Options expiration will have clouded the volume picture, particularly for the S&P, but it was a day for buyers to build some momentum into the Santa rally. The FOMC rate statement put a huge dent in prior rallies, with the S&P now having to deal with a 'bull trap'. Although it was the Russell 2000 ($IWM) that finds itself most on the back foot having undercut its 50-day MA, and now looking at the 200-day MA as its next test. It was the only one of the lead indices to turn net bearish in supporting technicals; the November breakout gap is no more. What's more likely is a new trading range, bound by November highs, with the $205 level a possible support level.

All markets enjoyed a bright day - even the Russell 2000 ($IWM) - although the last hour of trading saw some comeback across the indices. Best of the action came from the Semiconductor Index. Friday's gains were enough to see the index close above all key moving averages. Today's trading saw the index close above multiple converged resistance areas. Having said that, it's not the ultimate breakout of 5,400, but it goes a long way to bedding the bearish action of recent weeks.

The loss of the 20-day MA in the Russell 2000 ($IWM) is playing towards a test of the 50-day MA. Friday's premarket had suggested a recovery was possible but the reality was something different. Volume climbed to register distribution, and technicals, aside from momentum (stochastics), are bearish. Action in August and September at the 50-day MA didn't amount to much, but it has played as support since. We do have the Santa rally coming, so a pre-emptive strike at the 50-day MA would make sense.

There was only one winner today and it was the Nasdaq. Last week's push past resistance has an established breakout gap (today's gain looks to have put to bed any chance of this gap closing, thereby marking it as a "breakout gap"), that in itself, may also be a measuring gap. If we also have a measuring gap, then look for a push towards 20,500. Technicals are net positive, and there has been a good surge in relative performance against the S&P.

Bears ultimately won out, but it was not Semiconductors that suffered, but the Russell 2000 ($IWM) instead. I had talked about the Rusell 2000 as the bullish play for today, but in the end, it couldn't deliver. However, despite today's loss it didn't undercut 20-day MA support, although the 'sell' trigger in the MACD expanded as did the index underperformance relative to the Nasdaq. Because support held, there will be a second chance for bulls tomorrow.

This could be viewed as the glass half full after the Nasdaq gained over 3% on Friday, but the Semiconductor Index is doing its best not to participate in the festive goodwill. Technicals edge on the bearish side with momentum (Stochastics 39,1) struggling to make it over the mid-line. Converged moving averages, along with wedge resistance, remain in play as upside blockers.

Today belonged to the Nasdaq. There was a good opening gap and the index kicked on nicely on higher volume accumulation. Technicals are net bullish. Healthy action with no bearish divergences flagged.

The Russell 2000 ($IWM) has reached a point where it has successfully rebuffed the bearish inverse hammer with a series of narrow range candles near its highs, and is now ready to challenge the all-time high. Technicals are net bullish; On-Balance-Volume is in an accumulation trend as the index outperforms the Nasdaq and S&P.