Weekly: Stocks end mixed – and split, as large caps outperform small caps

Friday, September 19, 2014 -

Stocks showed a lack of direction on Friday as large caps held onto prices and small caps took a real beating – a schizophrenic picture of bipolar nervousness among traders.

In a clear show of rotation to safety, the Dow once again managed to end Friday’s trading at a new high while small caps went underwater early and showed serious weakness as it closed beneath its 50MA and 200MA and on the brink of a bearish death cross – a mixed market, indeed.

While the Dow crept up 14 points (+0.1%) to 17,280, the Nasdaq dipped 14 points (-0.3%) to 4,580 and the S&P 500 edged down 0.96 points (-0.1%) to 2,010. The NYSE finished at -0.31% and the small cap Russell 2000 at -1.07%.

And while the larger cap indexes moved higher for the week, the small cap indexes and microcap stocks put in a third back to back negative week, with the Russell 2000 on the brink of a death cross where the 50MA crosses down below the 200MA as small cap prices have moved into the basement. I suggest there is some large cap exuberance here – that won’t last.

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Leading Indicators Miss Mark

Though not yet in negative decline, the leading U.S. economic indicators are flattening out, typical of a change in the trend. The Conference Board reported on Friday that its index of leading U.S. economic indicators rose by less than expected in the month of August.

The Conference Board said its leading economic index edged up by 0.2 percent in August following an upwardly revised 1.1 percent jump in July. Economists had expected the index to climb by 0.4 percent.

Ken Goldstein, an economist at the Conference Board, said, “The leading indicators point to an economy that is continuing to gain traction, but most likely won’t repeat its stellar second quarter performance in the second half.”

I am a bit at a loss defining the second quarter as stellar – perhaps these guys are only looking at the sectors that showed growth rather than the complete economic profile. Smaller companies are really . . .

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