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U.S. Futures Ease Higher; NKY Rallies On Abe Corporate Tax Plan; Europe Advances

This morning. Earning season is in its 5th week, with 324 of 450 S&P 500 companies having reported with better EPS and revenues than consensus, though critics argue that the better EPS is largely due to cost cutting and that revenue growth remains unimpressive. Notwithstanding, 2013-2015 annual EPS estimates are somewhat improved overall from estimates prior to the start of the current season. Since July 11th, the market trend is "confirmed uptrend".

In Monday's session, the major indexes closed mixed, improving from an early, if moderate sell-off. The DJ Transports (TRAN) outperformed the DJ Industrials (Private:DJI). Overall, technicals were little changed, as the SPX closed for a 2nd consecutive day below its 5-, 10-, and 20-day moving averages. All closed above their respective 50-, 100-, and 200-day moving averages. Most SPX market segments closed lower.

Trading desks reported another "tired" session, an noted better performance in European bourses, where equity indexes are outperforming the U.S. Focus is on the start of monetary tapering this September 18th, when the FOMC next meets. Discussion has turned to large-scale asset purchase (LSAP) taper and associated logistics, asset sale specifics, and the longevity of zero interest rate policy (ZIRP).

U.S. economic and Eurozone reporting is light.

In Asia, Japanese equities recorded an exceptional strong gain, which followed news that PM Abe is considering a reduction in corporate taxes. Monday's Nikkei 225 (NKU3) equity futures are up +0.361%. Chinese equity futures are mixed. In Europe, equities are moderately higher. Commentary is otherwise unfocused, tending toward regional headlines and currency and interest rate moves.

This morning, long-term U.S. Treasury yields are 2.6864%, compared to 2.6206% at the prior close. Spanish and Italian 10-year debt yields are 4.46% and 4.16%, respectively, compared to 4.48% and 4.16% the prior day. The U.S. dollar is stronger. U.S. options markets improved to neutral to bullish, from neutral the prior day. The CBOE skew fell back with a neutral range.

In pre-market futures trading, September SPX equity futures are moderately lower, but near the middle of a 1677-1680 range. After a fair value adjustment of 1.08 points, SPX equity futures are at 1689.00, up +3.08 points. The SPX opens -0.15% below and +2.17% above its respective 20- and 50-day moving averages, and +3.8% and +9.37% above its respective 100- and 200-day moving averages.

In Asia, equity market closed higher, with exceptional gains in Tokyo, where indexes closed at intraday highs. The Japanese Nikkei (NYSEARCA:NKY) closed +2.57% higher. The Hang Seng (HSI) rose +1.21%. The Shanghai composite (SHCOMP) rose +0.23%.

The NKY's relative strength index (RSI) closed at 47.57, up from 41.20 the prior day and in a neutral 30-70 range. The index's RSI is down from an overbought 82.61 on May 22nd, up from a low of 34.42 on June 13th, and down from 64.16 on July 23rd. The HSI's RSI rose to 65.92, from 62.09 the prior day. The SHCOMP's RSI fell to 62.23, from 61.50 the prior day, but up from June 27th's grossly oversold 15.27.

Commentary focused on a weaker yen.

This week, the NKY is up +1.85%, the HSI is up +3.36%, and the SHCOMP is up +2.63%. Last week, the NKY closed down -5.88%, the HSI lost -1.73%, and the SHCOMP gained +1.12%. The prior week, the NKY closed up +2.38%, while the HSI and SHCOMP are up +1.01% and +0.92%, respectively. In August, the NKY is up +1.45%, the HSI is up +3.00%, and the SHCOMP is up +5.64%. In July, the NKY closed down -0.07%, the HSI closed up +5.19%, and the SHCOMP rose +0.74%. In June, the NKY closed down -0.71%, the HSI -7.10%, and the SHCOMP -14.0%.

In 2013, the NKY is up +33.4%. The HSI is down -0.51%. The SHCOMP is down -7.18%. In 2012, the NKY rose +1.37%. The HSI rose +22.9%. The SHCOMP rose +3.17%.

In Japan, the NKY closed at 13,867.00, up from 13,519.43 the prior day. The index gapped higher to open above 13,700, but traded narrowly through mid-session. The index strengthened as the afternoon session began, and rallied strongly through the final 90 minutes to end at the intraday high. The index ended -11.3% below its recent May 22nd 15,627.26 closing high, but +65.8% above its 8,295.63 July 18, 2012 low. The index closed -2.47% below and +0.66% above its respective 20- and 50-day moving averages, and +1.12% above and +15.4% above its respective 100- and 200-day moving averages. All market segments closed at least +1.73%. Leaders were telecommunications, consumer services and consumer goods, which rose at least +2.45%. Laggards were financials, utilities, and health care.

