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U.S. Futures End Week Flat; Asia Closes Mixed; Europe Lower

This morning. U.S. equity futures are slightly lower and in the middle of their morning trading range. In Asia, equity markets closed mixed. In Europe, equities indexes are moderately lower in mid-afternoon, with greater weakness in Milan. The dollar strengthened following yesterday's ECB press conference, which generated views that the ECB will commence asset purchases and other monetary easing in June. Treasury 10-year yields are modestly higher, but the worldwide sovereign bond market rally continues. Commodities are mixed. Monday's Nikkei 225 June 2014 (NKM4) equity futures are modestly lower.

On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opens -0.81% below the April 2nd record 1890.90 close.

Commentary focuses on earnings, and commodity and currency developments. European earnings are mixed. Barclays is trading higher following announcement of its strategic overhaul.

Trading desks noted quiet overnight markets, with a mixed Asia, but moderately lower European trading to end the week. Thursday's U.S. session was noisy, as major indexes traded early to the top of their recent ranges, then sold off and reversed lower before ending mixed. The sell-off's trigger may have been news reports that Senator Levin would propose legislation that would prohibit corporate tax inversions, wherein U.S. corporations reincorporate overseas to avoid punitive U.S. taxes. Momentum sectors continued to struggle, with the Nasdaq Internet Index (QNET) in bear market territory, and Nasdaq Biotech (NBI) nearly so. Treasuries continue to rally. On the other hand, value stock continue to outperform. Based on ECB president Draghi's conference call, the ECB is likely to take steps next month to deal with low inflation and strong euro. The weeks-old 1840-1890 trading range continues to hold. Conviction remains low as 10-year bond strength continues to weigh on equity prices. Sentiment remains poor, and advances are regarded skeptically as indexes remain near the top of recent trading ranges. Breaks above SPX 1880 appear likely to be sold.

U.S. economic reporting ends the week with March wholesale inventories and trade sales.

Thursday, on lower and below average volume, U.S. major equity indexes opened higher, gapped lower after the 10:00 start of Chairman Yellen's testimony before the Joint Economic Committee, then (with the exception of the Nasdaq) reversed higher by late morning and traded narrowly higher to the close. The S&P 500 (SPX), DJ Industrials (DJI), and NYSE composite rose +0.56%, +0.72%, and +0.55%, respectively. The Nasdaq closed down -0.32%, as "momentum" internet and biotech stocks continued their sell-offs.

The DJ Transports (TRAN) rose +0.04%, and closed -0.50% below its recent April 23rd record high.

NYSE volume fell -9.31% to 0.96x its 20-day moving average. The SPX and NYSE composite are now +1.48% and +2.01% higher in 2014, while the DJI and Nasdaq are down -0.18% and -3.00%, respectively.

Other notable indexes closed lower. The Russell 2000 (RTY) fell -0.50%, while the Nasdaq Internet (QNET) and Nasdaq Biotech (NBI) fell -1.00% and -1.88%, respectively. The QNET is in bear market and the NBI is in correction, down -20.4% and -18.2%, respectively, from recent highs.

The 1Q2014 earnings reports began on March 15th, with 450 of 500 SPX companies having now reported, with respective +6.32% EPS and +0.20% revenue surprises.

Price earnings multiples are elevated. With SPX equities trading at a 17.0 (compared to 17.0 the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.0x times survey $117.88 2014 SPX operating earnings suggests a 2007.23 SPX level this year, a +7.02% rise).

Technicals were little changed. SPX market segments closed mixed. Market breadth was negative, and up volume lagged down volume. Volatility rose. Treasury bond markets strengthened. On the day, the U.S. Treasury 10-year bond yield fell -0.36 bps to 2.5878%, compared to 2.5914% at the prior close.

This morning, 10-year U.S. Treasury yields are up +1.83 bps at 2.6161%, compared to the prior close. World sovereign bond markets continue to rally, too. Notably, Spanish and Italian 10-year debt yields are near their lowest levels since 2005, at 2.97% and 3.01%, respectively.

