Seeking Alpha

Gary Townsend's  Instablog

Gary Townsend
Send Message
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
My company:
GBT Capital Management LLC
My blog:
Listening to Markets
  • April Employment Surprises, U.S. Futures Yawn; Asia And Europe Mixed 0 comments
    May 2, 2014 9:20 AM

    This morning. Despite a surprising large U.S. April employment beat, U.S. equity futures are only modestly higher, and off the highs immediately following the report's surprisingly strong 8:30 am release. In Asia, equity markets closed mixed. In Europe, indexes are mostly lower. The dollar is stronger. Treasury 10-year yields are higher following the employment report. Commodities are mostly higher. Monday's Nikkei 225 June 2014 (NKM4) equity futures are modestly higher.

    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 -0.66% below the April 2nd record 1890.90 close.

    Trading desks report a relatively quiet morning ahead of the 8:30 U.S. employment report, with mixed markets in both Asia and Europe, though China is closed for holiday. Yesterday's trade was a long wait to this morning's economic reporting, though attention focused on strengthening Treasury markets, which seemingly defy explanation. The weeks-old 1840-1880 trading range continues to hold. Conviction remains low, though the "momentum" complex rallied. Sentiment remains poor, and advances are regarded skeptically as indexes remain near the top of recent trading ranges. Breaks above SPX 1880 appear likely to be sold.

    U.S. economic reporting is heavy, with April employment the focus. At 9:45, ISM New York reports, followed by March factory orders at 10:00.

    Thursday, on lower and below average volume, major equity indexes showed modest weakness in early trading, moved briefly higher mid-session then generally eased to a mixed close. The S&P 500 (SPX) and the DJ Industrials (DJI) closed down -0.01% and -0.13%, respectively, while the Nasdaq and NYSE composite rose +0.31% and +0.02%, respectively.

    The DJ Transports (TRAN) rose +0.61%, though it closed below its recent April 23rd record high.

    NYSE volume fell -23.1% to 0.95x its 20-day moving average. The SPX and NYSE composite are now +1.91% and +2.20% higher in 2014, while the DJI and Nasdaq are down -0.11% and -1.18%, respectively.

    Other notable indexes closed mixed. The Russell 2000 (RTY) fell -0.08%, while the Nasdaq Internet (QNET) and Nasdaq Biotech (NBI) closed up +1.52% and +1.09%, respectively. The QNET and NBI are in correction, down -15.7% and -14.9%, respectively, from recent highs.

    The 1Q2014 earnings reports began on March 15th, with 373 of 500 SPX companies having now reported, with a +5.81% EPS, but -0.16% revenue surprises.

    Price earnings multiples are elevated. With SPX equities trading at a 17.1 (compared to 17.1 the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.1x times survey $117.71 2014 SPX operating earnings suggests a 2005.36 SPX level this year, a +6.86% rise).

    Technicals were little changed. SPX market segments closed mixed. Market breadth was positive, and up volume led down volume. Volatility fell. Treasury bond markets strengthened. On the day, the U.S. Treasury 10-year bond yield fell -3.26 bps to 2.6133%, compared to 2.6459% at the prior close.

    This morning, 10-year U.S. Treasury yields are up +4.33 bps at 2.6612%, compared to the prior close. Spanish and Italian 10-year debt yields are at their lowest levels since 2005, at 3.00% and 3.07%, respectively.

    U.S. options markets are neutral to bullish, compared to neutral to bullish the prior day. The CBOE SKEW remains above a neutral range.

    In pre-market futures trading, June SPX equity futures (SPM4) price near the bottom of a 1875-1886 trading range. After a fair value adjustment of +0.13 points, the SPM4 future prices at 1878.25, up +0.37 points. The SPX opens +1.12% and +1.17% above its respective 20- and 50-day moving averages, and +2.51% and +6.06% above its 200-day moving averages. Initial resistance is 1888.83. Initial support is 1878.28, then 1872.89.

