This morning. After disappointing U.S. trade balance, non-farm productivity, unit labor cost reports, and May ADP employment, U.S. equity futures are moderately lower and near the bottom of their trading range. The market outlook is "confirmed uptrend". Later reporting focuses on final May Markit services and composite PMIs, and ISM non-manufacturing composite. In Asia, Japanese equity markets extended their recent gains, while Chinese equity markets closed lower. In Europe, equities indexes are moderately lower and near the bottom of the session's trading range. The dollar is stronger. Following the morning's economic reports, Treasury 10-year yields are lower at 2.5662%. The recent worldwide sovereign bond market appears to be taking a respite. Spanish and Italian 10-year yields little changed. Commodities are mixed. Thursday's Nikkei 225 June 2014 (NKM4) equity futures slightly lower.
Tuesday, major U.S. indexes ended lower. The S&P 500 (SPX), DJ Industrials (DJI), Nasdaq, and NYSE composite rose -0.04%, -0.13%, -0.07%, -0.02%, respectively. The SPX, DJI, Nasdaq, and NYSE composite are +4.11%, +0.88%, +1.38%, and +3.56% higher in 2014, respectively. NYSE volume rose +19.8% to 1.00x its 20-day moving average.
The DJ Transports (TRAN) fell -0.84%. Momentum indexes ended mixed. The Russell 2000 (RTY) fell -0.24%, -6.83% below early March highs. The Nasdaq Internet (QNET) index fell -0.66%, and the Nasdaq Biotech (NBI) index rose +0.42%. The QNET and NBI are in correction, down -14.1% and -11.9%, respectively, from recent highs.
Trading desks report "another night of nothing" as markets wait for catalysts to move markets higher. Japan rallied on expectations of lower corporate taxes. China closed lower on property valuation concerns. European markets are lower after disappointing PMIs, but the focus is tomorrow's ECB action report. Regarding Tuesday's trade, U.S. equities moved lower in early trading, but recovered most losses by session's end. Volatility rose but remains well below its 20-day moving average.
Today's U.S. economic reporting is heavy, but following today's disappointing ADP employment report, the focus is on Friday's May U.S. employment report. Commodity and currency price developments are another focus. Sovereign debt yields are little changed. Relative strength indicators have risen to levels above the middle of a neutral range, but do not yet suggest that the market is particularly short-term overbought.
The 1Q2014 earnings reports began on March 15th, and 494 of 499 SPX companies have now reported, with respective +5.90% EPS and +0.20% revenue surprises. Compared to February 28th, the May-end 2014 EPS estimate rose to $117.93, compared to $117.74. Respective estimates for 2015 and 2016 are now $131.08 and $145.36, compared to $130.81 and $144.98 at February-end.
Price earnings multiples remain elevated. With SPX equities trading at a 17.5x (compared to 17.5x the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.5x times survey $118.14 2014 SPX operating earnings suggests a 2063.87 SPX level in the next year, a +7.26% rise from yesterday's close).
Technicals were little changed. Most SPX market segments closed lower. Market breadth was negative, and up volume lagged down volume. Volatility rose but remains near 30-day lows. Treasury bond markets weakened. On the day, the U.S. Treasury 10-year bond yield rose +7.18 bps to 2.5985%, compared to 2.5267% at the prior close.
This morning, 10-year U.S. Treasury yields are down -1.53 bps at 2.5832%, compared to the prior close. World sovereign bond markets are little changed. Spanish and Italian 10-year debt yields are 2.85% and +3.00%, respectively, compared to 2.85% and +3.00% the prior day.
U.S. options markets are unchanged at neutral, compared to neutral the prior day. The CBOE SKEW fell, but remains above a neutral range.
In pre-market futures trading, June SPX equity futures (SPM4) price near the bottom of a 1916-1923 trading range. After a fair value adjustment of +0.34 points, the SPM4 future prices at 1917.75, down -5.09 points. The SPX opens +1.58% and +2.53% above its respective 20- and 50-day moving averages, and +3.76% and +7.00% above its 200-day moving averages. Initial resistance is 1926.61. Initial support is 1920.33, then 1916.42.
