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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 After June ADP; Asia Advances, Europe Mixed 0 comments
    Jul 2, 2014 9:31 AM

    This morning. After the first trading day of July and 3Q2014, major U.S. equity indexes are at least +0.62% higher. This morning, the S&P 500 (SPX), DJ Industrials (DJI), NYSE composite, and DJ Transports open after record closes yesterday. U.S. equity futures are modestly lower after fair value adjustment and near bottom of their premarket trading ranges. Economic reporting focuses on this morning's strong ADP employment report, which briefly pushed futures higher immediately following its 8:15 EDT release. Asia closed moderately higher. Europe is mixed in mid-afternoon. The market outlook is "confirmed uptrend". The dollar is mixed. U.S. Treasury 10-year yields spiked higher on the ADP news. Commodities are mixed. Thursday's Nikkei 225 September 2014 (NKU4) equity futures are modestly higher.

    Tuesday, major U.S. indexes closed moderately higher. The SPX, DJI, Nasdaq and NYSE composite rose +0.67%, +0.77%, +1.14%, and +0.62%, respectively. This week, the SPX, DJI, Nasdaq, and NYSE composite are up +0.63%, +0.62%, +1.38%, and +0.66%, respectively. All are at least +0.62% higher in July. In 2014, the SPX, DJI, Nasdaq, and NYSE composite are +6.76%, +2.29%, +6.75%, and +6.21% higher, respectively. NYSE volume fell -13.3% to 0.95x its 20-day moving average.

    Other notable indexes were mixed. The DJ Transports (TRAN) rose +0.67%. According to Dow Theory, the simultaneous DJI and TRAN record closes confirm the equity market uptrend. The Russell 2000 (RTY) rose +1.09%, -0.22% below early March highs. The Nasdaq Internet (QNET) index rose +1.60%, and the Nasdaq Biotech (NBI) index rose +2.34%. The QNET is down -6.72%, from recent highs, while the NBI closed -3.68% below its recent high.

    Trading desks report positive overnight trading, particularly in China, with less pronounced gains in Europe, though there is little incremental news. The better than expected ADP report may signal the start of a period when "good news" is regarded as bad for market valuations, which at 16.7x expected 2014 earnings appears fully valued. Any change to current monetary policy narratives (Yellen speaks today, and the ECB reports tomorrow) could stymie further market advances. The next FOMC meeting is July 29-30. A quiet trading day is expected as news flows and earnings reports are slow and few. The equity bias appears higher, with expectations that gains will become more difficult, compared to the recent linear move higher. Conviction is low.

    The 2Q2014 earnings seasons began June 18th, and now 20 of 500 SPX companies have reported with respective +1.28% and +0.63% adjusted EPS and revenues surprises. In 1Q2014, 499 of 499 SPX companies reported with respective +5.91% EPS and +0.20% revenue surprises. Forward estimates moved up. Compared to February 28th, the June-end 2014 EPS estimate rose +0.26% to $118.05, from $117.74. Respective estimates for 2014, 2015 and 2016 are now $118.50, $132.04, and $146.10, respectively compared to $117.74, $130.81 and $144.98 at February-end, respective increases of +0.64%, +0.94% and +0.78%. Price earnings multiples remain elevated. With SPX equities trading at a 17.9x (compared to 17.8x the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.9x times survey 2014 SPX operating earnings suggests a 2122.92 SPX level in the next year, a +7.58% rise from yesterday's close).

    Technicals were little changed. Led by health care and technology, most SPX market segments closed higher. Market breadth was positive, and up volume led down volume. Volatility fell to historically low levels. Treasury bond markets weakened. On the day, the U.S. Treasury 10-year bond yield rose +3.43 bps to 2.5647%, compared to 2.5304% at the prior close.

    This morning, 10-year U.S. Treasury yields are up +2.90 bps at 2.5937%, compared to the prior close. World sovereign bond markets are weaker. Spanish and Italian 10-year debt yields are 2.70% and +2.86%, respectively, compared to 2.64% and +2.83% the prior day.

    U.S. options markets worsened to neutral, compared to neutral to bullish the prior day. The CBOE SKEW rose +0.01% to 139.36, compared to 139.35 the prior day, well 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 bottom of their 1965-1970 trading range. After a fair value adjustment of -0.08 points, the SPM4 future prices at 1965.50, down -0.17 points. The SPX opens +1.16% and +3.13% above its respective 20- and 50-day moving averages, and +4.78% and +7.97% above its 200-day moving averages. Initial resistance is 1980.50. Initial support is 1964.21, then 1955.11.