    In Asia, equity markets closed mixed. Shanghai was closed for holiday. The Nikkei 225 (NYSEARCA:NKY) opened lower and fell to an early 14,405.77 intraday low, then traded narrowly through the close with a late 14,473.75 intraday high. The index remains in correction, with its 50-day moving average below its 200-day moving average. The Hang Sang index (HSI) rose +0.57%. On Thursday, the Shanghai SE composite (SHCOMP) index closed up +0.30%. Both HSI and SHCOMP 50-day moving averages are also below their respective 200-day moving averages. Today's volumes are unavailable.

    Commentary focused on expectations for today's U.S. employment report. This week , the NKY closed up +0.20%. The HSI closed up +0.17%, and the SHCOMP closed off -0.50%. Last week, the NKY closed down -0.60%, while the HSI closed off -2.36%, and the SHCOMP closed down -2.92%. In April, the NKY closed down -3.53%, while the HSI and SHCOMP closed down -0.08% and -0.34%, 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 -11.3% and -4.49%, respectively, while the SHCOMP is down -4.24%. 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, as the SHIBO 7-day rate rose +5.00 bps to 4.12%, compared to 4.07% Tuesday, 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 ended at 49.40, compared to 50.21 the prior day, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI fell to 46.72, compared to 43.87 the prior day. The SHCOMP's RSI rose to 40.83, compared to 39.04 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 14,457.51, compared to 14,485.13 the prior day, -11.3% below its recent year-end 16,291.31 high and -62.9% below its late-1989 38,915.87 high close. The index gapped lower to open near 14,450 and traded narrowly through the session with an early 14,405.77 intraday low and late session 14,473.75 intraday high. The index closed +0.15% above and -1.12% below its 20- and 50-day moving averages, and -3.56% and -1.41% below its respective 100- and 200-day moving averages. Most market segments closed lower. Leaders were telecommunications, financials, and health care, which rose at least +0.03%. Laggards were industrials, oil and gas, and utilities, which fell at least -0.61%.

    In China, the HSI closed at 22,260.67, compared to 22,133.97 at the prior close. The index opened higher to open above 22,180, then rallied to a mid-morning 22,312.71 intraday high, then traded narrowly to the close. Most market segments closed higher. Leaders were technology, consumer services, and basic materials, which rose at least +1.67%. Financials rose +0.42%. Laggards were utilities, which rose at least +0.35%, and oil and gas and telecommunications, which fell at least -0.42%. The index closed -6.90% below its recent December 3rd 23,910.47 high, but +23.5% above its 18,185.59 June 4, 2012 low.

    In Shanghai, the SHCOMP closed Wednesday at 2,076.78, compared to 2,020.34 at the prior close, +3.92% above the 1,950.01 June 27, 2013 close, last year's low. The index traded to a late morning 2,029.49 intraday high, but fell back to breakeven in early afternoon before improving through the afternoon. Most market segments closed higher. Leaders were telecommunications, health care, and consumer services, which rose at least +1.03%. Laggards were oil and gas, which rose +0.06%, and basic materials and financials, which fell at least -0.04%.

    In Europe, equities are mixed. The FTSE 100 is up +0.24%, while the Euro Stoxx50, CAC 40, and DAX are down -0.32%, -0.46%, and -0.04%, respectively. The Spanish IBEX 35 is up +0.32%. The Italian FTSE MIB up +0.35%.

    Economic reporting focuses on Eurozone inflation and the day's disappointing earnings reports..

    European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 54.62, compared to 56.46 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.

    The Euro Stoxx50 trades -1.30% below its 3,230.33 April 4th post-2008 high close, and -39.3% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,198.66 close, the index gapped lower to open at 3,194 and fell to an early 3,189.18 intraday low. The index has traded narrowly through mid-afternoon and currently trades at 3,189.08. Most market segments are lower. Leaders are telecommunications, basic materials, and health care, which are up at least +0.15%. Laggards are consumer technology, financials, and consumer services, which are down at least -0.43%.