In China, the HSI closed at 22,541.13, compared to 22,271.28 at the prior close. The index closed -5.38% below its January 30th 23,882.06 high, but +24.0% above its 18,185.59 June 4, 2012 low. The index gapped higher to open above 22,350 but rallied to 22,450 in early afternoon to a mid-afternoon 22,563.81 intraday high. The index closed +3.40% and +5.64% above its respective 20- and 50-day moving averages. Most market segments higher. Leaders were basic materials, consumer services, and financials, which rose at least +2.42%. Laggards were telecommunications, which rose +0.48%, and industrials and utilities, which fell at least -0.04%.

In Shanghai, the SHCOMP closed at 2,106.16, compared to 2,101.28 at the prior close, and +8.01% above the recent 1,950.01 June 27th closing low. The index traded narrowly through the session, with a mid-morning 2,093.95 intraday low and late session 2,106.40 intraday high. The SHCOMP closed +3.78% and +1.87% above its respective 20- and 50-day moving averages. Most market segments closed higher. Leaders were technology, industrials, and consumer services, which rose at least +0.41%. Laggards were oil and gas, health care, and telecommunications, which closed off -0.15%.

In Europe, the major equity indexes are moderately higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +0.28%, +0.47%, +0.27%, and +0.71%, respectively. The Spanish IBEX 35 is down -0.06%. The Italian FTSE MIB is up 0.30%.

Commentary focuses on currency and monetary policy developments.

From its 2,827.15 prior day's close, the Euro Stoxx50 (SX5E) rallied to a mid-morning 2,845.13 intraday high, but fell to a mid-session 2,831.44 intraday low. The index currently trades at 2,835.22. Most market segments are higher. Leaders are basic materials, utilities, and consumer goods, which are up at least +0.68%. Laggards are telecommunications, industrials, and financials, which are down at least -0.12%.

This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +0.33%, +0.34%, +0.10%, and +0.91%, respectively. Last week, the Euro Stoxx50 and CAC 40 closed up +0.52% and +0.76%, respectively, while the FTSE 100 and DAS closed off -0.97% and -0.82%. The prior week, the Euro Stoxx50, CAC 40, FTSE 100, and DAX closed up +2.52%, +1.42%, +1.94%, and +1.97%, respectively. In August, Euro Stoxx50, CAC 40, and DAX are up +2.94%, +2.75%, and +2.06%, respectively, while the FTSE 100 is down -0.19%. In July, the Euro Stoxx50, FTSE100, CAC 40, and DAX closed up +5.82%, +6.48%, +6.22%, and +3.58%, respectively. In 2013, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +7.55%, +12.0%, +12.1%, and +10.5%. In 2012, the indexes closed up +13.8%, +5.84%, +15.2%, and +29.1%, respectively.

2Q2013 SPX Earnings. Of 448 (of 499) reporting companies, 324 or 72.3% surprised positively on earnings, with a +2.83% surprise average. Of reporting companies, 250 or 55.9% reported sales or revenues in excess of estimates. The average sales/revenue surprise is +0.57%.

Valuation. The SPX trades at 16.3x 2012 earnings ($103.41), 15.3x estimated 2013 earnings ($110.31), 13.8x estimated 2014 earnings ($122.31), and 12.5x estimated 2015 earnings ($135.15). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2013, 2014, and 2015 earnings to grow +6.68% and +10.9%, and +10.5%respectively.

Composite, index, and equity options. Options markets improved to neutral to bullish, from neutral the prior session. Composite options are bullish, index options are bullish, and equity options are neutral. The composite put/call ratio is 0.76, compared to 0.90 the prior day, and better compared to its 5- and 10-period moving averages of 0.86 and 0.85, respectively. The index put/call ratio is 0.78, compared to 1.24 the prior day, and better compared to its 5- and 10-period moving averages of 0.90 and 0.96, respectively. The equity put/call ratio closed the day at 0.76, compared to 0.80 the prior day, and better compared to its 5- and 10-period moving averages of 0.89 and 0.83, respectively.

NYSE Volume, Breadth Indicators. Volume fell -8.06% to 585.78 million shares, from 637.15 million shares the prior day, 0.88x the 668.52 million share 20-day moving average. Market breadth was positive, but up volume lagged down volume. Advancing stocks led decliners by +227 (compared to -84 the prior day), or 1.16:1. Up volume was 0.96:1 down volume.

Distribution day count. Since the current market uptrend commenced on July 11th, the distribution count is 3 SPX, 3 NYSE composite, 3 Nasdaq, and 2 DJI.

Libor, LOIS, Currencies, Treasuries, Commodities:

· USD LIBOR is 0.11890%, down from 0.11980% the prior day. USD 3-month LIBOR is 0.26420%, down from 0.26470% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

· The US Libor-OIS (LOIS) spread is 16.89 bps, down from 16.62 bps the prior day, and compares to the January 6th high of 50.050 bps. Euribor-OIS is 12.70 bps, up from 12.30 bps the prior day, and down from the December 27, 2011, high of 98.80 bps. Moves in the LOIS indicate changes in intra-bank lending risk premiums.

· The 3-month Euro basis swap is -9.065 bps, compared to -9.000 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, and below a normal -10 bps and -40 bps range.