    "Confirmed Uptrend" Market Outlook and Distribution Day Count. On May 27th , the market outlook improved to "confirmed uptrend", ending a period of market "in correction" that began on April 4th. The SPX closed June 19th at a record 1959.48, +7.92% above the 1815.69 close on April 11th, the recent low close. On July 2, 2014, the Nasdaq reached a multi-year 4,458.65 high (compared to its 4,572.83 March 31, 2000 record close), then fell -8.22% to 3,999.73 before recovering +11.5% to the June 18th 4,458.65 close. Since May 27th, distribution days number 3 for the SPX, DJI, and NYSE composite, and 2 for the Nasdaq.

    In Asia, equity markets closed higher, with better strength in Hong Kong, which reopened following the prior day's holiday. The Nikkei 225 (NYSEARCA:NKY) rose +0.29%. The Hang Seng (HSI) Index, which rose +1.55%. The Shanghai SE composite (SHCOMP) rose +0.44%. The NKY, HSI, and SHCOMP 50-day moving averages are below their respective 200-day moving averages. Today's volumes are unavailable.

    Economic reporting remains light. Commentary focused on the latest PMIs, the direction of monetary policy, currency, and commodity price developments.

    This week, the NKY, HSI, and SHCOMP are up +1.82%, +1.41%, and +1.12%, respectively. Last week, the NKY closed off -1.66%, the HSI gained +0.12%, and the SHCOMP gained +0.49%. In July, the NKY, HSI, and SHCOMP are up +1.37%, +1.41%, and +1.12%, respectively. In June, the NKY gained +3.62%, the HSI gained +0.47%, and the SHCOMP gained +0.58%.

    In 2014, the NKY is down -5.66%, the HSI is up +1.04%. The SHCOMP is down -2.67%. 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 fell -54 bps to 3.91%, compared to 4.45% 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 are in a neutral ranges. The NKY RSI rose to 62.39, compared to 61.14 the prior session, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI rose to 64.82, up from 55.87 on Tuesday. The SHCOMP's RSI rose to 56.29, compared to 53.26 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 15,369.97, compared to 15,326.20 the prior day, -5.66% below its recent year-end 16,291.31 high and -60.5% below its late-1989 38,915.87 high close. The index rose to an early 15,444.63 intraday high, then eased through the session to a late 15,354.91 intraday low. Most market segments closed higher. Leaders were telecommunications, energy, and consumer staples, which rose at least +0.61%. Laggards were financials and industrials, which rose at least +0.05%, and materials, which fell -0.02%.

    In China, in Shanghai, the SHCOMP closed at 2,059.42, compared to 2,050.38 at the prior close, +5.61% above the 1,950.01 June 27, 2013 close, last year's low. The index traded narrowly through the morning session, when it fell to a 2,044.21 intraday low, but then reversed higher by mid-afternoon when it rallied to a late 2,060.54 intraday high. All market segments closed at least +0.12% higher. Leaders were industrials, telecommunications, and energy, which rose at least +0.51%. Financials rose +0.35%. Laggards were materials, consumer staples, and health care.

    In Europe, equities have traded narrowly and are mixed in mid-afternoon. The Euro Stoxx 50 and CAC 40 are down -0.01% and -0.13%, respectively, while the FTSE 100 and DAX are up +0.31% and +0.14%, respectively. The Spanish IBEX 35 is up +0.04%. The Italian FTSE MIB is up +0.73%.

    Economic reporting is light. The euro is slightly weaker compared to the dollar.

    European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 51.30, compared to 51.37 at the prior close, in a neutral (30-70) range, 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 24, 2013, which marked the year's 2,494.54 closing low.

    The Euro Stoxx50 trades -37.9% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,258.71 close, the index opened modestly lower and set an early 3,251.78 intraday low, then rose to a late morning 3,265.69 intraday high. The index has eased to breakeven and currently trades at 3,258.40. Most market segments are higher. Leaders are utilities, consumer staples, and consumer discretionary, which are up at least +0.37%. Financials are up +0.04%. Laggards are industrials, health care and telecommunications, which are down at least -0.01%.