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

In pre-market futures trading, June SPX equity futures (SPM4) price near the middle of a 1866-1872 trading range. After a fair value adjustment of -1.22 points, the SPM4 future prices at 1871.00, down -0.03 points. The SPX opens +0.51% and +0.55% above its respective 20- and 50-day moving averages, and +1.85% and +5.33% above its 200-day moving averages. Initial resistance is 1886.45. Initial support is 1867.43, then 1859.23.

In Asia, equity markets closed mixed. The Nikkei 225 (NYSEARCA:NKY) rose +0.47%, but remains in correction, with its 50-day moving average below its 200-day moving average and its 200-day moving average now below its 100-day moving average. The Hang Sang index (HSI) closed up +0.12%. The Shanghai composite (SHCOMP) fell -0.21%. Both HSI and SHCOMP 50-day moving averages are also below their respective 200-day moving averages. Today's volumes are unavailable.

Commentary focused on earnings, but macro and economic reporting was light. Attention turns to Chinese April money supply and bank loans, released this weekend, but there's little expectation of material changes in present PBOC policy.

This week, the NKY, HSI, and SHCOMP closed down -1.78%, -1.79%, and -0.75%, respectively. Last week, the NKY rose +0.20%. The HSI closed up +0.17%, and the SHCOMP closed off -0.50%. In May, the NKY is down -0.73%, the HSI is down -1.22%, and the SHCOMP is down -0.75%. In April, the NKY closed down -3.53%, while the HSI and SHCOMP closed down -0.08% and -0.34%, respectively.

In 2014, the NKY and HSI are down -12.8% and -6.19%, respectively, while the SHCOMP is down -4.95%. 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 -1.0 bps to 3.20%, compared to 3.21% 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 in the lower end of neutral ranges. The NKY RSI ended at 44.05, compared to 42.98 the prior day, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI rose to 40.86, compared to 40.21 the prior day. The SHCOMP's RSI fell to 38.20, compared to 39.17 the prior session. On June 27, 2013, the index's RSI fell to a low of 15.27, which was also last year's low index close.

In Japan, the NKY closed at 14,199.59, compared to 14,163.78 the prior day, -12.8% below its recent year-end 16,291.31 high and -63.6% below its late-1989 38,915.87 high close. The index opened lower, set an early 14,091.20 intraday low, then reversed higher by mid-morning and rose to a late morning 14,266.29 intraday high. The index traded narrowly around 14,200 through the afternoon. All market segments closed at least +0.08% higher. Leaders were financials, technology, and basic materials, which rose at least +0.41%. Laggards were telecommunications, health care, and consumer services. The index closed -12.8% below its recent December 31st 16,291.31 high.

In China, the HSI closed at 21,862.99, compared to 21,837.12 at the prior close. The index opened lower, set an early 21,705.12, but immediately reversed higher to a mid-morning 21,925.39 intraday high. The index around breakeven through most of the session's remainder. Market segments closed mixed. Leaders were consumer services, technology, and oil and gas, which rose at least +0.08%. Laggards were basic materials, telecommunications, and consumer goods, which fell at least -0.24%. The index closed -8.45% below its recent December 3rd 23,910.47 high, but +20.2% above its 18,185.59 June 4, 2012 low.

In Shanghai, the SHCOMP closed at 2,011.14, compared to 2,015.27 at the prior close, +3.13% above the 1,950.01 June 27, 2013 close, last year's low. The index opened higher, set and early 2,020.40, then reversed lower and trended lower to an early afternoon 2,001.35 intraday low. By mid-afternoon, the index rallied back to breakeven, then traded narrowly lower to the close. Most market segments closed lower. Leaders were basic materials, oil and gas, and financials, which rose at least +0.13%. Laggards were industrials, technology, and consumer goods, which fell at least -0.73%.

