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U.S. Futures Fall In Quiet Trade; Asia Mixed; Europe Lower Following Strong Week's End

This morning. In a quiet pre-session U.S. equity futures are modestly lower, but near the bottom of their range, following a mixed Asian and lower European trade. European sovereign rates are mixed, the dollar is slightly stronger, and U.S. Treasury 10-year yields are lower. Commodities are mostly lower. Economic reporting is light, focusing on Chinese and German August trade results, with attention moving toward the mid-month FOMC meeting and possible language changes. Tuesday's Nikkei 225 September 2014 (NKU4) equity futures are modestly lower.

Friday, on lower, but above average volume, U.S. equity indexes reversed early moderate losses and closed with moderate gains. The S&P 500 (SPX), DJ Industrials (DJI), Nasdaq, and NYSE composite close up +0.50%, +0.40%, and +0.45%, and +0.39% respectively. Last week, indexes are mixed. Last week, indexes closed at least +0.06% higher. In August, indexes closed up at least +2.98% higher. In July, indexes closed off at least -0.87%. In 2014, the SPX, DJI, Nasdaq, and NYSE composite are up +8.62%, +3.38%, +9.73%, and +6.47%, respectively.

Since August 13, the U.S. equity market outlook is "confirmed uptrend". Subsequent distributions number only 1 for the Nasdaq and NYSE composite. T

NYSE volume fell -2.79% to 1.07x its 20-day moving average.

Other notable indexes closed mixed. The DJ Transports (TRAN) rose +0.61% and closed at a record. The Russell 2000 (RTY) rose +0.25%. The Nasdaq Internet (QNET) index rose +0.40%, while the Nasdaq Biotech (NBI) index fell -0.09%. The RTY, QNET, and NBI are down -3.19%, -4.73%, and -2.11%, respectively, from their recent record highs.

Trading desks report a quiet morning, with a mixed Asia (higher in Tokyo, lower in Hong Kong, and Shanghai closed), but a moderately lower Europe on Ukraine ceasefire violations and a Scottish poll suggesting that a majority might vote to withdraw from the United Kingdom. German and Chinese trade numbers surprised positively. Attention turns to the FOMC's September 17th meeting, when there may be some change to the "considerable time" phraseology, according to a JP Morgan analyst. Also, President Obama will "speak to the nation" to explain an approach to ISIL. In Friday's trade, the SPX managed to reverse early losses and closed at another record high, but the positive reversal would have been more impressive had volume rose.

The 2Q2014 earnings season began June 18th and is now largely complete as 497 of 500 SPX companies have reported with respective +5.08% and +1.52% adjusted EPS and revenues surprises. Financials (84 of 84 reporting) lead with respective +9.47% and +2.38% EPS and revenue surprises. In 1Q2014, 499 of 499 SPX companies reported with respective +5.91% EPS and +0.20% revenue surprises.

Forward estimates have moved up. Respective estimates for 2014, 2015 and 2016 are now $119.62, $132.81, and $147.63, respectively compared to $118.05, $131.36 and $145.70 at June-end, respective increases of +1.33%, +1.10% and +1.32%. Price earnings multiples remain elevated. With SPX equities trading at a 17.5x (compared to 17.4x the prior day) average 2014-15 earnings ($126.21), attention focuses on prospective 2014-15 earnings and valuations (17.5x times survey 2014-15 SPX average operating earnings suggests a 2209.45 SPX level in the next year, a +10.1% rise from yesterday's close).

Technicals were little changed. SPX market segments closed mixed. SPX market breadth was positive, and up volume led down volume. Volatility rose, and the CBOE SPX volatility index (VIX) now suggests a 68% probability that the 30-day change in the SPX will be less than ±4.19%. Treasury bond markets strengthened, with the 10-year U.S. Treasury bond yield rising +0.90 bps to 2.459%, compared to 2.4497% at the prior close.

