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U.S. Futures Advance Modestly Following July Jobs; Asia Mixed, Europe Higher

This morning. This morning, the S&P 500 (SPX), DJ Industrials (Private:DJI), and NYSE composite open after record closes yesterday. After the 8:30 EDT release of a solid U.S. June employment report and in-line May trade balance, U.S. equity futures are modestly higher after fair value adjustment and near middle of their premarket trading ranges. Economic reporting focuses is busy, with a focus on the employment report and its details. Asia closed mixed. Europe is moderately higher in mid-afternoon. The market outlook is "confirmed uptrend". The dollar is slightly strong. The U.S. Treasury 10-year yields spiked higher after the employment report. Commodities are mixed. Friday's Nikkei 225 September 2014 (NKU4) equity futures are modestly higher. U.S. markets are closed Friday for the July 4th holiday.

Wednesday, major U.S. indexes closed mixed. The SPX, DJI, and NYSE composite rose +0.07%, +0.12%, and +0.03%, respectively, while the Nasdaq eased -0.025. This week, the SPX, DJI, Nasdaq, and NYSE composite are up +0.70%, +0.74%, +1.36%, and +0.69%, respectively. All are at least +0.69% higher in July. In 2014, the SPX, DJI, Nasdaq, and NYSE composite are +6.83%, +2.41%, +6.73%, and +6.25% higher, respectively. NYSE volume fell -13.3% to 0.95x its 20-day moving average.

Other notable indexes were mixed. The DJ Transports (TRAN) fell -0.35%. The Russell 2000 (RTY) fell -0.53%, -0.76% below early March highs. The Nasdaq Internet (QNET) index fell -0.25%, but the Nasdaq Biotech (NBI) index rose +0.72%. The QNET is down -6.96%, from recent highs, while the NBI closed -2.99% below its recent high.

Trading desks report mixed overnight trading, mixed in Asia, but moderately higher in Europe, where the ECB left monetary policy and quantitative easing unchanged. Yesterday's trade was extremely quiet, with the major indexes mixed, but largely unchanged. Yellen spoke at the IMF mid-day, but last week's "Fed behind the curve" has quieted, though today's stronger than expected employment report may revive the argument/discussion. The next FOMC meeting is July 29-30. Ahead of the holiday, quiet trading day is expected. Earnings reports remain 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 21 of 500 SPX companies have reported with respective +1.53% and +0.66% 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 $118.54, $132.04, and $146.10, respectively compared to $117.74, $130.81 and $144.98 at February-end, respective increases of +0.68%, +1.00% and +0.86%. Price earnings multiples remain elevated. With SPX equities trading at a 17.9x (compared to 17.9x the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.9x times survey 2014 SPX operating earnings suggests a 2125.07 SPX level in the next year, a +7.62% rise from yesterday's close).

Technicals were little changed. Led by health care and telecommunications, most SPX market segments closed higher. However, market breadth was negative, and up volume lagged down volume. Volatility fell and is near historically low levels. Treasury bond markets weakened. On the day, the U.S. Treasury 10-year bond yield rose +6.17 bps to 2.6264%, compared to 2.5647% 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 improved to neutral to bullish, compared to neutral the prior day. The CBOE SKEW rose +0.72% to 140.37, compared to 139.36 the prior day, well above 130, a level that correlates well with short-term market tops.

In pre-market futures trading, September SPX equity futures (SPM4) price near the bottom of their 1966-1971 trading range. After a fair value adjustment of -0.48 points, the SPU4 future prices at 1969.25, up +1.98 points. The SPX opens +1.11% and +3.09% above its respective 20- and 50-day moving averages, and +4.75% and +7.96% above its 200-day moving averages. Initial resistance is 1976.67. Initial support is 1972.58, then 1970.53.

"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 July 2nd at a record 1974.62, +8.75% above the 1815.69 close on April 11th, the recent low close. On February 3rd, the Nasdaq closed at its 3996.96 year-to-date low, but has recovered +11.5% to the July 2nd 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 mixed. The Nikkei 225 (NYSEARCA:NKY) fell -0.17%. The Hang Seng (HSI) Index, which fell -0.08%. The Shanghai SE composite (SHCOMP) rose +0.19%. 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 today's U.S. employment report, the latest PMIs updates, the direction of monetary policy, currency, and commodity price developments.