"Confirmed Uptrend" Market Outlook and Distribution Day Count. On May 27th, based on the Nasdaq follow-through and the SPX record close, the market outlook improved to "confirmed uptrend", ending a period of market "in correction" that began on April 4th. The SPX closed June 2nd at a record 1923.57, +5.94% above the 1815.69 close on April 11th, the low close. On March 5, 2014, the Nasdaq peaked at 4,357.97 (compared to its 4,572.83 March 31, 2000 record close), then fell -8.22% to 3,999.73 before recovering +6.07% to the June 2nd 4,242.62 close.
In Asia, the Nikkei 225 (NYSEARCA:NKY) rose +0.22%. The NKY is down -7.51% from its recent year-end high. On April 21st, its 50-day moving average moved below its 200-day moving average. Its 200-day moving average is also below its 100-day moving average. The Hang Seng (HSI) Index fell -0.60%, and the Shanghai SE (SHCOMP) fell -0.66%. The HSI and SHCOMP 50-day moving averages are also below their respective 200-day moving averages. Today's volumes are unavailable.
Asian economic commentary focused on firming Chinese economic growth prospects. Commentary focused on currency and commodity developments.
This week, the NKY and HSII are up +2.98% and +0.30%, respectively, while the SHCOMP is down -0.70%. Last week, the NKY, HSI, and SHCOMP rose +1.18%, +0.50%, and +0.23% respectively. In May, the NKY closed up +2.29%, the HSI rose +4.28%, and the SHCOMP rose +0.63%. 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 -7.51% and -0.66%, respectively, and the SHCOMP is down -4.31%. 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 -2 bps to 3.16%, compared to 3.18% 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 and in the upper end of a neutral range, while Hong Kong and Shanghai are in the middle in a neutral ranges. The NKY RSI ended at 68.02, compared to 67.33 the prior day, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI fell to 62.98, compared to 68.67 the prior day. The SHCOMP's RSI eased to 45.27, compared to 49.91 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 15,067.96, compared to 15,034.25 the prior day, -7.51% below its recent year-end 16,291.31 high and -61.3% below its late-1989 38,915.87 high close. The index traded narrowly around breakeven through the session with an early afternoon 15,071.78 intraday high, and mid-afternoon 14,985.21 intraday low. The index rallied strongly in the final hour, reversing higher. Most market segments rose. Leaders were oil and gas, telecommunications, and technology, which rose at least +0.77%. Laggards were financials, utilities, and consumer services, which fell at least -0.09%.
In China, the HSI opened at the 23,284.17 intraday high, fell to an early afternoon 23,110.85 intraday low. The index closed at 23,151.71, compared to the 23,291.04 prior close. Most market segments closed higher. Leaders were utilities, which rose +0.02%, and industrials and financials, which fell at least -0.25%. Laggards were consumer services, telecommunications, and technology, which fell at least -0.80%. The index closed -3.17% below its recent December 3rd 23,910.47 high, but +27.3% above its 18,185.59 June 4, 2012 low.
In Shanghai, the SHCOMP closed at 2,024.83, compared to 2,038.31 at the prior close, +3.84% above the 1,950.01 June 27, 2013 close, last year's low. The index set and early 2,038.36 intraday high, then trended lower to an early afternoon 2,012.98 intraday low. Most market segments closed lower. Leaders were oil and gas, which rose +0.06%, and telecommunications and utilities, which fell -0.36%. Financials fell -0.65%. Laggards were industrials, basic materials, and health care, which fell at least -0.92%.
In Europe, equities are moderately lower. The Euro Stoxx 50, FTSE 100, CAC 40, and DAX are down -0.40%, -0.38%, -0.31%, and -0.29%, respectively. The Spanish IBEX 35 is down -0.77%. The Italian FTSE MIB is down -0.75%.
Economic reporting focuses on composite and services PMIs. Other foci are currency and commodity developments, but especially tomorrow's ECB action report. The euro is weaker today compared to the dollar.
European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 56.59, compared to 60.53 at the prior close, in the middle of 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 24th, which marked the 2013 2,494.54 closing low.
The Euro Stoxx50 trades -38.5% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,241.04 close, the index opened modestly lower, rose to an early 3,243.00 intraday high, then reversed lower to a late 3,217.87 intraday low. The index improved to 3,237 in early afternoon, but subsequently weakened. The index currently trades at 3,229.21. Most market segments are lower. Leaders are health care, which is up +0.58%, and basic materials and utilities, which are down at least -0.10%. Laggards are telecommunications, technology, and oil and gas, which are down at least -0.72%.