This morning, 10-year U.S. Treasury yields are -3.22 bps lower at 2.4265%, compared to the prior close. World sovereign bond markets are mixed, with the German 10-year yield at 0.925%, compared to 0.928% the prior day. Spanish and Italian 10-year debt yields are higher at 2.078% and 2.277%, respectively, compared to 2.043% and +2.254% the prior day.

U.S. options markets improved to neutral, compared to bearish to bullish the prior day. The CBOE SKEW rose +5.64% to 137.49, compared to 131.55 the prior day, above a neutral 115-120 range and well above 130, a level that correlates well with short-term market tops. The SKEW closed at a record 143.60 on June 20th.

In pre-market futures trading, September SPX equity futures (SPM4) price are above first resistance but near the bottom of their 2000-2006 trading range. After a fair value adjustment of +0.31 points, the SPU4 future prices at 2002.50, down -3.81 points. The SPX opens +1.43% and +1.93% above its respective 20- and 50-day moving averages, and +3.62% and +6.62% above its 200-day moving averages. Initial resistance is 2013.58. Initial support is 1995.97, then 1984.23.

"Confirmed Uptrend" Market Outlook. Based on Nasdaq's August 13th follow-through, the U.S. equity outlook improved to "confirmed uptrend", concluding a brief "in correction" that commenced on August 6th, which followed a period of "uptrend under pressure" that began on July 8th. Since August 13th, the distribution count is 1 for the Nasdaq and NYSE composite. There have been no other index distributions.

2Q2014 earnings continue to surprise positively, with financials' earnings leading other sectors. On September 5th, the SPX closed at a record 2007.71, up +3.82% compared to its August 12th 1933.75 close.

On May 27th, the market outlook improved to "confirmed uptrend", ending a period of market "in correction" that began on April 4th. The SPX closed July 24th at a record 1987.01, +8.99% above the 1815.69 close on April 11th, the recent low. On February 3rd, the Nasdaq closed at its 3,996.96 year-to-date low, but then recovered +15.0% to the September 2nd 4,598.19 multi-year record close.

In Asia, equity markets closed mixed. The Nikkei 225 (NYSEARCA:NKY) rose +0.23%. In China, the Hang Seng (HSI) Index fell -0.20%, while the Shanghai SE composite (SHCOMP) was closed for holiday. The NKY, HSI, and SHCOMP 50-day moving averages are above their respective 200-day moving averages. Today's volumes are unavailable.

Commentary focused on last Friday's U.S. economic reports, Chinese trade data, and currency and commodity developments.

Last week, the NKY, HSI, and SHCOMP closed up +1.58%, +2.01%, and +4.04%, respectively, compared to the prior week, when the NKY, HSI, and SHCOMP closed down -0.74%, -1.47%, and -1.05%, respectively. In September, the NKY, HSI, and SHCOMP are up +1.82%, +1.81%, and +4.93%, respectively, compared to August, when the NKY and HSI closed down -1.26% and -0.06%, while the SHCOMP gained +0.71%.

In 2014, the NKY is down -3.60%, the HSI is up +8.08%, and the SHCOMP is up +9.95%. 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, and the SHIBO 7-day fell -6 bps to 3.20%, compared to 3.26% 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) have Tokyo and Hong Kong in a neutral range, while the SHCOMP is signaling overbought. The NKY RSI rose to 61.10, compared to 59.71 the prior session, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI eased to 62.78, compared to 64.80 the prior day, down from an overbought 81.00 on July 31st. The SHCOMP's RSI rose to 75.46, compared to 73.06 the prior day. On July 28th, the index's RSI set a record 81.72. 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 15,705.11, compared to 15,668.68 the prior day, -3.60% below its year-end 16,291.31 high and -59.6% below its late-1989 38,915.87 high close. The index set an early 15,730.33 intraday high, but dropped immediately to the 15,656.40 intraday low, then traded narrowly around 15,690 through the session's remainder, improving in the final hour. Market segments closed mixed. Leaders were telecommunications, utilities, and industrials, which rose at least +0.65%. Financials rose +0.57%. Laggards were consumer discretionary, consumer staples, and energy, which fell at least -0.29%.