    This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.98%, +1.01%, +0.54%, and +1.06%, respectively. Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed down -2.26%, -0.99%, -2.30%, and -1.72%, respectively. In July, the Euro Stoxx50, FTSE 100, CAC 40, and DAX rose +0.97%, +1.22%, +0.86%, and +0.87%, respectively. In June, the Euro Stoxx50 close up +0.03%, while the FTSE 100, CAC 40, and DAX closed down -0.88%, -1.53%, and -0.84%, respectively.

    In 2014, the indexes are higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +4.84%, +1.14%, +3.84%, and +3.84%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

    2Q2014 SPX Earnings. The 2nd quarter earnings season began June 18th, and now 20 of 500 SPX reporting firms have reported, with respective +1.28% EPS and +0.63% revenue surprises.

    In 1Q2014, of 499 (of 499) reporting companies, 370 or 74.5% surprised posi2tively on earnings, with an average +5.91% surprise average. Of reporting companies, 263 or 53.0% reported sales or revenues above estimates. The average sales/revenue surprise was +0.20%. Energy led with respective +10.0% and -1.01% earnings and revenue surprises. Financials had a respective +5.67% and +0.26% earnings and revenue surprises. Consumer staples lagged with respective +0.34% and -0.66% earnings and revenue surprises.

    Valuation. The SPX trades at 17.9x estimated 2013 earnings ($110.15), 16.7x estimated 2014 earnings ($118.50), 14.9x estimated 2015 earnings ($132.04), and 13.5x estimated 2016 earnings ($145.10). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +7.58%, +11.4%, and 10.7%, respectively.

    The KBW Bank Index (BKX) trades at 13.9x 2013 adjusted EPS ($5.16), 13.5x estimated 2014 earnings ($5.33), 12.0x estimated 2015 earnings ($5.98), and 10.8x 2016 earnings ($6.67). Analysts expect 2014, 2015, 2016 EPS will grow +3.19%, +12.3%, and +11.6%, respectively.

    Composite, index, and equity options. Options markets worsened to neutral, compared to neutral to bullish the prior session. Composite options are neutral, index options are neutral, and equity options are neutral. The composite put/call ratio is 0.93, compared to 0.84 the prior day, and worse than 5- and 10-period moving averages of 0.88 and 0.83, respectively. The index put/call ratio is 1.05, compared to 1.31 the prior day, and worse than its 5- and 10-period moving averages of 1.17 and 1.02, respectively. The equity put/call ratio closed the day at 0.85, compared to 0.69 the prior day, and worse than its 5- and 10-period moving averages of 0.77 and 0.74, respectively.

    NYSE Volume, Breadth Indicators. Volume fell -13.3% to 686.20 million shares, compared to 791.83 million shares the prior day, 0.95x the 719.50 million share 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +1,064 (compared to +617 the prior day) or 2.05:1. Up volume was 2.00:1 down volume.

    Libor, LOIS, Currencies, Treasuries, Commodities:

    · USD LIBOR is 0.09590%, compared to 0.09500% the prior day. USD 3-month LIBOR is 0.23460%, down from 0.23180% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

    · The US LIBOR-OIS (LOIS) spread is 12.960 bps, compared to 12.380 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 15.600 bps, compared to 15.100 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 -10.388 bps, compared to -10.639 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, and within a normal -10 bps and -40 bps range.

    · German 10-year debt yields are 1.25%, compared to 1.25% the prior day.

    · Japanese 10-year debt yields are 0.56%, compared to 0.56% the prior day.

    · Spanish and Italian 10-year debt yields are slightly higher. Spanish 10-year debt yields are 2.70%, compared to 2.64% the prior day, modestly above the U.S. 10-year yield and compares to its 2.575% June 9th low. Italian 10-year debt yields are at 2.86%, compared to 2.83% the prior day and their June 9th 2.704% recent low. Spanish and Italian 10-year debt years peaked at 7.62% and 7.26%, respectively, in July 2012 and November 2011.