In Europe, equities are moderately lower and near their intraday lows, with greater weakness in Milan. The Euro Stoxx50, CAC 40, and DAX are down -0.57%, -0.33%, -0.58%, and -0.21%, respectively. The Spanish IBEX 35 is down -0.94%. The Italian FTSE MIB is down -1.24%.

Economic reporting is light, with greater attention to earnings, currency and commodity price developments, and prospects for ECB monetary policy easing in June.

European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 53.57, compared to 56.85 at the prior close, in the middle of a neutral (30-70) range, but better than its recent February 5th 33.57 low, which coincided with its 2014 low. The indexes lowest recent RSI level was 25.77 on June 24th, which marked the 2013 2,494.54 closing low.

The Euro Stoxx50 trades -1.37% below its 3,230.33 April 4th post-2008 high close, and -39.3% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,204.30 close, the index gapped lower to open at 3,195 and trended lower to an early afternoon 3,180.54 intraday low. The index currently trades at 3,185.96. Most market segments are lower. Leaders are industrials, which are up +0.06%, and utilities, and consumer goods, which are down at least -0.01%. Financials are down -0.96%. Laggards are consumer oil and gas, technology, and telecommunications, which are down at least -1.05%.

This week, the Euro Stoxx 50, CAC 40 and DAX are up +0.25%, +0.51%, and +0.30%, respectively, while the FTSE 100 is down -0.34%. Last week, the Euro Stoxx50 and FTSE 100, closed up +0.97% and +0.43%, respectively, while the CAC 40 and DAX closed down -0.65% and -0.49%. In May, the FTSE 100 is up +0.53%, compared to the Euro Stoxx50, CAC 40, and DAX, which are down -0.39%, -0.14%, and -0.20%, respectively. In April, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +1.16%, +2.75%, +2.18%, and +0.50%, respectively.

In 2014, the indexes are higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +2.47%, +1.00%, +4.31%, and +0.34%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

1Q2014 SPX Earnings. Of 450 (of 498) reporting companies, 340 or 75.7% surprised positively on earnings, with an average +6.32% surprise average. Of reporting companies, 237 or 52.9% reported sales or revenues above estimates. The average sales/revenue surprise is +0.20%. Energy leads with respective +10.0% and -1.01% earnings and revenue surprises. Financials have a respective +5.63% and +0.03% earnings and revenue surprises. Consumer staples lags with respective +1.06% and -0.54% earnings and revenue surprises.

Valuation. The SPX trades at 17.0x estimated 2013 earnings ($110.15), 15.9x estimated 2014 earnings ($117.88), 14.3x estimated 2015 earnings ($131.02), and 12.9x estimated 2016 earnings ($145.61). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +7.02%, +11.2%, and 11.1%, respectively.

The KBW Bank Index (BKX) trades at 13.2x 2013 adjusted EPS ($5.16), 12.7x estimated 2014 earnings ($5.37), 11.3x estimated 2015 earnings ($6.01), and 10.1x 2016 earnings ($6.71). Analysts expect 2014, 2015, 2016 EPS will grow +4.12%, +11.9%, and +11.6%, respectively.

Composite, index, and equity options. Options markets are neutral to bullish, compared to neutral to bullish the prior session. Composite options are neutral, index options are bullish, and equity options are neutral. The composite put/call ratio is 0.93, compared to 0.86 the prior day, and worse than 5- and 10-period moving averages of 0.90 and 0.90, respectively. The index put/call ratio is 0.92, compared to 0.76 the prior day, and worse than its 5- and 10-period moving averages of 0.86 and 0.91, respectively. The equity put/call ratio closed the day at 0.95, compared to 0.90 the prior day, and worse than its 5- and 10-period moving averages of 0.92 and 0.90, respectively.

NYSE Volume, Breadth Indicators. Volume fell -9.31% to 694.85 million shares, compared to 766.15 million shares the prior day, 0.96x the 725.68 million share 20-day moving average. Market breadth was negative, and up volume lagged down volume. Advancing stocks lagged by -512 (compared to +920 the prior day) or 0.71:1. Up volume was 0.70:1 down volume.