This week, the NKY, HSI, and SHCOMP are up +1.68%, +1.33%, and +1.31%, 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 +1.23%, +1.47%, and +0.73%, 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 -5.79%, the HSI is up +0.97%. The SHCOMP is down -2.49%. 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 -50 bps to 3.41%, compared to 3.91% 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 fell to 61.33, compared to 62.39 the prior session, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI eased to 64.11, compared to 64.82 the prior day. The SHCOMP's RSI rose to 57.53, compared to 56.29 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 15,348.29, compared to 15,369.97 the prior day, -5.79% below its recent year-end 16,291.31 high and -60.6% below its late-1989 38,915.87 high close. The index opened at its 15,435.34 intraday high, but eased through breakeven in early afternoon and fell to a mid-afternoon 15,324.32 intraday low. Most market segments closed higher. Leaders were utilities, technology, and materials, which rose at least +0.07%. Laggards were industrials, financials, and energy, which fell at least -0.31%.

In China, in Shanghai, the SHCOMP closed at 2,063.23, compared to 2,059.42 at the prior close, +5.81% above the 1,950.01 June 27, 2013 close, last year's low. The index opened lower and set an early 2,048.17 intraday low, then improved and reversed higher by late morning. The index traded as high as 2,066.43 by mid-afternoon, then eased into the close. Most market segments closed higher. Leaders were health care, materials, and industrials, which rose at least +0.75%. Laggards were technology and energy, which rose at least +0.03%, and financials, which fell -0.56%.

In Europe, equities have are moderately higher in mid-afternoon. The Euro Stoxx 50, FTSE 100, CAC 40, and DAX are up +0.38%, +0.47%, +0.28%, and +0.61%, respectively. The Spanish IBEX 35 is up +0.04%. The Italian FTSE MIB is up +0.54%.

Economic reporting focuses on PMI revisions and the ECB action report, which was essentially unchanged. 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 51.46, compared to 49.73 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 -38.0% 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, but quickly reversed higher to a late morning 3,273.35 intraday high. The index eased back to breakeven in mid-afternoon, but currently trades at 3,257.01. Most market segments are higher. Leaders are health care, technology, and materials, which are up at least +0.53%. Financials are up +0.26%. Laggards are consumer discretionary, which is up +0.10%, and energy and utilities, which are down at least -0.13%.

This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.90%, +1.29%, +0.29%, and +1.36%, 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 are up +0.89%, +1.50%, +0.61%, and +1.17%, 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 +4.76%, +1.42%, +3.58%, and +4.15%, 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 21 of 500 SPX reporting firms have reported, with respective +1.53% EPS and +0.66% 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 ($118.54), 14.9x estimated 2015 earnings ($132.12), and 13.5x estimated 2016 earnings ($146.22). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +7.62%, +11.5%, and 10.7%, respectively.

The KBW Bank Index (BKX) trades at 13.9x 2013 adjusted EPS ($5.16), 13.5x estimated 2014 earnings ($5.32), 12.0x estimated 2015 earnings ($5.97), and 10.7x 2016 earnings ($6.67). Analysts expect 2014, 2015, 2016 EPS will grow +3.19%, +12.2%, and +11.6%, respectively.

Composite, index, and equity options. Options markets improved to neutral to bullish, compared to neutral the prior session. Composite options are bullish, index options are neutral, and equity options are neutral. The composite put/call ratio is 0.87, compared to 0.93 the prior day, and worse than 5- and 10-period moving averages of 0.88 and 0.84, respectively. The index put/call ratio is 1.04, compared to 1.05 the prior day, and worse than its 5- and 10-period moving averages of 1.15 and 1.04, respectively. The equity put/call ratio closed the day at 0.81, compared to 0.85 the prior day, and worse than its 5- and 10-period moving averages of 0.78 and 0.76, respectively.

NYSE Volume, Breadth Indicators. Volume fell -13.0% to 596.69 million shares, compared to 686.20 million shares the prior day, 0.83x the 719.74 million share 20-day moving average. Market breadth was negative, and up volume lagged down volume. Advancing stocks lagged by -796 (compared to +1,064 the prior day) or 0.59:1. Up volume was 0.94:1 down volume.

Libor, LOIS, Currencies, Treasuries, Commodities:

· USD LIBOR is 0.09540%, compared to 0.09590% the prior day. USD 3-month LIBOR is 0.23210%, down from 0.23460% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

· The US LIBOR-OIS (LOIS) spread is 13.160 bps, compared to 12.380 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 14.700 bps, compared to 15.600 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 -10.723 bps, compared to -10.564 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 1.30%, compared to 1.29% the prior day.

· Japanese 10-year debt yields are 0.57%, compared to 0.56% the prior day.

