P I P E R

J A F F R A Y

T E C H N I C A L

The Informed Investor

Winding Our Way to SPX 2K
February 25, 2014
Craig W. Johnson, CFA, CMT
Managing Director
612 303-6428
craig.w.johnson@pjc.com
Leah Williams
Research Analyst
312 267-5080
leah.j.williams@pjc.com

R E S E A R C H

Disclosures for the universe of Craig Johnson*

1.

I or a household member have a financial interest in the securities of the following companies: none

2.

I or a household member is an officer, director, or advisory board member of the following companies: none

3.

I have received compensation within the past 12 months from the following companies: none

4.

Piper Jaffray or its affiliates beneficially own 1% or more of any class of common equities of the following companies: YOKU

5.

The following companies have been investment banking clients of Piper Jaffray during the past 12 months: none

6.

Piper Jaffray expects to have the following companies as investment banking clients within the next three months: none

7.

Other material conflicts of interest for Craig Johnson or Piper Jaffray regarding companies in my universe for which I am aware include: none

8.

Piper Jaffray received non-investment banking securities-related compensation from the following companies during the past 12 months: CNA, CS, CYN,
INFA, GS, MASI, PNC, RVBD, TXN

9.

Piper Jaffray makes a market in the securities of the following companies, and will buy and sell the securities of these companies on a principal basis:
ALTR, BBRY, CAT, CRUS, DD, DECK, FSLR, GOOG, HRC, IBKR, INFA, JCI, JOBS, MASI, MGM, RVBD, TXN, UA, VRX, YOKU, ZNGA

10. Piper Jaffray usually provides bids and offers for the securities of the following companies and will, from time to time, buy and sell the securities of these
companies on a principal basis: BA, BAC, BRFS, CFX, CNA, CNW, CS, CYN, CYNO, DHR, GS, HI, HIG, HOT, HZO, JEC, MTD, NBR, OMI, ORA,
PKD, PNC, RNST, SPW, SSW, TDW, TWX, TX, USG

*Represents companies in the Technical Research Model Portfolio

Fundamentalist vs. Technician | Two Approaches

Technical Analysts Approach

Can analyze a large number of stocks

P = $
E
Fundamental Analysts
Approach
Typically follows 20-30 Stocks
Source: Piper Jaffray Technical Research

Topics
Major Market Trend
Market Performance
Attractive-Looking MicroGroups
Weak-Looking MicroGroups

S&P 500 | A Hop, a Drop and a Pop?

S&P 500 Total Returns | 2014 a Good but Not Great Year

History May Not Repeat Itself, but We Suspect it will Rhyme

1928-1962

1972-1992

2000 - 2014

Source: Piper Jaffray Technical Research

Major Market Trend | Stocks Can Work in a Rising Rate Environment

Major Market Trend | Stocks Can Work in a Rising Rate Environment

Avg S&P P/E = 15.87

Avg 10-year yield: 5.5%
Current 10-year yield: 2.73%

Source: Piper Jaffray Technical Research

Major Market Trend | Groups Above a 40-Week MA = Sell

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Major Market Trend | Historical Perspective

As of 1/24/2014, the S&P 500 is 4.5% above its 40-week MA, lower than the statistical norm of 5% (1969-2013),
but well below the historically extreme readings.

A current reading shows that

the S&P 500 is 4.5% above its
40-week MA, which suggests
that there is more upside
potential before it reaches a
historically elevated reading.

Source: Piper Jaffray Technical Research

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S&P Cyclical Trends | Looking for a Drop?

Source: Piper Jaffray Technical Research

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Fed Chairmanship Changes | Looking for a Drop?

Source: Piper Jaffray Technical Research

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Major Market Trend | Post-January Barometer Years

The only consecutive January Barometer years were in 1975 and 1976. On average, post-January Barometer years are flat to slightly down.

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S&P 500 Historical Valuation Ranges

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Attractive-Looking
MicroGroups

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Weak-Looking
MicroGroups

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Analyst Certification Craig W. Johnson, CFA, CMT, Technical Analyst

The views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of my compensation was, is, or will be
directly or indirectly related to the specific recommendations or views contained in this report.
Piper Jaffray was making a market in the securities of J. C. Penney Company, Inc. at the time this research report was published. Piper Jaffray will buy and sell J. C. Penney Company,
Inc. securities on a principal basis.
Piper Jaffray research analysts receive compensation that is based, in part, on overall firm revenues, which include investment banking revenues.
Other Important: The material regarding the subject company is based on data obtained from sources deemed to be reliable; it is not guaranteed as to accuracy and does not purport to be
complete. This report is solely for informational purposes and is not intended to be used as the primary basis of investment decisions. Piper Jaffray has not assessed the suitability of the
subject company for any person. Because of individual client requirements, it is not, and it should not be construed as, advice designed to meet the particular investment needs of any
investor. This report is not an offer or the solicitation of an offer to sell or buy any security. Unless otherwise noted, the price of a security mentioned in this report is the market closing
price as of the end of the prior business day. Piper Jaffray does not maintain a predetermined schedule for publication of research and will not necessarily update this report. Piper Jaffray
policy generally prohibits research analysts from sending draft research reports to subject companies; however, it should be presumed that the analyst(s) who authored this report has had
discussions with the subject company to ensure factual accuracy prior to publication, and has had assistance from the company in conducting diligence, including visits to company sites
and meetings with company management and other representatives. This report is published in accordance with a conflicts management policy, which is available at
http://www.piperjaffray.com/researchdisclosures.
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