"In Correction" Market Outlook and Distribution Day Count. On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opened April 3rd at a record 1890.90, up +0.99% from the April 1st 1872.34 open. Today, the SPX opens -0.81% below the April 2nd record close.

Libor, LOIS, Currencies, Treasuries, Commodities:

· USD LIBOR is 0.08860%, compared to 0.08850% the prior day. USD 3-month LIBOR is 0.22410%, up from 0.22335% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

· The US LIBOR-OIS (LOIS) spread is 13.100 bps, compared to 13.035 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 16.770 bps, compared to 16.300 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 -5.373 bps, compared to -4.816 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, but far better than a normal -10 bps and -40 bps range.

· German 10-year debt yields are 1.45%, compared to 1.45% the prior day.

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

· Spanish and Italian 10-year debt yields are at their best levels since 2005. Spanish 10-year debt yields are 2.88%, compared to 2.88% the prior day. Italian 10-year debt yields are at 2.91%, compared to 2.92% the prior day. Spanish and Italian 10-year debt years peaked at 7.621% and 7.261% in July 2012 and November 2011, respectively.

· U.S. Treasury yields are slightly lower, with 2- and 10-year maturities yielding 0.383% and 2.601%, respectively, compared to 0.387% and 2.616% Thursday. The yield curve narrowed -1.140 bps, with the 2- to 10-year spread at +2.218%, compared to 2.229% 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$79.720, compared to a US$79.798 intraday high and US$79.361 the prior day, and worse compared to its $79.799 50-day, US$80.196 100-day, and US$80.462 200-day averages. The euro trades at US$1.3783, compared to a US$1.3769 intraday low and US$1.3840 the prior day. The euro trades better compared to its US$1.3825 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 ¥101.79, compared to ¥101.66 the prior day. The yen trades better than its 50-day moving average ¥102.37, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

· Citigroup Economic Surprise Index improved to -9.70, compared to -11.20 the prior day, better than its recent -45.90 worst on April 7th, but continuing its string of consecutive negative readings since February 18th. The index is better compared to its respective -12.88 5-day and -19.33 10-day moving averages. Last year, on June 10th, the index fell to a then 52-week low of -33.26. The index improved and turned positive on July 30th and rose to 53.30 on October 1st, but subsequently fell on dollar weakness to -2.10 on October 31st. It subsequently strengthened to a +72.70 high on January 15th, but then subsequently trended lower and turned negative on February 19th and fell to a -45.90 124-week low on April 7th . After a lag, the CESIUSD correlates with EPS revisions.

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

Volatility, Skew:

· The CBOE SPX Volatility Index (VIX) rose +0.22% to 13.43, compared to 13.40 at the prior close. The VIX is -4.22% below the 14.02 20-day moving average. Its 30-day high is 17.85. Its 30-day low is 12.60. The index's all-time closing low is 9.31 on December 22, 1993. The long-term average is 20.14.

· The Euro Stoxx 50 volatility index (V2X) is 16.82, up +0.50% compared to 16.73 at the prior day's close. The V2X index trades -4.94% below its 17.69 20-day moving average, -17.7% below the 20.43 30-day high, and +8.50% above the 15.50 30-day low.

· The Hang Seng volatility index (VHSI) closed at 15.43, down -1.47% compared to 15.66 at the prior close. The VHSI index trades +1.49% above its 15.20 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

· CBOE SKEW (SKEW) rose +0.54% to 123.93, compared to 123.27 the prior session, above a neutral reading (115-120), but below 130, a level that correlates well with short-term market tops. The recent record high was 143.20 on December 20th. Its recent low was 112.47 on May 25, 2013. Spikes in excess of 130 correlate well with short-term market tops, though not in October or November. The index rarely falls below 110, last on July 31, 2009. The index correlates with market tail risks, the cost of buying out-of-the-money, long-dated options, i.e., options not affected by expirations. A rise suggests that investors are buying more puts than calls, a bearish signal.