· Spanish 10-year debt yields are 4.46%, down from 4.48% the prior day and up from the 4.039% May 3rd low. Italian 10-year debt yields are at 4.16%, unchanged from 4.16% the prior day, and up from the 3.822% May 3rd low. German 10-year debt yields are 1.77%, compared to 1.70% the prior day. Japanese 10-year debt yields are 0.74%, compared to 0.75% the prior day.

· The U.S. government overnight repo rate is 5 bps, unchanged from 5 bps the prior day. The January 2, 2013, 45 bps rate was the highest since late 2008. The 0.00 bps low was on January 31, 2009.

· U.S. Treasury yields are higher, with 2- and 10-year maturities yielding 0.310% and 2.654%, respectively, compared to 0.306% and 2.621% Monday. The yield curve widened +2.9200 bps, with the 2- to 10-year spread at +2.344%, compared to 2.315% the prior day. In the past year, the 2- and 10-year spread varied from a low of +1.5484% on August 31, 2012, to a high of +2.3812% on August 1, 2013.

· The U.S. dollar is better compared to the euro and Japanese yen and slightly worse compared to the British pound. The dollar trades at US$81.551, compared to a US$81.623 intraday high and US$81.333 the prior day, and mixed compared to its $82.216 50-day, US$82.552 100-day, and US$81.591 200-day averages. The euro trades at US$1.3296, compared to a US$1.3282 intraday low and US$1.3300 the prior day. The euro trades better compared to its US$1.3174 50-day and US$1.3083 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥98.00, compared to ¥96.90 the prior day. The yen trades better than its 50-day moving average ¥98.33, and better than its May 17th 103.21 closing low.

· Citigroup Economic Surprise Index improved to +38.00, compared to +36.90 the prior day, its 9th consecutive positive reading and its best reading since 39.90 on December 31st. The index is better compared to its respective +37.04 and +22.58 5-day and 10-day moving averages. The index signaled exhaustion on December 20th, and from 55.76 moved lower to -30.80 on January 30th. The index turned positive on February 25th and moved to a March 25th high of 30.20, but turned negative again on May 6th and fell to a low of -32.90 on June 10th. After a lag, the CESIUSD correlates with EPS revisions.

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

Volatility, Skew:

· The VIX closed at 12.81, down -4.47% from 13.41 at the prior close. The VIX is -1.45% below its 13.00 20-day moving average. Its 30-day high is 17.32. Its 30-day low is 11.83. The index's all-time closing low is 11.26 on June 30, 1993. The long-term average is 20.18.

· At mid-session, the Euro Stoxx 50 volatility index (V2X) is 17.13, down -1.33% from 17.36 at the prior day's close. The V2X index trades -3.90% below its 17.82 20-day moving average, -29.5% below the 24.30 30-day high, and +2.69% above the 16.69 30-day low.

· The Hang Seng volatility index (VHSI) closed at 16.16, down -1.16% from 16.35 the prior day. The VHSI index trades -8.43% below its 17.65 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

· CBOE skew closed at 115.44, down -5.61% from 122.30 at the prior day's close, and within a neutral (115-120) range. The recent low was 112.47 on May 25, 2013. Spikes in excess of 130 (as on February 15th and 18th and previously on September 21st, and March 12th, 15th, and 16th) correlate well with short-term market tops. The recent high closes were 130.46 on February 15th and 130.60 on September 21st. 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:

· July monthly Federal budget deficit was -$97.6 billion, compared to -$96.0 billion survey and -$69.6 billion prior.

· July NFIB small business optimism rose to 94.1, with 94.5 survey and 93.5 prior.

· At 8:30, July MoM advance retail sales rose +0.2%, with +0.3% survey and +0.4% prior.

· Retail sales ex autos and gas rose +0.4%, with +0.4% survey and -0.1% prior.

· At 10:00, June business inventories, with +0.2% survey and +0.1% prior.

Overseas Economic Reporting and News:

· Australia - July NAB business conditions were -7, compared to -7 revised prior.

· Japan - June MoM machine orders fell -2.7%, with -7.0% survey and +10.5% prior. YoY machine orders rose +4.9%, with +2.6% survey and 16.5% revised prior.

· Eurozone - June MoM industrial production rose +0.7%, with +1.0% survey and -0.2% revised prior. YoY industrial production rose +0.3%, with +0.3% survey and -1.3% revised prior.

Company Ratings/News:

· None.

Friday's Trade. On below average volume, U.S. equity markets fell to early session lows, rallied to mixed by mid-morning, then eased through mid-afternoon. The Nasdaq gained +0.27%, but the NYSE composite, SPX, and DJI lost -0.14%, -0.12%, and -0.04%, respectively. Market breadth was modestly positive, with gainers 1.16:1 losing stocks. Most SPX market segments closed lower. Leaders were technology, telecommunications, and industrials, which rose at least +0.06%. Laggards were financials, oil and gas, and utilities, which fell at least -0.46%.

