oil and gas, which ended unchanged. Financials dropped -0.41%. Laggards were basic materials, telecommunications, and utilities, which fell at least -0.47%.

    In Europe, equities are moderately higher. The Euro Stoxx50, FTSE 100, and CAC 40 are up +0.13%, +0.28%, +0.37%, and +0.42%, respectively. The Spanish IBEX 35 is up +0.15%. The Italian FTSE MIB up +0.14%. Commentary focuses on the latest earnings reports.

    Economic reporting is light. Commentary focuses on today's earnings reports. Ukrainian developments and headlines are ignored.

    European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 51.94, compared to 50.74 at the prior close, in the middle of 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 near its intraday high at 3,147.26, -2.47% below its 3,230.33 April 4th post-2008 high close, and -40.1% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,139.26 close, the index traded lower through most of the session to an early afternoon 3,121.82 intraday low, but then rallied and reversed higher to a recent 3,147.58 intraday high. Most market segments are now higher. Leaders are industrials, financials, and basic materials, which are up at least +0.45%. Laggards are telecommunications, utilities, and technology, which are down at least -0.05%.

    This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.99%, +0.68%, +1.43%, and +0.54%, respectively. Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed down -3.52%, -2.00%, -2.65%, and -3.29%, respectively. In April, the FTSE 100 and CAC 40 are up +0.12% and +0.83%, respectively, while the Euro Stoxx50 and DAX are down -0.45% and -1.99%. 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 and CAC 40 are up +1.23% and +3.08%, respectively, while the FTSE 100 and DAX are down -2.124%, and -1.95%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

    1Q2014 SPX Earnings. Of 75 (of 500) reporting companies, 50 or 68.5% surprised positively on earnings, with an average +4.03% surprise average. Of reporting companies, 37 or 50.0% reported sales or revenues above estimates. The average sales/revenue surprise is -0.13%. Financials leads with respective +7.16% and +0.41% earnings and revenue surprises. Consumer staples lag with respective +1.31% and -0.05% earnings and revenue surprises.

    Valuation. The SPX trades at 16.9x estimated 2013 earnings ($110.15), 15.9x estimated 2014 earnings ($117.08), 14.3x estimated 2015 earnings ($130.55), and 12.8x estimated 2016 earnings ($145.04). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +6.29%, +11.5%, and 11.1%, respectively.

    The KBW Bank Index (BKX) trades at 13.4x 2013 adjusted EPS ($5.16), 12.7x estimated 2014 earnings ($5.46), 11.5x estimated 2015 earnings ($6.07), and 10.2x 2016 earnings ($6.81). Analysts expect 2014, 2015, 2016 EPS will grow +5.77%, +11.3%, and +12.1%, respectively.

    Composite, index, and equity options. Options markets improved to neutral to bullish, compared to bearish to bullish the prior session. Composite options are neutral, index options are bullish, and equity options are neutral. The composite put/call ratio is 0.90, compared to 0.94 the prior day, and better than 5- and 10-period moving averages of 0.85 and 0.89, respectively. The index put/call ratio is 0.86, compared to 1.03 the prior day, and worse than its 5- and 10-period moving averages of 0.85 and 0.89, respectively. The equity put/call ratio closed the day at 0.86, compared to 1.03 the prior day, and better than its 5- and 10-period moving averages of 1.03 and 0.94, respectively.

    NYSE Volume, Breadth Indicators. Volume fell -14.5% to 675.16 million shares, compared to 789.26 million shares the prior day, 0.85x the 793.78 million share 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +1,808 (compared to +674 the prior day) or 3.92:1. Up volume was 3.71:1 down volume.

    Market Outlook and Distribution Day Count. On April 4th, the U.S. equity markets distributed and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opened April 4th at a record 1888.77, up +0.88% from the April 1st 1872.34 open. Today, the SPX opens -1.51% below the April 2nd record close.

    Libor, LOIS, Currencies, Treasuries, Commodities:

    · USD LIBOR is 0.09050%, compared to 0.09070% the prior day. USD 3-month LIBOR is 0.22585%, down from 0.22785% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

    · The US Libor-OIS (LOIS) spread is 14.885 bps, compared to 14.135 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 14.920 bps, up from 14.270 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 -2.130 bps, compared to -1.949 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 1.49%, compared to 1.49% the prior day. Japanese 10-year debt yields are 0.61%, compared to 0.61% the prior day.

    · Spanish and Italian 10-year debt yields are at their best levels since 2005. Spanish 10-year debt yields are 3.08%, compared to 3.07% the prior day. Italian 10-year debt yields are at 3.11%, compared to 3.10% the prior day.