U.S. Economic Reporting and News:
 

  • At 10:00, March MoM wholesale inventories, with +0.5% survey and prior. MoM trade sales, with +1.1% survey and +0.7% prior.


Overseas Economic Reporting and News:
 

  • Japan - March preliminary leading index was 106.5, compared to 106.7 survey and 108.7 revised prior. March preliminary coincident index was 114.0, compared to 114.0 survey and 112.9 revised prior.
  • Germany - MoM March exports fell -1.8%, compared to +1.3% survey and -1.3% prior. MoM March imports fell -0.9%, compared to +0.6% survey and +0.4% prior.
  • United Kingdom - March MoM industrial production fell -0.1%, compared to -0..2% survey and +0.8%% revised prior. MoM manufacturing production rose +0.5%, compared to +0.3% survey and +1.0% prior. MoM construction output fell -1.0%, compared to +0.6% survey and -2.0% revised prior.


Company Ratings/News:
 

  • None.


Thursday's Trade. On lower and below average NYSE volume, major U.S. equity indexes rallied to early afternoon highs, then reversed lower in the final hour before ending mixed. The SPX, Nasdaq, and NYSE composite fell -0.14%, -0.40%, and -0.15%, while the DJI struggled to a +0.20% gain. The SPX and NYSE composite are higher in 2014. Market breadth was negative, with gainers 0.71x losing stocks. SPX market segments closed mixed. Leaders were telecommunications, financials, and consumer services, which rose at least +0.17%. Laggards were health care, utilities, and oil and gas, which fell at least -0.57%.

Other notable indexes closed lower. The Russell 2000 (RTY) fell -1.00%, and closed -9.20% below its March 4th record close. The Nasdaq Internet Index (QNET) fell -0.50% and is in a bear market at -20.4% below its March 6th closing high. The Nasdaq Biotech Index (NBI) fell -1.88% and is in correction, down -18.2% from its recent February 25th record high.

On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. Today, the SPX opens -0.81% below the April 2nd record 1890.90 close.

NYSE volume fell -9.31% to 694.85 million shares, compared to 766.15 million shares the prior day, 0.96x the 725.68 million share 20-day moving average volume. On the day, bond markets strengthened slightly. The U.S. 10-year yield opened at the 2.6215%, and traded narrowly through the session, with an early session 2.6323% intraday high, and late afternoon 2.5784% intraday low. The yield ended at 2.6161%, up +2.83 bps compared to the 2.5878% prior close.

From its prior day 1867.72 SPX close, June 2014 SPX futures (SPM4) suggested a modestly lower open. In early trading, the index bounced off 1875 and immediately reversed higher, climbing to 1885 before 10:00. The index traded narrowly through early afternoon, with a mid-day 1889.07 intraday high, then reversed lower by mid-afternoon, falling to the 1870.05 intraday low shortly after 3:00. The index improved in the final hour to narrowly the session's lost. The index closed at 1875.63, -0.81% below its recent April 2nd record closing high. The index closed +74.5% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

The DJ Transportation index (TRAN) rose +0.04%, compared to the DJI's +0.20% gain. From its prior 7,700.26 close, the TRAN traded to an early afternoon 7,775.10 intraday high, then weakened and reversed lower in the final hour, finding support at 7,685. The index closed at 7,703.70, -0.50% below its recent April 23rd closing record high. Volume rose +12.3% to 12.400 million shares, compared to 11.041 million shares the prior session, and 0.96x the 15-day moving average volume. The TRAN closed +1.11% and +1.92% above its 20- and 50-day moving averages, and +3.75% and +8.76% above its respective 100- and 200-day moving averages.

Market volatility rose +0.22%, as the CBOE SPX volatility index (VIX) closed at 13.43, compared to 13.40 at the prior close. The VIX opened above 13.70, then fell to a mid-session 12.92 intraday low, then rose as the broader indexes weakened through the afternoon to a 13.88 intraday high just after 3:00 EDT. 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. The CBOE put/call SKEW rose 0.54% to 123.93, compared to 123.27 the prior session, above a neutral 115-120 range, but below 130, a level that correlates well with short-term market tops.