NYSE volume fell -8.06% to 585.78 million shares, from 637.15 million shares the prior day and +0.78x the 668.52 million share 20-day moving average volume. U.S. 10-year yields fell -1.06 bps to 2.5784%, from 2.5892% at the prior close.

Futures indicated a lower open, and from its 1691.42 prior day close, the SPX opened below 1685 and fell to an early 1683.35 intraday low, but rallied to breakeven by late morning. Finding resistance, the index eased back to 1687 by mid-afternoon, but improved in the final hour to close at 1689.47, -1.18% below the August 2nd record close. The index closed +57.2% above the 1074.77 October 4, 2011, intraday low.

From its 6,479.63 prior close, the TRAN opened below 6,460, and fell to an early 6,442.49 intraday low, but immediately rallied to 6,500, where it found resistance through the session's remainder. The TRAN ended at 6,494.52, up +0.23% compared to the DJI's -0.04% loss. The TRAN closed -2.63% below its August 1st 6,670.06 record close. Volume fell -2.20% to 75.3% average volume. The TRAN fell -0.24%, compared to the DJI's -0.47% loss, and again failed to confirm the DJI's August 2nd record. The TRAN closed -0.24% below and +2.07% above its respective 20- and 50-day moving averages. The index ended +3.26% and +9.86% above its respective 100- and 200-day moving averages.

Market volatility fell. From its prior 12.81 close, the VIX set an early 13.57 intraday high, but quickly reversed lower to a late morning 12.80 intraday low. The improved to 13.10 through most of the afternoon, but eased through the final hour. The index closed at 12.81, down -4.47%. The VIX's all-time closing low was 11.26, set June 30, 1993.

The broader market's technical factors were little changed. For a 2nd consecutive session, the SPX closed below its 5- , 10-, and 20-day moving averages. SPX closed above its 50-, 100-, and 200-day moving averages. SPX relative strength (RSI) fell to 55.39, from 56.59 the prior day, in a neutral range. The CBOE put/call skew fell -5.61% to 115.44, from 122.30 the prior day, moving back within a neutral 115-120 range.

This week, the Nasdaq is up +0.27%, while the SPX, DJI, and NYSE composite are down -0.12%, -0.04%, and -0.14%, respectively. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed down -1.07%, -1.49%, -0.80%, and -0.70%, respectively. The prior week, the SPX, DJI, and NYSE composite closed up +1.07%, +0.64%, +2.12%, and +0.73%, respectively. In August, the SPX, Nasdaq, and NYSE composite are up +0.22%, +1.20%, and +0.53%, respectively, while the DJI is down -0.52%. In July, the SPX, DJI, Nasdaq, and NYSE composite closed up +4.95%, +3.96%, +6.56%, and 4.90%, respectively.

In 2013, the SPX, DJI, Nasdaq, and NYSE composite are up +18.5%, +17.7%, +21.5%, +13.8%, respectively. All closed at least +5.91% higher in 2012. Immediate SPX resistance is 1699. Immediate support is 1685, then 1679.

KBW Bank Index (BKX). On lower and below average volume, the BKX closed down -0.26% to 65.16, from 65.33 at the prior day's close. The index gapped lower to an early 64.89 intraday low, but rallied by mid-morning to breakeven and its 65.37 intraday high. The index eased through most of the afternoon, but found support near 65.00 before rallying modestly into the close. Volume fell -17.1% to 31.002 million shares, from 37.393 million shares the prior day, or 0.69:1x the 44.912 million share 15-day moving average.

Large cap banks underperformed the regional banks' performance, as the KBW regional banking index (KRX) rose +0.31%.

This week, the BKX is down -0.26%. Last week, the BKX fell -2.42%, compared to a +1.47% gain the prior week. In August, the BKX is down -0.93%. In July, the BKX closed up +7.10%. For the year, the BKX is up +27.1%, better than the SPX's +18.5% rise. In 2012, the index rose +18.9%, compared to a +13.4% rise in the SPX.

The BKX is now +10.1% better than the June 24th 59.19 close, its worst since May 13th. The index crossed above 50 on December 17th and 60 on May 31st. The BKX closed +100.2% above the 32.56 intraday low on October 4, 2011. Large-cap bank stocks have outperformed the broader market's rebound, with the SPX up +57.2% in the same period.

The BKX index closed -46.2% below its February 20, 2007, record 121.06 high. The BKX is up +250.0% from its 18.62 March 6, 2009, closing low.

Technical indicators worsened marginally. The index closed below its 5-, 10-, and 20-day moving averages. The index closed above its 50-, 100-, and 200-day moving averages. The index closed -1.10% below and +2.79% above its respective 20- and 50-day moving averages. The index closed +7.71% and +15.6% above its respective 100- and 200-day moving averages. The index has closed above its 100-day moving average since August 7, 2012. The 20-day moving average rose +2 bps. The 50-day moving average rose +7 bps. Its 100-day moving average rose +8 bps, and the 200-day moving average rose +8 bps. The 20-day closed (by +2.50 points) above the 50-day, and the gap narrowed -5 bps. The 50-day moving average closed (by +7.05 points) above the 200-day moving average, and the gap was unchanged. The 100-day moving average closed (by +4.15 points) above the 200-day moving average since March 19th, and the gap widened +1 bp.