This week, the Euro Stoxx50, FTSE 100, CAC, and DAX are down -0.51%, -0.50%, -0.66%, and -0.52%, respectively. Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX rose +1.29%, +0.42%, +0.59%, and +1.79%, respectively. In May, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +1.44%, +0.95%, +0.72%, and +3.54%, 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 +3.83%, +0.91%, +4.51%, and +3.55%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.
1Q2014 SPX Earnings. Of 494 (of 499) reporting companies, 365 or 74.2% surprised positively on earnings, with an average +5.90% surprise average. Of reporting companies, 261 or 53.2% 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 +5.67% and +0.26% earnings and revenue surprises. Consumer staples lags with respective +0.29% and -0.66% earnings and revenue surprises.
Valuation. The SPX trades at 17.5x estimated 2013 earnings ($110.15), 16.3x estimated 2014 earnings ($118.14), 14.7x estimated 2015 earnings ($131.30), and 13.2x estimated 2016 earnings ($145.72). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +7.26%, +11.1%, and 11.0%, respectively.
The KBW Bank Index (BKX) trades at 13.5x 2013 adjusted EPS ($5.16), 13.0x estimated 2014 earnings ($5.35), 11.6x estimated 2015 earnings ($5.99), and 10.4x 2016 earnings ($6.67). Analysts expect 2014, 2015, 2016 EPS will grow +3.59%, +12.0%, and +11.4%, respectively.
Composite, index, and equity options. Options markets were unchanged at neutral, compared to neutral the prior session. Composite options are neutral, index options are neutral, and equity options are neutral. The composite put/call ratio is 0.93, compared to 0.69 the prior day, and worse than 5- and 10-period moving averages of 0.82 and 0.82, respectively. The index put/call ratio is 1.38, compared to 1.17 the prior day, and worse than its 5- and 10-period moving averages of 1.04 and 0.94, respectively. The equity put/call ratio closed the day at 0.79, compared to 0.56 the prior day, and worse than its 5- and 10-period moving averages of 0.75 and 0.80, respectively.
NYSE Volume, Breadth Indicators. Volume rose +19.8% to 657.42 million shares, compared to 548.98 million shares the prior day, 1.00x the 655.77 million share 20-day moving average. Market breadth was negative, and up volume lagged down volume. Advancing stocks lagged by -729 (compared to -143 the prior day) or 0.61:1. Up volume was 0.95:1 down volume.
Libor, LOIS, Currencies, Treasuries, Commodities:
· USD LIBOR is 0.08800%, compared to 0.08900% the prior day. USD 3-month LIBOR is 0.22740%, up from 0.22715% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.
· The US LIBOR-OIS (LOIS) spread is 13.350 bps, compared to 13.140 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 20.600 bps, compared to 19.900 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 -10.047 bps, compared to -10.00 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 1.41%, compared to 1.41% the prior day.
· Japanese 10-year debt yields are 0.62%, compared to 0.59% the prior day.
· Spanish and Italian 10-year debt yields remain near their multi-year lows. Spanish 10-year debt yields are 2.86%, compared to 2.85% the prior day. Italian 10-year debt yields are at 3.00%, compared to 3.00% the prior day and their May 11th 2.911% 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 slightly higher, with 2- and 10-year maturities yielding 0.395% and 2.581%, respectively, compared to 0.399% and 2.599% Tuesday. The yield curve narrowed -1.410 bps, with the 2- to 10-year spread at +2.186%, compared to 2.200% 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$80.587, compared to US$80.677 intraday high and US$80.554 the prior day, and better compared to its $79.962 50-day, US$80.143 100-day, and US$80.366 200-day averages. The euro trades at US$1.36223, compared to a US$1.3600 intraday low and US$1.3628 the prior day. The euro trades worse compared to its US$1.3761 50-day and US$1.3738 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥102.63, compared to ¥102.51 the prior day. The yen trades worse than its 50-day moving average ¥102.23, but better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.
· Citigroup Economic Surprise Index improved to -2.10, compared to -3.20 the prior day, its 2nd consecutive negative reading. The index is worse compared to its respective -1.40 5-day and +0.36 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 . After a lag, the CESIUSD correlates with EPS revisions.
· Commodities prices are mixed, with higher energy, mixed precious metals, lower aluminum and copper, and mostly higher agriculture prices.