    This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +1.30%, +2.08%, +0.52%, and +2.12%, respectively. Last week, the Euro Stoxx50 and DAX closed down -0.27% and -0.09%, while the FTSE 100 and CAC 40 closed up +0.91% and +0.27%, respectively. In April, the Euro Stoxx50 closed down -0.27%, while the FTSE 100, CAC 40, and DAX closed up +2.34%, +1.25%, +2.06%, 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 higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +2.55%, +1.12%, +3.98%, ad +0.51%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

    1Q2014 SPX Earnings. Of 366 (of 500) reporting companies, 276 or 75.4% surprised positively on earnings, with an average +6.16% surprise average. Of reporting companies, 192 or 52.6% reported sales or revenues above estimates. The average sales/revenue surprise is +0.22%. Utilities leads with respective +9.18% and +13.6% earnings and revenue surprises. Financials have a respective +6.13% and +0.10% earnings and revenue surprises. Consumer staples lags with respective +0.45% and -1.09% earnings and revenue surprises.

    Valuation. The SPX trades at 17.1x estimated 2013 earnings ($110.15), 16.0x estimated 2014 earnings ($117.71), 14.4x estimated 2015 earnings ($131.05), and 12.9x estimated 2016 earnings ($145.60). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +6.86%, +11.3%, and 11.1%, respectively.

    The KBW Bank Index (BKX) trades at 13.2x 2013 adjusted EPS ($5.16), 12.7x estimated 2014 earnings ($5.38), 11.3x estimated 2015 earnings ($6.03), and 10.1x 2016 earnings ($6.74). Analysts expect 2014, 2015, 2016 EPS will grow +4.28%, +12.1%, and +11.7%, 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 bullish, and equity options are neutral. The composite put/call ratio is 0.90, compared to 2.00 the prior day, and better than 5- and 10-period moving averages of 0.90 and 0.86, respectively. The index put/call ratio is 0.71, compared to 1.11 the prior day, and better than its 5- and 10-period moving averages of 1.03 and 1.00, respectively. The equity put/call ratio closed the day at 0.82, compared to 0.79 the prior day, and better than its 5- and 10-period moving averages of 0.89 and 0.94, respectively.

    NYSE Volume, Breadth Indicators. Volume fell -23.1% to 698.35 million shares, compared to 908.54 million shares the prior day, 0.95x the 738.67 million share 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +430 (compared to +1,018 the prior day) or 1.33:1. Up volume was 1.03:1 down volume.

    "In Correction" 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 3rd at a record 1890.90, up +0.99% from the April 1st 1872.34 open. Today, the SPX opens -0.38% below the April 2nd record close.

    Libor, LOIS, Currencies, Treasuries, Commodities:

    · USD LIBOR is 0.08850%, compared to 0.08800% the prior day. USD 3-month LIBOR is 0.22285%, unchanged from 0.22285% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

    · The US LIBOR-OIS (LOIS) spread is 12.985 bps, compared to 12.985 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 16.500 bps, compared to 17.000 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 -3.687 bps, compared to -4.274 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 1.46%, compared to 1.47% the prior day.

    · Japanese 10-year debt yields are 0.61%, compared to 0.62% the prior day.

    · Spanish and Italian 10-year debt yields are at their best levels since 2005. Spanish 10-year debt yields are 2.99%, compared to 3.00% the prior day. Italian 10-year debt yields are at 3.06%, compared to 3.07% the prior day.

    · U.S. Treasury yields are slightly higher, with 2- and 10-year maturities yielding 0.410% and 2.627%, respectively, compared to 0.407% and 2.613% Thursday. The yield curve widened +0.960 bps, with the 2- to 10-year spread at +2.216%, compared to 2.207% 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 slightly stronger compared to the Euro, British pound, and Japanese yen. The dollar trades at US$79.578, compared to a US$79.506 intraday low and US$79.527 the prior day, and worse compared to its $79.878 50-day, US$80.2442 100-day, and US$80.524 200-day averages. The euro trades at US$1.3862, compared to a US$1.3871 intraday high and US$1.3870 the prior day. The euro trades better compared to its US$1.3812 50-day and US$1.3732 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥102.52, compared to ¥102.33 the prior day. The yen trades worse than its 50-day moving average ¥102.41, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

    · Citigroup Economic Surprise Index improved to -28.70, compared to -323.50 the prior day, better than its recent -45.90 worst on April 7th, but continuing its string of consecutive negative readings since February 18th. The index is worse compared to its respective -25.78 5-day and -25.60 10-day moving averages. Last year, on 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 mostly higher, with higher energy, higher precious metals, mixed aluminum and copper, and higher agriculture prices.