The directional movement indicator widened to +3.807, from +4.014 the prior day, its 30th consecutive positive reading. Relative strength fell to 51.00, from 52.47 the prior day, within a neutral 30-70 range. Next resistance is 65.39; next support is at 64.91.

Price and Selling Exhaustion/Trend Reversal (based on TD sequential):

SPX - On a monthly basis, the SPX initiated a buy setup in June 2008, with the month's 1404.05 high setting the resistance level. The setup perfected at 735.09 in February 2009. A sell setup ensued in May 2009. In September 2010, a follow-on setup began. The May 2009 setup perfected in January 2010. Its countdown completed in January 2012, closing at 1312.41 and setting a 1429.36 risk level. The follow-on setup perfected in May 2011. In March 2012, the index closed at 1408.47, above resistance, suggesting further upside. In September 2012, the index closed at 1440.67, above the 1429.36 risk level and suggesting the likelihood of further upside. In October and November, the index closed below the risk level, but above support. Also, the follow-on countdown rose to 8 in September 2012, but hasn't subsequently progressed. In August 2012, the index initiated a new sell setup, which perfected in April 2013. In May, the sell countdown stemming with the May 2011 perfection completed, setting a risk level of 1793.08, based on May's 105.90 range and 1687.18 high. In July, the index closed at 1685.73, up +4.95% from 1606.28 the prior month and 1569.19 four months prior. The May 2013 sell countdown progressed to 3. The index closed -5.99% below the risk level.

On a weekly basis, the SPX signaled selling exhaustion the week ended June 8th, during which the SPX traded to an intraweek 1266.74 low on June 4th, and then perfected a weekly buy setup with its 1325.66 close. The next week's bullish price flip initiated a sell setup that perfected on August 10th at 1405.87. On January 4th, a bullish price flip initiated a sell setup, which perfected the week ending March 1. On January 31st, the sell countdown associated with August 10th perfection completed and generated a 1525.36 risk level. On August 2nd, the March 8th sell countdown completed. In the week ending August 9th, the index closed down -1.07% at 1691.42, from 1709.67 the prior week and 1680.19 close four weeks prior. The July 12th sell setup progressed to 5. The index closed +10.9% above the 1525.36 risk level.

On a daily basis, the SPX perfected a sell setup on March 13th, with a 1552.52 close. On April 29th, the March 13th sell countdown. On May 2nd, a bullish price flip initiated a follow-on sell setup, and on May 14th, the sell setup perfected and initiated a sell countdown, which completed on July 8th. The completion set a risk level of 1725.50, based on the 38.32 point May 22nd trading range and 1,687.18 intraday high. On June 26th, a bullish price flip initiated another follow-on sell setup, and this setup perfected on July 9th and initiated a sell countdown. On August 1st, a bullish price flip initiated a sell setup. On Monday, the SPX fell -0.12% to 1689.47, from 1691.42 the prior day and 1697.37 4 days prior. The August 7th buy setup progressed to 4. The July 9th 11 sell countdown is unchanged since August 2nd. The index closed -2.09% below the 1725.50 risk level.

BKX - On a monthly basis, the BKX perfected a buy setup in December 2007, but has yet to complete its associated buy countdown, which is has been a deferred 13 since April 2011. That same month, the BKX initiated a buy setup, but the setup has remained unperfected since December 2011, when the index closed at 39.38. The buy countdown would complete with a close below 28.72, the February 2009 close with an 8 buy countdown. In September 2012, the index initiated a sell setup, which perfected in May 2013. In July, the index closed at 65.77, up +7.10% from 61.41 at June-end and 56.28 four months prior. The May 2013 sell countdown progressed to 3.

On a weekly basis, a bullish price flip occurred on July 27, 2012, and the sell setup perfected the following September 21st. Subsequent trends were weak until December 7, when the index initiated a new sell setup, which perfected on February 1, 2013. On February 22nd, the September 21st sell countdown completed and set a 56.93 risk level. On July 19th, the February 1st sell countdown completed and set a 68.29 risk level, based on the day's 2.24 point range and 66.05 intraday high. On August 9th, the BKX closed at 65.33, down -2.42% from 66.95 the prior week and 64.49 four weeks prior. The July 5th sell setup progressed to 6. The index closed -4.33% below the 68.29 risk level.