· The CBOE SPX Volatility Index (VIX) rose +2.50% to 11.87, compared to 11.58 at the prior close. The VIX is -3.49% below the 12.30 20-day moving average. Its 30-day high is 15.28. Its 30-day low is 11.29. The index's recent closing low was 11.05 on March 14, 2013. 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 16.86, up +2.07% from 16.52 at the prior day's close. The V2X index trades +5.51% above its 16.08 20-day moving average, -14.4% below the 19.70 30-day high, and +12.9% above the 14.94 30-day low.
· The Hang Seng volatility index (VHSI) closed at 14.66, down -0.95% compared to 14.80 at the prior close. The VHSI index trades -2.23% below its 15.00 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.
· CBOE SKEW (SKEW) fell -1.25% to 121.79, compared to 123.33 the prior session, above a neutral reading (115-120), but below 130, a level that correlates 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, 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:
- The latest week's MBA mortgage applications fell -3.1%, compared to -1.2% the prior week.
- At 8:15, May ADP employment change was 179K, compared to 210K survey and 220K prior.
- At 8:30, the April trade deficit was -$47.2 billion, compared to -$40.8 billion survey and -$44.2 billion revised prior.
- 1Q2015 non-farm productive fell -3.2%, compared to -3.0% survey and -1.7% prior.
- 1Q2014 unit labor costs rose +5.7%, compared to +5.3% survey and +4.2% revised prior.
- At 9:45, May final Markit services PMI, with 58.2 survey and 58.4 prior.
- May final Markit composite PMI, with 58.6 prior.
- At 10:00, May ISM non-manufacturing composite, with 55.5 survey and 55.2 prior.
Overseas Economic Reporting and News:
- China - April leading index was 1100.11, compared to 99.75 revised prior.
- Japan - May Markit services PMI was 49.3, compared to 46.4 prior. Markit/JMMA composite was 49.2, compared to 46.3 prior.
- Eurozone - May final Markit services PMI was 53.2, compared to 53.5 survey and prior. May final Markit composite PMI was 53.5, compared to 53.9 survey and prior. QoQ 1Q2014 preliminary GDP rose +0.2%, compared to +0.2% survey and prior. YoY GDP rose +0.9%, compared to +0.9% survey and prior.
- France - May final Markit composite PMI was 49.3, compared to 49.4 survey and 49.3 prior. May final Markit services PMI was 49.1, compared to 49.2 survey and prior.
- Germany - May final Markit composite PMI was 565.0, compared to 56.4 survey and prior. May final Markit services PMI was 55.6, compared to 56.1 survey and prior.
- Italy - May Markit composite PMI was 52.7, compared to 52.6 prior. May final Markit services PMI was 51.6, compared to 51.4 survey and 51.1 prior.
- Spain - May Markit composite PMI was 55.7, compared to 56.1 survey and 56.5 prior. May Markit services PMI was 55.6, compared to 56.3 prior.
- United Kingdom - May Markit/CIPS composite PMI was 59.0, compared to 58.7 survey and 59.2 prior. May Markit/CIPS services PMI was 58.6, compared to 58.2 survey and 58.7prior.
Tuesday's Trade. On better, but below average NYSE volume, major U.S. equity indexes closed lower, with the SPX, DJI, and NYSE composite closing off their prior day records. The SPX, DJI, Nasdaq, and NYSE composite closed down -0.04%, -0.13%, -0.07%, and -0.02%, respectively. The SPX, DJI, Nasdaq, and NYSE composite are at least +0.88% higher in 2014. Market breadth was negative, with gainers 0.61x losing stocks. Most SPX market segments closed lower. Leaders were oil and gas, utilities, and health care, which closed up at least +0.16%. Financials rose +0.04%. Laggards were basic materials, consumer goods, and telecommunications, which fell at least -0.20%.
Other notable indexes ended mixed. The TRAN closed lower, off its prior day record. The Russell 2000 (RTY) lost -0.24% and -6.83% below its March 4th record close. The Nasdaq Internet Index (QNET) fell -0.66%, and remains in correction, -14.1% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +0.42%, but remains in correction, down -11.9% from its recent February 25th record high.
NYSE volume rose +19.8% to 657.42 million shares, compared to 548.98 million shares the prior day, 1.00x the 655.77 million share 20-day moving average volume. Bond markets weakened. The U.S. 10-year yield opened at 2.5285%, and moved narrowly lower to 2.5160% intraday low, then moved higher through the day to end at the intraday high. On the session, the yield rose +7.18 bps to 2.5985%, compared to 2.5267% at the prior close.