· Spanish and Italian 10-year debt yields are slightly higher. Spanish 10-year debt yields are 2.74%, compared to 2.73% 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 2.91%, compared to 2.91% 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 mixed, with 2- and 10-year maturities yielding 0.484% and 2.625%, respectively, compared to 0.480% and 2.626% Wednesday. The yield curve narrowed-0.550 bps, with the 2- to 10-year spread at 2.141%, compared to 2.146% 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$80.035, compared to US$80.052 intraday high and US$79.956 the prior day, and worse compared to its $80.140 50-day, US$80.040 100-day, and US$80.258 200-day averages. The euro trades at US$1.3652, compared to a US$1.3645 intraday low and US$1.3660 the prior day. The euro trades worse compared to its US$1.3682 50-day and US$1.3739 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥101.90, compared to ¥101.77 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 improved to -18.60, compared to -22.60 the prior day. The index is worse compared to its respective -22.00 5-day and -16.23 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, lower precious metals, higher aluminum and copper, and mostly higher agriculture prices.

Volatility, Skew:

· The CBOE SPX Volatility Index (VIX) fell -2.96% to 10.82, compared to 11.15 at the prior close. The VIX is -5.42% below the 11.44 20-day moving average. Its 30-day high is 12.89. 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 13.43, down -3.81% compared to 13.96 at the prior day's close. The V2X index trades -4.02% below its 13.99 20-day moving average, -22.1% below the 17.23 30-day high, and +9.14% above the 12.30 30-day low.

· The Hang Seng volatility index (VHSI) closed at 12.70, down -5.22% compared to 13.40 at the prior close. The VHSI index trades -1.54% below its 12.90 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

· CBOE SKEW (SKEW) rose +0.72% to 140.37, compared to 139.36 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 7:30, June YoY Challenger job cuts -20.2%, compared to +45.5% prior.
  • At 8:30, May trade balance was -$44.4 billion, compared to -$47.0 billion revised prior.
  • June change in nonfarm payrolls was 288K, compared to 215K survey and 224K revised prior.
  • June change in private payrolls was 262K, compared to 215K survey and 224K revised prior.
  • June change in manufacturing payrolls was 16K, compared to 10K survey and 11K revised prior.
  • June unemployment was 6.1%, compared to 6.3% survey and prior.
  • June MoM hourly average earnings rose +0.2%, compared to +0.2% survey and prior.
  • June average weekly hours were 34.5, compared to 34.5 survey and prior.
  • The latest weeks' initial and continuing jobless claims were 315K and 2579K, respectively, compared to 313K and 2560K survey and 312K and 2568K revised prior.
  • June underemployment rate was 12.1%, compared to 12.2% prior.
  • June labor force participation rate was 62.8%, compared to 62.8% prior.
  • At 9:45, June final Markit services PMI, with 61.0 survey and 61.2 prior.
  • June final Markit composite PMI, with 61.1 prior.
  • At 10:00, June ISM non-manufacturing composite, with 56.3 survey and prior.


Overseas Economic Reporting and News:
 

  • Eurozone - June final Markit services PMI was 52.8, compared to 52.8 survey and prior. Markit composite PMI was 52.8, compared to 52.8 survey and prior.
  • European Central Bank - The deposit facility rate was unchanged at -0.100%. Main refinancing rate was unchanged at +0.150%
  • France - June final Markit composite PMI was 48.1, compared to 48.0 survey and prior. Services PMI was 48.2, compared to 48.2 survey and prior.
  • Germany - June final Markit services PMI was 54.6, compared to 54.8 survey and prior. Markit/BME composite PMI was 54.0, compared to 54.2 survey and prior.
  • Italy - June Markit/ADACI composite PMI was 54.2, compared to 52.7 prior. Markit/ADACI services PMI was 53.9, compared to 52.0 survey and 51.6 prior.
  • Spain - June Markit services PMI was 54.8, compared to 55.9 survey and 55.7 prior. Markit composite PMI was 55.2, compared to 55.6 survey and prior.
  • United Kingdom - June Markit/CIPS composite PMI was 58.0, compared to 58.6 survey and 59.0 prior. Markit/CIPS services PMI was 57.7, compared to 58.3 survey and 58.6 prior.


Company Ratings/News:
 

  • None.