On a daily basis, on December 17th, the 50.62 close above the November 1st 50.45 close and above the prior two days' close completed a sell countdown and initiated a sell setup, which perfected on February 13th. On March 14th, the sell setup closed above 57.22 and perfected. On March 19th, a bearish price flip initiated a buy setup with a 56.84 close. On April 1st, the buy setup perfected. On May 3rd, a bullish price flip initiated a sell setup. On May 15th, the sell setup perfected. On June 26th, a bullish price flip initiated a sell setup, which perfected on July 9th and initiated a sell countdown. On July 2nd, the index completed its May 15th sell countdown, which set a 64.06 risk level, based on the May 30th 1.14 point high/low range and 62.92 close. On July 24th, the July 12th sell setup perfected, but did not initiate a sell countdown. Monday, the index closed at 65.16, down -0.26% from 65.33 the prior day and 66.02 four days prior. The August 9th buy setup progressed to 4. The July 9th 8 sell countdown is unchanged since August 2nd. The index closed +1.72% above its 64.06 risk level.

VIX - On a monthly basis, the VIX perfected a sell setup in October 2007. The associated sell countdown progressed to a deferred 13 in June 2012, but is subsequently unchanged. In May a bullish flip initiated a sell countdown. The VIX ended July at 13.45, down -20.2% from 16.86 at the end of June and 12.70 at the end of March. The May 2013 sell setup progressed to 3.

On a weekly basis, the VIX perfected a buy setup on January 27, 2012, and a sell setup on June 8th, followed by another perfected buy setup on August 10th. On April 12th, the VIX completed the buy countdown associated with the August 10th, setup, which also established a 9.17 risk level. The week ending August 9th, the VIX rose +11.9% to 13.41, from 11.98 the prior week, and 13.84 4 weeks prior. The July 5th buy setup progressed to 6. The index closed +28.8% above the risk level.

On a daily basis, on May 20th a bullish flip initiated a sell setup, which perfected on May 31st and initiated a sell countdown. On June 26th, a bearish flip initiated a buy countdown, which perfected on July 9th, when a sell countdown was initiated. Monday, the VIX closed at 12.81, down -4.47% from 13.41 the prior day and 12.72 at the 4 days' prior close. The August 7th sell setup progressed to 4. The July 9th 10 buy countdown was unchanged. The VIX closed +23.1% above the 10.41 risk level.

USGG10YR - On a monthly basis, the USGG10YR began a downward trend from 5.0506% in May 2006, perfecting a sell setup in April 2008 (at 3.7295%) and completing the associated buy countdown in June 2011 (at 3.1600%), when it produced a 1.1121% risk factor. A subsequent 9 buy setup perfected in May 2012, with the rate at 1.5578%. In September 2012, a bullish price flip initiated a sell setup. The rate ended July at 2.5762%, compared to 2.4857% the prior month and 1.8487% 4 months prior. The May 2013 sell setup progressed to 3.

On a weekly basis, on December 7th, a bullish rate flip (at 1.6215%) initiated a sell setup, which perfected on February 1st. The perfection initiated a sell setup. Subsequent trends were weak until a May 3rd bullish rate flip (at 1.7382%) initiated a sell setup, which perfected on June 28th, when the rate ended at 2.4857%. For the week ended August 9th, the rate ended at 2.5784%, down from 2.5960% the prior Friday and 2.5821% four weeks prior. The bearish rate flip initiated a buy setup. The February 1st 9 sell countdown is unchanged since July 5th.

On a daily basis, after a late October 2012 intraday spike to 1.861%, the trend was lower until November 16th, when the rate closed at 1.580%. A bullish price flip on December 7th initiated a sell setup. On December 19th, the rate perfected its sell setup and initiated a sell countdown. On February 20th, a bearish rate flip initiated a buy setup, which perfected on March 4th. On April 8th, the buy setup perfected. On April 15th, the buy countdown associated with the March 4th perfection completed and set a 1.6098% risk level, based on the April 5th 10.61 bps range between the intraday high and low rate and 1.7159% close. On May 15th, the May 3rd buy setup perfected. On June 24th, the May 20th sell countdown completed, setting a 2.8150% risk level, based on the June 24th 15.03 bps trading range and 2.6647% intraday high. On Monday, the rate ended at 2.6197, up +2.95 bps from 2.5784% the prior day and 2.6421% four days prior. The August 7th buy setup progressed to 4. The rate closed -19.7 bps below the 2.8150% risk level.

EUR, USD Cross - On a monthly basis, Euro Dollar cross perfected a buy setup on May 30, 2008, at 1.554. Subsequent monthly trends were weak until December 31, 2009, when a monthly decline of -4.56% brought the index to 1.4321. The downward move continued until July 2010, when from 1.2238, the index rose +7.10%, with an unperfected buy setup in August 2010. The index failed to establish much strong upward momentum, however, peaking at the end of April 2011 at 1.4807, but then trending lower to retest the July 2010 lows. In March, a bearish price initiated a buy setup. The cross ended July at 1.3302, up +0.45% from 1.3010 the prior month and 1.2815 4 months prior. The June 2013 sell setup progressed to 2. The 9 buy countdown progressed is unchanged since March.