In China, in Shanghai, the SHCOMP closed Friday at 2,326.43, compared to 2,306.86 at the prior close, +19.3% above the 1,950.01 June 27, 2013 close, last year's low. The index initially traded narrowly around 2,315 until mid-afternoon, then rallied through the final two hours to end with a moderate gain. All market segments closed at least +0.27% higher. Leaders were industrials, utilities, and financials, which rose at least +1.02%. Laggards were consumer staples, energy, and health care.

In Europe, major equity indexes are moderately lower in early afternoon, with greater weakness in London, where a recent poll suggested that Scotland may vote to withdraw from the United Kingdom. Indexes are off their worst early afternoon levels. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are down -0.37%, -1.00%, -0.30%, and -0.10%, respectively. The Spanish IBEX 35 is down -0.09%. The Italian FTSE MIB down -0.36%. Compared to their recent highs, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are down -1.56%, -1.57%, -2.73%, and -3.12%, respectively.

Commentary focuses on Ukrainian truce violations, last week's ECB actions, Scottish polling, Euro weakness, U.S. economic reports, and commodity price developments.

European bourses have recently underperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 65.86, compared to 68.43 at the prior close, in the upper end of a neutral (30-70) range. On August 8th, its RSI closed at 28.17, well below its prior February 5th 33.57 low, which coincided with its prior 2014 low. The index's lowest recent RSI level was 25.77 on June 24, 2013, which marked the year's 2,494.54 closing low.

The Euro Stoxx50 trades -1.56% below its recent June 18th 3,314.80 multi-year high and -37.8% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,275.25 close, the index initially traded narrowly and set an early 3,278.56 intraday high, then trended lower after mid-morning and fell to an early afternoon 3,257.58 intraday low before finding support. The index currently trades at 3,260.74. Most market segments are lower. Leaders are technology and telecommunications, which are up at least +0.12%, and health care, which is down -0.03%. Financials are down -0.42%. Laggards are consumer discretionary, energy, and consumer staples, which are down at least -0.71%.

Last week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +3.14%, +0.52%, +2.41%, and +2.92%, respectively, compared to the prior week, when the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +2.49%, +0.62%, +3.02%, and +1.40%, respectively. In September, the Euro Stoxx50, CAC 40, and DAX are up +2.75%, +2.10%, and +2.82%, respectively, while the FTSE 100 is down -0.49%. In August, the Euro Stoxx50, FTSE 100, CAC 40, and DAX closed up +1.93%, +1.33%, +3.18%, and +0.67%, respectively.

In 2014, the indexes are higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +4.95%, +0.55%, +4.12%, and +1.94%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

2Q2014 SPX Earnings. The 2nd quarter earnings season began June 18th and is now largely complete, with 497 of 500 SPX reporting firms having reported, with respective +5.08% EPS and +1.52% revenue surprises. Financials (84 of 84 reporting) lead with a 9.47% EPS surprise and +2.39% revenue surprise.

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

Valuation. The SPX trades at 18.2x estimated 2013 earnings ($110.15), 16.8x estimated 2014 earnings ($119.62), 15.1x estimated 2015 earnings ($132.81), and 13.6x estimated 2016 earnings ($147.63). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +8.59%, +11.0%, and 11.2%, respectively.

The KBW Bank Index (BKX) trades at 13.9x 2013 adjusted EPS ($5.16), 13.0x estimated 2014 earnings ($5.52), 12.1x estimated 2015 earnings ($5.94), and 10.8x 2016 earnings ($6.63). Analysts expect 2014, 2015, 2016 EPS will grow +6.98%, +7.62%, and +11.6%, respectively.

Composite, index, and equity options. Options markets improved to neutral, compared to bearish to bullish the prior session. Composite options are neutral, index options are neutral, and equity options are neutral. The composite put/call ratio is 1.02, compared to 0.97 the prior day, and worse than 5- and 10-period moving averages of 0.95 and 0.96, respectively. The index put/call ratio is 1.24, compared to 0.91 the prior day, and worse than its 5- and 10-period moving averages of 1.11 and 1.03, respectively. The equity put/call ratio closed the day at 0.94, compared to 1.00 the prior day, and worse than its 5- and 10-period moving averages of 0.91 and 0.94, respectively.