Wednesday's Trade. On lower and below average NYSE volume, major U.S. equity indexes closed modestly mixed. Notably, the SPX, DJI, and NYSE composite closed again eclipsed the prior day's record highs. The SPX, DJI, and NYSE composite rose +0.07%, +0.12%, and +0.03%, respectively, while the Nasdaq fell -0.02%. The SPX, DJI, Nasdaq, and NYSE composite are at least +2.41% higher in 2014. All are at least +0.65% higher in July. Market breadth was negative, with gainers only +0.59x losing stocks. Most SPX market segments closed higher. Leaders were health care, telecommunications, and consumer staples, which rose at least +0.23%. Financials fell -0.03%. Laggards were energy, industrials, and utilities, which fell at least -0.11%.

Other notable indexes closed mixed. The Russell 2000 (RTY) fell -0.53% and closed -0.76% below its March 4th record. The Nasdaq Internet Index (QNET) fell -0.25% and closed -6.96% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +0.72%, -2.99% below its February 25th record high.

NYSE volume fell -13.0% to 596.69 million shares, compared to 686.20 million shares the prior day, 0.83x the 719.74 million share 20-day moving average volume. Bond markets weakened. The U.S. 10-year yield fell to an early 2.5466% intraday low, but rose sharply after the 8:30 ADP employment report, then trended higher to the close, with a late 2.6282% intraday high. On the day, the yield rose +6.17 bps to 2.6264%, compared to 2.5647% at the prior close.

From its prior day and record 1973.32 SPX close, June 2014 SPX futures (SPM4) suggested a modestly lower open. The index opened briefly lower, but immediately rallied to 1975, then traded narrowly through the session with a mid-morning 1976.67 intraday high and late afternoon 1972.58 intraday low. The index closed at 1974.62, +83.7% 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) fell -0.34%, compared to the DJI's +0.12% gain. The TRAN opened lower, set an early 8,218.67 intraday low, then traded narrowly around 8,235 through the session's remainder. The index closed at 8,232.59, -0.35% below the prior July 1st 8,261.70 record close. Volume rose +11.0% to 13.914 million shares, compared to 12.533 million shares the prior session, and 1.002x the 15-day moving average volume. The TRAN closed +1.00% and +3.37% above its respective 20- and 50-day moving averages, and +6.76% and +11.4% above its respective 100- and 200-day moving averages.

Market volatility fell -2.96%, as the CBOE SPX volatility index (VIX) closed at 10.82, compared to 11.15 at the prior close. The index fell to a mid-morning 10.56 intraday low, then moved narrowly around 110.75 through the close. 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 +0.72% to 140.37, compared to 139.36 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 70.01, compared to 69.54 the prior day, moving above 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 +0.70%, +0.74%, +1.36%, and +0.69%, 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 +0.73%, +0.89%, +1.12%, and +0.65%, 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 +6.83%, +2.41%, +6.73%, and +6.25%, 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 fell -0.14% to 71.65, compared to 71.75at the prior day's close, its 20th consecutive close above 70, but -1.73% below its 72.91 March 20th post-2008 closing high. The index initially traded higher and set its 71.75 intraday high before 10:00, then eased to breakeven by mid-morning, and reversed lower in early afternoon, easing to a late 71.57 intraday low. Volume fell -15.0% to 34.722 million shares, compared to 44.288 million shares the prior day, and 0.85x the 45.577 million share 15-day moving average.

Large cap banks outperformed the regional banks, as the KBW regional banking index (KRX) fell -1.06%.

This week, the BKX is up +0.49%, compared to last week, when the BKX closed up +0.83%. In July, the BKX is up +0.48%, compared to June, when the BKX rose +3.48%. In 2014, the BKX is up +3.45%, compared to the SPX's +6.83% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

The BKX is now +21.1% 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 +120.1% 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 +83.7% in the same period.

The BKX index closed -40.8% below its February 20, 2007, record 121.06 high. The BKX is up +284.8% 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 +0.63% and +3.16% above its respective 20- and 50-day moving averages, and +2.72% and +5.24% above its respective 100- and 200-day moving average. The 20-day moving average rose +10 bps to 71.20. The 69.46 50-day moving average rose +5 bps. Its 69.75 100-day moving average rose +4 bps, and the 200-day moving average rose +4 bps to 68.08. The 20-day closed (by +1.74 points) above the 50-day, and the gap widened +6 bps. The 50-day moving average closed (by +1.38 points) above the 200-day moving average, and the gap widened +1 bp. The 100-day moving average closed (by +1.67 points) above the 200-day moving average, and the gap was unchanged.

The directional movement indicator widened to +15.559, compared to +9.274 the prior day, with consecutive positive readings since June 10th. Relative strength eased to 60.90, compared to 62.19 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 recent RSI level was 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 71.96; next support is 71.46.

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