    Volatility, Skew:

    · The CBOE SPX Volatility Index (VIX) fell -1.19% to 13.25, compared to 13.41 at the prior close. The VIX is -7.09% below the 14.26 20-day moving average. Its 30-day high is 17.85. 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 16.79, down -1.66% compared to 17.07 at the prior day's close. The V2X index trades -3.77% below its 17.44 20-day moving average, -17.8% below the 20.43 30-day high, and +8.30% above the 15.50 30-day low.

    · The Hang Seng volatility index (VHSI) closed at 15.04, up +1.28% compared to 14.85 at the prior close. The VHSI index trades -0.44% below 15.11 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

    · CBOE SKEW (SKEW) was unchanged at 123.44, compared to 123.44 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 April change in non-farm payrolls was 288K, compared to 218K survey and 203K revised prior.
    • The April change in private payrolls was 273K, compared to 215K survey and 202K revised prior.
    • The April change in manufacturing payrolls was 12K, compared to 8K survey and 7K revised prior.
    • The April unemployment rate was 6.3%, compared to 6.6% survey and 6.7% revised prior.
    • April MoM average hourly earnings were +0.0%, compared to +0.2% survey and +0.1% revised prior. YoY average hourly earnings were +1.9%, compared to +2.1% survey and +2.1% revised prior.
    • The April underemployment rate was 12.3%, compared to 12.7% revised prior.
    • The April labor force participation rate was 62.8%, compared to 63.2% prior.
    • At 9:45, April ISM New York, with 54.0 survey and 52.0 prior.
    • At 10:00 March factory orders, with +1.5% survey and +1.6% prior.


    Overseas Economic Reporting and News:
     

    • Eurozone - April final Markit manufacturing was 53.4, compared to 53.3 survey and prior. April manufacturing PMI was 53.9, compared to 53.5 prior. March unemployment was 11.8%, compared to 11.9% survey and 11.8% revised prior.
    • France - April final manufacturing PMI was 51.2, compared to 50.9 survey and 50.9 prior.
    • Germany - April final Markit/BME manufacturing was 54.1, compared to 54.2 survey and prior.
    • Italy - April Markit/ADACI manufacturing was 54.0, compared to 52.9 survey and 52.4 prior.
    • Spain - April Markit manufacturing PMI was 52.7, compared to 53.4 survey and 52.8 prior.
    • United Kingdom - Markit/CIPS UK construction OMI was 60.8, compared to 62.2 survey and prior.


    Company Ratings/News:
     

    • None.


    Thursday's Trade. On lower and below average NYSE volume, major U.S. equity indexes closed mixed. The Nasdaq and NYSE composite rose +0.31% and +0.02%, respectively, while the SPX and DJI fell -0.01% and -0.13%. All are higher on the week, but the Nasdaq remains lower in April. The SPX and NYSE composite are higher in 2014.

    Other notable indexes were also mixed. The Russell 2000 (RTY) fell -0.13%, and closed -6.84% below its March 4th record close. The Nasdaq Internet Index (QNET) rose +1.52%, and is in correction at -15.7% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +1.09%, and is in correction, down -14.9% 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 -0.66% below the April 2nd record 1890.90 close.

    Market breadth was modestly positive, with gainers 1.33x losing stocks. SPX market segments closed mixed. Leaders were telecommunications, consumer services, and utilities, which rose at least +0.29%. Financials rose +0.13%. Laggards were industrials, oil and gas, and basic materials, which fell at least -0.27%.

    NYSE volume fell -23.1% to 698.35 million shares, compared to 739.20 million shares the prior day, 0.95x the 738.67 million share 20-day moving average volume. On the day, bond markets weakened. The U.S. 10-year yield opened at the 2.6550%, traded narrowly higher through mid-afternoon, then eased and reversed lower to a late 2.5916% intraday low. The yield ended at 2.6133%, down -3.26 bps compared to the 2.6459% prior close.