NYSE Volume, Breadth Indicators. Volume fell -2.79% to 609.75 million shares, compared to 617.68 million shares the prior day, 1.07x the 572.53 million shares 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +774 (compared to -1,038 the prior day), or 1.68:1. Up volume was 1.79:1 down volume.

Libor, LOIS, Currencies, Treasuries, Commodities:

· USD LIBOR is 0.09100%, compared to 0.09100% the prior day. USD 3-month LIBOR is 0.23230%, compared to 0.23310% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

· The US LIBOR-OIS (LOIS) spread is 14.23 bps, compared to 14.01 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 16.90 bps, compared to 21.40 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 curve is -18.386 bps, compared to -19.539 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, and within the lower end of a normal -10 bps and -40 bps range.

· German 10-year debt yields 0.927%, compared to 0.928% the prior day.

· French 10-year debt yields 1.385%, compared to 1.396% the prior day.

· Japanese 10-year debt yields are 0.531%, compared to 0.543% the prior day.

· Spanish and Italian 10-year debt yields are lower and near multi-year lows. Spanish 10-year debt yields are 2.091%, compared to 2.043% the prior day. Italian 10-year debt yields are at 2.288%, compared to 2.254% the prior day. Spanish and Italian 10-year debt yields peaked at 7.62% and 7.26%, respectively, in July 2012 and November 2011.

· U.S. Treasury yields are lower, with 2- and 10-year maturities yielding 0.500% and 2.437%, respectively, compared to 0.508% and 2.459% Thursday. The yield curve narrowed -1.360 bps, with the 2- to 10-year spread at +1.937%, compared to 1.951% the prior day. In the past year, the 2- and 10-year spread varied from a low of +1.861% on August 27, 2014, to a high of +2.648% on December 31, 2013.

· The U.S. dollar is modestly mixed compared to the euro, Japanese yen, and British pound. The dollar trades at US$82.920, compared to US$83.967 intraday high and US$83.739 the prior day, and better compared to its $81.426 50-day, US$80.781 100-day, and US$80.535 200-day averages. The euro trades at US$1.2953, compared to a US$1.2961 intraday high and US$1.2951 the prior day. The euro trades worse compared to its US$1.3384 50-day and US$1.3538 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥105.25, compared to ¥105.09 the prior day. The yen trades worse than its 50-day moving average ¥102.65, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

· Citigroup Economic Surprise Index eased to +37.90, compared to +47.00 the prior day, with successive positive readings since August 21st. The index is better compared to its respective +38.00 5-day and +25.87 10-day moving averages. From a +72.70 high on January 15th, the index subsequently trended lower and turned negative on February 19th and fell to a -45.90 124-week low on April 7th. The index turned briefly positive in the latter half of May, then turned negative on May 29th and remained negative through August 5th. The index turned positive again on August 21st. After a lag, the CESIUSD correlates with EPS revisions.

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

Volatility, Skew:

· The CBOE SPX volatility index (VIX) fell -4.35% to 12.09, compared to 12.36 at the prior close. The VIX is -3.52% below the 12.53 20-day moving average. Its 30-day high is 17.57. Its 30-day low is 11.24. 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 16.29, up +5.31% compared to the 15.47 prior day close. The V2X index trades -5.59% below its 17.78 20-day moving average, -26.5% below the 22.15 30-day high, and +11.9% above the 14.87 30-day low.

· The Hang Seng volatility index (VHSI) closed at 14.62, up +1.32% compared to 14.43 at the prior close. The VHSI index trades +0.088% above its 14.49 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

· CBOE SKEW (SKEW) rose +5.64% to 137.49, compared to 130.15 the prior session, above a neutral reading (115-120) since March 27th, and well above 130, a level that correlates well with short-term market tops. The recent record high was 143.26 on June 20, 2014. Its recent low was 112.47 on May 25, 2013. Spikes in excess of 130 correlate well with short-term market tops, as occurred last December, ahead of market declines last January. The index rarely falls below 110, last on July 31, 2009. The index correlates with market tail risks, the cost of buying out-of-the-money, long-dated options, i.e., options not affected by expirations. A rise suggests that investors are buying more puts than calls, a bearish signal.