    · U.S. Treasury yields are higher, with 2- and 10-year maturities yielding 0.367% and 2.636%, respectively, compared to 0.367% and 2.628% Wednesday. The yield curve widened +0.810 bps, with the 2- to 10-year spread at +2.269%, compared to 2.261% 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 modestly weaker compared to the Euro, Japanese yen, and British pound. The dollar trades at US$79.634, compared to a US$79.581 intraday low and US$79.803 the prior day, and worse compared to its $80.009 50-day, US$80.306 100-day, and US$80.671 200-day averages. The euro trades at US$1.3859, compared to a US$1.3865 intraday high and US$1.3816 the prior day. The euro trades better compared to its US$1.3781 50-day and US$1.3716 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥102.13, compared to ¥102.23 the prior day. The yen trades better than its 50-day moving average ¥102.37, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

    · Citigroup Economic Surprise Index improved to -30.40, compared to -32.70 the prior day, better than its -45.90 worst on April 7th, but continuing its string of consecutive negative readings since February 18th. The index is better compared to its respective -36.54 5-day and -40.46 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 -45.90 124-week low on April 7th . After a lag, the CESIUSD correlates with EPS revisions.

    · Commodities prices are mixed, with lower energy, mixed precious metals, higher aluminum and copper, and mostly higher agriculture prices.

    Volatility, Skew:

    · The CBOE SPX Volatility Index (VIX) fell -9.16% to 14.18, compared to 15.61 at the prior close. The VIX is -3.24% below the 14.65 20-day moving average. Its 30-day high is 18.22. Its 30-day low is 12.60. 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 17.46, up +0.83% compared to 17.32 at the prior day's close. The V2X index trades -0.87% below its 17.61 20-day moving average, -28.3% below the 24.35 30-day high, and +12.7% above the 15.50 30-day low.

    · The Hang Seng volatility index (VHSI) closed at 14.78, down -5.44% compared to 15.63 at the prior close. The VHSI index trades -7.41% below 15.96 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

    · CBOE SKEW (SKEW) fell -2.95% to 125.43, compared to 129.24 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:

    • At 8:30, the latest weeks' initial and continuing jobless claims were 304K and 2739K, compared to 315K and 2780K survey and 302K and 2750K revised prior.
    • At 10:00, Philadelphia Fed business outlook with 10.0 survey and 9.0 prior.

    Overseas Economic Reporting and News:

    • Australia - 1Q2014 NAB business confidence was 6, compared to 8 prior.
    • China - March YoY foreign direct investment fell -1.5%, compared to +2.0% survey.
    • Japan - March consumer confidence was 37.5, compared to 37.7 survey and 38.5 revised prior. YoY national department store sales rose +25.4%, compared to +3.0% prior.
    • Eurozone - March new car registrations rose +10.6%, compared to +8.0% prior.
    • Germany - March MoM PPI fell -0.3%, compared to +0.00% survey and prior. YoY PPI fell -0.9%, compared to -0.7% survey and -0.9% prior.

    Company Ratings/News:

    • CapitalOne Financial Corp - Reported adjusted earnings of $1.910, compared to $1.702 EPS survey, and revenues of $5.370 billion, compared to $5.454 billion revenue survey.
    • BB&T Corp (BBT) - Reported adjusted earnings of $0.690, compared to $0.703 survey, and revenues of $2.294 billion, compared to $2.302 billion revenue survey.
    • Goldman Sachs - Reported adjusted earnings of $5.130, compared to $4.180 survey, and revenues of $8.782 billion, compared to $7.745 billion revenue survey.
    • Morgan Stanley - Reported adjusted earnings of $0.680, compared to $0.599 survey, and revenues of $8.803 billion, compared to $8.572 billion revenue survey.

    Thursday's Trade. On lower and below average NYSE volume, U.S. equity indexes continued to rally from last week's distributions. On the day, the SPX, DJI, Nasdaq, and NYSE composite rose +1.05%, +1.00%, +1.29%, and +1.00%, respectively. All remain lower in April, but the SPX and NYSE composite are now higher in 2014.

    Other notable indexes also rallied. The Russell 2000 (RTY) rose +1.10%, and closed -6.36% below its March 4th record close. The Nasdaq Internet Index (QNET) rose +2.27%, and is in correction at -13.8% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +2.41%, and improved to in correction from in a bear market, down -18.5% from its recent February 25th record high.

    On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. Today, the SPX opens -1.51% below the April 2nd record 1890.90 close.

    Market breadth was positive, with gainers 3.92x losing stocks. All SPX market segments closed at least +0.53% higher. Leaders were basic materials, industrials, and consumer services, which rose at least +1.28%. Financials rose +0.98%. Laggards were telecommunications, utilities, and health care.

    NYSE volume fell -14.5% to 675.16 million shares, compared to 789.26 million shares the prior day, 0.85x the 793.78 million share 20-day moving average volume. On the day, bond markets were largely unchanged. The U.S. 10-year yield opened at the 2.6247%, traded narrowly higher through mid-afternoon when the index rose to the 2.6589 intraday high. The yield closed at 2.6282%, down -0.01 bps compared to the 2.6283% prior close.