    · U.S. Treasury yields are modestly lower, with 2- and 10-year maturities yielding 0.461% and 2.556%, respectively, compared to 0.465% and 2.565% Tuesday. The yield curve narrowed-0.510 bps, with the 2- to 10-year spread at 2.095%, compared to 2.100% 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, but weaker compared to the Japanese yen and British pound. The dollar trades at US$79.857, compared to US$79.898 intraday high and US$79.815 the prior day, and worse compared to its $80.134 50-day, US$80.042 100-day, and US$80.260 200-day averages. The euro trades at US$1.3665, compared to a US$1.3656 intraday low and US$1.3679 the prior day. The euro trades worse compared to its US$1.3685 50-day and US$1.3740 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥101.49, compared to ¥101.53 the prior day. The yen trades better than its 50-day moving average ¥101.97, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

    · Citigroup Economic Surprise Index worsened to -22.60, compared to -22.00 the prior day. The index is worse compared to its respective -22.34 5-day and -15.52 10-day moving averages. From a +72.70 high on January 15th, the index subsequently trended lower and turned negative on February 19th and fell to a -45.90 124-week low on April 7th. The index turned briefly positive in the latter half of May, but has been negative since May 29th. After a lag, the CESIUSD correlates with EPS revisions.

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

    Volatility, Skew:

    · The CBOE SPX Volatility Index (VIX) fell -3.63% to 11.15, compared to 11.57 at the prior close. The VIX is -3.07% below the 11.50 20-day moving average. Its 30-day high is 13.30. Its 30-day low is 10.34. Its all-time closing low is 9.31 on December 22, 1993. The long-term average is 20.00.

    · The Euro Stoxx 50 volatility index (V2X) is 14.03, down -2.51% compared to 14.39 at the prior day's close. The V2X index trades -0.62% below its 14.12 20-day moving average, -18.6% below the 17.23 30-day high, and +14.0% above the 12.30 30-day low.

    · The Hang Seng volatility index (VHSI) closed at 13.40, up +4.20% compared to 12.86 at the prior close. The VHSI index trades +3.33% above its 12.97 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

    · CBOE SKEW (SKEW) rose +0.01% to 139.36, compared to 139.35 the prior session, above a neutral reading (115-120) and since June 19th, above 130, a level that correlates well with short-term market tops. The recent record high was 143.20 on December 20, 2013. Its recent low was 112.47 on May 25, 2013. Spikes in excess of 130 correlate well with short-term market tops, as occurred last December, ahead of market declines last January. 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 7:00, the latest week's MBA mortgage applications fell -0.2%, compared to -1.0% prior.
    • At 8:15, June ADP employment change was 281K, compared to 205K survey and 179K prior.
    • At 9:45, June ISM New York, with 55.3 prior.
    • At 10:00, May factory orders, with -0.3% survey and +0.7% prior.


    Overseas Economic Reporting and News:
     

    • United Kingdom - June Markit/CIPS construction PMI was 62.6, compared to 59.8 survey and 60.0 prior.


    Company Ratings/News:
     

    • None.


    Tuesday's Trade. On lower and below average NYSE volume, major U.S. equity indexes closed moderately higher. Notably, the SPX, DJI, NYSE composite and DJ Transports (TRAN) closed at record highs. According to Dow Theory, the contemporaneous record closes confirms a market uptrend. The SPX, DJI, Nasdaq, and NYSE composite rose +0.67%, +0.77%, +1.14%, and +0.61%, respectively. The SPX, DJI, Nasdaq, and NYSE composite are at least +2.99% higher in 2014. All are at least +0.62% higher in July. Market breadth was positive, with gainers 2.05x losing stocks. Most SPX market segments closed higher. Leaders were health care, technology, and consumer discretionary, which rose at least +1.05%. Financials rose +0.57%. Laggards were materials and energy, which rose at least +0.10%, and utilities, which fell -0.98%.

    Other notable indexes closed higher. The Russell 2000 (RTY) rose +1.09% and closed -0.22% below its March 4th record. The Nasdaq Internet Index (QNET) rose +1.60% and closed -6.72% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +2.34%, -3.68% below its February 25th record high.

    NYSE volume fell -13.3% to 686.20 million shares, compared to 791.83 million shares the prior day, 0.95x the 719.50 million share 20-day moving average volume. Bond markets weakened. The U.S. 10-year yield fell to an early 2.5187% intraday low, then rose through the session to a late 2.5683% intraday high. On the day, the yield rose +3.43 bps to 2.5647%, compared to 2.5304% at the prior close.

