Stock Indices Close The Week Above Key Moving Averages

A few days ago it was looking as if the bears were about to take control of the  stock market due to the heavy volume I was seeing on the down days but by the close of the week stocks held firm above technical support. All of the major indices ( Dow, S&P500 NASDAQ and Russell2000) held their 50 day moving averages which has supported previous declines over the past few months.

Above is a daily chart of the Ruseell2000 along with its relative strength line in the lower panel. As you can see, the Russell 2000 has made a small symmetrical triangle which is supported by the 50 day moving average. In the lower panel we see the ratio line is breaking out to a new high which indicates strength in the small cap stocks compared to the S&P500. A move above Thursday's high may trigger another leg up for the stock market and if that does indeed happen, the small cap stocks may very well lead the charge!