Morning Gap Up Will Push Russell 2000 Over Early November Highs « Market Montage

A general positive tone has hit the Street this morning as supposed progress on the fiscal cliff (progress via lack of new public comments), a business sentiment survey out of Germany (reading of 6.9 vs -15.7 previous month), and "more QE" conspire together.  Whatever the reason there is a chance for an improvement in the technical tone of the market after a few weeks of very range bound action.  December and January is usually the period for small caps to rule and they have come to the forefront, with the Russell 2000 leading the more senior indexes this month.  Based on premarket indications the R2K will be clearing the 830.55 level from early November, therefore being the first index to do so.


The equivalent levels for the S&P 500 is the 1434s and the for the lagging NASDAQ 3033s.

Yesterday was a strange session as many of the glamour tech type stocks had rough days or didn't participate much – and frankly after the dead cat bounce off the mid November lows quite a few (not just Apple) have struggled.  Meanwhile we have seen a rotation into other parts of the market such as financials, industrials and in the past week some parts of the resources sector as the "China is back" theory takes hold on Wall Street.  So it has been an interesting dichotomy.

Either way if the other indexes can join the Russell in clearing their highs from 6 weeks ago and hold those gains, the overall tone would turn more constructive.

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