    From its prior day 1842.98 SPX close, June 2014 SPX futures (SPM4) suggested a moderately higher open. The SPX index rallied to 1856.00 in early trading, then eased back to 1848 by late morning. The index strengthened again to 1858 in early afternoon, then rallied through the final two hours to end at the intraday highs. The index ended at 1862.31, -1.51% below its 1890.90 April 2nd record close. The index closed +73.3% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

    The DJ Transportation index (TRAN) rose +1.67%, compared to DJI's +1.00% gain. From its prior 7,466.79 close, the TRAN rallied through the session to a late 7,593.59 intraday high. The TRAN closed at 7,591.54, -1.35% below its April 2nd record high close. Volume fell -8.93% to 15.860 million shares, compared to 17.416 million shares the prior session, and 1.23x the 15-day moving average volume. The TRAN closed +0.98% and +2.20% above its 20- and 50-day moving averages, and +3.27% and +8.62% above its respective 100- and 200-day moving averages.

    Market volatility fell -9.16%, as the CBOE SPX volatility index (VIX) closed at 14.81, compared to 15.61 at the prior close. The VIX opened below 15.00, set an early 15.27 intraday high, then eased through the session to a late 14.05 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 CBOE put/call SKEW fell -2.95% to 125.43, compared to 129.24 the prior session, above a neutral 115-120 range, but below 130, a level that correlates well with short-term market tops.

    The market's technical factors improved as all but the Nasdaq recaptured their 20-day moving averages. The SPX relative strength (RSI) improved to 52.37, compared to 47.13 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 at an earlier record high, but above earlier oversold levels of 35.14 on August 27th and 39.19 on October 9th. This week, the SPX, DJI, Nasdaq, and NYSE composite are up +2.57%, +2.48%, +2.16%, and +2.19%, respectively. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed down -2.26%, -1.82%, -3.75%, and -1.48%, respectively. In April, the SPX, DJI, Nasdaq, and NYSE composite are down -0.54%, -0.20%, -2.69%, and -0.21%, respectively. In March, the DJI and NYSE composite closed up +0.01% and +0.09%, respectively, while the SPX and Nasdaq are down -0.10% and -3.54%, respectively.

    In 2014, the SPX and NYSE composite are up +0.75% and +1.01%, respectively, while the DJI and Nasdaq are down -0.92% and -2.16%, respectively. 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 and above average volume, the BKX rose +0.25% to 69.29, compared to 69.12 at the prior day's close, its 5th consecutive below 70.0 and -4.97% below its 72.91 March 20th post-2008 closing high. In early trading the BKX rallied to a 69.34 intraday high, but reversed lower in early trading to a mid-morning 68.65 intraday low. For a 3rd consecutive session, the sell-off failed, and the index reversed higher in early afternoon, then traded narrowly to the close. Volume rose +2.69% to 62.643 million shares, compared to 61.003 million shares the prior day, and 1.15x the 54.658 million share 15-day moving average.

    Large cap banks underperformed the regional banks, as the KBW regional banking index (KRX) rose +0.68%.

    This week, the BKX is up +1.76%, compared to last week, when the BKX closed down -4.69%. In April, the BKX is down -4.15%, compared to March, when the BKX closed up +4.94%. In 2014, the BKX is up +0.04%, compared to the SPX's +0.75% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

    The BKX is now +17.1% 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. On April 10th, the BKX fell below 70.00 to an April 11th 68.09 closing low. The BKX closed +112.8% 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 +73.3% in the same period.

    The BKX index closed -42.8% below its February 20, 2007, record 121.06 high. The BKX is up +272.1% from its 18.62 March 6, 2009, closing low.

    Technical indicators improved as the index recaptured its 100-day moving average. The index closed -2.65% and -0.90% below its respective 20- and 50-day moving averages, but +0.12% and +3.73% above its 100- and 200-day moving averages. The 20-day moving average fell -11 bps to 71.17. The 69.92 50-day moving average rose +6 bps. Its 100-day moving average rose +3 bps to 69.21, and the 200-day moving average rose +4 bps to 66.80. The 20-day closed (by +1.25 points) above the 50-day, but the gap narrowed -18 bps. The 50-day moving average closed (by +3.12 points) above the 200-day moving average, and the gap widened +2 bps. The 100-day moving average closed (by +2.41 points) above the 200-day moving average, and the gap narrowed -1 bp.

    The directional movement indicator improved to -15.936, compared to -16.781 the prior day, its 8th consecutive negative reading. Relative strength improved to 42.73, compared to 41.50 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 69.54; next support is 68.85.

    SPX, DJI, RTY, TRAN, CCMP, NYA, VIX, SKEW, NKY, EURUSD, USGG10YR, HSI, SHCOMP, SX5E, CAC, DAX, FTSE, JPY, GBP, EUR

    This morning. Today, U.S. equity futures are flat following yesterday impressive rally, the market's 3rd consecutive, though on lower volume. In Asia, equity markets closed largely unchanged. In Europe, indexes have reversed higher and stand near their intraday highs. The dollar is weaker. Commodities are mixed. Friday's Nikkei 225 June 2014 (NKM4) equity futures are up +0.278%. The U.S. trading week is shortened by this Friday's Good Friday holiday.

    On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opens -1.51% below the April 2nd record 1890.90 close.

    Themes: SPX, DJI, RTY, TRAN, CCMP, NYA, VIX, SKEW, NKY, EURUSD, USGG10YR, HSI, SHCOMP, SX5E, CAC, DAX, FTSE, JPY, GBP, EUR Stocks: COF, BBT, GS, MS
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