Market Recap For 21st Sep 2014 – Higher and Higher?

By Markus Heitkoetter

It was a definitely a week for the record books.

Between the S&P and DOW rallying to all-time highs, Alibaba’s IPO spectacle, and a Scottish vote for possible independence, there was a lot to move the market…and it certainly did move!

The DOW closed higher every day of the week. And with five consecutive winning days, the DOW ended the week 292 points higher and with a new all-time high close of 17279.74.

Although the S&P didn’t have the same impressive wining streak as the DOW, the S&P did make new all-time highs. The S&P ended the week at 2010.40, up 25 points.

Alibaba (BABA) did not disappoint with its initial public offering. Priced at $68/share the IPO opened at $92.70 and made history as the largest IPO to date.

While the DOW and S&P soared to new levels, losses in the RUSSELL stood out like a sore thumb. The RUSSELL and the small cap stocks that make up the index moved in the exact opposite direction, ending the week 13 points lower and down 1.18%.

It’s hard not to notice the disconnect between the RUSSELL and the DOW. They say that “a rising tide lifts all ships”, and that stocks in general will benefit from a strong uptrend. But this hasn’t been the case.

Will the RUSSELL finally catch up with the rest of the market? Or is the RUSSELL’s weakness telling us something?

It was a tricky week of trading for traders trying to short the DOW. But Caterpillar (CAT) was the exception.

After trending nicely all year, a Power Crossover Method Sell Signal was identified on 10th Sep 2014. With an entry at $105.37, Power Crossover traders were looking for a $102.15 Average Daily Range Profit Target.

While much of the DOW moved higher, CAT continued to show weakness and traded through the target.

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