    From its prior day 1883.95 SPX close, June 2014 SPX futures (SPM4) suggested a modestly higher open. The SPX index weakened modestly to a mid-morning 1878.04 intraday low, but recovered to breakeven by late morning, when the index rose to its 1888.59 intraday high. The index eased lower through mid-afternoon, and moved lower, trading around 1882 through the final two hours before improving into the close. The index closed at 1883.68, -0.38% below its 1890.90 April 2nd record close. The index closed +75.3% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

    The DJ Transportation index (TRAN) rose +0.61%, compared to the DJI's -0.13% loss. From its prior 7,672.19 close, the TRAN traded to 7,749.79 intraday high, then traded narrowly to the close. The index closed at 7,719.02. Volume fell -26.4% to 12.025 million shares, compared to 16.340 million shares the prior session, and 0.84x the 15-day moving average volume. The TRAN closed +1.75% and +2.66% above its 20- and 50-day moving averages, and +4.34% and +9.42% above its respective 100- and 200-day moving averages.

    Market volatility fell -1.19%, as the CBOE SPX volatility index (VIX) closed at 13.25, compared to 13.41 at the prior close. The VIX opened higher and set an early 13.75 intraday high, then traded narrowly around the prior close, with a late morning 13.10 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 was unchanged at 123.44, compared to 123.44 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 were little changed. The SPX relative strength (RSI) eased to 57.26, compared to 57.37 the prior day, in a neutral range, but 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 +1.09%, +1.21%, +1.27%, and +1.18%, respectively. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed down -0.08%, -0.29%, -0.49%, and -0.26%, respectively. In April, the SPX, DJI, and NYSE composite are up +0.61%, +0.61%, and +0.96%, while the Nasdaq is down -1.70%. 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 +1.91% and +2.20%, respectively, while the DJI and Nasdaq are down -0.11% and -1.18%, 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 lower and below average volume, the BKX fell -0.35% to 68.19, compared to 68.43 at the prior day's close, its 16th consecutive below 70.0 and -6.47% below its 72.91 March 20th post-2008 closing high. In early trading, the index rose to the 68.59 intraday high, then reversed lower to support at 68.10 by mid-morning. The index improved to breakeven by late morning, but reversed lower in early afternoon, falling to a mid-afternoon 67.97 intraday low. The index improved through the final hour, narrowing the loss. Volume fell -28.9% to 40.077 million shares, compared to 53.127 million shares the prior day, and 0.71x the 56.355 million share 15-day moving average.

    Large cap banks outperformed the regional banks, as the KBW regional banking index (KRX) fell -0.38%.

    This week, the BKX is down -0.53%, compared to last week, when the BKX fell -0.67%. In April, the BKX is down -5.67%, compared to March, when the BKX closed up +4.94%. In 2014, the BKX is down -1.44%, compared to the SPX's +1.62% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

    The BKX is now +15.2% better than the June 24, 2013 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 and has eased consistently to an April 28th 67.72 closing low. The BKX closed +109.4% 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 +73.2% in the same period.

    The BKX index closed -43.7% below its February 20, 2007, record 121.06 high. The BKX is up +266.2% from its 18.62 March 6, 2009, closing low, its low during the 2008-09 financial panic.

    Technical indicators were little changed. The index's 20-day moving average remains below its 50-day moving average. The index closed -11.77% and -2.71% below its respective 20- and 50-day moving averages, but -1.66% below and +1.71% above its 100- and 200-day moving average. The 20-day moving average fell -18 bps to 69.42. The 70.09 50-day moving average rose +2 bps. Its 100-day moving average rose +2 bps to 69.34, and the 200-day moving average rose +2 bps to 67.04. The 20-day closed (by -0.68 points) below the 50-day, and the gap widened -19 bps. The 50-day moving average closed (by +3.05 points) above the 200-day moving average, and the gap narrowed -2 bps. The 100-day moving average closed (by +2.30 points) above the 200-day moving average, and the gap was unchanged.

    The directional movement indicator improved to -15.804, compared to -16.694 the prior day, its 18th consecutive negative reading. Relative strength fell to 40.00, compared to 41.41 the prior day, in the lower 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 was 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 68.53; next support is 67.91.

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

Back To Gary Townsend's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.