From its prior day 1923.87 SPX close, June 2014 SPX futures (SPM4) suggested a moderately lower open. In early trading, the index fell to 1919, but improved to 1924 before weakening to a late morning 1918.79 intraday low. The index improved and rallied to a mid-afternoon 1925.07 intraday high, then eased to the close. The index closed at 1924.24, -0.04% below its prior day record close. The index closed +79.0% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.
From its prior day 8,080.30 close, the DJ Transportation index (TRAN) fell -0.84%, compared to the DJI's -0.13% loss. The TRAN opened lower and fell to a late morning 8,058.56 intraday low, then traded narrowly around 8,080 through the afternoon. The index closed at 8,080.30. Volume rose +40.0% to 13.287 million shares, compared to 9.494 million shares the prior session, and 1.26x the 15-day moving average volume. The TRAN closed +2.23% and +4.82% above its 20- and 50-day moving averages, and +7.18% and +12.1% above its respective 100- and 200-day moving averages.
Market volatility rose +2.50%, as the CBOE SPX volatility index (VIX) closed at 11.87, compared to 11.58 at the prior close. The index rose to an early 12.13 intraday high, but fell to a 11.72 intraday low before trading around 11.85 through the session. 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 fell -1.25% to 121.79, compared to 123.33 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 65.70, compared to 66.16 the prior day, in the top of a neutral range, far 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 +0.03%, +0.03%, and +0.13%, respectively, while the Nasdaq is down -0.20%. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed up +1.21%, +0.67%, +1.36%, and +0.70%, respectively. In May, the SPX, DJI, Nasdaq, and NYSE composite closed up +2.10%, +0.82%, +3.11%, and +1.22%, 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, DJI, Nasdaq, and NYSE composite are up +4.11%, +0.88%, +1.38%, and +3.56%, 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 better, but below average volume, the BKX rose +0.35% to 69.52, compared to 69.28 at the prior day's close, its 38th consecutive close below 70.0, -4.65% below its 72.91 March 20th post-2008 closing high. In early trading, the index fell to an early 68.97 intraday low, but reversed higher by 10:00 and rose to a mid-morning 69.66 intraday high. The index fell back to breakeven by mid-session, but strengthened again in early afternoon and traded narrowly around 69.50 through the close. Volume rose +16.6% to 35.309 million shares, compared to 30.295 million shares the prior day, and 0.89x the 39.608 million share 15-day moving average.
Large cap banks underperformed the regional banks, as the KBW regional banking index (KRX) rose +0.49%.
This week, the BKX is up +0.89%. Last week, the BKX closed up +1.16%. In May, the BKX rose +0.70%, compared to April, when the BKX closed off -5.34%. In 2014, the BKX is up +0.38%, compared to the SPX's +4.11% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.
The BKX is now +17.5% 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 +113.5% 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 +79.0% in the same period.
The BKX index closed -42.6% below its February 20, 2007, record 121.06 high. The BKX is up +273.4% from its 18.62 March 6, 2009, closing low, its low during the 2008-09 financial panic.
Technical indicators improved, as the index recaptured its 50- and 100-day moving averages. The index closed +2.07% and +0.33% above its respective 20- and 50-day moving averages, and +0.33% and +3.31% above its respective 100- and 200-day moving average. The 20-day moving average rose +7 bps to 68.11. The 69.29 50-day moving average fell -7 bps. Its 69.29 100-day moving average fell -1 bp, and the 200-day moving average rose +2 bps to 67.29. The 20-day closed (by -1.18 points) below the 50-day, and the negative gap narrowed +13 bps. The 50-day moving average closed (by +2.00 points) above the 200-day moving average, and the gap narrowed -9 bps. The 100-day moving average closed (by +2.00 points) above the 200-day moving average, and the gap fell -3 bps.
The directional movement indicator widened to +14.880, compared to +7.046 the prior day, its 6th consecutive positive reading and best since early April. Relative strength rose to 59.23, compared to 57.43 the prior day, in the middle 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 69.80; next support is 69.11.
SPX, DJI, RTY, TRAN, CCMP, NYA, VIX, SKEW, NKY, EURUSD, USGG10YR, HSI, SHCOMP, SX5E, CAC, DAX, FTSE, JPY, GBP, EUR