U.S. Economic Reporting and News:

· At 3:00, July change in consumer credit, with $17.00 billion survey and +$17.255 billion prior.

Overseas Economic Reporting and News:

· China - August trade balance expanded to $49.84 billion, compared to $40.0 billion survey and $47.30 billion prior. YoY exports rose +9.4%, compared to +9.0% survey and +14.5% prior, while YoY imports fell -2.4%, compared to +3.0% survey and -1.6% prior.

· Japan - 2Q2014 final GDP fell -1.8%, compared to -1.8% survey and -1.7% prior.

· Eurozone - September Sentix investor confidence fell to -9.8, compared to +1.4 survey and +2.7 prior.

· France - August Bank of France business sentiment was 97, compared to 95 survey and 96 prior.

· Germany - YoY 2Q2014 labor costs rose +1.7%, compared to +0.5% revised prior.

· United Kingdom - MoM Halifax house prices rose +0.1%, compared to +0.3% survey and +1.2% revised prior.

Notable Company Ratings/News:

· None.

Friday's Trade. Equity indexes opened lower, but found support by mid-morning and trended higher through the session's remainder to end near or at session highs. Both the S&P 500 (SPX) and DJ Transports (TRAN) closed at new records, while the DJ Industrials (DJI) closed fractionally below its July 16th record close. The SPX, DJI, Nasdaq, and NYSE composite rose +0.50%, +0.40%, +0.45%, and +0.39%, respectively. Last week, indexes closed with modest gains, with index up at least +0.06%. In August, indexes closed up at least +2.98. In July, indexes closed down at least -1.51%. In 2014, indexes are up at least +3.38%. Market breadth was positive, with gainers 1.68x losing stocks. All SPX market segments closed at least +0.18% higher. Leaders were utilities, energy, and technology, which rose at least +0.65%. Laggards were consumer discretionary, industrials, and financials.

Other notable indexes closed mixed. The Russell 2000 (RTY) rose +0.25% and closed -3.19% below its March 4th record high. The Nasdaq Internet Index (QNET) rose +0.40%, down -4.73% below its March 6th closing high. The NBI fell -0.09%, closing -2.11% below its August 29th 2,892.71 record high.

NYSE volume fell -2.79% to 609.75 million shares, compared to 627.28 million shares the prior day, 1.07x the 572.53 million share 20-day moving average volume. Bond markets weakened. From its prior day 2.4497% close, the U.S. 10-year yield rose to its 2.47.21% intraday high just before the 8:30 EDT August employment report release, then fell sharply to the 2.3856% intraday low. The index trended higher through the session's remainder and moved higher in the final hour to end at 2.4587%, up +0.90 bps from the prior close.

From its prior day 1997.65 close, September 2014 SPX futures (SPM4) suggested a moderately lower open. The index fell to a mid-morning 1990.10 intraday low, but found support and reversed higher by mid-session than trended higher through the afternoon to end at the session high. The index closed at 2007.71, +3.82% above the August 12th 1933.75 close (which marked the start of the current market uptrend), and +86.2% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

From its prior day record 8,549.79 close, the DJ Transportation index (TRAN) fell to 8,505.23 in early trading, but reversed higher by mid-morning and rose through the session's remainder to a late 8,601.80 intraday high, eclipsing the prior day's record close. Volume fell -25.0% to 9.035 million shares, compared to 12.052 million shares the prior session, and 0.83x the 15-day moving average volume. The TRAN closed +2.67% and +3.58% above its respective 20- and 50-day moving averages, and +6.13% and +11.4% above its respective 100- and 200-day moving averages.