On a weekly basis, the cross perfected a buy setup on January 6th, followed by another buy setup and completed countdown on June 1, 2012, when the cross closed at 1.2434. The cross completed a buy countdown on July 27th, and set a 1.1964 risk level. The index initiated an sell setup the week ended August 3rd, when it closed at 1.2387, and the setup perfected on September 28, with a 1.2860 close. On January 18th, the index completed a sell setup at 1.336. The week of August 9th, the index rose +0.50% to end at 1.3342, from 1.3276 the prior week and 1.3067 4 weeks prior. The July 19th sell setup progressed to 4. The sell countdown associated with the September 28th perfection is a deferred 13, unchanged since June 7th. The cross closed +11.2% above the 1.1964 risk level.

On a daily basis, on February 14th, a bearish price flip initiated a sell setup, which subsequently perfected on February 26th. On April 4th, a bullish price flip initiated a sell setup, which perfected on April 12th. On June 7th, the sell countdown associated with the April 12th perfection completed. The completion set a 1.3537 risk level, based on the June 6th 0.0231 trading range and 1.3306 intraday high. On June 11th, the May 29th sell setup perfected and initiated a sell countdown. On July 2nd, the June 20th buy setup perfected and initiated a buy countdown. On July 10th, a bullish price flip initiated a sell setup, which perfected on July 22nd. The perfection canceled the July 2nd buy countdown. With Monday's -0.31% lower close, the EURUSD cross ended at 1.3301, down from 1.3342 the prior day and 1.3305 four days prior. The bearish price flip initiated a buy setup. The July 22nd 8 sell countdown is unchanged since August 8th. The cross closed -1.74% below the 1.3537 risk level.

SX5E - On a monthly basis, the Euro Stoxx50 perfected a sell setup on May 31, 2007. It perfected a buy setup on September 30, 2008. The buy countdown completed in May 2012. A bullish price flip in August 2012 initiated a sell setup, which perfected in May 2013 and initiated a sell countdown. In July, the index closed at 2,753.97, up +5.82% from 2,602.59 the prior month and 2,624.02 four months prior. The bullish price flip canceled a 1 buy setup and initiated a sell setup. The May 2013 sell countdown is unchanged since May 2013.

On a weekly basis, a bullish price flip the week of November 23rd (2,557.03 close) initiated a sell setup that perfected on January 18th at 2,709.59, up +5.97%. The sell countdown associated with the August 10th perfection also completed on January 18th, when the index closed at 2,709.59, up +24.2% over the June 15th bullish price flip. The completion set a 2,785.45 risk level. Since January 18th, the subsequent trend was lower, until a bullish price flip in the week ending July 12th. In the week ended August 9th, the index rose +0.52% to 2,825.62, from 2,811.00 the prior week and 2,674.87 at the 4 weeks' prior close. The July 12th sell setup progressed to 5. The sell countdown stemming from the January 18th perfection progressed to 12. The index closed +1.63% above the risk level.

On a daily basis, on January 3rd, the index completed the associated countdown (with a 2,701.22 close) and set a 2,786.57 risk level, based on the prior day's 2,711.25 high and 51.46 intraday range. On March 14th, the March 4th sell setup perfected. On March 18th, a bearish price flip initiated a buy setup, which perfected on March 28th, and initiated a buy countdown. On April 23rd, a bullish price flip initiated a sell countdown, which perfected on May 3rd. On June 12th, the May 31st buy setup perfected and initiated a buy countdown. On July 8th, a bullish price flip initiated a sell setup, which perfected on July 18th and initiated a sell countdown. Monday, the index fell -0.52% to 2,827.15, from 2,825.62 the prior day and 2,790.78 at the prior 4 days' close. The August 8th sell setup progressed to 3. The July 18th sell countdown progressed to 10.

NKY - On a monthly basis, the NKY perfected a buy setup on April 30, 2009 (at 8,828.26), but subsequently traded narrowly until November, 2012, when the index rose +5.80%, following an increase of +1.50% in October, and initiated a sell setup. The index ended July at 13668.32, down -0.07% from 13,677.32 the prior month and 12,397.91 four months prior. The November 2012 sell setup progressed to 9 and perfected.

On a weekly basis, the NKY perfected a sell setup on March 9th, and a subsequent buy setup on June 1st with a countdown of 8. The index initiated a sell setup on October 26th, and on December 21st, the sell setup perfected. Notably, on December 28th, the index closed at 10,395.18, +2.01% above 10,190.35 resistance (its April 4th weekly high), suggesting further upside. The sell countdown associated with the December 21st perfection completed April 5th and set a 14.645.46 risk level, based on the 1,419.84 point range on that day and 13,225.62 intraday high. For the week ending August 9th, the index closed down -5.88% at 13,615.19, from 14,466.16 the prior week and 14,506.25 four weeks' prior. The bearish price flip canceled the July 5th 5 sell setup and initiated a buy setup. The index closed -3.54% below the risk level.

