AT40 = 47.9% of stocks are trading above their respective 40-day moving averages (DMAs)
AT200 = 54.6% of stocks are trading above their respective 200DMAs
VIX = 11.4
Short-term Trading Call: cautiously bullish

Commentary

In a surprising plot twist, small caps led the way as the iShares Russell 2000 ETF (IWM) bounced off its 50DMA to close with a fractional gain. Until the last two days, small caps were helping to underline the drag on the market that earlier represented narrowing participation in the stock market's rally and formed a bearish divergence.

The Nasdaq fell from a marginal all-time high and is trying to cling to its re-entry into its upper-Bollinger Band (BB) channel.

The PowerShares QQQ ETF (QQQ) also feel from its new marginal all-time high but did not hold its upper-BB channel.

Suddenly, iShares Russell 2000 ETF looks ready to resume its previous rally. I am watching for the downtrending 20DMA to flatten.

The volatility index, the VIX, continued its fade from Wednesday's spike higher. It is a move that confirmed the bullish divergence.

The Australian dollar however is still not cooperating. Its weakness continued. Against the Japanese yen, AUD/JPY confirmed a double breakdown: the 200DMA gave way as support AND the head and shoulders pattern completed its bearish warning.

AUD/JPY followed through on a bearish breakdown.

Time is ticking away for the bears and sellers as the period between Thanksgiving and Christmas is typically a very mild, even bullish, period for the stock market.