Market volatility fell, as the CBOE SPX volatility index (VIX) fell -4.35% to 12.09, compared to 12.64 at the prior close. The VIX opened at 12.30, then moved higher to the mid-morning 13.18 intraday high before moving lower again by late morning, and through the afternoon to a late 11.96 intraday low. The VIX's all-time closing low is 9.31, on December 22, 1993. Its record high is 89.53 in December 2008. Its lifetime average is 20.01. The CBOE put/call SKEW rose +5.64% to 137.49, compared to 130.15 the prior session, above a neutral 115-120 range and above 130 for the first time since June 18th, a level that correlates well with short-term market tops. Its record 143.26 high came on June 20th.

The market's technical factors were little changed. The SPX relative strength (RSI) eased to 66.37, compared to 62.18 the prior day, in a neutral range. The latest RSI compares to an oversold 32.85 on August 7th, an overbought 73.73 on June 9th, and an oversold 31.24 on February 3rd, its previous yearly low, when the SPX closed at 1741.89. The RSI compares to an overbought 71.26 on December 31st, when the SPX closed at an earlier record 1848.36 high, and compares to earlier oversold levels of 35.14 on August 27th and 39.19 on October 9th.

Last week, the SPX, DJI, and Nasdaq closed up +0.22%, +0.23%, +0.06%, and +0.25%, respectively. The prior week, the SPX, DJI, Nasdaq, and NYSE composite closed up +0.75%, +0.57%, +0.92%, and +0.90%, respectively. In August, the SPX, DJI, Nasdaq, and NYSE composite rallied +3.77%, +3.23%, +4.82%, and +2.98%, respectively. In July, the SPX, DJI, Nasdaq, and NYSE composite closed down up -1.51%, -1.56%, -0.87%, and -2.30%, respectively.

In 2014, the SPX, DJI, Nasdaq, and NYSE composite are up +8.62%, +3.38%, +9.73%, and +6.47%, 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 and above 15-day average volume, the BKX was unchanged at 71.81, compared to 71.81 at the prior day's close, its 11th consecutive close above 70. The index closed -1.51% below its 72.91 March 20th post-2008 closing high. The index opened higher and set an early 72.24 intraday high, but reversed lower by late morning and trended lower to a final hour 71.52 intraday low. Volume rose +21.3% to 40.092 million shares, compared to 33.055 million shares the prior day, and 1.07x the 37.545 million share 15-day moving average.

Large cap banks underperformed the regional banks, as the KBW regional banking index (KRX) rose +0.01%.

This week, the BKX closed up +0.454%, compared to the prior week, when the BKX closed up +0.56%. In August, the BKX rose +1.92%, compared to July, when the BKX closed off -1.64%. In 2014, the BKX is up +3.68%, compared to the SPX's +8.62% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

The BKX is now +23.9% 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. On June 5th, the BKX rose back above 70, but then again surrendered that level on August 1st.

The BKX closed +120.6% 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 +86.8% in the same period. The BKX index closed -40.7% below its February 20, 2007, record 121.06 high. The BKX is up +285.1% from its 18.62 March 6, 2009, closing low, its low at the end of the 2008-09 financial panic.

Technical indicators were little changed. The index closed +1.80% and +1.56% above its respective 20- and 200-day moving averages, and +2.63% and +3.23% above its 50- and 100-day moving averages. The 20-day moving average rose +18 bps to 70.54. The 70.70 50-day moving average rose 1 bp. Its 69.97 100-day moving average rose +3 bps, and the 200-day moving average rose +3 bps to 69.56. The 20-day closed (by -0.16 points) below the 50-day, and the negative gap narrowed -15 bps. The 50-day moving average closed (by +1.14 points) above the 200-day moving average, and the gap narrowed -2 bps. The 100-day moving average closed (by +0.41 points) above the 200-day moving average, and the gap was unchanged.

The directional movement indicator worsened to +3.596, compared to +9.058 the prior day, extending positive readings since April 21st. Relative strength eased to 60.57, compared to 60.57 the prior day, in a neutral range, down from an overbought 73.14 on June 9th, but compares to recent lows of 32.95 on February 3rd and 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 72.04; next support is 71.36.

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