The market's technical factors were little changed. The SPX relative strength (RSI) eased to 52.85, compared to 53.96 the prior day, in the middle of a neutral range, but better than an oversold 31.24 on February 3rd. The RSI is also down from an overbought 71.26 on December 31st, when the SPX closed at an earlier record high, but above earlier oversold levels of 35.14 on August 27th and 39.19 on October 9th. This week, the SPX, DJI, and NYSE composite are up +0.66%, +1.16%, and +1.01%, respectively, while the Nasdaq is down -0.59%. Last week, the SPX DJI, Nasdaq, and NYSE composite closed down -0.08%, -0.29%, -0.49%, and -0.26%, respectively. In May, the SPX, DJI, Nasdaq, and NYSE composite are down -0.44%, -0.18%, -1.53%, and -0.16%, respectively. In April, the SPX, DJI, and NYSE composite closed up +0.62%, +0.75%, and +0.94%, respectively, while the Nasdaq closed off -2.01%.

In 2014, the SPX and NYSE composite are up +1.48% and +2.02%, respectively, while the DJI and Nasdaq are down -0.18% and -3.00%, respectively. In 2013, the SPX, DJI, Nasdaq, and NYSE composite closed up +29.6%, +26.5%, +38.2%, +23.2%, respectively. All closed at least +5.91% higher in 2012.

KBW Bank Index (BKX). On lower and below average volume, the BKX rose +0.15% to 68.04, compared to 67.94 at the prior day's close, its 21st consecutive close below 70.0, -6.68% below its 72.91 March 20th post-2008 closing high. In early trading, the index set the 67.81 intraday low, but immediately reversed higher and rose to an early afternoon 67.81 intraday high. The index trended lower and briefly reversed lower just after 3:00 EDT, then rallied modestly to preserve a modest gain. Volume fell -11.5% to 40.241 million shares, compared to 45.487 million shares the prior day, and 0.81x the 49.544 million share 15-day moving average.

Large cap banks outperformed the regional banks, as the KBW regional banking index (KRX) fell -0.66%.

This week, the BKX is down -0.74%, compared to last week, when the BKX closed down -0.67%. In May, the BKX is down -0.57%, compared to April, when the BKX closed off -5.34%. In 2014, the BKX is down -1.76%, compared to the SPX's +1.48% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

The BKX is now +15.0% 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 Mary 6th 67.13 closing low, its lowest close since early February. The BKX closed +109.0% 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 +74.5% in the same period.

The BKX index closed -43.8% below its February 20, 2007, record 121.06 high. The BKX is up +265.4% from its 18.62 March 6, 2009, closing low, its low during the 2008-09 financial panic.

Technical indicators were little changed. The index's 20-day moving average remains below its 50- and 100-day moving averages. The index closed -0.79% and -2.89% below its respective 20- and 50-day moving averages, but -1.93% below and +1.41% above its respective 100- and 200-day moving average. The 20-day moving average fell -15 bps to 68.58. The 70.07 50-day moving average fell - bp. Its 100-day moving average rose +1 bp to 69.38, and the 200-day moving average was unchanged at 67.09. The 20-day closed (by -1.49 points) below the 50-day, and the negative gap widened -14 bps. The 50-day moving average closed (by +2.98 points) above the 200-day moving average, and the gap narrowed -1 bp. The 100-day moving average closed (by +2.29 points) above the 200-day moving average, and the gap widened +1 bp.

The directional movement indicator improved to -10.339, compared to -15.511 the prior day, its 23rd consecutive negative reading. Relative strength fell to 40.24, compared to 41.86 the prior day, in the lower end of a neutral range, up from the recent 32.95 low on February 3rd, but down from an overbought 75.56 and 71.88 on January 9th and 10th, respectively. The recent low RSI level was 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 68.43; next support is 67.73.

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