On a daily basis, on March 27th, a bearish price flip initiated a buy setup, which perfected on April 15th. On May 7th, a bullish price flip initiated a sell setup. On May 17th, the sell setup perfected; also, the sell countdown associated with the April 26th perfection completed. The completion set a 15,412.34 risk level, which is based on the May 16th 15,155.72 intraday high and 276.21 point range. On June 4th, the May 23rd buy setup perfected and initiated a buy countdown. On July 10th, the June 28th sell setup perfected, cancelled the June 4th 7 buy countdown, and initiated a sell countdown. On August 2nd, a bullish price flip initiated a sell setup. Tuesday, the index rose +2.47% to 13,867.00, from 13,519.43 the prior day and 13,824.94 four days prior. The bullish price flip canceled the August 7th 4 buy setup and initiated a sell setup. The July 10th sell countdown progressed to 7. The index closed -10.0% below the 15,412.34 risk level.

HSI - On a monthly basis, the HSI perfected a buy countdown on March 31, 2009, and two subsequent perfected upward setups on December 31, 2009 and May 31, 2011. In February, the index closed at 23,020.27, completing the sell countdown stemming from the May 2011 perfection. The completed countdown set a 27,194.16 risk level. A bullish price flip in September 2012 initiated a sell setup. A bearish price flip in May 2013 initiated a buy setup. The index ended July at 21,883.66, up +5.19% from 20,803.29 the prior month and 22,299.63 four months prior. The May 2013 buy setup progressed to 3. The index closed -19.5% below the risk level.

On a weekly basis, the HSI perfected a sell setup on March 2, 2012, and the associated sell countdown completed on September 21, 2012, and set a 22,357.00 risk level, based on the September 14, 2012, when it set a 22,357.00 risk level. The index perfected two sell setups on November 9th and February 1st. A buy setup initiated the following week and perfected on April 5th, initiating a sell countdown. On August 9th, the index closed at 21,807.56, down -1.73% from 22,190.97 the prior week and 21,277.28 four weeks prior. The July 12th sell setup progressed to 5. The April 5th 6 buy countdown is unchanged since June 21st. The index closed -2.46% below the risk level.

On a daily basis, on April 19th, a bullish price flip initiated a sell setup, which perfected on May 2nd and initiated a sell countdown. On June 4th, the May 23rd buy setup perfected and initiated a buy countdown. On June 20th, a bearish price flip initiated a buy setup. On June 25th, the June 4th buy countdown completed and set a 18,860.42 risk level, which is based on the day's 565.94 trading range and 19,426.36 intraday low. On Tuesday, the index rose +2.13% to 22,541.13, from 22,271.28 the prior day and 21,588.84 four days prior. The August 12th sell setup progressed to 2. The index closed +21.3% above the 18,860.42 risk level.

SHCOMP - On a monthly basis, the SHCOMP perfected a buy setup on September 30, 2008, and subsequently rallied to an August 31, 2009, high, but without perfecting a subsequent sell setup. In May 2011, the SHCOMP assumed a downward trend and perfected a buy setup on January 31, 2012. The perfection initiated a buy setup. In April 2013, a bearish price flip initiated a buy setup. In July, the index closed at 1,993.80, up +0.74% from 1,979.21 the prior month and 2,236.62 four months prior. The April 30th buy setup progressed to 4. The January 2012 buy countdown progressed to 9.

On a weekly basis, the SHCOMP last perfected a buy setup on April 8, 2011. The index has subsequently trended lower, with a downward perfected setup on September 23, 2011, and January 6, 2012 countdown completion, when it closed at 2,163.40. The index rallied to a high of 2,476.22 during the week ending March 16th, but without perfecting an upward setup. On July 13th, the index perfected a buy setup. In subsequent weeks, it traded below the sales exhaustion target of 2148.45 to a 1980.12 close on November 30th, when the buy countdown reached 11. On December 14th, a bullish price flip initiated a sell setup at 2,059.47. That setup perfected on February 8th, with a 2,432.40 close, up +18.1%. On August 9th, the index closed the week up +1.12% at 2,052.24, from 2,029.42 the prior week and 2,039.49 four weeks prior. The July 26th sell setup progressed to 3.

On a daily basis, On December 4th, a bullish price flip initiated a sell setup. On January 14th, the sell setup that began on December 25th perfected; also, the bullish price flip initiated a follow-on sell setup. On March 26th, a bearish price flip initiated a buy setup, which perfected on April 9th. On June 3rd, a bearish price flip initiated a buy setup, which perfected on June 19th, and initiated a buy countdown. On June 7th, the April 9th buy countdown completed and set a 2,142.63 buy risk level. On July 29th, a bullish price flip initiated a sell setup. On July 30th, the June 19th buy countdown completed and set a 1,735.74 risk level, based on the June 25th 113.91 point trading range and 1,849.65 intraday low. Tuesday, the index rose +0.23% to 2,106.16, from 2,101.28 at the prior close and 2,046.78 4 days prior. The August 1st sell setup perfected and initiated a sell countdown. The index closed +21.3% above the July 30th risk level.