Bulls have managed to retain control of their powerful rally off October lows. Shorts looked ready to attack with yesterday's bearish 'cloud cover' candestick in the Nasdaq and S&P, but today's action has managed to counter that without really changing the larger picture. If you held index ETFs then current action would be a decent opportunity to sell covered calls against your position. There may be some pullback, but it's hard to see any selling going all the way back to those October lows.

It has been a relatively slow start to the week given what is at stake we remain waiting for the potential breakout in the Russell 2000 ($IWM). The Russell 2000 has drifted back in relative underperformace against the S&P, but only to a small degree. Other technicals remain net positive. The Nasdaq and S&P both closed higher. Not enough to kick start a continuation of the rally, but the sizable gaps from early November for both indices have the look of measuring gaps, and this means there is still more to come for these indices. I remain optimistic for the Russell 2000, but it's feasible we will see moves higher in either the S&P or Nasdaq before then. Bulls hold all the cards at the moment, quite the change from late October. Get a 50% discount on my Roth IRA with a 14-day free trial. Use coupon code fallondpicks at Get My Trades to get the discount. --- Follow Me on Twitter Investments are held in a pension fund on a buy-and-hold strateg

Whether you see the past week-and-a-half action in the Russell 2000 as a bullish ascending triangle or pennant, it's clear there is a significant bullish turn in momentum since the early November gap higher (on higher volume accumulation). Obviously, we can't read too much into Black Friday's trading, but we have a broader bullish picture on net bullish technicals. Even relative performance against the S&P looks to be turning in bulls favor. The only key resistance level left to break is the 200-day MA, and it is interesting that prices have stayed consistently below since the failed attempt on the inverse hammer spike. While the Russell 2000 sets up for a bullish week, other indices reached a logical end point of their October-November rally. For the Nasdaq, a sequence of narrow range days above the August swing high has the potential to generate a 'bull trap' that would leave shorts with a trade (to the 20-day MA). Likewise, for the S&P, w

While coming in as a technical distribution day, the general low volume is a sign that Thanksgiving trading has come early. I won't be expecting much until next Monday, but Black Friday is more likely to be bullish. The Russell 2000 ($IWM) experienced the larges loss. The 50-day MA is a potential support area although it may not be needed.

Friday was a good day for indices as both the S&P and Nasdaq were able to close near the highs of the week, while Thursday's losses in the Russell 2000 ($IWM) were reversed by Friday's narrow range day near the previous day's highs. Indices are all well placed to kick on, but it's the Russell 2000 which really needs to do it. The Russell 2000 ($IWM) still has Wednesday's spike high to reverse, but if it's able to generate a daily close that negates this high, it will also register as a close above its 200-day MA - another significant positive. We can see on the weekly chart of the Russell 2000 ($IWM) that the high price touched on a convergence of 20-week, 50-week and 200-week MAs. The technical picture for this time frame is firmly bearish, which is why a good performance into Thanksgiving is critical to getting this index back on track. The weekly charts for the S&P and Nasdaq do look alot more healthy. Since the 'bear trap'

It was inevitable that markets were going to slow down after the recent surge during the week. The biggest reversal came from the Russell 2000 ($IWM) which posted a classic inverse reversal hammer, intersecting the 200-day MA, followed by a down-day today to complete a "bearish evening star". As in any candlestick pattern, the significance of the reversal pattern is increased at momentum extremes, and the Russell 2000 is overbought. Other support technicals are net positive, so I would be looking to the 20-day MA as an area where buyers might step back in.

Markets clearly liked the latest inflation data with substantial gains for indices. Leading the charge was the Russell 2000 ($IWM) that added over 5% on the day. Not only did it generate a large gap, it also cleared its 50-day MA and took out the last swing high on higher volume accumulation. Trading volume has soared over the last couple of months and is well up on summer trading. Technicals are net bullish and the index is now attempting to outperform the S&P, last tried in November and late September, but yet to succeed. The crash risk from the end of October is looking like a distant memory.