    From its prior day and record 1960.23 SPX close, June 2014 SPX futures (SPM4) suggested a moderately higher open. The index gapped higher to open above 1964, then trended higher to a mid-afternoon 1978.58 intraday high. The index eased through the final three hours and closed at 1973.32, +83.6% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

    From its prior day 8,202.30 close, the DJ Transportation index (TRAN) rose +0.72%, compared to the DJI's +0.77% loss. The TRAN trended higher to an early afternoon 8,295.29 intraday high, then fell back to 8,260, where it traded narrowly through the session's final two hours. The index closed at 8,261.70, +0.57% above the prior June 9th 8,214.99 record close. Volume fell -12.8% to 12.533 million shares, compared to 14.052 million shares the prior session, and 0.91x the 15-day moving average volume. The TRAN closed +1.45% and +3.87% above its respective 20- and 50-day moving averages, and +7.27% and +11.9% above its respective 100- and 200-day moving averages.

    Market volatility fell -3.63%, as the CBOE SPX volatility index (VIX) closed at 11.15, compared to 11.57 at the prior close. The index rose to a mid-morning 11.42 intraday high, then fell to a mid-afternoon 10.92 intraday low. The VIX's all-time closing low is 9.31, on December 22, 1993. Its record high is 89.53 in December 2008. Its lifetime average is 20.01. Notably, the CBOE put/call SKEW rose +0.01% to 139.36, compared to 139.35 the prior session, above a neutral 115-120 range, and well above 130, a level that correlates well with short-term market tops. The record 143.26 high came on June 20th.

    The market's technical factors were little changed. The SPX relative strength (RSI) rose to 69.54, compared to 64.37 the prior day, in the upper end of a neutral range, down from an overbought 73.73 on June 9th, but better than 58.90 on June 12th, and an oversold 31.24 on February 3rd. The RSI compares to an overbought 71.26 on December 31st, when the SPX closed at an earlier record high, and compares to 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 +0.63%, +0.62%, +1.38%, and +0.66%, respectively. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed up +1.28%, +0.45%, +2.02%, and +1.02%, respectively. In July, the SPX, DJI, Nasdaq, and NYSE composite are up +0.67%, +0.77%, +1.38%, and +0.66%, respectively. In June, the SPX, DJI, Nasdaq, and NYSE composite rose +1.91%, +0.65%, +3.90%, and +2.07%, respectively.

    In 2014, the SPX, DJI, Nasdaq, and NYSE composite are up +6.76%, +2.29%, +6.75%, and +6.21%, 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 15-day average volume, the BKX rose +0.01% to 71.31, compared to 71.30 at the prior day's close, its 18th consecutive close above 70, but -2.19% below its 72.91 March 20th post-2008 closing high. The index traded narrowly through the session, with a mid-morning 71.11 intraday low and 71.50 mid-afternoon intraday high. The index eased through the final hour and traded modestly lower late in the session. Volume fell -25.0% to 44.288 million shares, compared to 59.010 million shares the prior day, and 0.996x the 44.477 million share 15-day moving average.

    Large cap banks underperformed the regional banks, as the KBW regional banking index (KRX) rose +1.29%.

    This week, the BKX is up +0.63%, compared to last week, when the BKX closed up +0.83%. In July, the BKX is up +0.62%, compared to June, when the BKX rose +3.48%. In 2014, the BKX is up +3.60%, compared to the SPX's +6.76% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

    The BKX is now +21.2% 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 then eased consistently to the May 15th 66.81 closing low, its lowest close since early February. The BKX closed +120.36% 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 +83.6% in the same period.

    The BKX index closed -40.7% below its February 20, 2007, record 121.06 high. The BKX is up +285.3% from its 18.62 March 6, 2009, closing low, its low during the 2008-09 financial panic.

    Technical indicators were little changed. The index closed +0.92% and +3.36% above its respective 20- and 50-day moving averages, and +2.92% and +5.45% above its respective 100- and 200-day moving average. The 20-day moving average rose +12 bps to 71.10. The 69.41 50-day moving average rose +5 bps. Its 69.71 100-day moving average rose +4 bps, and the 200-day moving average rose +4 bps to 68.04. The 20-day closed (by +1.68 points) above the 50-day, and the gap widened +5 bps. The 50-day moving average closed (by +1.37 points) above the 200-day moving average, and the gap widened +2 bps. The 100-day moving average closed (by +1.67 points) above the 200-day moving average, and the gap rose +2 bps.

    The directional movement indicator widened to +15.559, compared to +9.274 the prior day, with consecutive positive readings since June 10th. Relative strength rose to 62.19, compared to 58.59 the prior day, in a neutral range, down from an overbought 73.14 on June 9th but up from the recent 32.95 low on February 3rd. The lowest RSI level was 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 72.17; next support is 71.40.

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

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